I first used that headline in a follow up for one of our better calls:
Yesterday we posted "Getting Ready for the Wednesday/Thursday Market Pop" at around 1:10 EDT. Today the headlines at MarketWatch were...gratifying:
Back on May 9 we posted "Shop for Property/Casualty Insurance Savings NOW! Then Short Their Stocks With the Savings":I don't have time to go into a lot of detail right now, maybe next week. The current overcapacity in P&C, which has led to a bit of a price war, will be ending soon, maybe three to six weeks.That was a month before the June 12 Iowa floods.
A back of the envelope calculation says insurers would be mis-pricing weather risk vs. "average" conditions.
The recent flip of the Pacific Decadal Oscillation to it's cold phase will, if past history repeats, lead to higher insured losses in everything from hail damage to landfalling hurricanes.
I really should develop this further, unfortunately there is time enough to do anything, not enough to do everything.
Since then we've had these headlines (all from Bloomberg):
Natural Disasters In U.S. Cost Insurers $6 Billion In Quarter...
U.S. stock futures up on final day of first quarterPaul Farrell: Six reasons for calling a bottom
Just as interesting (to me) was this:
because it ties in to what we were talking about in "If I Were Manipulating the Dow Jones Industrial Average".
Keep an eye on Big Blue, not because it's a bell cow but because it isn't.
If, in a few weeks, it is holding up (and thus holding up the DJIA, by virtue of it's weighting in the index) while the lower price members of the index weaken, look for a quick decline when the trap is pulled.
Now back to our regulary scheduled programming