All Posts Tagged With: "financial"

Here’s what happens in our Alphabet Soup Economy:

Plan A doesn’t work…neither does Plan Z.

Last week ended with a whimper and a bang. Stock markets whimpered. Investors didn’t know what to think. And nothing happened last week to help them figure it out.

So far, almost everything that we thought ought to happen is happening. More or less. The crisis. The feds’ reaction. The market’s lack of reaction to the feds’ over reaction. Then, the feds’ reaction to the markets failure to react. One dumb thing begets another.

What’s your take on technical analysis? The idea that prices can be forecast from charts seems counterintuitive, let alone at odds with the Daily Reckoning philosophy. Well, working alongside Murray Dawes, our trader here in St Kilda, would change your perception rather quickly.

Buffett, in his role as aloof spokesman for a bygone era, said, “I am a huge bull on this country…We will not have a double dip recession at all. I see our businesses coming back almost across the board.” All of that is interesting. But only some of it is relevant. Berkshire Hathaway’s shareholders would be more concerned with the actual performance of its units than how Buffett feels about America. But to the extent that Buffett himself has become a brand (cliché)…

The Aussie market is up 2.77% since the Federal election on August 2nd, if you’re using the ASX/200 as your proxy. This whole “not having a government thing” is working out well for investors. It turns on the uncertainty of having no-one in charge is better than the certainty of having someone in charge. Maybe that will all change this week, though. To begin with, the jobs data from the U.S. gave the market a positive lead. We’re not sure this matters one little bit.

“The Coalition has started to put the heat on the three hold-out rural independents – saying it was ‘inconceivable’ any of them would back a Labor government that had joined the Greens to push a left-leaning agenda.”Oh. So it’s all over.Well, the market enjoyed it.

You’ll recall that when we left off last week, Ben Bernanke assured the world that while the recovery was not exactly what he had hoped for, he nevertheless had the situation in hand. He said he had the tools necessary to fix the problem and would do whatever was required.

Eventually, investors are going to realize that the discussion of a “recovery” is nonsense. The economy can never recover the pace and frenzy of the bubble years – and so much the better. It has to move on to something new. The big question is: What will this new economy look like?