Aug 8, 2011

Equity markets tanked 5-8%. Bank of America fell 20%. Basically, everything was down except gold bullion and – wait for it – Treasuries. re the latter, the dollar was down v the swissie, yen, pound, swedish krona — up v others. So my second-tier safe-havens may work here. My concern re all the non-Treasury “safe havens” is that they attract an absolute flood of panicky hot money – and then capsize. My concern re gold is purely short-term. It’s a crowded trade right now and the powers that be know how to shake that tree if they want to — and they will want to at some point soon. Plus, I’m already at full allocation and anything more is a speculation and I’m not interested in speculation right now. Even closed out the one small short I had. I like the optionality of cash. 52 wk lows are at levels only seen on a couple of days in 2008 so I think we are very near a (temporary) bottom. That said, the indicators still show absolutely nothing reversing/bottoming. In fact, they are still indicating deterioration – from extremely deteriorated levels.

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