This may become a sore point, but I’m willing to risk some of my reputation with freelance gambling.
We will not be collapsing this year.
There’s still too much that the system can do to stave off judgment. Despite rampant destruction of the euro, inflation levels are still relatively subdued in the euro block. Remember, really damning inflation is measured in X, not in %.
Also, most of the problems here in the US are still “vote-able”.
Do you think a real crisis can be tallied away? Hahaha. No no – the fiscal cliff is a bumper sticker. If you can legislate away a problem, it isn’t really a problem. It’s only a real crisis when all the politicians holding hearings in the world can’t save you; just ask Greece how that works.
Real problems don’t give a fuck about consensus.
So we’ll hit the summer doldrums with sky high euro crisis pessimism expecting record low economic activity, just in time for the winter pick- me-up and another holiday spectacle of television personalities declaring “all is fixed” in spite of a total lack of evidence to back it up.
This ongoing crisis has served to introduce volatility, not direction. When every bond auction is a choice between introducing low price inflation, or crippling and immediate deflation, yes you get some wide price ranges. Each participant needs to play every day based on their own book.
My advice to you is the same as it has been for well over one year now. Have lots of cash. And only short into the highest of euphoria.
Despite believing that this winter will be a repeat of the last two, I would not call this sell off a buying opportunity. Not yet.
Wait, be patient, and prepare.
If you enjoy the content at iBankCoin, please follow us on Twitter
“It’s only a real crisis when all the politicians holding hearings in the world can’t save you; just ask Greece how that works.
Real problems don’t give a fuck about consensus.” …..well said, indeed.
Inflation levels are still relatively subdued. Indeud. The problemo, amigo, is not inflation but disinflation threatening to become deflation in rapid fashion. And once deflation takes hold it’s a bitch to get rid of (see Japan since 1990).
It is still my assessment that, despite plea’s from Chuck the Schum-dog to get to work, the Bernank is on the sidelines until after the election. And that possibility opens the door to stateside deflation taking hold before the first Tuesday in November. A possibility the market is finally starting to price in.
Forgto to mention that inflation is subdued if you take out everything that’s been going up in price. Little things like healthcare, education and (as soon as the drought effects begin to work through the pipeline) foodstuffs.
Sorry, don’t know why the filter caught that comment and didn’t publish it
If oil can rally 9% in a day just because a European summit went better than expected, I would have to agree that there is a lot that can be done to further inflate markets.
Yes we’re selling off and maybe it will get worse. But make no mistake, every asset manager the world over is chomping at the bit to get in on any perceived action by the Fed or possibility of a European resolution.
Thanks Cain. Great post, as usual.
Also, Bobby Boucher, I like the Japan sentiment. Scott Bleier regularly says that’s the future. And I think Fly mentioned it this morning, too. Plus, your comments about Bernanke actions viz. election timing are really interesting.
@LeftCoastTrader – you said it man.
Thank you for stopping by.
What’s everybody holding? I’m curious how we’re all positioned here.
Lol David Frum over on CNN saying idiotic, unsubstantiated things about gun control, while half the little barbs he calls readers parade around as pseudo-intellectuals, talking about their awesome statistics (that are never mentioned explicitly, of course).
Highlight bias:
“Republicans are twice as likely to own a gun as Democrats. Maybe not so coincidentally, Republicans are more likely to watch the scariest news channel of them all: Fox”
My God; the flawlessness of your science is blinding.
Cain, not holding much these days. A little GLW, a little ABB and a little INFN….
80% cash.
If you’re curious, I’m waiting for a major correction lower (out of this trading range – not sure what the catalyst will be), to pick up some longer term value plays.
If all goes magically according to plan: Hoping to get some great buying opportunities in August, then see some QE3 in September and repeat the market magic that did me so well in the fall season of last year.
In the meantime, I’m doing my best to resist PPT sparked directional swing bets. But patience is tricky, you know?
I know. Seems like a good plan. I have no idea what the chances are we break down instead of up, but it’s got to be an even shot.