Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter .
I receive a slew of emails on a daily basis; many are constructive and thought-provoking insights on global markets or the socioeconomic landscape; some of them are pure vents, such as the missive I received last night. It was aimed at stateside policy; I've edited it for purposes of brevity, but the thrust shines through.
"Thank you for the domestic beatings. We'll try harder to have our morale improve. We'll likely be getting more of the same unaccountable (policies) that took us to these historical disproportionate times to begin with, the result of economic disparity and the media depiction of 'how's it going.'
"For those of us not toiling away on the US cultural hamster wheel or not complacent enough so as to actually read, it just keeps getting harder each day to swallow that powerful flood of mass suggestion."
I found the thread interesting on the heels of the recent AP study that stated that "four out of five US adults struggle with joblessness, near poverty, or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream."
While some will argue that these numbers are fudged or at least embellished, we can certainly agree that there is a difference between a stock market rally and a legitimate -- or somewhat linear -- economic recovery. It is reminiscent of December 2006 when what worried me most was that stocks were trading at all-time highs, but "nobody really felt like we were at all-time highs."
These disparities, between income gaps as well as between perception and reality, have a way of mattering in some way, shape, or form. If you believe that social mood and risk appetites shape financial markets and juxtapose that view against supply, demand, liquidity, and accounting (sad but true), you arrive at the summer of 2013.
I'm not smart enough to know if the S&P (INDEXSP:.INX) is tracing out a bullish cup-and-handle formation that will take it above S&P 1700 or if we're migrating through a bearish double-top that will trap fund managers with performance anxiety. (Consumer confidence, according to the University of Michigan, is at levels last seen in July 2007.)
I am, however, seasoned enough to see both sides, respect the powerful agendas of those with enough financial muscle to suspend reality for a sustained period of time, and understand that the world has changed on Wall Street and beyond.
Put another way, if the majority of the world's social classes are this disgruntled with our finance-based global economy trading at or near record highs, what awaits us after a 20% correction, or worse, if the business cycle is ever allowed to play through?
Some might feel that this food for thought is extraneous with the markets acting so well; I would argue that this is precisely the time to be having the tough conversations.
- Deutsche Bank ( DB ) and Barclays ( BCS ) are down 4% and 8%, respectively, as we fire up Turnaround Tuesday jets.
- Big Ben under oath? And you thought his lip quivered on the Hill? Perhaps the back-slapping on the Beltway two weeks ago was indeed a trading top in Big Ben ?
- Thirteen years ago, a community of like-minded professionals intent on effecting positive change through financial understanding was born. Who would have ever thought that the world -- particularly the financial and media worlds -- would have shifted so dramatically since then?
- Gold: Oversold bounce or legitimate turn? I suppose that's a matter of inflation vs. deflation. And what if we have inflation in things we need and deflation in things we want?
- While SeaWorld and the Zoo were on our West Coast agenda while traveling with our two-year-old to San Diego last week, I was fascinated with the offshore military exercises by the Navy SEALs on Coronado Isle.
- Does SAC (a firm that trades IN-N-OUT with high frequency) have the same counter-party contagion risk that Long-Term Capital Management (flush with complex OTC derivatives) had many moons ago? Would its absence cause a ripple on Wall Street, via lost commissions and/or liquidity?
- The highest consumer confidence since July 2007? And do you remember, off the top of your head, that in July 2007, the S&P was about to embark on a false breakout (through previous highs) before a 58% decline the following year and a half?