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Monday, November 21, 2011

Market Thought... catalysts

There are catalysts to the upside and down side. Below is an examination of the potential near term catalysts.

Upside:

1. The amended EFSF is given a detailed plan.

2. The (pathetically named) Super Committee gives their bosses (the American public) thoughtful and worth while spending cuts, while boosting revenue on the top 1-2%.

Downside:

1. Continued lack of a stability mechanism in the EU.

2. The super committee gives us nothing.

3. Bulk of earnings are completed. With out the micro to focus on, the imagination of the macro economists run wild. Case in point, this weekend was an orgi of 'what ifs'. The extremely colorful scenarios acts as an indication to the massive amounts of uncertainty the EU is allowing for.

4. Related to #1, no stability mechanism leads EU bank runs, which leads to nationalizations, which leads to sovereign debt downgrades.

5. Related to #2, Standards and Poor's was quite clear this go around that they will downgrade US debt again if a better deal is not reached. Although a disagree with their downgrade, an investor can not ignore the risk.

6. The technicals are not in the markets favor right now. The twiddling of thumbs in Europe and US are letting these markers come down, and keep going down due to the negative set-ups.

The Cons out weigh the Pros, and the futures reflect it, obviously.

Unfortunately for investors, we are held hostages to completely inept leadership. Completely inept. As the leadership controls the positive market catalysts.

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