Reason for Market Sell-off Today?

[FaninAma]

Obamacare. Moody's downgraded all of the major health insurance carriers today. Most major health insurers have their tentacles in almost all sectors....especially in the financial sector.

Don't worry, though. The Federal Reserve will up their QE program again if things start looking too shaky.

[SanJoaquinSooner]

Cramer says otherwise...



If there's one thing Wall Street hates its surprises. And it just got a dilly.

According to a string of news reports, one of China's high-yield trust investment products appears set to default -- for the first time, ever.


"Until the last 24 hours, no one was really focused on the issue," Cramer noted.


However, on Thursday "the Street decided collectively that it can reverberate into every company that has any exposure to China, as far ranging as Ford and Coach and Boeing and Goldman Sachs." As a result all the major averages finished sharply lower.

[FaninAma]

Yeah, the high interest Chinese trust default is a pretty big deal. Also, unemployment claims were up again. I do think thedowngrade of health insurers played some role today butt he Chinese default was probably the bigger cause. I do think the Obamacare fallout will continue to affectt he economy and markets, though.

[KantoSooner]

Oopsie! Just spoke with a buddy who's a banker in Singapore. He was completely unwilling to talk about exposure to Chinese banks. That and it is already late in the evening on a Friday there and he was still in the office.

I do believe I'm going to call around to some other folks and see who else has had their happy hour distrurbed.

[SanJoaquinSooner]

The indexes have been moving upward for 10 months with hardly a pullback. A 5 to 7% correction might be healthy.

[KantoSooner]

No sign of imminent disaster. called 4 other banker types in Asia. They were all home or partying. Not to say that China is healthy, but there doesn't appear to be any meltdown in progress that just hasn't hit the news, yet.

[FaninAma]

No sign of imminent disaster. called 4 other banker types in Asia. They were all home or partying. Not to say that China is healthy, but there doesn't appear to be any meltdown in progress that just hasn't hit the news, yet.

Dow off another 300 today. Emerging markets getting hammered even thought they have been trending down all year. I still think there may be a black swan(or two) that will make an appearance before 2016 even though our fearless leaders assured us they killed the only one in 2008.

[KantoSooner]

Again, don't take my words to indicate that I think China is in good shape. I continue to believe that data from Chinese banks are a joke and utter fantasy. It would not surprise me to see a major financial disaster emanate from China at any time. My very limited point is that it's not happening as we speak. The guys I talked to would all be in lock-down-don't-talk-with-anybody-mode if so. (They're not captains of industry, but are in positions where they'd see things happening and would be in their offices trying very hard to get answers for their head offices if the caca was hitting the fan.) I think 'fear' just got the better of 'greed' for a bit. We'll see what Monday brings.
With QE phasing out, there will likely be a move to 'quality' over the next months. And that means higher risk/higher reward emerging markets are going to get whacked around a bit. Argentina is already seeing it. Eastern Europe will likely also suffer. It'll be spotty but probably not armaggedon unless the freak out factor gets out ahead of events.