An Eye-Opening Moment By: Dempster R. Cherry

Photo Credit: http://jerredmckee.com

With great fanfare, the big news of the week was that finally the Silly Season has ended; to the winners go the spoils, to the loserโ€ฆsoul searching.ย  The election essentially unspoiled the status quo and now the frenzied media, realizing that thereโ€™s no real story to be had there anymore, shifted their attention immediately shifted to the impending “Fiscal Cliff.”ย  Ahem, dear media, by the time you hear the sirens, itโ€™s already too late.ย  Youโ€™re about as useful as a football bat.ย  Anyone paying attention has followed this issue for months, literally.

For the record, I sincerely believe, that with the election results being what they are and the demographic and political landscapes being forever changed, that the possibilities of a โ€œGrand Bargingโ€ being achieved in the next few weeks / months are entirely realistic.ย  Yes, we still have the same moronic players in Congress but the circumstances are different if not historic.ย  The consequences of non-action will touch nearly every segment of American society regarding increasing taxes.ย  I would not be shocked to see specifics emerge before the end of the month as the adults in the room finally decide to speak up.

Last weekโ€™s other big news was the highly volatile markets.ย  Wednesday opened with a severe move downward and gave us a 2% down day on the heavy volume.ย  Thursday carried the markets further to the downside and by Fridayโ€™s closing bell; all of the major U.S. equity indexes were negative by more than 2% on the week.ย ย  The S&P 500 closed below 1,400, the Dow Industrials below 13,000, the NASDAQ below 3,000, and the Russell 2000 below 800. It wasnโ€™t only the political candidates who were made slack-jawed immediately after the elections.ย  Can it be called the Obama pullback?ย  Itโ€™s no secret that Wall Street wanted different electoral results however I reason to suggest that Europe held significant sway over last weekโ€™s market actions.ย  And by the way, thereโ€™s more of that to come, I suspect as European economic reports showed further deterioration.ย  Mario Draghiโ€™s (European Central Bankโ€™s President) comments regarding Germany on Wednesday actually sent the European market into a tail spin which in turn took down the US Markets.

I remain optimistic.ย  The time to ignore reality and remain in an information free cocoon must come to an end.ย  I remain optimistic, but cautious.

Dempster R. โ€œBobbyโ€ Cherry
Financial Advisor

 

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