Fear And Loathing In Uncertain Times

The stock market has been behaving like a spoiled child on a sugar-fueled field trip to the toy store. As a parent, it's hard to tell what this brat wants. It's times like these you're faced with two choices - give the kid more candy and ride out their manic energy - or take it away and gird yourself for the onslaught of complaining and unwanted attention from strangers. Regardless of what choice you make, you'll question it.

I've said no to the candy. I won't feed this monster. No sir. Not while it's behaving this way. Perhaps you're in the same boat. 'Retail' investors like us have yet to put money into the stock market. Institutional investors and big bailed-out banks have driven the market with low cost borrowings from Uncle Sam.

Here's one thing I know:

The labor market sucks. I know this from personal experience. When companies are turning down candidates on the basis of being unemployed, you know things are bad.

Out of work applicants need not apply

We're about as unpopular as the referee in the US - Slovinia soccer match.

This brings me to my point. Economic growth requires two things - money and labor. So far companies have been spending little and squeezing every last inch of productivity from their workers. Consumers are getting fatigued. Stimulus is drying up. The housing market is about as stable as BP's leaking oil well. And governments around the world are on the verge of bankruptcy with massive amounts of debt.

US legislators are debating right now whether to continue giving this kid more candy. Feed it some more at least until the mid-term elections in desperate hope that they might still have a job. (I hope they don't)

Like Staff Sgt. Barnes in Platoon, I say it's time to 'TAKE THE PAIN' Half measures like the 'Jobs Bill' or the 'Stimulus Act' are only prolonging the natural economic consequences that our spoiled brat of a financial/regulatory complex has wrought. This market is artificially supported on the basis of the country returning back to average growth. But growth will not come until banks lend more and businesses begin to spend more and hire.

Earnings season is upon us like the approaching tide of oil on the Florida coast and will be met with as much enthusiasm. It's times like these where the only real opportunities are cleaning up other people's messes.