Top Reasons Why the Market May Stumble

• Israel / Iran escalation explodes
• China’s slowdown stalls
• Syrian devotion creates collateral support on both sides increasing risk premia in stalemate
• Sovereign liquidity bazooka posturing has bluff called by bond market.
• Greek bond swap is a failure as new bonds plummet shortly, installing fear for efficacy of European control over the crisis.
• LIBOR fixing case escalates or gets more notable attention creating mistrust in credit markets
• Oil prices get squeezed by geopolitical events or surprisingly good data and trigger a new recession.
• Facebook IPO becomes symbol of the excess in this rally and seals the top of this market and it’s own fair in the bear market that follows. Irrational but practically fair guess.
• Obama’s GOP challengers fade and his tax policy surfaces into the election
• Major hedge fund blows up
• High frequency trading investigation roils liquidity providers creating another flash crash” as market makers unwind into these lower volumes markets with fewer retail clients buying.
• Credit rating downgrades surprise to the downside in magnitude and timing.
• European cooperation breaks down into elections as popular votes support protectionism, liquidity unexpectedly unwound.
• interest rates back up suddenly 50 bps causing shocking losses feeding the sell of in “safe assets” and spiking over more heavily into selling of “risk assets”. Dollar rallies again.
• US real estate recovery exposed as weaker than originally thought with inventory overhang growing with new sales activity much like unemployment may grow as more people reenter the workforce.
• Government enforcement of Dodd Frank puts new pressure on banks earlier than anticipated, forcing more derisking.
• Apple iPad debut falls short of lofty expectations stories turn to “after Steve jobs” and the company’s massive weighting in indexes roils markets as it corrects.
• Capacity utilization unexpectedly soars as obsolescence becomes apparent and prices rise squeezing demand already starved by higher oil and weaker borrowing by consumers.
• By weather or other natural disaster global food supplies are squeezed and prices for key commodities sky rocket crimping the global consumer.


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