Is Wall Street Ready for Obama’s Fall?
The stock market’s powerful bear rally, now five month’s old, has fed on false hopes and delusional thinking, but it is unlikely to survive the coming collapse of the Obama presidency. Mr. Obama’s once-overwhelming popularity, though ebbing, has so far survived the voters’ growing discontent with his policies. However, disapproval is mounting, even on the political left, and it’s going to reach critical mass once the president’s ill-conceived plan for a government takeover of the healthcare system has gone down in flames. He will become a lame-duck president after less than a year in office…
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‘All Roads Lead to Deflation’
When we dropped out of the inflation/deflation debate a while ago, we asked the inflationists to wake us when the price of suburban homes reached a quadrillion dollars. Wouldn’t that be nice for the fifty million or so Americans who owe more on their homes than they’re worth! Anyway, the topic continues to percolate in the Rick’s Picks forum, including this recent, astute post from “Senor Cuidado”. Like us, the Senor doubts inflation is lurking around the bend:
Tahoe Billy, you priced gold and eggs but you left out oil. Oil is key to the U.S. economy. With gold at $3,000, what is the oil price going to be? And how are Americans going to afford the new stratospheric oil price? You also left out any interest rate prognostication. My advice is to read bloggers Ackerman, Shedlock, Denninger et al. and get a handle on…
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2009 Promises to Get Tougher
(Here’s the latest dispatch from our friend and colleague Larry Amernick, who thinks any stock-market corrections in the offing are going to be shallow. If you’d like to sample his work, e-mail him at: Amernick@comcast.net.)
Time for some straight talk about the stock market, since nothing has improved fundamentally. Congress has passed no financial reform, the Federal Reserve is financing a new equities bubble on Wall Street, and the real economy is on life support. According to our technical runes, the market is overbought but unlikely to correct more than 7 percent…
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A Scenario to Trap Both Bulls and Bears…
We offered an S&P 500 chart here a while back that was intended to show how a very powerful rally over the next 18 months would not change a long-term picture that remains very bearish to this day. The S&Ps were trading around 900 at the time, but we added 18 bars to the monthly chart in order to help readers visualize a steady, spectacular climb to 1400 by early 2010. We are much too bearish on the economy to think that such a powerful rally is in the cards. However, “thinking” about this market is not necessarily…
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Inflation No Threat in Collapsing Economy
I’ve harped endlessly on the point that stagnant-to-falling incomes, soaring joblessness, imploding credit and collapsing asset values make inflation nearly impossible at this time. Here’s our friend Senor Cuidado once again, explaining this more lucidly than I have. He is responding to statements (in boldface) posed in the Rick’s Picks forum by “Edward,” who is…