Overprepared for the Next Storm?

From Barrons: A New York Times headline Wednesday proclaimed "Windows Are Ready for the Big Storm (the One from Last August)." The article was about the curious abundance of Manhattan apartment windows still taped in ineffectual and belated protection against Hurricane Irene. But it could well have been alluding to the financial markets' bracing for a rerun of last summer's gale of dangerous economic conditions.

The global selloff in risk assets during May, mostly prompted by the gradual but steady weakening in Europe's debt levees and sharp slowing in China's economy, was barely tallied by the time the lousy May employment report arrived Friday morning.  .The meager net increase of 69,000 jobs was the poorest reading since—you guessed it—last August, as the 2011 Europe debt drama was peaking. And gold prices, so long in an ebb phase, had their largest one-day rise since August, too, as expectations of more central-bank money-conjuring surged. Big U.S. stocks had held up better than nearly every other risk-asset class for the year but succumbed Friday to more aggressive selling, the Dow industrials losing 274 points and surrendering all gains for the year.

The case for avoiding last year's fate, or worse, rests on somewhat larger fundamental cushions….

Read more at http://online.barrons.com/article/SB50001424053111903964304577422302044692954.html