My official position on this market is as follows:
It can rally to Saturn, so long as oil keeps going down.
Actually, a decreasing price per barrel of oil I feel is contingent on further market gains, at this point, as foolish gas station owners threaten to derail the global economy by sending prices soaring past any point before which citizens and entrepreneurs could have continued to operate with some level of apathy.
It is fully encouraged that these people take it in the teeth, so that they might learn some restraint when willing to pay Exxon or the like $3.00 per gallon to fill their reserves, so that they might scalp record profits off of the backs of the average customer.
Let’s see them remember why getting stuck with excess supply and downward price action is to be avoided.
Meanwhile, be wary about the Europeans, but not so much that you start doing something crazy like shorting. It would be very, very bad if their economies slow to the point that it starts to drag on global sales.
However, everything before that point will result in a much stronger dollar, so the expectation is lower equity and commodity prices. Combine that with a rigid dollar structure (for the moment), and you want a cash position. Don’t shun it, stronger currencies can be a good thing if they take the pain off savers enough to spur more demand. Quite worrying about the banks all the time, they aren’t the keystone to the market like they were in ’07. We just need them around to do their task, not necessarily to have them do well.
For me, the right cash level is about 10% (I’m a margin addict, in the recent past). If you typically keep cash around, then it likely looks more like 30-50% cash.
The Greeks having certain kinds of austerity forced on them is not a bad thing, unconditionally. Asset divestitures, for instance, will get resources into the hands of those who can better use them, at cheap and competitive pricing. Let the Greek government be left holding no land, for all I care.
However, if the cuts start to crush the populace to the extent that they don’t feel able to engage in consumerism, that’s another story. Public parks are irrelevant. But some pensions may be critical.
For now, I am optimistic that this issue can be navigated, all the while leading market responsibly lower. But there may come a point where everything is so colossally absurd that further easing and like is unavoidable.
That is when I’ll get full-coke-line-long again, if ever.
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austerity is another word for slavery, and oppression. more of it will be on our shores pretty soon. what will you say when you yourself find out that your generation “cant” collect your fica till 70……. will you not care? anyone under 55 is “almost screwed, anyone under 38, is really screwed…………….
“austerity is another word for slavery…”
Nonsense. Austerity is an action for when promises are obviously overdone.
I won’t care, as I would be mad to have counted on money from an obvious ponzy scheme. Every day I pay into SS, that money is marked off as having been burned.
thats the problem. there is no one to champion, for the public, that it is nothing but a tax, that the fed gov,hopes to never have to return. austerity is an action for when promises are over done, or when they really say,” we have no way in getting this money back to the very people we ponz’ied it from. that is a default, just spun differently…………. give me back every dime that i payed into for 43 years. because they will make sure that we die before we can collect. that seems to be what is happening,but you’ll never hear them talking about people paying their lifetimes into “never” to get a dime back. that in and of itself is enough to cause unrest…… used to cost 2 bucks to park at a meter downtown chi town, they sold it . it now cost about 8 bucks to park at a meter
Except the oldest participants of these systems are generally saved for last. Take for instance here in the U.S.; any potential restructuring of our entitlement programs would omit the oldest participants and generally phase in, leaving the youngest and most able to adept to take the brunt of the change.
It’s not like a government is going to have some 70 year olds go cold turkey; they’d starve to death.
I think when the large voting block of older people and boomers dies off, and if voting technology is changed to make it young person friendly, then older Americans will be thrown under the bus, to starve and die.
If the voting process is young demographic friendly and simultaneously becomes much harder for older people, it is all over for the elderly.
Hey Cain,
I admire your writing for its literacy and intelligence. Check out my last two PG posts and let me know what you think!!
Thanks,
Chivo