Buy (more) of the ProShares Short Russell 2000 ETF to short small caps in this credit crisis
Today I’m adding the ProShares Short Russell 2000 ETF (RWM) to my Jubak Picks Portfolio.
Today I’m adding the ProShares Short Russell 2000 ETF (RWM) to my Jubak Picks Portfolio.
I’ve hi-lighted the key characteristics of the coming global debt bomb explosion that investors MUST include in any plan to protect a portfolio from the explosion of this bomb.
On Monday Moody’s Investors Service Ratings cut the credit ratings of 10 small and midsized banks. The company also put six big lenders on notice for a future downgrade assigning them a negative outlook.
We’re at the point in the credit cycle when lenders and borrowers can get into trouble. The typical pattern is that lenders looking to keep loan balances climbing loosen up on lending standards and extend more credit to less qualified customers just as a slowing economy threatens the ability of these creditors to pay. See the subprime mortgage crisis that began in 2007 for the playbook. That particular crisis is still so fresh in lenders’ minds (I hope) that I think it’s unlikely that the mortgage market will be the locus of the next blow-up. It’s likely to show up somewhere else in the lending ecosystem. One place I’m watching right now is the credit-card market where lenders big and small look to be extending more credit to consumers with less-than-stellar credit ratings.
Any post-Brexit crisis will will be a slow motion crisis driven by a gradual slowdown in economic growth in the United Kingdom, the European Union, Japan, China and the United States that results in a dimming of prospects for corporate earnings growth. The crisis will be interrupted periodically, as it has been in the last two days, by the hope that this time central banks will be able to intervene and get this or that economy growing again