The 2012 Macro Swan of the East

Nothing captures better the angst of the macro swan of the east than a long-term chart of the Shanghai Composite.   Our friends at The Chart Store do a great job charting anything and everything and have not disappointed on this one.

This Shanghai looks hopeless with the October 2008 low seeming to be the magnet as to where the index is moving.  Unless, of course, we see a policy response — i.e., monetary easing — from the government that will send the shorts reaching for the you know you what.  Tough to sell a less than transparent market that is down 31 percent in the past year.

Nevertheless,  China is the blind side swan that could really sack the markets, including commodities,  in 2012, in our opinion.  Keep it on your radar.

(click here if chart is not observable)