WASHINGTON, June 4, 2012 – Over the weekend, things looked awfully grim in Futures Land. Example: Dow futures were as low as negative 280 at one point on Sunday. As of this writing, 9:15 a.m. EDT, that number seems to be wavering between +4 and -4. Not much guidance there. But after Friday’s chart-busting debacle, optimism doesn’t seem to be on the horizon this morning as the world’s central banks continue to fiddle while late-stage capitalism burns.
China, the alleged savior of the west, continues to be confused about where it goes next.
The Eurocrats continue with their refusal to solve the knot of problems solely of their own making, due to a “unified” currency that was never unified and is still not unified, pulled apart as it is by the makers (like Germany) and the takers (Greece).
The U.S. continues to limp along courtesy of the much-maligned Ben Bernanke who can’t really do much more than another chapter of Quantitative Easing (QE). The Harry Reid Senate, the oldest bunch of adolescents in history, refuses for a third year running to pass ANY budget, and the feckless Obama administration continues to pursue class struggle, global warming, and socialism while ignoring that he’ll still need a few capitalists to fund his empty utopian dreams.
It’s clear at this point that politicians in the west are still more worried about their own jobs (and the jobs of their crony capitalist friends) than the jobs of the people they allegedly represent. Much more of this, and they’ll need to fear not only for their jobs but for their lives. We’re hearing much talk this morning about a second leg to the Great Recession. That’s nonsense.
Economists aside, ask any American and he’ll tell you: we never got out of the first one. We should be more afraid that Europe will turn this mess into Great Depression II. If that happens, the only thing we can guarantee is that Harry Reid will still be opposed to passing any budget, even if he turns out to be the Senate Minority Leader this fall.
If the market takes another swan dive this morning, we’ll probably clear out of most of our remaining lonely positions and reverse course by dipping into the S&P 500 short ETF (SH). Otherwise, we’ll pick positions carefully on the short side depending on what happens. The market is grossly oversold and could really bounce significantly here without warning. But the short bet seems the best one at the moment.
Uncle Ben may have another trick up his sleeve. The international banking system could conduct a coordinated action that might boost markets. But we’re pretty fed up at this point with the world’s “democratic” politicians and the naïve boobs, frankly, who re-elect them. So probably the best course for your money, still, is that already-overstuffed mattress.
Things are so uncertain this morning that we’re not going to predict the general move. The irrational dominates so thoroughly that reliable investment systems have long ceased to produce their former reliable results. So maybe the best thing to do is stay out of the way.
If anything significant pops up this morning, we’ll update this report. Otherwise, today will probably give us a slightly more certain beacon for the rest of the week.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
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