Time to panic! Or not…
Greece! Oh my goodness, did you hear about Greece?! There’s a debt problem over there. And it might lead to contagion. You better sell your stocks right now because of this Greece contagion risk.
Oh wait. My bad, I was watching a replay of CNBC from two weeks ago. Or was it two months ago. Or was it two years ago. Hmm. I can’t remember. I better check on WSJ.com and see what the latest headlines about Greece and the contagion risk there are:
Hmm, not a single mention of Greece on the front page at all. That’s strange. Let me check TheStreet.com. Nope, nothing on there either. Must be a conspiracy among the mainstream media to not talk about this incredibly dire risk to my American stocks.
The big headlines of the week about Greece — two of the biggest banks there, both of which would be bankrupt immediately if not for massive ongoing welfare from the governments of the EU and the US itself, are merging so they can concentrate their power and welfare lobbying efforts even further than they are already.
It’s sort of an offshoot of how we here in the US solved our problems with TBTF banks like Merrill Lynch and CountryWide by giving other TBTF banks like Bank of America a bunch extra welfare money so it can combine their operations under the roof of one bank. Smart, huh?
Speaking of brilliant macro-economic policy management, I sure hope those Republican/Democrat guys in Washington figure out how to get past this horrific US budget impasse that could imperil the entire world’s economies. Oh, wait, did we get past that after all? Did it work out? I can’t remember, so I’ll go check the WSJ. Nothing on there about the budget impasse either. Strange.
Anyway, remember Greece? No? Remember how you were supposed to panic two weeks ago because this country who’s entire economy doesn’t even add up to Apple’s market cap is going to have to default in various ways on their government’s lenders over coming quarters and years? No?
Remember that US budget impasse and how supposedly if they didn’t find a tens of billions of dollars — less money than Google, a company barely a decade old has in the checking account right now — worth of social services to cut while maintaining every single tax loophole for rich people and giant corporations…then your smartphone stocks would probably crash? No?
Now, once again, that we’ve rallied nearly 10% from the lows of those panics…I highly suggest that if you really think Greece’s sovereign debt crisis will eventually make our own stock market crash (for real, next time!) then RIGHT NOW IS THE TIME TO PANIC OVER GREECE and the US BUDGET IMPASSE.
For the rest of us, however, there is a huge lesson that we need to remember the next time the mainstream media decides to try to panic us over some arbitrary economic issue that clearly doesn’t matter to the degree with which they make it out to. That next time is a’coming soon too. Be ready for it.
Now for an update to last week’s poll. Last Tuesday, I asked all of you subscribers to Revolution Investing along with readers of my Marketwatch blog and my independent trading service for their answer to the question: “Who’s more scared right now, the bulls or the bears”.
When I’d asked that question, the DJIA was 7% below where it is right now and it was at the height of the panic over things like the fake US-debt impasse and the Greek contagion stories.
Here were the results: 140 replies. 139 said “bulls are more scared” 1 said “bears are more scared”.
I wrote last week that such overwhelming consensus to that question often marks a serious turn in the markets. And that 7-10% pop the market indices have had since that poll was published speaks to that correlation.
So I asked everybody on my blog and on TradingWithCody.com again yesterday, after that big rally, the same question — “Whos’ more scared right now, the bulls or the bears?”
I got about 80 replies last night. 49 said the bulls. 31 said the bears. Big change in that consensus, just like there was a big change in the market. Unfortunately, the “easy” part of that bottom call is over, as the consensus is now far from overwhelming. That doesn’t mean we can’t rally and rally big from here. It just means that the obvious “it’s wildly oversold and over-negative out there” trade is now past. Hope you caught it as I highlighted it into the teeth of that decline last week!
No trades for me today. Easy does it, as I keep saying.
