Q. Happy New Year, Cody. Was just wondering if you had any short term trades in mind for the debt ceiling/sequester train wreck that’s coming in two months.
A. Here’s my initial thoughts about the prepackaged hype over the next debt-ceiling/fiscal-cliff/austerity crisis that’s coming. Has the market finally learned to look past this nonsense? For all the weakness and panicky headlines in the markets during this last manufactured crisis/resolution, there wasn’t a true panic of the sort we’ve seen with the repeated euro crisis panic cycle. I couldn’t believe that the reporters and pundits were already trying to rescare the world into another cycle of tax/fiscal/entitlement negotiations. Other than traders/the powers-that-be tanking the markets into that next cycle of hype, there’s nothing economic or meaningfully political in the actual bill that will again at some point be passed by the Republican/Democrat Regime and will be full of all kinds of new corporate welfare and subsidies just like this one was. There will be no meaningful recovery to our economy or our society until the banks and bankers are restrained and prosecuted for their crimes and the entire financial system reformed and that ain’t ever gonna happen with the Republican/Democrat regime in power.
Q. Cody, what will it take for the NAZ to have a similar run like it did in 1999–March 2000? All the growth is tech?
A. To get a 1999-2000-esque kind of blow off top bubble rally like we had back in the day, you’d need the Federal Reserve and the Federal Government to agree to do whatever it takes to blow up new asset bubbles with unprecedented money printing and debt borrowing all plowed into domestic assets and corporate margins/earnings despite the fact that earnings and margins were already at all-time highs. Oh wait, we already have that. What we don’t have though is domestic domination of that asset bubble blowing, as we are now sending trillions of dollars annually overseas via the IMF, the EU, the ECB, the UN, and of course in the wars in Afghanistan, Iraq, Pakistan, Syria, and a few other nations that nobody in the mainstream media will mention. I’m not sure we can truly have the dot-com/tech/real-estate bubbles we had previously when we’ve been funneling so much of that borrowing/wealth/resources into wildly corrupt and violent foreign economies.
Q. Cody, what do you think about REITs? I was thinking about putting some of my portfolio into them. Also, my mom who is retired gets her income from dividends and stock sales. Do you think she should move some stock to REITs so she can save a bit on taxes?
A. The whole real estate industry is so convoluted, socialized, subsidized, and otherwise contorted that I’d be leery about trusting my money with any of those public REIT sharks. Maybe there’s a place for some small exposure to REITs but be very careful about selecting the ones you risk your capital with. The whole reason we have to do this whole Revolution Investing approach to our portfolios is because the Republican/Democrat regime and the global banking syndicate and the global corporate complex has pushed their own quiet revolution of no interest for savers or retirees to the point they have. And they’re pushing ever harder. I think you have to stay long some stocks as long as they can continue to enable record corporate profits and profit margins and/or create new asset bubbles.
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