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kirkydu (93.74)

Let the Stock Market Fall!!!

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June 28, 2011 – Comments (6) | RELATED TICKERS: UUP

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.

6 Comments – Post Your Own

#1) On June 28, 2011 at 1:21 PM, PeteysTired (< 20) wrote:

the echo boomers, to study math and science, AND make education affordable for them.

We have been trying to make education more affordable at the local, state and federal lever....for ever. 

I think too much public money is flowing into these institutions and with more money comes higher prices.  A novel approach would be cutting public money and forcing these institutions to compete on quality and price. 

We can't try that though :)

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#2) On June 28, 2011 at 3:43 PM, kirkydu (93.74) wrote:

Public schools in big cities are suffering for reasons other than money.  I'm referring more to high school and college education in general.  For some reason, getting a teen to study seems harder and harder.  I suspect that the level of spoiled has gotten way past the acceptable line.. 

I'm not really sure where you see education being made more affordable.  The trend has been higher costs for three decades (really everything in American that has turned down can be traced to the 1980s). 

Yeah, we need to freeze wages and benefits on some educators (we seem to have gone a little too far on that in WI), but to say that high school and college has become more attainable is silly. 

Requiring students to get into heavy debt for an education is counter productive.  The money needs to go to them more directly so their debts are nominal (some debt is good to teach responsibility). 

I'm all for more competition, but the reality is that affordability won't come from that- though higher quality might.

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#3) On June 28, 2011 at 11:15 PM, MoneyWorksforMe (< 20) wrote:

There is absolutely no doubt in my mind that the federal government is directly involved in the stock market these days, particularly after the CFTC's aggressive margin hikes to suppress silver and gold prices, and the recent release of emergency oil reserves to momentarily lower oil prices...

The federal government can't fight the markets indefinitely, and it will soon lose...

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#4) On June 29, 2011 at 9:23 AM, kirkydu (93.74) wrote:

The Fed just extended by one year the foreign swaps program.  Hmmmm, just long enough to get to the next election.

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#5) On June 29, 2011 at 9:36 AM, outoffocus (22.75) wrote:

Are you running for President?

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#6) On June 30, 2011 at 2:57 AM, kirkydu (93.74) wrote:

I can't run for President, I'd have the liberals mad at me for not going straight left, the cons would hate me because I wasn't a conservative and middle majority is so apathetic that they don't bother to vote for what's good for them.  Sort of the current President's problem set.

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