I had a fraternity brother who was, perhaps, the biggest Smiths fan (remember…this is circa 1986) ever. If I hadn’t known him better, his room would have resembled a creepy, stalker shrine to the band’s front man, Morrissey…aka…Steven Morrissey…aka…Steve the Nutter. What always amazed me is that my fraternity brother was from a tiny, rural, farming community. Talk about a collision of outliers! The mopeyist of mopey Britpop meets an obsessed fan from an isolated area of the rural south. Before the internet. Before smart phones. Three years later, the Smiths broke up and Morrissey was making mediocre solo records. I’m sure at the time other people were “discovering” the Smiths, but it was too late. It wasn’t relevant. However, it took a little while for the word to spread.
It’s no surprise that financial markets and crappy economies (yes…our economy IS crappy…don’t let anyone tell you differently) take time to realize things: prices are too high and they need to come down, prices are too low and its time to buy. This sector is done, this one’s about to pop, interest rates, everything.
This week the market has been expressing its opinion on a lot of things. Some observers may say it has to do with the bicameral circus debate on the debt ceiling. I don’t buy it. The smart people knew it was bullshit kabuki, political theatre. It was already baked into the cake. Two of the ratings agencies have reaffirmed the T-bond’s AAA rating. If the other downgrades? BFD. Those guys lost just about every ounce of credibility thanks to their brilliant calls on mortgage backed securities and Lehman Brothers.
No. Parts of the market are starting to realize that the Eurozone is a big, fiscal hot mess and that their unified currency is whistling past the graveyard. Face it. The Euro is DOA. It’s just that no one has accepted that fact yet. Well, not everyone. Basically, a major, world currency is going to die a slow, agonizing death. It will take time. And as the Euro and all around it gasp and writhe slowly but surely, it will affect U.S. markets and the economy. Where is Milton Friedman when you need him? Fiscal shock therapy stat! But this storm has been brewing for a couple of years but now the market is starting to wake up.
It’s taken a while for the market to realize that rates aren’t going higher any time soon so utility stocks make some sense. Never mind that most pay dividends that exceed the Ten Year and that, as a group, they outperformed the broader market during the hell of Q4 2008 – Q1 2009 and have underperformed since then. The utility average is just starting to show some signs of life. Yes. I am saying that utility stocks are a good place to be as we stare into the face of uncertainty. But, then again, when do we NOT do that on a daily basis?
Yes, dear reader, these things take time. How soon is now?
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It’s no surprise that financial markets and crappy economies (yes…our economy IS crappy…don’t let anyone tell you differently) take time to realize things: prices are too high and they need to come down, prices are too low and its time to buy. This sector is done, this one’s about to pop, interest rates, everything.
This week the market has been expressing its opinion on a lot of things. Some observers may say it has to do with the bicameral circus debate on the debt ceiling. I don’t buy it. The smart people knew it was bullshit kabuki, political theatre. It was already baked into the cake. Two of the ratings agencies have reaffirmed the T-bond’s AAA rating. If the other downgrades? BFD. Those guys lost just about every ounce of credibility thanks to their brilliant calls on mortgage backed securities and Lehman Brothers.
No. Parts of the market are starting to realize that the Eurozone is a big, fiscal hot mess and that their unified currency is whistling past the graveyard. Face it. The Euro is DOA. It’s just that no one has accepted that fact yet. Well, not everyone. Basically, a major, world currency is going to die a slow, agonizing death. It will take time. And as the Euro and all around it gasp and writhe slowly but surely, it will affect U.S. markets and the economy. Where is Milton Friedman when you need him? Fiscal shock therapy stat! But this storm has been brewing for a couple of years but now the market is starting to wake up.
It’s taken a while for the market to realize that rates aren’t going higher any time soon so utility stocks make some sense. Never mind that most pay dividends that exceed the Ten Year and that, as a group, they outperformed the broader market during the hell of Q4 2008 – Q1 2009 and have underperformed since then. The utility average is just starting to show some signs of life. Yes. I am saying that utility stocks are a good place to be as we stare into the face of uncertainty. But, then again, when do we NOT do that on a daily basis?
Yes, dear reader, these things take time. How soon is now?
To receive the premium version of Yieldpig..please follow the link to Amazon's Kindle store. Works on iPad, iPhone, PC, Blackberry, Android, and of course...Kindle.
http://www.amazon.com/Yieldpig-Premium/dp/B0057KR7LI/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1311531078&sr=1-1
AND...follow us on Twitter @Yieldpig
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