Posts Tagged ‘Fiscal Cliff’

Weekly Recap & Outlook – 12.28.12

Friday, December 28th, 2012

Tower Private Advisors

  • Brief one this week

Capital Markets Recap

 

 Man, this is wierd. This has to be the most widely publicized deadline since Y2K. Google search volume on the phrase is at peak levels…

…the same Statesmen who presided over the 2011 debt ceiling are largely the same players this time round, and polarization in Congress has never been higher…

Shamelessly lifted from Zero Hedge blog post. Click image to go to the complete post.

 …and while I thought we were on the eve of destruction, Barry McGuire’s chorus seems to be in play.

And you tell me
Over and over and over again, my friend
Ah, you don’t believe
We’re on the eve
of destruction.
 Sure, we fell sharply today–and the worst came after the President and the Wise Men were meeting at the White House–but the damage seems pretty mild. Apparently, the President didn’t have anything new to offer.
 
 
In fact, the market’s reaction–measured by the S&P 500, at least–is almost EXACTLY what one might expect from revisiting 2011. Here is a back-to-the-future look at the Debt Ceiling debacle with the Fiscal Cliff action overlaid on it. In it, July 31, 2011, is matched up with January 2, 2013. It shows stocks in the top panel; 10-year Treasury in the middle; and Gold in the bottom panel.
 
Stocks and bonds are more and less, respectively, following the 2011 script–stocks almost precisely. By that script, the decline in stocks is set to accelerate after January 1, which is about when gold began its decisive rise. This shouldn’t be relied upon, entirely, as a roadmap for stocks–history rhymes; it doesn’t repeat, but it suggests one might get better buying opportunities in the next couple of weeks. Oh, and by the way, any fiscal cliff “resolution” rallies will just amount to rearranging the deck chairs on the Titanic. Our debt and spending trajectories are unsustainable.
 

Click for a bigger version….go ahead, really.

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Debt Ceiling:Fiscal Cliff tracking chart

Monday, December 24th, 2012

This chart overlays the current S&P 500 (think blue line) on top of the S&P 500 during the Debt Ceiling debacle of 2011. My thinking is that, with the same body in charge of resolving the issue as was in charge then, it makes sense that markets might follow the same path. One tenet of technical analysis is that history repeats. One tenet of Congress seems to be that it’s dysfunctional. July 31, 2011, was when Congress approved the debt ceiling increase, so I thought it was appropriate to center that with January 2, 2013, when we will be–in some form or other–past the edge of the cliff. Those dates are shown by the dashed orange line. A few days later in 2011, S&P downgraded U.S. Treasuries; that’s the vertical, dashed red line. So far, the current market path seems uncannily like 2011′s. Hopefully, the similarity ends soon. 

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Weekly Recap & Outlook – 12.21.12

Friday, December 21st, 2012

Tower Private Advisors

Below

  • More fiscal cliff
  • More complacency

(more…)

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Weekly Recap & Outlook – 12.07.12

Friday, December 7th, 2012

Tower Private Advisors

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  • Intriguing mixture of headlines
  • Cartoon of the week
  • Payrolls report should be disappointing

(more…)

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Weekly Recap & Outlook – 11.02.12

Friday, November 2nd, 2012

Tower Private Advisors

Below

  • Slew of headlines
  • Payrolls report
  • Comics

(more…)

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