In this week’s Off the Cuff with Mish & Chris podcast, Mish and Chris opine on:
The Death of the Bull Market?
- Is the market at an important turning?
- Painful Math
- The US is only a ‘bright spot’ if you close your eyes to the data.
- Taxes!
- Why we get so little bang-for-the-buck from the taxes we pay.
Chris and Mish’s calls for caution over the past weeks are increasingly looking like very sage advice. A nasty week in the stock market finishes with depressing technical indicators for what’s to come next. Add to that the ugly progress the economy is making when you take a more macro view, and top it off with the taxman’s coming arrival. It’s enough to make you reach for the Pepto-Bismol — or a stiff drink.
Has the Bear Slain the Bull?
The relentless upward momentum of the stock market sputtered this week. And a number of new developments don’t bode well for a reversal back to optimism: a big miss on initial claims unemployment numbers, signs of slowing China growth, and big emerging (re-emerging, is more accurate) trouble in Spain.
Spain looks like its going to be the new Greece, with much scarier implications. Get ready to hear a lot more about it in the coming months. It’s not going away as easily this time.
And from a technical perspective, the short sharp rallies we’ve been seeing recently that are quickly undone are classic indicators of a bear market. If you’re net long, get protection now.
The U.S. is Flunking Math
There are many still referring to the US as a “bright spot” vs the woes elsewhere in the world, like Europe. That opinion falls apart quickly when taking an impartial look at the macro data.
The US is now running annual deficits at 8.5%+ of its GDP. The number of workers with employment benefits has not increased since 2001 — even though the working age population has increased by 28 million. These are not signs of a healthy economy.
The Joy of Taxes
So how are we going to plug this deficit hole?
by arthur-robey-2