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Maybe it's just us, jaded, cynical, and glued to a chair, facing a computer screen looking for clues as to what's next. But, suddenly, we get the feeling that the world is at one of those transition points that could, well, change everything.
Suddenly, CNBC anchors are smiling. Madoff's secretary and her Vanity Fair piece disclosing Bernie's weird antics and sexual innuendoes is hot news. Maureen Dowd isn't skewering politicians but wondering what Elizabeth Edwards' book with regard to her husband's infidelity is all about. And Arlen Specter is all alone in the Senate.
The stress test results show that if and when things got really ugly banks will need more capital, but the government won't let any of the 19 banks on the list fail anyway.
And even though the Taliban is on the verge of making Pakistan home, suicide bombings are back in Iraq, and Mexico is still a ghost town, the stock market is in the midst of a huge rally which is on the verge of picking up steam as investors who have missed the rally try to catch up.
What happened to all the other stuff that's still brewing?
Nothing has changed, except people are starting to move on. It seems as if folks are coming to grips with the notion that it is what it is, and life goes on. Obama is president, and will be there doing whatever he wants to for the next four years. Iran will eventually develop nuclear weapons and cause all kinds of trouble. Europe's recession is so deep that all they can do accross the pond is hope that the downturn burns itself out.
In other words, people seem to have made a choice between being right and making money, with the latter winning out, despite the fact that the littany of things we have named above will eventually do whatever it will do.
Chart Courtesy of StockCharts.com
The proof is in the S & P 500, which looks headed for the 950 area, being powered by the financial and energy sectors, a combination that points to the market betting on an economic recovery.
From a political standpoint, this is a parallel reaction to the point at which the Clinton administration was accepted by the markets, and the Internet boom took over the psyche of investors and the world.
So ironically, if this plays out similarly, Obama will have to thank the stock market for allowing his agenda to advance. As with Clinton, it was easier to swallow higher taxes if the stock market was giving you a financial boost, either in current income or in your retirement fund.
It was only when the market crashed and burned that the higher taxes began to burn and gave Bush his reason for lowering them. But, if things work out in a similar fashion to the Clinton years, it could be a long time before any consequences, if there are any, hit home.
The problem is not so much that Obama will raise taxes. He won, he gets to do what he wants. It's that this isn't 1992. It's 2009, and the problems that Clinton and Bush didn't do anything about in the past sixteen years, are bigger, and will be harder to fix.
The national debt is bigger. Medicare is in a deeper hole. And the bad guys that want to hurt America are larger in numbers, have more money, and access to all kinds of bad things that could eventually do some real damage.
In other words, as America starts to shrug off its problems, drunk on daily S & P gains, momentum is gathering, on Capitol Hill, in Afghanistan, Baghdad, Moscow, and Tehran. As the stock market once again becomes the intoxicant, folks who have other ideas will continue to move toward their implementation.
And as these things work out, something will happen somewhere. It will seem as if it is something out of the blue. But it won't be. It will have been in the works for months, perhaps years. And it will again change everything. And when that happens, all of the policy that has been put in place while everyone is drunk on their S & P cocktail, will come to roost.
Conclusion
Human beings are resilient and are also good at compartmentalizing things. The current situation is proof. There are some scant signs of economic recovery that are starting to appear. And the stock market is starting to pick up steam.
We are noticing that the daily discourse is starting to move on to less dangerous topics and away from health care reform, higher taxes, and the worsening of the security situation in Iraq, Afghanistan, and Pakistan.
But just because MSNBC, CNN, and the mainstream media is ignoring these things, it doesn't mean that they've gone away. In other words, moving on to the "next story" doesn't mean that the current story has gone away, only that the news proliferators aren't reporting it.
Sure, swine flu sells more papers than dreary news from Iraq. And new recovery highs on the S & P 500 are way cool as far as we're concerned. But, you just get the feeling that folks are starting to take their eyes off the ball. And in this world, that's likely something that most folks will eventually regret.
We're not advocating the notion that folks should be somber and angry. Life's too short for all that negativity. Yet, there ought to be a balance of sorts. And just as everyone went off the deep end when things look bad, we get the feeling that a couple of more weeks of heady gains in the stock market will make everyone think that everything's o.k. again, and that it will go on forever.
That, of course, is the point at which reality checks in, and disappointment rears its ugly head. For now, though, enjoy that stock market rally. Our ETF positions are holding up very well. Our energy section is the most populated with individual stocks.
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