Manufacturing matters

Much predictably fatuous comment has been devoted to the fact that, to the extent that the US is facing any difficulties at all outside the oil patch, at present these ‘only’ affect manufacturing—a sector which , as any fool knows, accounts for a mere 12% of GDP. Ergo, we are told, while employment in general holds up and consumer spending is maintained, a recession is not to be countenanced—a bill of clean health which conveniently supports the sell-side’s fingers-crossed contention that stocks are cheap and that credit is beginning to offer up real bargains for the man brave enough to dip his toe back into the waters. Continue reading

Canaries in the Coalmine

The old Wall St. adage runs that ‘stocks are not bought, they are sold’, but the idea here is that they are sold to eager acquirers and that the act of selling does not therefore depress the price too much. The same cannot be said of what we have experienced these past six weeks or so.

If the damage in the major indices—measured from the early December highs—has so far been limited to a ‘corrective’ 10%, others—whether geographically more far-flung or more sector-specific—have not been so fortunate. Continue reading