In the nearly three weeks since our last blog entry, equities markets have tilted toward the more negative outcome we discussed as a possibility. In response, we’ve raised our allocation to cash as nearly all the signals have retreated. The one positive trending major economy on the globe, the USA, seems to be faltering and recent stats confirm a small contraction in output of goods and services and importantly a slowdown in hiring. Below are some selected quotes and opinions from some of our favorite observers of the big picture. First, Alan Ableson, who I’ve followed since I was a neophyte investor at age 24 (I’m 63 today..my goodness how old is Alan?), scoffs at the annual cheerleading that emanates from the home marketing industry. Then, thoughtful Martin Wolfe, columnist for the Financial Times, highlights the abyss into which Europe seems to be falling. Finally, Greg Valliere a Washington economic/politics observer talks about a surprising improvement ini Mitt Romney’s prospects for the presidency this November (note, he predicted Hillary Clinton would be the Democratic candidate in 2008).
Clients can be assured I continue to be watching things closely and that positioning is defensive but not cowardly!
Alan Abelson, column, Barron’s June 3, 2012
Under the title “Yeah! The Housing Bottom is Here! (PWBC)” he proceeds to vent his bemusement at declarations of bottom sightings, along with excerpts from these cockeyed seers going back to 2006. All told, in the half-dozen years since then, which encompassed the worst housing collapse in history, he lists no fewer than 80 separate articles, analyses, explanations and the like pronouncing the turn in housing.
And Barry by no means claims that his sampling is anywhere near complete. The bad calls of a housing bottom, he says, occur every spring, as the data make their typical improvement. This year, the freakishly mild winter, he reports, threw the perennially wrong into a tizzy and suckered them into the same old joyously false belief of a bottom.
“Spring,” he exclaims, “has sprung, and the usual suspects are up to their old tricks.” Because there are so many PWBCs, he’s reluctant to make special mention of any one, but he can’t resist singling out Alan Greenspan, “who was wrong early and often,” and the National Association of Realtors, “whose spin has been astoundingly consistent — bullish and wrong.”
Martin Wolfe, Financial Times, June 5, 2012
“Panic has become all too Rational”
Greg Valliere, Potomac Advisors, May 31, 2012 Commentary
“More and more people I talk to in both parties are beginning to talk about Mitt Romney having a real possible chance of winning”
