This morning, I had a completely different view of what I would write about today. But, as the fundamental principle of the Multiverses dictates, change will happen, and it did, right after I read the headline below right after I read a bit from David Stockman, you remember, the Budget Director for President Reagan.
- Oil Is Getting Slammed Again, and Falling to Its Lowest Level in Years
I used to like David Stockman as a financial person. He always seemed reasonable and prudent, two excellent qualities when it comes to managing money. But alas …
- David Stockman: The Economy Is Falling Apart
Stockman is now out there on the apocalyptic circuit preaching doom and gloom. He has become a hilltop screamer. This makes me sad, and because of that, I ask, “Why would he do that?”
- “Japan is a bankrupt old age colony. China is the most monumental credit and construction Ponzi in human history. Europe is a terminal victim of socialist welfare and statist dirigisme,” Stockman proclaimed.
And then it hit me. The answer lies in the reason most folks on the apocalyptic circuit preach doom and gloom – they have something to sell. Stockman is no different. He has both a book out there and a blog, both of which need readers to make them go. One sure-fire way to attract readers is to appeal to fear, as we all know. It is an age-old approach to getting attention, and in this day and age, it is particularly effective.
- A new book, David Stockman, President Ronald Reagan’s budget director, chronicles the relentless downward spiral of America’s political and financial systems.
The market is up big today, which doesn’t mean much other than it shows there are still buyers out there. Now, how does this fit in with Stockman’s thesis – the global economy is doomed? If things were as bad as Stockman and others suggest, why is the market up at all? Why isn’t it falling apart? The folks behind the big money are not stupid.
- Stockman concludes: “The future is bleak… When the latest bubble pops, there will be nothing to stop the collapse.”
By the way … Stockman wrote the words above in 2013, when his book came out. Now, I don’t know how his book is selling, but some two years later, the US economy is much healthier and the economies of Europe and Japan are coming back to traction.
Maybe he needs a boost to his book sales, or maybe he doesn’t. I don’t know. What I do know is that Stockman and his ilk will always be with us, so as an investor or trader, you must learn to ignore them. Stick to the economic and market fundamentals, as those are the metrics you need to wisely make your money grow.
Speaking of fundamentals … The market is up today and oil is falling, as is the RBOB futures price of gasoline. If the price of crude keeps going down, say, below $40, what will that do to Stockman’s thesis?
- If there’s one call that investors and economists almost always seem to get wrong, it’s the direction of long-term interest rates. For years economists have been predicting that rates would rise, yet rates have been on a downtrend for ages.
Speaking of interest rates …
This week the Fed will come out with more language specific to raising interest rates. The Fed has been consistent in its language that it will raise rates this year, probably sooner rather than later, so why is the market up today?
Trade in the day; invest in your life …
