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F… the fiscal cliff
by Peter Switzer
The fiscal cliff is worrying me less day by day and that worries me! History often dictates that the point of capitulation is the turning point when stocks will go in the other direction but I’m going to tempt fate by buying some stocks.
Overnight the Dow was up again — 78.56 points or 0.6 per cent to 13,248.44 but it did lose some when Democrat Harry Reid put the kaibosh on a deal before Christmas!
The S&P 500 was up 9.29 points or 0.65 per cent to 1427.84.
I didn’t like Reid’s comments, and I don’t trust big mouth Yanks but I do trust Lance Lai who went into stocks two weeks ago. And Gary Stone of Share Wealth Systems says his charts say it’s safe to go back into stocks.
Also this week the Federal Reserve is likely to say something to support the market with Treasury purchases, which effectively increase the money supply.
One other reason for my confidence that the fiscal cliff won’t be too dramatic was a poll which showed 20 per cent thought the Yanks would go over the cliff, while 20 per cent said a deal would be done but 60 per cent said an alternative “kick the can down the road” plan would be developed.
In fact, that would be the best idea anyway because the US doesn’t need too much austerity now. It needs economic growth and a serious debt reduction plan would hurt growth. By the way, the more growth, the more taxes and the lower the debt.
Helping my optimism was the investor sentiment reading out of Germany, which spiked higher.
Also given the fact that I think stocks will go 10 to 15 per cent higher next year, I’m going to take on this damn fiscal cliff and punt on the Winston Churchill advice that “you can always count on Americans to do the right thing - after they've tried everything else!”
F…the fiscal cliff! I’m buying stocks.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
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Published on: Wednesday, December 12, 2012
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