Capitulation Abounds

Is it the end of the financial world?

Think about what happens when the end of the world doesn't come? People go, oh, gee, well, I'm still here. Maybe I outta buy some of the stuff that I was selling at such stupidly low prices just two weeks ago. The problem of course is telling when the end of the world is supposed to come and when it doesn't arrive. You really need to know when the spaceships are supposed to arrive and take everyone away from the mountaintop because otherwise you don't really know when it is all over.

You know I love sarcasm! Well done Jim Jubak!

I definitely believe that at least some things have been sold indiscriminately this week. At some point, I have to believe that people are going to look at all the paper fiat money in their hands and wonder, "Now what?" It reminds me a bit of when I turned bearish in 2004. I sold stocks. Within a day I realized that cash didn't look all that attractive either. Interest rates were just 1%. I ended up (at least partially) in gold and silver for a few years. Things are somewhat different now though. There's a 3% real yield on TIPS. Stocks are over 40% down from their peak. The market's having a half-price sale on oil.

If nothing else, just look how many Panic Musical Tributes I've had to create lately. It's reached daily routine mode. I can't speak for the market's selling, but I'm certainly nearing an exhaustion point.

The saying goes that if one must panic, panic early. I can't say much, but I can say that those panicking now are most certainly not panicking early. I do think things will get worse, but that doesn't mean they aren't already priced into the markets. Who knows?