This was a strange week. It was a week that disaster could have struck, but Bill Gross’ “1 in a million” estimation of the chances of default seems to have been spot-on. Boehner caved, true to form, and with Obama emboldened, you can be assured that Boehner will cave again in January. The only difference is that he’ll cave more swiftly. So nothing’s going to change.
One of the odder psychological elements out there was the (understandable) cloud of angst and despair. I got emails from people who basically had thrown up their arms once and for all at the “market”. This posting in the comments section sums up the feeling succinctly:
It’s no surprise, of course, that any remaining bears would have quit by now. I think I’m the last fool standing. Just take a look at the Russell since last November…..
What’s remarkable is, now that the market is at record highs across the board, there’s an increasing chorus of experts declaring was a bargain equities are. My friend Josh Brown penned this post a few days ago laying out the argument for buying “absurdly cheap” stocks. There are many adjectives I could use to describe the market, but my personal opinion doesn’t conjure up those two.
The best news of the week was that the D.C. nonsense has been shunted aside for a few months, and we can focus on charts and earnings. But perhaps even such quaint fundamentals don’t even matter anymore. Even ZeroHedge seems to be giving up hope, as it posts charts like this one showing that the Fed has the stock market under control lock, stock, and barrel, and the surge we saw since October 9th was little more than stocks catching up with the Fed balance sheet.
Maybe I’ve simply reached the point of irreversible insanity, but I’m seeing more fantastic short opportunities than ever. I’m excited about the week ahead, and the backlog of government reports is going to start tumbling in, starting Tuesday morning with the delayed jobs report. I’m actually looking forward to what should be a very exciting week, without any mention of Boehner, Pelosi, Obama, McConnell, or any other member of the three-ring circus.
I close with a scene of Brian speaking to the masses. I’m the chap who declares, “I’m not.”