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Random Thoughts On The Economy & Markets

31 August 2010 4 Comments

This is probably only for those of you that follow the economy, the Fed, and the markets.  I haven’t thought through much of these but this is more me just thinking out loud here…

  1. Everyone knows we have a bond bubble.  The question is when does it peak?  Shorting bubbles is very tough.  Here is one guy who thinks it might be that time.
  2. The counter argument is that the Fed will never allow a Treasury sell-off because they will just monetize and basically put a floor under them.  It will be interesting to see if there’s a sell-off even while the Fed monetizes?  Or will a sell-off be what forces a massive round of QE?  What a terrible equation.
  3. The economic data is terrible – will the markets reflect this at any point?  Yes, I know the markets are down from April highs, but will the markets head towards the March ’09 lows?
  4. Will retail investors continue to abandon stocks?  I see more and more baby boomers saying “to hell with stocks” as they pull back and prepare for retirement & retrenchment.  The terrible thought is if baby boomers get wiped out by a bond bust.
  5. Does any of this sound stable to you?  If not, what does sound stable?  Maybe gold?  How many of you have a hard time pulling the trigger on $1250 gold (gold coins will probably run you $1300+)?
  6. How many people that actually have money are a train wreck trying to determine where to put it?
  7. Does anybody have any money anymore?
  8. Confidence is still moving lower I think – which, in turn will probably still push gold higher.

Any reactions to any of this?  Let me know.


  • Stephan said:

    didnt consumer confidence actually go up in august compared to July? I know its still historically very low, but with the recent rise in consumer spending coupled with this small bump in consumer confidence i wouldnt say that confidence continues to move lower. the market took numerous bad economic reports over the past few weeks mainly related to housing and yet i am not seeing a nosedive. what gives?

  • 20smoney said:

    You permabull you 🙂

    I follow the data you mention, but it doesn't really form the basis for my strategies.. regardless of the month-to-month volatility, consumers are not going to spend what they were spending a few years ago no matter what.