Wednesday, March 19, 2008

Inside Views and Perspectives for a Wednesday

* It Can't Happen Here - Hard to believe it was only 14 years ago that a prominent University of Chicago economist made the case that "no serious danger of a derivatives-induced financial collapse really exists".

* The Story Beneath the Story - What one knowledgable observer sees in today's market selloff. Meanwhile the flight to safety continues unabated: 3 month Treasury yields near .50% (!) and TIPS yield remains negative.

* What's On Investors' Minds - Bursting bubbles and vulnerable hedge funds, according to Abnormal Returns.

* Libor Perspectives - Abnormal rates have become the norm, as charted by Alea.

* Fed Bailing Out the Boat - Better than letting it sink, points out Jeff Miller.

* Choppy Action - I took a look at the trajectory of my Cumulative Demand/Supply Indicator after today's trade. Continued choppy action with lack of follow-through on rises would lead to an *overbought* condition at a much lower price level (than the prior overbought signal), and that would trigger a major sell signal for my intermediate-term trading. We're not there yet, but the concern is on the radar.