Halfway Through “The Last Year”

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Well, it’s a Friday and a good excuse as any to look back at the week and see what happened and why…

Could the economic news get any more interesting?  Could there be even more negative news coming, other than what we’ve had served up to us this week?

‘Fraid so, old chums; on both counts.  Looks like the global economy’s slide into the abyss has gained a bit of momentum as of late.

What a week it has been…

The Fed announced a 6-month extension of Operation Twist—not that anyone cared…

Similar reflation actions were announced by the Bank of England, the European Central Bank, and the Banks of Switzerland and of Japan as recession returns to the UK, Europe, and Japan…

Can the US be far behind?  Of course we're not; it’s just that news of a return to recession doesn’t play well in an election year.

And, as we noted in 2 editions of The Gorrie Details this week, the Russians gained a foothold back in the Mideast with war games planned for next month with China, Iran and Syria.

It seems that spooky, puny czar Vlad Putin, the little rascal, has visions of grandeur and pines for a return to the former glory of Mother Russia, and is all about making sure Mom is queen of the hill once again…

There’s some deep, psychological mining to be done there, but I digress.

Seriously, have we just seen the profile the biggest anti-West alliance formed since the break up of the old Soviet Union?  These things always seem to come about when the global economy is in the tank…

Black Thursday

And then Thursday arrived with Moody lowering the ax on bank ratings around the globe, and the market ended with a 259-point drop in the Dow…although a bit of a snapback showed itself today (Friday). Even gold and silver took big hits and the housing market recorded a 15-year low.  The only winner, as usual by default, was the US Treasury market…

But with yields approaching the ridiculous side of zero% again, you have to wonder how long that can last…

And we should definitely  fear the consequences when the world’s love fest with the US bond market is over. But in the meantime, falling stock prices aren’t the only fact of life in markets around the world…

To make matters worse, the news that global commodity prices are falling as well is cutting deeply into investor confidence, to say nothing of the confidence people have in their governments’ ability to solve the problems that seem to never go away.

All the news this week means that with both commodity and stock prices falling, global recession, here we come. That throws a different light on the whole Russia/China/Iran/Syria “coffee talk” their all attending next month, doesn’t it?  Countries tend to choose up sides when the going gets sticky, and then of course, the going gets really sticky.

Broad trends aren’t so good

Here in The Gorrie Details, I’m speaking, of course, from strictly the macro view.   Why? Because that’s what I do.  But, being a big picture kind of guy doesn’t mean there isn’t good news out there as well…

It just means that I focus on broad trends that affect the health of the economy that may or may not impact the market, either positively or negatively.

And for the past couple of years, we’ve had back row seats to what amounts to a low grade Vegas magic show called quantitative easing, and the show has gotten worse the longer it lasts.

But, as I’ve said many times before, I’m not the only one who smells a rat in the kitchen…

Smart players like Bill Gross, Jim Rogers, and Craig R. Smith, whom I interviewed recently and of which Part 1 runs in today’s main feature at AbsoluteWealth.com, all see very bad signs that business as usual is over in the global economy.

Now, on the flip side of that, just because there is “slack” in the global economy, as the Fed admitted, or that the Eurozone is resembling a brontosaurus up to its neck in a tar pit and Japan’s economy is up to its eyeballs in the same recession tar pit doesn’t’ mean that there’s no great opportunities out there to make handsome profits.

Opportunity abounds

For instance, with interest rates so low and property values right down there with interest rates, several of my friends and colleagues have made some absolutely terrific home bargains and in real estate investment properties…

And, if you’re a gold bug, now might be a good time to buy, since gold prices are off their high by about 20%...

But rather than take my advice in that area, there are better resources available to you.

As you all know, I try to leave the investment side of things to my most able and insightful colleagues, John F. Carter and Hubert Senters, who are all over very clever trades in this market and send them to you daily via videos right here at AbsoluteWealth.com.

So as we finish out another week in the year to end all years…

What? I’ve gone 6 months without a single reference to the Mayan calendar, so give me a break here…

It’s important to remember that there is always opportunity somewhere, and that, no matter what happens, worrying ourselves to death about what happens in the world at large
won’t change things one little bit.

My advice?  Do what you can to enjoy the first official weekend of the summer season; have a barbeque and a beer with the people you care about and take in a warm summer evening.  Talk about anything but politics or the economy.

And those are…The Gorrie Details.

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