Warning! Markets Set To Collapse Next Week: Almost Everyone Is All In On Nearly Record Amounts Of Leverage, Ron Paul On The Fiscal Cliff: “We Have Passed The Point Of No Return”… Negotiations Are Going Very Badly!!! Middle Class Tax Rates Might Have To Be Hiked Too!!!

Saturday, December 29, 2012 15:47

 

It could be fairly normal to have the markets down over the new year though generally this type of futures signal would end up being a 500 point drop…

http://www.bloomberg.com/markets/stocks/futures/

Check out what happened with the DOW futures since Dec 21st 2012:

http://s9.postimage.org/uzksnc9jj/dow_2012_2.jpg

 

Margin Debt Soars To 2008 Levels As Everyone Is “All In”, Levered, And Selling Vol

There were some readers who took offense at our “bloodbath” recap of yesterday’s markets action (modestly different from that provided by MarketWatch). And, all else equal, a modest 28 step drop in the E-Mini/SPX would hardly be earthshattering. However, all else was not equal, and based on peripheral facts, the reason for our qualifier is that as of last week virtually nobody was prepared for a move as violent and sharp as the one experienced in the last minutes of trading yesterday. In such a context a “mere” 1.5% drop in the futures market has a far more pronounced impact on participants than a 10% or even 5% drop would have had, had traders been positioned appropriately. They weren’t. So what was the context? Let’s find out.

First as the NYSE just reported margin debt just soared to a near five year high, with Margin Debt at a whopping $327 billion, surpassing the highest print since the Lehman collapse, and the highest level since February 2008. Not only is everyone all in based on , but they are all in on nearly record amounts of leverage.

http://www.zerohedge.com/news/2012-12-29/margin-debt-soars-2008-levels-everyone-all-levered-and-selling-vol

Ron Paul On The Fiscal Cliff: “We Have Passed The Point Of No Return”

Forward to 5:45 for the Ron Paul interview (ignore everything else)

 

http://www.zerohedge.com/news/2012-12-29/ron-paul-fiscal-cliff-we-have-passed-point-no-return

According To Two Reporters, The Fiscal Cliff Negotiations Are Going Very Badly

http://www.businessinsider.com/john-harwood-ben-white-fiscal-cliff-negotiations-going-badly-2012-12

Market Asset Class Correlations Imply Swift Selling in Coming Days

http://www.marketoracle.co.uk/Article38266.html

FORMER ROMNEY ECONOMIC ADVISOR: Yes, Middle Class Tax Rates Might Have To Be Hiked Too

Former Mitt Romney economic advisor Greg Mankiw admits something that he probably would never have said during the campaign: Middle class tax rates can’t be set in stone. They might have to rise, too.

http://www.businessinsider.com/former-romney-advisor-greg-mankiw-says-middle-tax-rates-may-need-to-rise-2012-12 Read more at http://investmentwatchblog.com/warning-markets-set-to-collapse-next-week-almost-everyone-is-all-in-on-nearly-record-amounts-of-leverage-ron-paul-on-the-fiscal-cliff-we-have-passed-the-point-of-no-return-negotiations-ar/#TyQXqLrbSjmi0Mt1.99