A long time ago, when I had a 9-5 job, I would go into work every day to see the same sign above my desk, a sign I did not put there, but, apparently, had been there long before I assumed my seat at that desk. Anyway, the sign read: “Nothing changes as much as it remains the same.” Well, it took me a few days of pondering back then to understand the meaning, but, once I got it, the idea filtered into my life and it still finds its way into my thinking after lo these long years of not having a 9-5 job.
My point is that with the market, nothing changes as much as it remains the same.
- Greek 10-Year Yield Drops Below 6%, First Time Since March 2010.
The headline above speaks volumes about change and not change. Starting back in 2009 and right up and into last year, the hilltop screamers told us Greece was the harbinger of doom. It would fall and with it would go Portugal, Italy, Ireland, and Spain. The hilltop screamers are the same, and will remain the same, even as the world changes.
- Greece, at risk of crashing out of the euro zone just two years ago, will issue its first sovereign bond in almost four years on Thursday, seeking to send a strong political and economic signal it is on the way out of its debt crisis.
If it is not Greece, it will be Ukraine, France, Italy, China, or, as it earnings season again, an overvalued US market. One other thing that is important to understand about change and not change is that forces are incessantly at work to relieve businesses of government oversight. These insidious forces live in a fantasy world, a world where markets controls themselves through some type of divine law, laws defined by the “free” market place.
- A top U.S. central banker on Tuesday criticized the complexity of a nearly four-year-old financial-reform law, urging simpler and more transparent laws for Wall Street that would rely more on the free market to discipline banks and other firms.
How ridiculous is the above? The whole financial collapse of 2008 came about because governments across the globe had been deregulating the banking industry, beginning in 1996. The same insidious forces that even today suggest that markets can regulate themselves brought about US deregulation in the years between 1999 and 2004 that ensured the financial collapse as greed had a much freer hand.
Today, those same forces are fighting against the US government requiring the big banks to hold more capital in reserve (5-6%) than the Basel III requirement of 3%. The argument is that US banks will not be competitive with foreign banks if the reserve requirements are so high. Nothing changes as much as it remains the same – greed is a natural force, much like water. You have to contain it will flow everywhere.
The market is driving into the green for yet another day, which means the bears have lost some footing. Alcoa’s earnings have helped, but the real driver is, simply, that the bulls have a pattern now – lie in wait for the bears to falter and then buy.
- Revived appetite for emerging markets helped Asian stocks hit a near six-month high on Wednesday, driving more modest gains in Europe and other developed markets,
- U.S. stocks rose on Tuesday, snapping a three-day losing streak as investors bought beaten-down social media and Internet shares.
Nothing changes as much as it remains the same is in force here. The breathless media bellows, the hilltop screamers prophesize, and the market just does what it does – seeks balance. Count on it!
A while back, I suggested you watch Nokia, and, well, it still has room to run and then it has time to build.
- Nokia (NOK_) popped 5% after gaining Chinese government approval for the sale of its mobile handset business to Microsoft for $7.4 billion, a deal the company expects to close this month.
And the race is on for control of our living room entertainment. This too I have been following and I have suggested you follow it as well. There is opportunity in the battle outlined below.
- Amazon.com said on Tuesday that the number of Instant Video streams it offers nearly tripled from a year ago as the world’s largest online retailer tries to win a battle for control over people’s living rooms.
Trade in the day; Invest in your life …
