WASHINGTON, May 30, 2012 – As of 8:43 a.m. EDT, the Dow futures are down 109 points, and the market seems to be getting ready to punish us for that nice, bright up day we had yesterday. The charts had called for a “deep-oversold” rally and we got it all at once on Tuesday, relieving short term oversold conditions immediately but setting us up for another pummeling from the usual suspects in Europe. Of course, after the opening, who knows where we’ll go? Maybe to the amusement park where the roller coasters at least are fun to ride.
If you’re getting bored with this, so are we but what can you do? The markets are petrified of the Euro-mess, professionals have been slowly (and now quickly) dumping stocks even during the rally month of March, and the bear is simply making a mess of things.
Confidence building events like J.P. Morgan’s “London whale” fiasco and the metaphorical messy abortion otherwise known as the Facebook IPO have not helped the tone of this market. Morgan has been seen as a stalwart during the Great Recession (on the verge of becoming the Great Depression II, BTW), and Facebook BI (Before IPO) was being touted as the new god that would replace the still Boomer-led Apple as the shining beacon for the millennial generation. Both are now seen as only mortal and now, perhaps, less than that, and the disappointment is palpable.
As is the outrage over both. Check out the following Facebook rant from CNBC’s Jim Cramer. But let’s digress a bit first.
Mr. Cramer is routinely reviled by many Wall Street analysts. He can also be extraordinarily irritating on the tube, particularly attributable to the ever increasing velocity and decibel level of his delivery, not to mention his softball positive-spin interviews with stealth charlatans like Chesapeake’s Aubrey McClendon.
With the acquiescence of a compliant, crony-filled board of directors, McClendon played fast and loose with the funds of his resource company for years (immorally but not illegally so far as we can tell), but Mr. Cramer until recently always pushed that stock until its recent swan dive toward reality.
Yet for all his faults as a messenger, Mr. Cramer still has the guts to call outrages for what they are, citing chapter and verse. It’s a refreshing break from the usual DC-NYC mush mouthing that goes on any time you try to discuss the Screwing of America by crony capitalists and the Congressional clowns that love them. So again, proceed to the video below and you’ll learn all you need to know about the Facebook face plant in plain, unvarnished English, including Mr. Cramer’s cynical but spot on conclusion.
Our usual boring advice pertains today and probably will tomorrow. Until and unless the Eurocrats start acting like manly men, we’re likely to go through “Ground Hog Day” again and again. So keep that mattress stuffed with cash, keep stock funds mostly limited to utilities and safe REITs for the most part, and maybe a little sprinkling of treasurys, although heaven only knows that the shorter-duration paper now sports an effectively negative yield.
The market desperately awaits a Fed announcement on QE whatever to get the bulls back into action. But you know what? That’s like a hockey team on the cusp of the playoffs but unable to get into the playoffs with a win on its own. Rather, their season has been so mediocre that they rely on another team to lose in order for them to grab a seed in the playoffs.
Leaving your fate in someone else’s hands is always a stupid move. It means you haven’t been playing with skill and intensity. You’ve just been kicking back and taking a paycheck. Obviously, this doesn’t work either in hockey or professional sports. In 2012, it’s clear it doesn’t work for the average American’s life story either.
It’s hard to watch the complete destruction of the American middle class in slo-mo, but that’s what we’ve been witnessing here since circa 2008. Said dwindling middle-class needs to wake up and vote its own self-interest for a change this fall. Or there will no longer be any self-interests to vote for.
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Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.
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