All the gains from the non-taper event have already been given back. Primary focus: Systemic market risk.
Some further observations:
1. Derivitives and swaps remain off the books. They are virtual unknowns.
2. Huge consolidation occurred in banking and finance since 2008.
3. Risk is now more concentrated than any time in our economic history.
4. Bank reform legislation--D.O.A.-- should have done the opposite, spread risk.
5. The Federal Reserve has no exit strategy from Quantitative Easing.
6. The US economy is in much worse shape than skewed government statistics would indicate.
7. When the next crash occurs, further dramatic easing is not a viable option.
8. The Federal Reserve has painted itself into a corner.
9. Housing has another leg down--more foreclosures on the way.
10.The U.S. dollar is entirely faith based, and the decline will shock the experts.
11.Many complex derivitives are linked to the yield on the 10 year Treasury.
12.A spike in interest rates will cause these phantom contracts to unwind in ways not predicted.
13.40% of all volume on the NYSE and Nasdaq is computer driven.
14.Hal does not always cooperate, which has already been proven recently.
15.The real estate bubble has been transferred directly to equities, courtesy of the Federal Reserve.
16.There are unprecedented levels of complacency in the financial markets.
Summary: Something big gives between now and the middle of November. In the coming scenario, ZNGA, a company with zero utility, will be entirely irrelevant.
Lets be clear the Government is not running things. All this about government spending is bs. GDP proves there is a conspiracy. Greed is problem. Forbes has announced Bill Gates as the richest in the world again. Capitalism is destroying the world because one loses himself instead of putting others needs first.
1. China is our largest creditor, to the tune of $1.25 trillion. Trillion with a T.
2. That is only the widely accepted figure. It is actually a state secret in Beijing.
3. China has no more appetite to increase their holdings of U.S. Treasuries.
4. China is attempting to diversify out of dollar denominated assets.
5. China is now purchasing oil and gas from Russia denominated in renminbi/ruble.
6. That directly threatens the status of the petro dollar, which allowed us to export inflation.
7. The U.S.financial media has completely ignored point #5, and conveniently so.
China also faces their own particular set of challenges. Wage and food inflation. Ghost cities.
Inadequate drinking water supplies in the environmental wastelands of the mega metropolises.
A population fed up with one party endemic corruption. The United States cannot rely on China to bail us out. The dollar is rapidly eroding as the world's reserve currency. I would not be surprised in the least if China develops an asset backed renminbi, which would be a direct threat to the dollar.