Jay, you left out this part, "And when, presumably after scrounging and searching, the new unemployed do find another job, she adds, "it is often at salaries that are markedly below what they were making before. Households that are already heavily indebted and savings-poor are finding it necessary to dramatically tighten their belts. Many of the unemployed are middle-aged with tuition payments, large mortgages and little prospect for easy retraining and redeployment."
What struck us is that the slice of the jobless population Ms. Cooper describes also has been a prime investing group -- not a happy portent for the stock market. Of course, at the moment, the stock market is in a decidedly bullish mode and seems determined not to pay any mind to such trivia as collapsing consumer confidence and a listing economy. If anything, it embraced the melancholy data as a guarantee that the Fed will lower rates this week.
And so it might. But then what? Profits are still the stuff that makes -- and unmakes -- bull markets, and profits, as the employment numbers show clearly, are stuck on the far side of robust. And, from all indications, they're likely to remain there for quite a spell, whatever the Fed does."
... and if so, your shorted NLY puts, the ones that Maurice did not appreciate, will decrease in value, even as your gold and non-USD currencies may increase in value, except your borrowed Japanese Yen, because the strength of Yen depends on the same consumers that are losing jobs.
That is my story and I am sticking with it.
Chugs, Jay |
