Skip to comments.JEFF SAUT: The Stock Market Will Probably Tank After Obama's State Of The Union
Posted on 02/04/2013 6:46:32 AM PST by blam
JEFF SAUT: The Stock Market Will Probably Tank After Obama's State Of The Union
January 4, 2013
Raymond James strategist Jeff Saut offers his take on where the market is headed next.
Today is session 23 in the typical 17- to 25-session duration of a "buying stampede." Such skeins only have one- to three-session pauses or pullbacks before they exhaust themselves on the upside. While a few have lasted for 25 - 30 sessions, it is very rare to have one last for more than 30 sessions. That said, this one feels like it will extend towards the State of the Union address slated for February 12th. That address will likely be viewed negatively by the equity markets, which should serve to finally bring about a 5 - 7% correction. How the stock market reacts following such a pullback will tell us a lot about the market's future direction. In the interim I favor the upside with the caveat that this rally is long of tooth.
We have no idea if Saut is right or wrong or not, but do find it interesting that Obama's comments are still viewed so suspiciously by market pros.
The market has gone on a huge tear during this administration, and yet there's always this fear that Obama will say something about taxes that will cause investors to panic.
(Excerpt) Read more at businessinsider.com ...
It might keep going up, or it might crash. If I flip a coin, it might be heads or tails.
Fifty years ago Milton Friedman predicted the stock market would tank. He stated when you have the policies implemented by the Obama administration, huge deficit spending, debasing the currency, and endless borrowing, equities (stocks) would initially rise as a consequence of early hidden inflation. However since there has been no corresponding creation of real wealth, they will eventually tumble. Milton Friedman was rarely wrong. Of course he did not factor $16 trillion in actual Federal debt, $3 billion o day of continued deficit spending, trillions more in state debts, $100trillion in unfunded entitlements, the granddaddy of all real estate bubbles in China, a deindustrializing America and much much more. Decadence and decline in the age of Obama.
Huh? What's the third (or more) option?
Good. The tortured excuses by hedge funds as to why their pre-packaged deal that doesn’t happen unless and until they have a guarantee of 30 or 40 or 50 percent on their investment, which is at risk for a small number of milliseconds while stacks of papers are being shuffled around, should be taxed as capital gains rather than as income, haven’t gotten any better since this issue first came up a couple of years ago.
Buy high, sell low. Smart investors will get out now and not wait for the next Obama crash.
"All-party support is therefore locked on to the "liberal solution" of inflating the nominal value and the market price of anything tradable: stocks, gold, silver, real estate, oil and energy, food. This becomes a surrogate for economic growth and keeps the biggest players happy."
"Being fantastically divisive in its social effects in a stagnant economy, the political result of supposed "stealth" inflation is an ever growing Us-and-Them divide in society, most certainly and surely creating the potential for civil strife, and civil war. "
"We therefore have a choice of two no-wins: massive state debt, increasing austerity, rising real inflation and social injustice - or economic collapse and chaos.
“We have no idea if Saut is right or wrong or not, but do find it interesting that Obama’s comments are still viewed so suspiciously by market pros. “
Many of whom have given to Obama’s re-election campaign.
There’s a lot to what’s going on that I just don’t understand.
What is needed is to bring back American jobs.
If the GOP won’t do it, the Democrats will. Whichever side moves first, wins about the next 5 elections.
Bring back US jobs. Now.
“Given the 58 percent increase in taxes paid on capital gains as part of the recent deal to avert the fiscal cliff, it is our hope that any tax reform effort in 2013 will be about crafting policies that incentivize economic growth,” said Steve Judge, president and chief executive of Private Equity Growth Capital Council, responding to Obama’s comments.
Smart investors will establish short positions and profit off the declines :-)
Coin tossing like that with statists don’t work that way. With them, it’s “heads they win, tails we lose”.
“If the GOP wont do it, the Democrats will. Whichever side moves first, wins about the next 5 elections.”
Brilliant. Maybe we can resurrect the WPA, or perhaps forced labor camps, or totally fake the stats, that’s the progressive Democrat way. I’ll bet they report full employment in North Korea.
How about lowering corporate, capital gains, and income taxes which will attract capital and stimulate private sector economic activity? I don’t know what the GOP stands for anymore, but I’m damned sure I know what the commie Dems are all about.