I heard Greenspan. You heard Greenspan. There was nothing unusual said. There never is. Once again, Wall Street used the Greenspan speech as the EXCUSE to take the markets lower. Yes, some stocks moved too far too fast. . . and are getting haircuts this week in response. But don't be confused. Few of these stocks are getting chopped because they are suddenly bad. In fact, the contrary is true. There is extraordinary demand for their shares, due to lower floats. . . and many people made money riding these same names up over the month. Why not chop them down to size and re-load the boats when the small investors jump ship?
Nothing has changed in the economy this week. The only factor that makes any sense is the number of misses and lowered guidance. Then again, if you were a CEO and had to issue a legal outlook, you would be irresponsible to exclude discussion regarding the economy, which looks to be softening. That is what is predicted. . . that is what CEOs must include in their reports. Multiply those reports times thousands of companies and you get a torrent of what sounds like bad news. . . and the bad news further takes down the market, like a whirlpool. Don't be confused.
"Zero growth". The only thing new there, is the phrase. Sounds ominous, but it is actually good news, IMO. But leave it to short-sellers and spinmeisters to throw it in our face as something BAD! Now which would you rather have? Zero-growth or a deep recession? [negative growth, excessive unemployment, and the rest of what accompanies such an event] The term Zero Growth, IMO, is merely Greenspans way of conveying that he is expecting to pull us out of this tailspin and level us off for a beautiful three point landing. In a simple way of looking at a complex subject, I see this as good news, not bad.
Expected tax cuts? Encouraging them . . . . this is also GOOD news. Contrary to belief by the Street, the American consumer is still the most powerful engine in the world for moving an economy. The demand is incredible. And a tax cut would increase spending which would help to heat up the economy. This is NOT a bad thing, folks.
The media's spin is still the culprit that makes investors make the wrong moves. We'll have scorecards for their lousy calls, too.
On another note, I missed an obvious play this week, due to having my head buried deep in programming, phone calls, graphics, etc. . . the play was this: Certain volatile stocks shoot up sharply ahead of a Greenspan speech. . . Greenspan speeches lull trader/investors into a temporary coma. Trading nearly halts. Short-sellers come in unabated and slam the stocks which moved the fastest and sharpest. It was so obvious, none of us should have missed it. I'm sorry that I've been so tied up with trying to get Insighters.com open on time [it may have to be a week late] . . .that I completely missed pointing out that play. We won't miss it again.
This is certainly one of those days, where the Street sets up smoke screens. . . in fact this whole month has seen numerous stealth moves. . .just as we thought. This is why I keep preaching that we need to have sharper eyes to see what lies beneath the surface of the news and indices. Soon we'll be working on continuous monitoring of such things.
Lots of economic news coming out next week ahead of the FOMC meeting. There's still quite a bit of time left on the clock. And this is still anyones ballgame.
OT>I may be rooting for a Raven upset, but I'd be betting on the Giants.
Rande Is |
