WASHINGTON, November 1, 2012 – Short column today as we have things to do in town. That’s seemingly too bad, too, as the Dow is up roughly 150 points as of 11 a.m. EDT as we write this. The reason given is that consumer confidence numbers are allegedly up sharply while jobless claims “fell” by a whopping 9,000 members of the proletariat—based, of course, on “adjusted” figures from last week. Anyhow, the news led the market to grin like an enigmatic Cheshire Cat. As for tomorrow…
The numbers today had to be wonderful of course, given that the Obama Administration sorely needed these goosed averages going into the weekend before the election so they can put up thousands of ads claiming that the Obama economic recovery plan (i.e., Obamacare) is “working.” (All our scare quotes, BTW, indicate our high level of skepticism with these numbers.) Official government employment numbers come out tomorrow, of course, but they’ll be gamed as well. In any event, any employment improvement, whether real, perceived, or spun, is coming too late now to make much of an electoral difference.
We suspect that today’s up move is just a bit of celebration by traders and HFTs that neither they nor their high-speed computers and algorithms were harmed by Sandy, unlike the average investor or New Jersey shore homeowner. Add to that a bit of building stock spec an indications that China is at long last injecting capital into their moribund markets and industries and you have a good mood today. Whether speculation as to next week’s election results has been entered into the witches’ brew remains to be seen.
Regarding the election—it’s likely to be a vague but omnipresent factor in trading, at least through next Tuesday and beyond if we get another Y2K-style result. So in spite of today’s fun, we’re being cautious. Based on one of the investment services we subscribe to, we’ve taken an unusual bet in the double-inverse (double-short) yuan ETF labeled YCS. That advice is no doubt based as much on the system this services uses as on the perception that, to juice its strigoi-like economy, the Chicoms are weakening their currency, at least a teeny bit. That, in turn, could be good for our own economy, which, as we’ve already noted, could be part of the reason for today’s upsurge.
At any rate, we need to leave it here for now. But enjoy the day and, at least on the East Coast, the possibility that the sun will come out not tomorrow but today as Sandy drifts northward into bad memory territory.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate. He continues to own a position in IAU and has added a small position in YCS.
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