A fairly common sight lately has been the re-emergence of the once thought to be extinct (really, are these shills ever really gone?) bull wise guys peddling a strong dollar, strong US markets and THE economic recovery. I am sure Larry Kudlow is preparing a festive New Year celebration.
Yes, it is a bit easier to be bullish the dollar now that it has bounced and it is easy to be bullish the markets now that they have generally remained buoyant in the face of USD strength. 'It's the best of all worlds!' cheer the touts.
Well, I have have been awaiting a dollar bounce and as the NFTRH 1 Year Ago spot below reminded me, I had an original SPX target for Hope '09 of 1200. That was in the young and innocent days when I felt there could be a relatively (relative to the FrankenMess we have today, that is) healthy recovery, which of course would entail some healthy market action along the way. If SPX makes 1200 all in one shot, it will likely be as good as it gets and it will not be healthy. You go smoke some crack if you want to, I'll stick to risk vs. reward theory no matter how long it takes to pay off.
Anyway, I have ragged on Jim Sinclair on ocassion but thought his most recent note interesting, as it states exactly how I feel as Hope '09 drags its tired ass into Full Tout... Full Hubris '10.
From Mr. Gold:
As we approach the New Year it seems the party has already begun, and the commentators are all full of spirits. I can't find a bear in the woods.
According to them the equity market is going up, the dollar is going up, commodities are going up, and even lip service is being paid to gold, but lip service only. The conviction being blasted out there is a line up of former pro-gold guys like Faber and Rogers. Today they rolled out Barton Biggs for his bullish equity-bullish dollar forecast. Soros and Buffett have already made their contribution to a dollar rally.
Now go back to February of 2009. You could not find a bull on anything anywhere. I did an interview for a major F-TV station where I specifically said that the bottom of the equity market would occur in March 09. Even the interviewer argued with me.
Right now it is the absolute opposite even though the economic improvement given as green shots do not equal the real rate of inflation at the checkout counter.
In my opinion, the economy as a result of unprecedented stimulation is simply bottom bouncing, an experience seen in 1932.
