I have been wondering for well over a year when the day would come that there are no hiding places.

Today is one such day: US equities down, Asia equities down, European equities down, Treasuries down, European bonds down, foreign currencies down, commodities down.

The one and only hiding place today is the one asset everyone loves to hate: the US dollar.

Asia/Pacific Equities

European Equities

US Equities

The top three lines in the above chart are S&P; 500 futures, Nasdaq 100 futures, the DOW index.


Looks like the Swiss Franc was a small winner today too.






It was a struggle but I found two more winners: Red wheat and Spring wheat.

When Liquidity Dries Up

If you were invested in nearly anything on the long-side today except US dollars, you lost money.

This is what happens when liquidity dries up after a prolonged period with every market running on speculation, fumes, QE, pretense from the Fed, and a bubble belief that the Fed (central banks in general) can levitate markets forever.

Two Key Questions

  1. Will the Fed back off its statements if the market dives?
  2. Will it matter even if the Fed does?

I do not know timing, but at some point the market is not going to react kindly when the Fed goes back to the QE well one time too many.

What I do know is fundamentals will eventually trump liquidity, and this could be the start of it.

 Mike “Mish” Shedlock