Follow Bear Market Strategies Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
All weekend, we'd been waiting to see what China would do to retaliate to the White House's threat to slap tariffs on virtually all remaining Chinese imports, and yesterday morning, we got it.
A tsunami of fear started yesterday morning in Asia, and it raced like it was trying to beat the sun to Europe and across the Atlantic to American markets.
At first glance, China looks like it's retaliating with a roundhouse kick; it's making moves to devalue the yuan to its lowest level in a decade. And the government has asked its state-owned enterprises to halt "agricultural imports" from the United States.
Now, that second threat could prove to be bluster. It's a tall order, and it's certainly easier said than done.
But the Chinese can manipulate their currency all day long, as easily as anyone can. And that alone was enough to send stocks prices, bond yields, oil prices, and optimism crashing through the floor. The Dow alone was down more than 700 points after lunch.
But I'll tell you something: Investors aren't scared of the right things right now. Their eyes are off the ball, and that could mean big trouble a few months down the line – and big profits for folks who know what's really going on…
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.