Asset prices are in free-fall: stocks, housing and commodities.
Early morning today, stock prices are rising. Or at least they were when I started writing this blog.
Good chance to lighten up.
There are “reasons:”
+ Outlook for the economy has dimmed. Corporate profits are tightening.
+ The Fed is raising interest rates. Old rule: “Don’t fight the Fed.”
+ Trade War with China drags on. Xi and Trump are both ultra-stubborn. Xi is helping his hurting economy with infrastructure and help for the banks. You can do that when you’re President for life. Hence less incentive to meet Trump’s demands.
+ Housing is being hurt by higher interest costs. Houses are now more pricey.
+ Investors in hedge funds are bailing. Hedge funds are selling to met the demands.
+ Gridlock in Washington for the next two years, followed by a bruising Presidential battle.
+ Europe is not doing well. There’s Italy and Brexit.
+ Israel is going to war with Gaza, which just lobbed 300 rockets into Israel. Not good.
+ People are holding Open Houses for places they want to sell. And no one is showing up.
+ Black Swan events — like the Malaysian corruption scandal that just hit Goldman Sachs. Look at what just happened to them. This is the last five days:
I can’t predict any of this short-term. I’m guessing stocks will go lower. Certainly the gut-wrenching volatility is likely to continue.
Today seems a good time to lighten up and hold more cash.
There’ll be great buying opportunities soon. But not yet.
Stuff
+ My bank delayed sending an important wire because it thought someone had hacked my email. Cautious, yes. A pain, yes.
+ Fidelity is having trouble doing trades. No one knows why:
+ Spectrum is killing my Internet connection to the cloud (where this blog resides) every three minutes this morning. I don’t know why. Annoying.
Harry Newton, who remembers the old adage: Want a sure way to get a small fortune? Simple. Start with a large one.
Good news: You can now buy red MAGA hats on eBay for less than a quarter of what Trump is selling them for.
