Ukraine Disaster May Create Worldwide Panic & Contagion

Tuesday, March 4, 2014
By Paul Martin
March 3, 2014

Today KWN is pleased to share an important piece from 50-year veteran Art Cashin, who is Director of Floor Operations at UBS ($650 billion under management). Cashin has some incredibly important notes about the Ukrainian situation and why it may lead to panic and contagion. It includes an outstanding guest commentary.

Worthy Of Note – After some delay, the recent NYSE margin debt has been released. The always savvy Jason Goepfert over at SentimenTrader saw some uncomfortable parallels. Here is a bit of what he wrote:

The latest margin debt figures were released for January, showing another uptick in debt and decrease in the net worth of investors. The “available cash” for investors to withdraw is now negative $159 billion, another new record low. As a percentage of the market cap of all U.S. equities, it amounts to -0.75%, tied with February 2000 for the most extreme figure since June 1987.

Not two happy precedents.

The Ukraine – While the TV and other news reports will probably focus on troop movements and the like, traders will keep an eye on money movements.

The Russian Ruble has plunged, prompting the central bank to move to hike rates. The Ukraine is hemorrhaging money and the banks have put a limit on withdrawals, capping them at $1500 a day. Their central bank is rapidly running out of reserves. It is the money that may lead to contagion.

Consensus – U.S. and EU have no quick or easy options. Traders, as noted, will look to monetary consequence. Important to stick with the drill – stay wary, alert and very nimble.

The Rest…HERE

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