I don't know that the market will continue its decline tomorrow or even if it does for how long, but I do have a firm conviction on a macroeconomic level that the market is well above where it belongs at the moment and there is just so long it can defy gravity. I have given up on trying to predict when, but it will fall. And if the Nikkei is any indication, at the moment it is down 2.8%.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5wn0rKqNziY
"Shared National Credits [Pain]"
There is this thingy known as Shared National Credits whereby $20 million or more is collectively loaned by three or more unaffiliated institutions like banks, foreign banks, insurance companies, hedge funds, pensions and the like. Just think of them as big loans for big stuff. The FDIC just did a review, sampling, of these loans to see how they are doing. Answer, not too good. Mind you, there are $2.9 trillion of these outstanding, so not too good is problematic. What they call "criticized assets," i.e. anywhere from needing special attention to expected to be a loss, represent $642 billion of the loans, which is significantly higher than what they were in last year's review, when they stood at $373 billion. And you thought the worst was behind us.
http://www.fdic.gov/news/news/press/2009/pr09175.html
Then The Big News
Existing Home says unexpectedly declined in August. But if you are reading this, I suspect you already know that.
http://www.calculatedriskblog.com/2009/09/existing-home-sales-decline-in-august.html
Disclosures: None
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