One Of The Greats In The Business Just Issued This Dire Warning

With the Dow down nearly 300 and the Nasdaq tumbling almost 125, one of the greats in the business just issued this dire warning.

– A portion of today’s note from legend Art Cashin:  Ill Prepared, Indeed – In his insightful Geostrat blog, Bob Hardy revealed that less than half of the U.S. Air Force bomber fleet is ready for action. Another friend, and fellow market veteran, Jim Brown over at Option Investor ran through that topic last weekend. Here’s a bit of what Jim wrote: 

With all the headlines about North Korea attacking Guam and President Trump promising instant retaliation, I found it interesting that there are only 6 B2 bombers in Guam. Since that is the vehicle to deliver the long distance retaliation, it would seem to be a small fleet unless they are going to use nuclear weapons. The best description of a plan to retaliate suggests they will use the B2s and some cruise missiles to take out their 30+ missile launch and storage locations. However, there are no carrier strike forces near the Korean peninsula and it would take several weeks to move them back into position. Apparently, the U.S. is not taking the threat seriously despite the constant headlines.
 
Also of interest is that only 30 of the 62 B2 bombers in inventory can fly because of a lack of spare parts. This condition came from continuous budget cuts over the last 8 years. Nearly half of our existing fighters are grounded for parts and more than half of our tanks are mothballed because they have been scavenged for parts. Stockpiles of bombs and rockets are around 40% of recommended levels. 
We are not prepared to fight an actual war. We have the greatest military in the world but budget cuts have caused more damage than any enemy has. 

Not quite as secure as we seem on paper. 
Overnight And Overseas – In Asia, markets are mixed with minor changes. Tokyo and Hong Kong show fractional losses while Shanghai had a modest gain. India is virtually unchanged. 

In Europe, there are small losses as traders await the ECB minutes and puzzle over the muddle of U.S. politics. 
Among other assets, gold is adding to the gains it made Wednesday afternoon. Crude is soft and continues to trade below $47. The euro is weak against the dollar. U.S. yields are a smidge higher. 

Consensus – Futures suggest political uncertainty continues, making bidders a bit hesitant. Pence may be back tomorrow so that may be the key day. Watch crude carefully. 

Stay wary, alert and very, very nimble.

Gold And North Korea
King World News note:  It is also important to remember what Peter Boockvar stated about gold and North Korea:
“Don’t buy gold on North Korea or geopolitical worries. Only buy it if you believe in a weaker dollar and a loss of credibility and faith in central bank omnipotence is soon to come.”

King World News
8/18/2017