Man, that was a great week, wasn’t it? Those crazy Greeks were stuffed with a bailout they may or may not have really needed, but at least they don’t need to collect taxes for a little while longer. Stocks went crazy as expected and OH! Forgot! QE2 ended, too.
Feels great. Makes me wanna buy stocks again.
Not.
At least, not yet. We have one more hurdle before we can start mending consumer confidence. We gots to get that whole debt ceiling thingy fixed. We can’t have Uncle T raiding the coffers and inciting savings and stalling spendings and all sorts of other-ings. Or maybe not? Maybe our leaders can actually curtail spending such that we don’t need to raise the debt ceiling?
BWAAA-HA-Ha-Ha-Ha!!! Oh man, I kill myself sometimes.
No sirree Bob, we need to raise that debt limit. We do all recall what happened to the market when it was questionable whether or not Greece would get the bailout it did or did not need, right? Can you imagine how the conversation starts when Congress starts to debate our debt limit?
“Oh, c’mon guys, look at the market, it’s ripping. It must mean the economy is fine, and therefore tax receipts will go up, and therefore we don’t need to raise the debt ceiling because we will suddenly be able to pay for it all. Shit, we should give ourselves a pay raise for being so smart.”
“Yeah, I don’t know what Bernanke and Obama are whining about. In fact, there is so much money about to come in, we should just head it off at the pass and lower taxes first. And give ourselves raises. Shee-it.”
Yeah, this one’s going down to the wire. I don’t think the market is going to like it.
On the other hand, folks are pretty bullish right now. I am seeing and hearing lots of bits and pieces about beats on recent company reports and stocks responding appropriately. I am also seeing lots of selective reports on these beats, in particular one JPM report stating that the S&P500 companies reporting so far have beat expectations – but this report distinctly left out out MU which is still trying to regain its pre-earnings price level. We will need to look at that more closely and without the polished veneer of sell-side bullishness.
Meanwhile, The PPT says the market needs to be shorted. I traded my early-week burlap hat for a bandanna and added a pair of burlap pants. I think I will stop there as I like the idea of running half-naked Rambo-style out of the woods and waving my gun around calling for the end of the world, likely about the time The PPT says the market should be bought.
See what happens when you short stocks for too long?