Wednesday, November 25, 2015

Throwing this up tonight

Because I don't want to blow your Thanksgiving.

Commodity prices are plunging, the dollar is powering higher, the yield curve is flattening, ObamaCare is collapsing, global trade is plummeting and terrorism is spreading across the globe. The high yield credit markets are sending distress signals and 10-year swap spreads are negative. Energy companies are going out of business faster than you can say “frack” and trillions of dollars of European bonds are again trading at negative interest rates. The world is drowning in more than $200 trillion of debt that can never be repaid while European and Japanese central bankers promise to print more money and the Federal Reserve is being dragged kicking-and-screaming into raising interest rates by a paltry 25 basis points. Accurate pricing signals in the markets are distorted by overregulation, monetary policy overreach and group think. Hedge funds are hemorrhaging and investors, desperate to generate any kind of nominal return on their capital, continue to ignore the concept of risk-adjusted returns. Some market strategists believe this is a positive environment for risk assets; I am not among them.

The man may be wrong about what is coming, but he's nailing it it on the current state of the markets.  I have all but exited the equities market again, after carefully dipping my toe back in a few years ago.  Sure, I've missed out on a lot of money that could have been made, but I've also missed out on a lot of heartburn, anxiety and sleepless nights as well.

Yes, I agree with him.  We're cruisin' for a bruisin'.

I'm not one of those people who is going to tell you that, if you have money to invest, you should invest in gold or farm land or canned food and shotguns.  We each have to know our own tolerance for risk and our own heart and invest accordingly.  I'm just going to tell you that in a really bad economy, cash or things that act like cash are king.  The ability to provide for yourself, especially when it comes to food, is invaluable.  Good friends and neighbors that you can trust are as good as gold.

If you can't be thankful for those things tomorrow, you might consider working toward being thankful for them in 365 days from tomorrow.