What They Do on a Derailing Soul Train ~ The Risk Averse Alert

Tuesday, November 01, 2011

What They Do on a Derailing Soul Train

Same panicked drive to raise capital as last week ... just going in the other direction.

SPX 15-min

Obviously, the most shocking thing is the degree to which the buy-side is proven pathetically weak in the face of selling pressure. We saw this same kind of condition late-July, early-August. You will recall, too, this but marked the start of a much larger, protracted move lower.

Presently, though, considering that capital needs of the hopelessly insolvent consistently have resulted in daily fluctuations on the order of 1-2% since August, and so far this week 6%-ish already has been hacked away, some degree of stabilization over the next day or three might be in order.

Then again, don't count on this. The case of MF Global is proving an institutional "run on the bank" (highly recommended reading) indicative of "distrust, collateral calling, back stabbing" along lines suggested on Friday.

So, to all friends in the language of Ponzi finance is Hyperinflationary Bailout's Swan Song in the spirit of the day...

(By the way ladies, I still dance like that! I know, pretty pathetic. Definitely not my strong suit. Full disclosure...)

Fast Money
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