Let the Stock Market Fall!!!
Dear U.S. Gov'ment,
Please quit monkeying with the capital markets, the stock market in particular. While I understood and supported the spending to get out of the canyon that the gov'ment of 2000 (including the Dems) to 2008 drove us into, it is time to spend less and spend better, and let the dollar rise. Pumping money into the markets via primary dealers, which is what QE2 did, is not going to help us. A stronger dollar, more employment and less stealing will help America.
Look at the current and recent confidence numbers. Making people think they have a little more money in their retirement plans is not going to stimulate the economy. We have board room, demographic, employment and energy issues that are a one two three combination that need to be dealt with.
It is time for a stronger dollar, more corporate responsbility for employment, better education policy and a commitment to standard of living for anybody who works.
The insulated board rooms of the S&P 500 companies (not all but most) need to have their insulation torn out. The President is right to put pressure on them. The money they have taken out of the economy for themselves is beyond sinful. The poor ethics really jump out when we realize that the key mechanism that execs have used to enrich themselves has been to send jobs off shore- despite the fact that it is people in this country who made most of them rich- then take huge bonuses while pointing at temporarily high EPS numbers. Curiously, most shareholders haven't made much. It's skimming and it will end badly for America if we allow it to continue.
I think most people understand the demographics at this point. Really only time will solve that. And, it will only be solved if somehow, someway we convince the younger population, the echo boomers, to study math and science, AND make education affordable for them.
Ultimately the only thing that saves America is higher employment and better energy policy. Interestingly, we could partially solve both problems simultaneously if we employed more people in energy- BOTH traditional and alternative. This ideological wrangling over which way to go is killing us. Drill more and dig more, but have a strong EPA to police it all. Start building out a network of solar power in the south en masse. Rebuild the grid from sea to shining sea. The highways and bridges too. Add some cell towers to finish the 4G rollouts. There is plenty that can be done. Get those skilled folks to work and that's where we will get trickle down.
All this would help the standard of living for America. More employment. Less skimming. A stronger dollar.
Alright, enough rant, my coffee is wearing off.
A little about investing.
There is no way that the earnings of the S&P 500 are going to meet 2012 estimates. I don't know when that will set in on people and the markets, but it will at some point. With the second day of this week's rally, today I took the short side of the bet on CAPs. I'm probably very early, but we'll see. There was a 4 week confirmation of a downturn in late May. I've been market neutral since then in real life. The short ETFs I added to caps are strictly for tracking and a bit for scoring reasons. Regardless of CAPs, when the earnings estimates flatten then revert nearer to the long term mean (about 68 I believe) we will see a sharp correction. It won't be 2008, but look at the bottom support levels, it could go about there.