Finance and Economics > Economic News, the Global Economy and all Things Monetary

Is it Time to Pull Out of the Market?

(1/4) > >>

Orion53:
At the very end of Episode 947 Jack recently indicated that he believed the time to exit the market was coming very soon.  He was clear that he believed there was still time, but thought a "confluence of events" was coming by fall that could lead to an economic disaster.

I tend to agree with him, but wonder what impact a Romney win might have in delaying a depression/recession a few quarters longer.  I'm not a Romney, nor Obama (Romama?) fan, but Republicans are perceived as more business and tax friendly, so markets could respond positively.

The Euro crisis is deepening despite recent good news.  I tend to agree with Jack that TPTB are trying to keep it afloat til the fall elections, and we may see the Fed step in at that time.

Municipal bankruptcies are on the increase, yet you don't hear any other troubled cities enacting much in the way of austerity measures.  The fed is keeping rates depressed, and promising QE3 type measures.  Housing starts are up as a result, which is a bright light in the equation

Unemployment and underemployment numbers are stagnant, and have been that way for a long time.  The market "rebound" is just not showing up in the labor market, and that is the sign of a major problem.  Kids coming out of university are facing dire straits with hiring way down.

What are any of your thoughts on this?  I know we are a bit prone to dark thoughts in this community, so especially welcome those that disagree with Jack and me.

nelson96:
My wife and I ask ourselves the same thing.  We can do a lot with a BOL if we just had a crystal ball. . . .  (1.) You have to ask yourself is can you do okay after losing about 35% off the top (early withdrawal penalty and tax).  (2.) If we don't have a collapse, in your lifetime, will that 35% loss (along with additional interest you would have earned) keep you from living comfortably when you retire. . . .  Those are the two biggest questions we ask ourselves.

TexDaddy:
I stopped participating in that crime scene several years ago.

Alan Georges:

--- Quote from: Orion53 on July 29, 2012, 09:07:58 PM ---I tend to agree with him, but wonder what impact a Romney win might have in delaying a depression/recession a few quarters longer.  I'm not a Romney, nor Obama (Romama?) fan, but Republicans are perceived as more business and tax friendly, so markets could respond positively.
.
.
.
What are any of your thoughts on this?  I know we are a bit prone to dark thoughts in this community, so especially welcome those that disagree with Jack and me.

--- End quote ---

I started writing a too-long post, but deleted it to summarize with: (1) stasis until the election, (2) then the unraveling continues afterward no matter who gets into office.  There will be a different feel to this unraveling depending on the election's outcome, but the net result will be the same.  (3) If the presidential election is challenged, a la 2000, this will be punctuated by a few months of civil unrest.

And let me state for the record that I am now, have always been, and will remain a fan of Romana: http://en.wikipedia.org/wiki/Romana

bigbear:
Agreed that we'll tread water until the election.

I think the crux is going to be jobs.  Because if people are working, then they are in the IRS income column not the expense column.  Student loans get paid back.  Fannie/Freddie don't have to bail out as many bad loans or failed banks.  TPTB will continue pushing stimulus, QE3, and whatever other spending/hidden tax measures until legit Fed income increases for an extended time.  We've been deficit spending for so long now, that one election isn't going to change the course (more like a different tact into the same headwinds).

If Romney wins: Can opening drilling and domestic energy production create enough jobs to counteract decreased tax revenues (from extended across the board tax cuts)?  Some drilling comes at a cost (fracking knowns/unknowns - health, environmental...), but could provide a few economic boosts (jobs, increase tax base, decreased unemployment payouts, lower energy cost across the board, energy 'independence'?). 

But whatever happens is prolonging the inevidible as a culture shift in expectations will have to take place (living standards in the face of third world competition, the role of gov't/education/family, personal responsibility...).  And that doesn't happen quickly and rarely voluntarily.

If Obama wins:  He doesn't really have a jobs plan other than US gov't spending (stimulus projects) financed by debt or penalizing companies for off-shoring.  His fiscal plan seems to be forgive debts so that consumption spending can continue.  I think the trajectory increases the odds of a swifter failure.

Navigation

[0] Message Index

[#] Next page

Go to full version