Get used to the Dr. Jekyll and Mr. Hyde activity with the market, at least until the latest doomsday scenario passes.
- Stocks fall on concern about economy, budget fight.
- Stocks rise on encouraging reports on the economy.
Yet, don’t think for one minute the hilltop screamers are going away and don’t think for one minute they are right. See the upcoming dips as opportunities to buy on discount.
- In August of ’11 America gridlock led to the U.S. credit rating was downgraded and markets were plunged into temporary chaos. It proved to be a buying opportunity but in reality, this time might be worse.
Yep, that’s right. Jeff Macke and Peter Schiff over at Breakout are doing the tandem thing again – the world is coming to an end because of American debt. If you listen to those two, it is best for the US government to simply default on its debt now, so we can get on with our lives. Well, if the writing above is any clue as to the thinking, one should be wary of any proposition put forth in the article.
US debt is nothing new and the world has gone on just fine after some 200-plus years of American debt. Yes, I said over 200 years of American debt. Now, can we please get on with reality?
- The number of Americans filing new claims for jobless benefits fell last week to a near six-year low.
- But in a more worrisome sign, the Commerce Department said prices for goods and services purchased by U.S. households fell for the first time in four years.
First off, how is it bad that consumer prices dropped? Employment going up and prices going down seems like a good recipe to keep the US economy moving forward, does it not? Oh, yeh, the Fed, QE, and taper timing thing.
Anyway, here is some reality … Despite the fluctuations appearing in the week-to-week, month-to-month, quarter-to-quarter reporting of economic conditions, the economy is moving forward. And, despite the Dr. Jekyll and Mr. Hyde behavior of the market these days, the market is setting up for a big climb. We just have to get past the nonsense and hope that the idiots in America’s capitol don’t bring the whole ship down with their antics, meaning let’s hope the crazies in the crazy house don’t take over.
- Instead of the world coming to an end on account of the looming government shutdown or even an imminent tapering of QE, those donning the rose-colored Revo’s these days suggest another view. In short, the bulls contend that the current malaise seen in the market is more likely attributed to traders taking a wait and see approach to the mess in Washington than a rush to the exits.
I could not agree more. The situation today is so much different from those wild days in the summer of 2011. Back then, panic ruled The Street. No one knew what the crazies would do. As I wrote back then, the crazies would take us to the brink and then back off. Why? Because the crazies were not enough in number to resist the force of power money, meaning the money that “rules the roost” throughout the world. Those folks did not want to see their money making interrupted, so they let the crazies scream and shout and they abided a certain amount of wild gyrating, but in the end, they said, “Enough is enough. Make the deal and keep the ship afloat.”
They will say the same thing this time around. The market suspects this is so, and so, the market is not flipping out about the headline news and the crazies, such as Peter Schiff shouting the end is near.
Of course, it is always possible the crazies could take over the crazy house, but what would have to happen to make that a real possibility? Let’s all think about this …
Trade in the day; Invest in your life …
