I have to admit that I’ve been following the economic news of late with an increasing amount of attention, mainly trying to sort through all sorts of conflicting data to get a sense of just how screwed this country is in the short term. I think the long term economic future is pretty bleak (when you’re talking about the next 25-50 years), but I’m a lot more interested in the next 5-15 years, as far as hopefully grabbing a pile of cash when the grabbing is good.
But of late it seems an increasingly difficult proposition, as far as making sense of things. Suddenly the Dow is back bumping up against all-time highs, despite many sensible reasons to the contrary? Really? The housing market contiues to swirl down the drain in most regions, with no short term relief in sight, the dollar continues to fall off a cliff, and equities respond by roaring higher? Really?
The last few weeks have been particularly schizo. August payroll numbers come in way below expectations, swinging to a loss, and the markets tank. The Fed overreacts, cuts rates by half a point, and markets come roaring back. Various economic reports in the intervening weeks were less than rosy, but that was reason for an uptick in the markets, as the general take was that weak numbers would increase the likelihood of the Fed cutting rates again.
Mmkay. So bad = good. Got it. Economy is struggling, but another rate cut will save us all. Okay.
After a week or two of that, suddenly this morning the government reports not only decent job growth in September but that, oops, they sort of mucked up the estimates for August, and upwardly revised them to show an actual gain of 89,000 jobs in August (as opposed to the previously released figures of an unexpected loss of 4,000 jobs).
To which the market responds by roaring higher again, with all-time highs in sight again. So now good = good again, and we got a half-point rate cut basically for free, when Gentle Ben Bernanke overreacted to the shockingly bad August payroll numbers (which in reality were anythign but). Mmkay.
Don’t get me wrong, I like to see all the money suddenly appearing in my IRA and 401(k) account that wasn’t there a month or two ago, but it’d be nice if I felt like it was due to any sort of sustainable phenomenon, and not just the results of random chance, as I’m leaning more and more in the random chance category, as things seem to make less and less sense.
With investor friendly October and Q4 upon us, it seems dumb to lock in any profits at this point. So I probably won’t. ButI definitely feel like that decision is based more on superstitiously doubling my bet during a hot run at blackjack than on any sort of reasonable assessment ofwhat’s going on, and likely to occur in the future.
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