Friday, November 26, 2010

Santa Clod Rally?

It pains me as an eternal optimist to say so, yet one must speak the truth as one sees it.  The usual run-up in the stock market as the end of the year approaches - the annual "Santa Claus rally" - looks like it could be on hold this year due to a series of major headwinds.  The Eurozone mess, QE2 strengthening the U.S. dollar instead of weakening it as the Fed intended, North Korean sabre-rattling, and tepid economic indicators at best are all working against everyone's favorite fairytale - despite all the Black Friday hoopla caused by retailers discounting their merchandise way earlier than usual.  (Kind of like the way "cash for clunkers" moved up sales of autos.)  And we might as well face it folks, the Euro is unraveling before our very eyes.  Portugal swears that it cannot be forced to take a bailout, just like Jehovah''s Wackos refusing a life-saving transfusion.  Spain meanwhile seems to be pinning its hopes for avoiding a default on the heretofore undemonstrated strength of its domestic investors (good luck on that one, Senores).  And Germany just wants to take its deutschmarbles and go home.  All the more reason investors worldwide are bidding up the U.S. dollar when Bernanke & Co. want it to go down.  And then there's China.  Don't get me started.  The most unpredictable nation on earth, it can change the rules with a stroke of the People's Pen.  Even so, China is running out of food, fuel, and friends (unless you count North Korea).  As I said, it looks like December drudgery in the markets.  TGIF.