Sheep, banksters, and Tarriers served up this morning: A Monday slap of Reality is ready.
There was (predictably) no breakthrough this weekend on the debt ceiling or the budget, so this morning, the market is looking (at least in the futures, and early on) to open about 80 points down. And to see the market blow down several hundred points between now and Thursday shouldn’t come as a surprise to anyone.
The Rest of the World (RoW) is becoming afraid of two things: Namely that we American’s really might be as crazy as claimed by some and that worse, the fear-mongering bankster class might actually be partly right about their “End of the World” yammering’s.
Me? I don’t buy it.
Americans were told by the hundreds of thousand just four years ago about how we should tighten the belt a notch and get on with working and spending. We did our part and then some.
Now, when the same is expected of government, there’s a tremendous hue and cry about how whole this isn’t the country isn’t sailing off the edge of the Earth, yet, but you can hear the waterfalls from here… (There’s a famous painting, or two, devoted to that…)
So here we are Monday and as we begin another “…work all day for sugar in your tay…” (the Tarriers part) we can assess the overnight global picture this way, looking for signs and portents as we do:
China up 1.16%
Japan up 1.48%
France down 0.10 %
Germany down (0.08%
And the UK up 0.14%
“So,” you’re thinking “If the end of the world is really that close, how come the global collapse is not on right now, then?”
Fine point: At least in the early goings today, what I’d expect is a lot of ‘hot’ money blowing town looking for a more rational parking place. That’s why other countries are UP.
The Hype du Jour this morning is that Senate democorps have a new budget front to push. Yippee skippy!
The House is playing with (itself and) another short-term debt bill accompanied by the most bolloxed-up inability to articulate the concept of “Up to our collective asses in debt” in a way the sheep can grok as you’ll ever see.
Scare stories galore including this one about ripples at the State levels.
Hats off to our Veterans who went to the Memorials this weekend and tossed the barricades back to the White House.
Not to downplay the technical dangers, here, especially with IMF Money-Princess in Chief Chris Legarde calling things “very very disturbing,” (no shit?) but a lot of our 99er-friends who lost homes and savings in the 2008/2009 collapse see poetic justice in the wings. Want me to mention the MF Global screw-job perp in here, too, long as we’re sharpening our words?
What the Fools on the Hill may not comprehend: “Too Big to Fail” may no longer apply. And if that’s the case, we could be “Look out below!” for the markets.
A short story and further smack of reality here, if I may?
Every so often, when Capt. Midnight has time, he called me from the rural part of Virginia or other east coast areas when he’s off adventuring. And usually, our phone calls will be interrupted with cell drop out once or twice during a call.
When he rings back, the common laugh-line is “Damn third world phone system…”
Except we both know that is not a joke.
This morning there’s a really good interview by Kopin Tan with legendary trader Jim Rogers in Barron’s online over here. The paragraph I’d point out to you is this quote from Rogers:
“When I was selling my New York house, I almost backed out; I just couldn’t bear the thought of leaving. But now I’m very happy here. I fly to New York and I realize I’m in a Third World airport. Then I get into a Third World taxi onto a Third World highway. The difference now just slaps me in the face. New York is a wonderful place, with the people and the vibrancy, but I can find the same vibrancy, if not more, in Asia. “
As an occasional trader who is one foot in technical analysis and one foot in fundamentals, what I look around and see is very similar to what Rogers is describing.
What we have before us is a country on the verge of technical bankruptcy, an administration which has promised more than it has performed, backed up by a congress that’s the laughing stock of everywhere but Greece, Iceland, Cyprus and the other Euro countries which are are the same track.
When we should be taxing machines that replace humans, we instead provide real (tax and other) incentives to rip jobs out of America and stash untaxed money offshore. Slick, huh?
Businesses here, no longer fettered by monopolistic requirements such as make sense when placed on utilities (which telcos are) have systematically underinvested bare minimums to make as much money as possible. But at its core, we’re still coasting on infrastructure investments made a decade ago.
Free lunching is not limited to the masses of the poor – works in telecom too, which is why you can’t hardly find American tech support to save your soul.
So yeah, people are a bit skitterish. Like reader Andy:
G,
If the gov defaults, any recommendations in terms of having cash on hand, paying off debt ect
that you might share.
What will happen to the banks?
I can’t believe it has gotten this far.
But maybe it is good.
After all, you have been preaching that this insanity must stop and so this could be where it does.
What then?
Andy from Ohio
In order: Yes, always have 90-days of cash on hand, but own a gun and keep your mouth shut.