Come, my friends,
‘Tis not too late to seek a newer world.
Push off, and sitting well in order smite
The sounding furrows; for my purpose holds
To sail beyond the sunset, and the baths
Of all the western stars, until I die.
It may be that the gulfs will wash us down:
It may be we shall touch the Happy Isles,
And see the great Achilles, whom we knew
Though much is taken, much abides; and though
We are not now that strength which in old days
Moved earth and heaven; that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Ulysses, Alfred Lord Tennyson
Today begins with excellent news; world-changing news even. Scientists “have discovered two Earth-sized planets orbiting a distant Sun-like star”, according to the Wall Street Journal. You know what this means, don’t you? Those of us who are against central banking, government coercion, and the growing power of the all-knowing Nanny State may finally have somewhere to escape to!
We get back to getting off the planet in our article about banks and governments. But since we’re still on this planet and since its Wednesday under the Gregorian calendar, that must mean its show time for Slipstream Trader’s Murray Dawes and his regular S&P 500 market update over at his YouTube channel. To view it, simply click the stock market update link. And if you want the condensed version of today’s update, it’s this:
The US markets had a huge rally overnight on the back of some fudged housing figures. Whether this is the beginning of the Santa rally remains to be seen. I have returned to a more neutral footing on the S+P 500 until it sells off below 1220 again. If we fall under 1200 in the short term then I will become aggressively bearish. The ASX 200 has had a big leap today but remains in short, intermediate and long term downtrend. The 4180-4220 range should hold it in the short term.
What makes Murray’s charts and lines so alluring is that they seem both explanatory and predictive. But not many people were predicting the Dow Jones Industrials and the S&P 500 would be up nearly 3% overnight. Santa finally got on his horse and will try to rally down the homestretch of 2011.
Our view is that old Saint Nick has some tough sledding ahead. Just take a look at that horse. And he’s probably going to need a bigger bag, unless that one is filled with gold futures contracts.
Besides, Moody’s has warned Great Britain that it has “formidable challenges” to overcome in order to keep its AAA credit rating. Meanwhile the Federal Reserve is insisting US banks keep more cash on hand. And in yesterday’s Herald Sun, retiring Telstra Chief Financial Officer, John Stanhope warned that the REAL credit crunch will begin hitting Australia in 2013. He says, “Everybody is worried about fiscal year 2013 as there is a lot of debt to be refinanced and from a corporate level, the question will be how much does it cost.”
Of course 2013 is a whole year away. But here at the Daily Reckoning we believe in the mantra: panic now and avoid the rush later. If the cost of money is going up globally, then not even the RBA lowering rates will change the fact that we’re in a credit depression. Growth is sooo 2009. In 2012 and 2013, income is the new capital gains!
for The Daily Reckoning Australia