Salient to Investors:

Argutori writes:

The financial markets are due for a correction.

Volatility in the financial markets will spike before the end of 2013 because:

Volatility can’t go much lower. Historically, when the VIX has dropped below 15 the S&P 500 tends to fall as well.

Over the past 23 years, volatility has increased from July and is historically the highest in October.

Companies EV/EBITDA valuations are reasonable because companies are stock-piling cash. But when inflation starts to creep into purchasing decisions, they will want to beat the price rises. Cash-piles have grown at the expense of plant and equipment, so there won’t be sufficient capacity to meet new demand. When hoarding stops, US inflation could turn into a run-away train that will fuel volatility.

Didier Sornette says we are getting close to a top.

The Fed is confused, and doesn’t have any more tricks. Narayana Kocherlakota says the Fed is creating the next toxic asset bubble. James Bullard believes the Fed should not taper until inflation picks up toward the 2 per cent target.

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