01-29-2013 08:58 AM
And the cry goes out that the top of the equity market is in.
Well, with what the Fed is doing I am not so sure. We now hear calls that the retail investor has awoken and that normally is a sign the high is in. I think it is a simple fact that the money managers out there know that the Fed printing press is well oiled and will not stop any time soon. I am calling for a higher stock market as well as lower rates this year. Fundamentally that is a difficult thing but the economy has yet to prove to me it is turned around.
Corn, wheat and beans all better this morning. Remember we have a non-farm payroll number on Friday that I am sure will slow things down going into the weekend.
Gold is up, oil up and equities are sideways. The talking heads love housing and are blaming a spike in oil on an economic turnaround in the housing sector. Can't really sign up to that but that is the chatter.
01-29-2013 09:29 AM
VIX and most other sentiment indicators don't reflect much worry at all.
I suppose we'll generally float higher on the back of global currency devaluation and "successful" interventions in Europe and elsewhere.
Until we don't. But maybe there aren't any banana peels out there and we run all the way until the point where we suddenly recognize that pushing money into stocks didn't generate much real growth at all. That could go a couple quarters before reality intrudes, then.
Here's a funny thought I had (ha ha). The general meme is that rates wil rise (and thus bonds fall) and money will rotate into stocks as a general recovery takes hold.
Suppose that the "market" actually believes its own hooey and creates the bond crash that some have been calling for- even though the growth is in fact a phantom that has been created in order to separate more widows and orphans from their money and park it in Hamptons mansions.
Anyway, I'm generally voting with the idea that there are a few banana peels out there and given the tension between that belief and experience about not fighting city hall I'm just plain cautious.
01-29-2013 11:17 AM
You would probably classify me as gloom and doomer. This debt mess will not end well. Google David Walker(I think that is his name), and follow what he is saying. I think he use to be comptroller general.
01-29-2013 12:26 PM
Would you please explain how this money is injected into the economy day after day? Who gets it and under what conditions. Or do you just walk by Fed offices and they are handing out suitcases filled with money? I'm on vacation and could head to the nearest office (Denver?) and could defray some of my fuel costs.