WASHINGTON, July 21, 2014 – Not a lot to write this morning as the Maven needs to exercise his real estate evil twin out in the wilds of West Virginia and in far western Mountain Maryland, which politically, oddly enough, is an enclave about as conservative as any city or town near a Texas oil patch.
Many out in that Appalachian region would like to secede from a state that’s actually become a People’s Republic. We, ourselves, would like to secede from this beyond-weird stock market of Summer 2014.
The MH17 tragedy and resulting dark political comedy in the Eastern Ukraine continue to weigh heavily on the market this morning, as increased U.S. and now potentially European sanctions against the newly-dangerous
Josef Stalin-led Vladimir Putin-led U.S.S.R. Russia will likely win some obnoxious, energy-related retaliation from those resurgent Sovietskis.
Guess that’s another positive result of the Obama-Hillary Clinton policy “reset” that’s benefiting us since the foreign policy of G.W. Bush was tossed on the dustbin of history. So much for progress and “progressivism,” which is looking more and more to us and to the markets like the Gateway to Hell.
Aside from political pressures, the market is also being squeezed this morning by last week’s (and today’s) gradual easing of the Euro vs. the U.S. dollar. Some of this is a consequence of slowly upward-inching U.S. interest rates in anticipation of QE3’s imminent end and the Fed’s threat promise of higher interest rates sometime before Y3K. But some of it might also have to do with the bankruptcy filing of Portugal’s seriously troubled Banco Espirito Santo.
In any event, any strength in the dollar makes bulls nervous and bears more excited which generally causes a bout of selling. And thus, futures are off a good 40 points this morning on the Dow with trading set to begin roughly half an hour from now. It’s either going to be a good morning to do something else with your life, or a good morning to be a dip-buyer.
Probably little if any for us this morning as we’ll be on the road and our feeble WV DSL connection, once more than adequate, was slowing last weekend to something that felt like about 2400 baud. (Readers under 40: consult a paper-printed reference work for the definition of that term.)
We are, however, slowly lightening up on our bond holdings. Most of what we have left are set to mature in 2019. We bought them in 2009 on a serious hunch, at the absolute bottom of the two-phase Great Recession market crash. Interest rates were very high, made even higher by incredibly depressed bond prices. So we’re way ahead on these.
But prices are under some pressure right now and the pressure is likely to continue into the next several years, so perhaps it’s time for us to take capital gains and move on. Though we’re reluctant to do so, since we like staring at those 30-60% potential capital gains we currently have on these remaining bonds. We’ll never see the likes of a buy like this again. Or at least this aging Boomer Maven won’t.
Gold will get an uptick today, so we’ll continue to hold.
But aside from that, them West Virginny mountains beckon, so we’re outta here for now. Have a good Monday.