Beware the Wall Street Pom-pom Gang
May 24, 2012 by Leave a Comment
Author Larry Berman
Posted: 24 May 2012 re-posted from etfcm
The S&P 500 had a key inflection day yesterday and held above 1290. This remains an important inflection point as a break would clearly lead to a much more significant downside correction. To be sure, the US is in “less bad” shape than the rest of the world, but it is not immune to the systemic risk by any stretch of the “Wall Street” pom-pom gang. The group of cheerleaders call strategists remain optimistic about earnings and talk of valuation and clean balance sheets, but few if any understand that the markets work more on mass psychology than anything else. So “Bring it On” like you collectively did at the end of 2007 when AJC said all was good and the S&P 500 would earn $110 in 2008.
The world debt levels are toxic and de-leveraging will most certainly lead to another crisis in the US as well. As the political season heats up, Main Street will become aware once again that the US (Washington) is bankrupt both morally and fiscally. We cannot do much about the 20% that are simply lazy and living off the rest of us, but the other 79% that cares is “Fed” up! Bigger government is not the solution, but more QE…?
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