Thursday, April 01, 2010

The Markets: Devil’s Advocate

I’m trying to play Devil’s advocate on this recent market rally.  $$  So what could go wrong?

  • image As the economy improves, energy demand will go up.  President Obama has had no energy policy and we’re at the same place we were a few years ago, a decade ago, and 30 years ago.  We burn a lot of imported oil.  What happens as gasoline prices increase?  (Yes, he talks a lot about nuclear power, drilling for oil, green jobs, etc.  Talking and $84.87 will buy you a barrel of oil).
  • The economy is moving ahead with (basically) 0% interest rates.  What happens when interest rates go up?
  • Unemployment is in the double digits and there has been a continuing loss of private sector jobs.
  • Taxes are going up next year as the Bush tax cuts expire.  Health care taxes are coming.  In addition, most states are running budget deficits and will be under pressure to cut jobs and raise taxes.

This is all just a wall of worry, though.  Right?  The trend is your friend.  I remain 100% long.


But, here is the Black Box on $VTI…  Nothing to see here.  Ignore those red arrows and move along, son!


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