WASHINGTON, April 19, 2013 – Another short column for another boring market day today. Up to our eyeballs in other tasks, we took a day off yesterday and it didn’t seem to matter very much as the averages continued with their slow, relentless slide downward, predicting, perhaps, a recession within this ongoing Great Depression II.
This market is very, very toppy. Storm clouds are gathering and thickening and nasty stuff is starting to happen in the world outside Wall Street, as it so often does around market turns. The Boston Marathon Plot sickened this morning with more deaths, although law enforcement did succeed in uniting one of the alleged Chechen plotters with his 72 virgins.
This morning, the Boston metro area was effectively in full lockdown mode as cops and the Feds try to hunt down the remaining bomber—although there could be other plotters afoot as well. In any event, these awful events are distracting many traders today away from market action, even though it’s April options expiration Friday. Weirdly, the Dow has been persistently down all day today while the S&P 500 and the NASDAQ have been persistent on the upside. It makes no sense. Maybe everybody is simply busy watching TV news coverage.
Meanwhile in DC, a petulant President Obama, after badmouthing the NRA and its “bitter clingers” yesterday, is remedying the Senate’s failure to pass his bogus Second Amendment Repeal by declaring he’ll put some form of gun control into effect anyway, likely via his favorite methodology, the executive order. The Supremes may ultimately have to explain the constitution to the President whose role model, when opposed, seems to be the ghost of Hugo Chavez. More storm clouds. These socialists never, ever give up, do they? It scarcely matters how the average citizen is suffering.
All the death, mayhem, and politics distracts attention from what the current market swoon is really all about. Even after all the money printing the Fed has been undertaking to implement QE Infinity, gold and commodities are tanking daily. That tells us some kind of “recession” is on the way and/or deflation is rearing its ugly head again as many assets are still trying to return to the levels they occupied before the various 2006-2008 bubbles massively inflated and then popped.
Depressing the market, too, is the fact that the Administration and Congressional Democrats are now into their fifth straight year of ignoring America’s massive unemployment situation.
Instead of getting people back to work, since January of 2009, Obama and his pals have: given away tons of money to unions and failed “green startups” to “stimulate” the economy; taken over the healthcare industry which has already begun to stagger individuals and businesses with massive price increases for less medicine; shamelessly co-opted a tragic grade school massacre to attack the Second Amendment while failing to address the inevitable fact that bad actors obtain weapons anyway and always will; and pushing an immigration bill they really want to fail in the hopes that they can blame the Republicans for the failure and thus win the 2014 elections. (Watch ‘em try to figure out another way to delay the Keystone Pipeline extension past next fall’s elections as well.)
Where in all this agenda-speak do we see anything even remotely having to do with stimulating companies to employ more out-of-work Americans? That’s a rhetorical question, of course. As with Chavez and his successor—who just avoided losing a heavily rigged election, BTW—power is what matters, and the average citizen is useful for only one of three things: a pawn, a dupe, or a scapegoat.
What the market is telling us right now is that the chickens may at last be coming home to roost. Even the tsunami of money flowing out of the Fed is proving not nearly enough to stimulate growth when terrified Americans and American businesses spend most of their time now trying to factor in just how badly Obamacare will damage the way they make a living. Right now, the markets are telling us the answer is: pretty badly. Add to this the dramatic return of Islamofascist terrorism to these shores and people just aren’t feeling very good about things these days.
Thus, the selling, with an occasional break—aka “distribution” in trading circles—will continue and will accelerate as more and more HFTs, traders, and gnomes get out in front of “sell in May and go away” and continue to bail before the annual Socialist Workers’ Holiday on May 1. The Administration may be dancing around the Maypole then, but much of the rest of the country will not.
Stay away from the market today and enjoy the weekend. And remain in cash or cash equivalents. Aside from utilities and maybe a couple of REITs, it’s really time to go and hide.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate. He intends to nibble on the preferred stocks mentioned above as the occasion warrants.
Positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.
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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