A Peak at 2013
As in years past, we like to let the year provide a little peak before making the yearly forecast and projections. Note that this blog was first published on January 22, 2008. Our Annual Forecast will be presented in the next few weeks.
In any case here are a few things that we see as significant at the moment:
1) First, our Inflation/Deflation Update of 9/30/12 on our home page is still in play and becoming more relevant.
2) Secondly, it must be kept in mind that the very short-term focus of the market participants that we have seen over the past few years is a result of less and less participation of individual investors who are looking for long term investment returns. This leaves a market where paid agents run the mutual, hedge, and pension fund asset bases, they by definition of their pay packages are short-term players. They wait to the last minute to react to market forces, and this adds to daily crash type risks.
3) Thirdly, the FED along with fiscal government policy has nutured a belief on the part of market participants that everyone is back stopped by the US taxpayer.
4) Fourth, a FED that is stacked with economists rather than bankers is a ticket for unreality.
As to cuurent market action:
1) in the past two days the value of the Dollar is breaking out to the upside versus T-Bonds, not the start of a trading cycle but the start of a very long macro cycle .
2) The really big trade, in terms of trading potential, now being staged, not triggered yet, is the long dollar / short stocks trade.
3) The gold macros have now broken out to the downside, we’ll sell more on rallies.
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