WASHINGTON, Oct. 14, 2015 – From in the tank a few weeks ago to way-oversold last Friday, post-Columbus Day markets have decided to slip back into the red again this week. Air went out of the latest rally’s sails Tuesday, and approaching noon Wednesday, the selling is heavying up on moderate volume thus far. The ship of stocks is sinking again.
As of approximately 11:30 a.m. EDT, the Dow is off 109.17, the S&P 500 is getting nicked for a negative 8.5, and the NASDAQ is getting smacked around to the tune of minus 19 and change. Most sectors are off today as bulls are getting set up for yet another disappointment and as bears reload with selling and shorting once again. Those grizzlies, like America’s Socialist Party hacks (aka, left-wing Democrats), never give up.
Arguably, the most recent stock rally was led not by confidence in the economy but by a massive short squeeze that caught those ever-more-aggressive bears off guard, forcing them to cover, big time.
However, convinced that time is on their side, and still plenty dangerous as wounded bears tend to be, the selling is picking up again, particularly in the oil patch. Word here is that lots of contracts had to get squared up recently, and oil was bid back up near $50 bbl. (WTI) to help.
But now, the bears seem to have figured, oil should slouch steadily down once again as the Saudis slowly destroy themselves by continuing to overproduce. That, so the thinking goes, will eventually bring oil prices so low that the oil companies will be paying us to take the black goo off their hands.
That’ll be the day, the Maven figures. Meanwhile, so much for the once-ballyhooed “peak oil” era, which seems to have vanished without a trace, just as the
global warming climate change alarmist hoax is beginning to fade into ever-clearer and more pristine sunsets. Why anyone ever believes these social-engineering alarmists is beyond the Maven, but they do, which doesn’t say much for human perception and intelligence these days.
Perhaps that intelligence or lack thereof has been behind the current brutal market environment. The moment you start to believe in one tale of tape, that theory gets slapped down and you get the polar opposite story. No one knows what to believe anymore. This 2015 market has been so trendless and irrational that the mighty Maven himself has begun to doubt his own super-genius capacity at this point.
Bottom line, all of 2015 has pretty much been a day-trader’s market. That puts the Maven and most other serious investors at a big disadvantage, making it difficult to make long-term investment decisions as opposed to short- or very short-term bets on stocks or ETFs.
Complicating matters today are clues in the Wall Street Journal that the Fed may be done even thinking about raising interest rates this year, due to things it seems to have been trying to minimize, like the fake unemployment data they’ve been touting to keep the Administration’s rosy “full employment” scenario in the news. The 10+ percent of Americans still un- or under-employed know this is a lie, and now it looks like at least half the voting Fed members have noticed this, too.
Why? Because there has been essentially zero wage inflation since 2007, except among federal, state and local government employees, of course. And because commodity prices have been deflating, not inflating.
You can blame the latter phenomenon on China, the Maven thinks. Beijing’s all-knowing, all-powerful Commie kleptocrats busied themselves a few years back buying up, at low, Great Recession prices, all the copper and other key materials they could find room to store. That’s called “hoarding” in most circles, and the Commies figured they’d corner the market on everything you need to make stuff.
They also figured that when commodity prices soared once again, due to international lack of supply, they’d be sitting pretty, could produce away via their vast stockpiles, and grossly undercut everyone’s prices for the end products.
But now, as when Curtis Jadwyn cornered all the world’s wheat in Frank Norris’ novel “The Octopus,” the Chinese economic gurus have suddenly discovered what happens when you own most of the available supply of a commodity that a deflating world economy simply doesn’t want. You get hosed.
Why the media hasn’t bothered to explore this will at least for now remain a great mystery, although reportorial laziness—a disease that seems to have caught on during Bill Clinton’s administration—could be part of the reason, along with the Chicoms’ own lack of transparency.
At any rate, it looks like what we’re trying to say here is that the investing world is one confused mess at this point.
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There is absolutely no adult leadership in Washington, D.C. Corporations are continuing to inflate earnings per share not with breakthrough inventions or spiffy new products but with share buybacks. All economic statistics are being gamed by federal agencies. Obama’s foreign policy (or complete lack thereof) has killed international U.S. influence as he intended, causing the world to slide back into its customary dangerous chaos and putting Vladimir Putin’s thugocracy at least temporarily in charge.
None of this should make the average American very happy, as our noble revolutionary birthright has been squandered by a clueless, narcissistic dope and his wealthy Boomer pond scum associates in under eight years. It’s all clearly making investors even less happy as, without any certainty on anything (except higher government spending), only the very brave or very foolhardy will be making big bets on a resurgent American future.
Keep you powder dry. There’s often a “Santa Claus Rally” near the end of each calendar year. But it’s entirely possible that in 2015, Santa, too, has been served with a pink slip.