I must apologize that I haven't posted since April of 2010. It has been a busy time with lots of things going on in our world. I want to thank my readers for continuing to read and visit the site, despite the lack of posts. But it is February 2011 and it continues to be a dynamic time for the markets. Here is some commentary on the things going on in the markets.
- The bottom was hit in the spring of 2009. We posted in "It's Time To Lean In" of April 2009 that it was time to lean in and place bets in the markets. Indeed that spring was rock bottom for the financial markets. I did not know when the bottom was in but apparently the lows were in March 2009. Do I think we will have a double dip? No. The last year has shown that the government and central bankers worldwide will manipulate and do whatever they can to prevent implosion of the system.
-Municipality Defaults - We mentioned the greatest Ponzi scheme of all with reference to the State of California and its IOUs. Apparently, defaults by municipalities have surfaced in the news and they may be forthcoming. It's simply a matter of local and state governments living on borrowed money and leveraging themselves to the hilt. Their numbers will be called soon.
-Opening up of private markets - IPOs have crept back into the spotlight, shares of private social networking companies are very hot. The private markets like all markets go through cycles and we are at the beginning of another frothy cycle.
-Easy Money To Continue - We've gone from the brink of disaster where credit was frozen to an environment of easy money. All indicators suggest that we haven't hit our stride in terms of employment numbers and jobs, but we all know that these are lagging indicators. By the time they start showing that our economy has recovered, we will already be at the beginning of a frothy bubble. It's at those times that the professional investors are starting to jump ship and get ready for the bubble bursting.
-Repeal of Democratic Legislation and Centering of the President - November elections and all time low approval ratings have led the President to shift toward the center and be a little nicer to businesses and bankers. Despite this posturing, we all know that these shifts are with a eye toward the re-election campaign. The current administration has already shown its true colors and there is no turning back. Meanwhile we will continue to slog through the implementation of anti-risk taking measures such as Dodd-Frank. As the offering of Facebook shares by Goldman Sachs (only to investors outside of the US) shows, anti-free market legislation just drives transactional activity offshore.