What happened this week:

  • The yield curve is inverted again. This is very important
  • Funding drain as CDO sales slow – (this is what is called credit crunch)
  • Market finally reacted, even though credit panic started few weeks ago. We all had plenty of time to sell stocks in advance
  • Consumer was weak according to Q2 GDP report

What to watch next week:

  • Personal consumption – the most important data now! (I expect nothing good)
  • I’m looking for credit market panic to finally start looking for a bottom. There is no room to go down anymore
  • I expect the yield curve to invert sharply