Juggling Dynamite

“I abandoned free market principles to save the free market system.”–George W. Bush, on CNN, December 16, 2008

David Stockman makes many good points in his scathing assessment of the financial crisis and policy responses in his NY Times Op-Ed this weekend here:  State-Wrecked:  The Corruption of Capitalism in America.  (Although, for the record, I take great exception to his reference to energy innovator Elon Musk as a “crony capitalist”).

In this 1 hour debate, both former White House budget directors, Stockman (under Reagan) and Peter Orszag (under Obama, now Vice Chairman of Global Banking at Citigroup) spar over key issues of stimulus, healthcare, the economy and defense spending.  Here is the direct link.

Danielle was a guest on This Week in Money with Phil Mackesy, you can listen to an audio clip of the segment here.

Marc Faber, Gloom Boom & Doom Report, explains why he believes the rally could end badly this year.Here is a direct link.

This chart of the S&P 500 price performance since late 2012 versus other key markets such as copper, Emerging Markets, China, the TSX and the Canadian Venture Exchange underlines the “decoupling” risk that Faber refers to in the clip.

Chart source:  Cory Venable, CMT, Venable Park Investment Counsel Inc.

Weakness in heavy equipment maker to the world–Caterpillar–shown here offers another red flag.

Chart source: Cory Venable, CMT, Venable Park Investment Counsel Inc.

For Canada–hardware store to the world–the Venture Exchange has traditionally led our broader market by 3 to 4 months, so the continued divergence over the past year is alarming.

Chart source: Cory Venable, CMT, Venable Park Investment Counsel Inc.

Whenever I feel weary of this charade and frustrated by how long it is taking US stocks to reflect economic reality, I think about the thousands of Perma-bulls who are celebrating recent US highs and dominating business media, but in reality have made zero and negative returns now for more than 15 years!! No wonder they live in a permanent state of denial.  Admitting the alternative–that they are useless at preserving and growing capital–indeed worse, that they have actually been harmful to capital and clients for more than a decade now–must be too painful to admit.