Squalls come up quickly, do their damage and then dissipate.
In the stock market, we just had one blow through; it was an oil price shock. In this case it was all about a collapse in prices rather than an increase. Why would this be a shock? Lower prices should be good for far more parts of the economy than not?
It is really about some big money positioned the wrong way and having a quick change thrust upon them. It is also about the unknown collateral damage. For instance, companies, banks and countries that have borrowed or spent on the basis of higher prices. So a few got caught wrong; for the rest of us it’s potentially a Merrier Christmas.
This will be over soon and we will find out where the damage was most severe. Then the benefits of lower prices will begin to pass through the economy and there will be joy.
Have a wonderful holiday season.
the Lonely Bull