In early July, I hope to pen a more detailed look at the first half of what has occurred in 2016 and how it has played into my New Year’s belief that 2016 would be the year America enters its worst ever economic, social and political era.
For now, I shall take a peek at the markets I still follow (but remember my soothsayer clothing, tea leaves and coin flipper have been retired).
For many months, I’ve written about (and stressed taking into account NY Post Columnist John Crudele’s numerous articles about) the clearly flawed reporting of monthly employment numbers. It’s been both our arguments that the employment numbers were greatly overstating the strength of the U.S. economy and were giving a false sense of an improving economy.
It’s also been my stance that given the fact we created trillions and trillions of dollars in new debt; the fact the economy could never flip from recovery to the overly-promoted inevitable economic expansion that has never materialized despite the “Don’t Worry, Be Happy” crowd’s constant preaching it would, we would find ourselves with little true appreciation (except for a very small group at the top of life’s pyramid) and even more debt that future generations will sooner or later have to pay for.
U.S. Stock Market – This former “Soothsayer” felt 2016 would be a year where most stocks would be flat to down despite all the propaganda from the “Happy” people in the financial services industry (and much of the financial media that promotes them daily). Yours truly felt the stock market inevitably reverts back to what its original premise was – a place where people can buy and sell part ownership of businesses and those businesses single most important factor was the state of the economy.
Knowing the “happy” crowd shall wave their pom poms no matter what, it shall be difficult for most to part from much of their equity exposure because tens of billions of marketing dollars have been spent to create the illusion their equity ownership is the single best investment vehicle for the masses and buy and hold (while the financial advisors collect their fees) is the best strategy.
So-called professionals and the public have been weaned on basically a one-way street when it comes to equities and wouldn’t know what an extended period of under (or poor) performance of equities looks like if it hit them in the face. Worse yet, is both professionals and the public are incapable of dealing with the mental anguish that shall certainly take hold of them.
U.S. Bonds – For quite some time now, I’ve called Treasuries and some muni’s the far lesser of two evils versus equities. I think for the foreseeable future that thought remains appropriate. I do still avoid high-yield (junk) bonds like the plague.
Oil – I like to never utter another word about oil so my last call on it would be as close to perfect on any call in 32 years in and around Wall Street. But like I’ve done in the past and shall do in the future, I will eventually have to pull a Fonzie on oil too.
$50 was the target from literally foreseeing the day it made its low earlier this year. Given economic weakness persists in much of the world, I would not be surprise to see oil stay within a $10 or so trading range for the balance of 2016. But keep in mind, I also have made two big investments in the following business schools:
- Hillary Clinton’s Email 101 Classes
- Donald Trump’s How To Be Humble Program
Gold – Once again the overwhelming bears came out of hibernation with their “relic’ and numerous other why not to own gold claims. But has it often does, the physical demand overwhelms the paper assaults and the bears are sent packing (until the next gold cartel assault). Unfortunately for them, slowly but surely, the real physical world (centered in China) is wrestling control from the paper hangers that remain in the West.
For me, a gold price above $1300 is a question of when, not if. And “if and when” I’m correct, it shall kick this new gold bull market into overdrive.
U.S. Dollar – It once again did this:
after yet “another “Yellen pump up interest rates chatter backfired.
The race to debase continues and while the U.S. Dollar is not near the leaders, I’m convinced it shall charge towards the leaders in 2017 and beyond.
Yours truly remains comfortable here!