Subscribe: RSS Feed | Twitter | Facebook | Email
Home | Contact Us

Don’t Worry Be Happy

Posted by Larry Doyle on November 13, 2009 11:40 AM |

Happy Friday!!

I have to admit, virtually every major story I review today would seem to indicate further challenges for the American economy. In the perverse world of the Uncle Sam economy circa 2009, those challenges seemingly do not present hurdles for our markets but rather greater comfort for those who would want to add to positions via the dollar carry trade. Is that bizarre? No, that’s the market. While many may not believe what the market is saying, please recall I always maintain the market is never right nor wrong, per se. It is merely the market.

What stories represent increasingly high hurdles on our domestic front?

1. The Federal Housing Administration, which now plays an ever larger role in our domestic housing market, is poised for a bailout by Uncle Sam. You didn’t actually believe the FHA leadership when it stated a mere few weeks ago that it would not need a bailout. Do not believe that man behind the curtain. Whether it is Freddie or Fannie, or now the FHA, the American taxpayer will most likely continue to pour multiple billions into the sinkholes of these three organizations. Let’s be honest. Our housing sector, to a very large extent, is nothing more than a social experiment.

Don’t worry, be happy!!

2. Our trade deficit unexpectedly widened. All other things being equal, that report would serve as a drag on our GDP, hit our greenback, likely push interest rates higher and equities lower.  Discounting the actual economic reasons that impacted this increase in the trade deficit, the market is comforted by the fact that the dollar should remain under pressure based on this report. A lower dollar comforts the leveraged positions across wide swaths of our markets.

Don’t worry, be happy!!

3. The University of Michigan Consumer Confidence reading plummets to a devilish level of 66 from 70.6. The market was expecting a bounce in this report to as high as 72. Reason to worry? Holiday sales might be a problem?

Come on, it’s Friday, don’t be a downer.

Don’t worry, be happy!!

What a world.


Recent Posts