John,
It is funny how Gridlock is rewarded on Wall Street. Basically the less that gets accomplished in D.C., the better off the country is. The government, even in lean times, cannot force itself to restrict spending, and save when it should be saving. The incentives just aren't there. Each governmental department has a budget, if they don't spend it all they won't get an increase next year, so you have these departments findings ways to waste/spend their budgets, so they get more money next year. Since the government as an entity doesn't have to work for its money, its like a spoiled kid, knowing that whatever is wasted doesn't matter as there is always a steady stream of tax receipts to fund their future "whims", no matter how disastrous their last program may have been. With all the Pork Barrel, patronage and dollar imperialism going on, there is no room for fiscal discipline, and thus the crux of the problem, IMHO.
On the markets, a more friendly topic <bg>, I follow the tics as well as the Trins and VXN, VIX, none of which has registered an extreme reading that would lead me to think we are at a bottom. I'm looking for a few days of -1000+ tics, higher VXN and VIX and consistent extreme Trin readings, to help "confirm" a bottom. We may be getting close, but I think we lose at least another 500 points on the DOW and another 150-200 on the Naz. We should get a good tradable rally into the 1st Qtr 2002, but that is all I'm currently looking for. We'll have to see about the "quality" of the rally and the economic and company numbers to see if it will be sustainable or just a time to be long for a few months.
Tom |
