Both Spain and Greece will be going to market, in a laughable attempt to rollover short term debt. This is either going to end very badly, or HORRENDOUSLY. By late July, we will have a good read on the BP relief well. And, the market will get to analyze another round of U.S. unemployment data—always good fun.
In a not-so-surprising press release, it is being reported that the U.S. savings rate rose to 4%, the highest level in 8 months. And, as we speak, the TLT is about to enter the vortex aka $100+.
On the inflation side, umm, I think there are some imaginary printing presses working somewhere. And, central bankers are committed to imposing “austerity measures” in order to reduce debt. Oh shit, that’s deflationary. So sorry.
My advice to you pal, quit thinking so much and go eat a meatball hero.
Top picks: VXX, ERY
quit,your making me hungry.
and French college students are in a uproar about the gov raising the retirement age from 60 to 62……
so fucking sad…
ha ha.
Fuck them. In the end, the retirement age will be lifted to 100.
Retirement is a farce. Work is fun, if you have work you like. I can’t imagine not working.
Agreed, however there needs to be job creation in excess of newly minted job seekers, in order for that to occur. At the current rate, these older job seekers will first be on Social Security and Medicare and then in the grave, before being able to work again. Maybe the employment picture in paradise is a bot better.
The next time I hear someone saying the solution to the very real Social Security problem is working longer, without first finding a way to encourage job creation in the private sector, will carry the asshat appellation for the remainder of their public lives.
Few people enter full retirement without doing some level of work afterward. Stats show that people die earlier if they have no goals.
This will become a necessity more often as people cannot pay for their basic needs in retirement. We are going to see a mass exodus from the US and into Latin countries as people realize this will allow them to start retirement much earlier.
That’s not my point. I agree people should be free to work as long as they want. My point is that there is no one to hire them. Usually SMB’s hire a lot of older workers that have been cut loose from larger companies. If SMB’s aren’t hiring due to lack of sales and uncertainty about the future, then the option of working longer is mute. Remember SMB’s will NOT hire unless there is already business in the door. They won’t hire and hope the business shows up.
There is a Credit Suisse leading economic index that has only missed once in the past 40 years – it bears watching here for possibly turning negative. Some universities are raising tuition – this is inflation – if one university ever cuts tuition – watch out deflation. Bernanke stands by with trillions for QE easing if necessary – a doublr dip will unleash Bernanke with a vengeance.
Look for govt to crack down on college lending
Assuredly. There was an interesting article a few months back about “subprime students” and the large rate of default student borrowers were entering. I’ll try and find it, if I have the time.
They will crack down on those dodgy “colleges” that sign people up for their courses, get them student loans to pay their tuition, then graduate unemployable people who can’t pay back their student loans.
Student loan default rates are about 40-50% all subsidized by govt. The numbers are getting big and can no longer be ignored
Do you have a link to this? I’ve tried doing some research but the closest readings I got were between 7-11%. Where are you getting 40-50%, it seems egregious.
I must be on crazy pills because I thought they already shut down the student loan for profit business…or my sarcasm meter is broken.
Your July thesis may be right.
Staying hedged is the key here. The market is moving sideways. In some respects, this is a positive, considering all the bad news out there. I’m surprised we haven’t broken down below 1040 on the S&P index.
This could be the consolidation period that the bulls are looking for to set up the next rally. However, I wouldn’t make any major market calls until we break out of this range of 1040 – 1125 S&P.
Staying market neutral and trading the current environment with only 10% of my portfolio is my current strategy.
fwiw – i don’t see any deflation in my day to day existence … in fact, daily staples, aka food, oil, gas, elec, cable, utes, are all higher …. and food is markedly higher
Food and energy prices are volatile. Most people can afford to buy food and staple. But is it getting easier or harder to pay off debt?
Fly when exactly in july?
Feels like too many people leaning short going into quarter end.
Who’s short?
Not you, of course, but every blog I read is talking doomsday scenario…Can’t find anyone saying this is the buying opportunity of a lifetime. Although I still remember your call for 9900 as the best buying opportunity of the year, and I know you have backed off that call, but I still keep thinking you might be right.
GNK has been on a wild ride since you mentioned it a while back.. ~ $17 down to $15 and now up again…
Thoughts?
Many people consider the deflation / inflation argument important because this tells them whether to buy gold / silver bullion as a hedge. The answer is that, historically, gold and silver have both performed well in inflationary and deflationery environments.
It has been many months since the top analysts figured out that we will enter a period of deflation, to be followed by hyperinflation soon after.