This is such a time - the frustrations in the US have reached levels which have made the Americans even more irrational than normal. Every single meeting I walked into in New York talked about the "choices being analog" - Analog? It was almost so indoctrinated that I started to believe they all had been brainwashed.
The consensus US story goes like this: (The score 12/13 meetings ):
- The political and economic choices are analog - there is no downside to fiscal stimulus and massive printing of momoney... its eithers ZERO or "something"......and it will be something... (bad?)
- Obama is a fine young man, who has the abilility to unite the US, and taking them through this crisis. He is rumoured to be more afraid of Speaker Pelosi than the GOP!
- The good news is that we are 50% through this crisis (apperently all recessions lasts exactly two years) and stock market always starts to go higher six month before recession is over - ergo: we are one year into the recesison, leaving between now and the next six month to be major rally point.
- Fed lies about the outlook (and denies reality) - they are saying unemployment peaks at 7.0% ish, but really believe its 9.0%+ -
- The closed circles of Treasury and Fed rallies behind each other like hangers on - or entrourages - there seems lots of room for Larry Summers( 'The women are less intelligent than men' former Harvard President....a former Clinitonite official) and the ever present Mr. Rubin, who despite taking Cititbank to the brink of bankruptcy is still called upon to help the US again - and unfortunately for me, and you, Volcker is merely seen as figurehead - a Statesman not to be heard.
- One day, soon, greed will return and the banks will stop asking the Fed or Treasury for more money and start taking risk on themselves.(I did not get how they in the meantime recapitalized the balancesheets?...but I am not one to let facts get in the way).. The only thing missing is the 4.5 mio. unsold homes - but with the printing press working overtime this is only matter of months before the inventory is gone.....
- 2009 is a lost year, but do not worry it will only make 2010 a much better year......
- The corporates in the US is doing great, hence there is no need for worry, it is "only"" the banks and the consumers which are toast ... but hang on.... aren't the corporations selling to those exact two audiences ? Apperently not.....and here I am being told US consumers is 70% of GDP- but it seems that's only when there is tailwind!
- The US consumers will never net safe - and here I must agree - they will move from spending more than they have to spending what they earn.... but they will not net safe... I agree, consider the average US smaller to medium sized cities ... they are built for people to consume.The US is built to spend money, it's a Ponzi scheme, where we continue to extract dimes in order to save on service, products and quality. Think about US cars, US food, design..........The US has given up on itself... it has lowered its standard to levels which is really only comparative to an emerging economy. In the middle of its biggest economic crisis I had the worst service EVER in New York, somebody needs to wake up!
- Pensions are now down so much it's impacting peoples work, life and future. I met several people seriously concerned about their future - their jobs.. and this is everybody from school teachers to Wall Street types.. they all live like they are going to lose their job...which to me indicated this economy will contract even further.
Friend of mine claims Wall Street will only be 50% of what it is today in one years time - I am sad to say I hope so, there is nothing to be had on Wall Street anymore - business is closed, and the IC, Intellectual Capital, remains focused on creating the consensus' scenarios like the above... maybe it is a good thing Obama creates hope, because if Bonaparte is right he may get the chance to be a leader.
Market continues to behave like it thinks this will work. Be my guest - I remain with 910/920 top in S&P which should be used to be maximum short. The sentiment will not change in six or twelve month. I was here in May, now in December its 50% worse.......
Finally, a personal note: My childhood friend Jens Christiansen, 44, passed away on Saturday all to soon.... Jens was my closest friend growing up....I will miss him, and my prayers goes out to his family...