When the government announced yesterday that the world would end next Thursday, many people thought the markets would take the news badly. After all, scientists had originally predicted the world wouldn’t end for another three billion years, and the new number thus came in below expectations. This minor discrepancy, however, didn’t keep stocks from looking beyond early morning pessimism and bouncing back strongly in late day trading, with the Dow ending with a very respectable 523 point gain.
While outsiders were confused, indeed stupified, by this impressive performance, it actually came as no surprise to regular market watchers, who in recent years have learned that come what may, you can’t keep a good bull down. On just one day last week, for example, when reports came in of a sharp drop in home building, a nasty fall off in consumer confidence, and even the happy-days-are-here-again Fed expressing concern about the so-called recovery, the stock market surged more than 200 points anyway on news that three public companies had better than expected quarterly earnings. And just this Monday, an absolutely horrendous report on June new home sales (the second fewest in the half century since records started being kept), the Dow managed another 100-point gain because this beat analyst expectations — in large measure because the previous month’s even more horrendous sales figures were revised significantly downward making them virtually impossible not to be bettered more than originally expected.
Man, oh, man. How can you not love a stock market like that?
So, then. What lies ahead for the market in the very brief future we still have to look forward to? Bud Verruchte, an economist with the highly respected Pancreas and Stillborne risk management firm, seems to speak for market experts generally when he declared just hours after the exact time earth will plunge into the sun was made public, “it’s going to be days filled with superb opportunities to cash in big time.”
Why? Verruchte predicted that underground homebuilders would go from nowhere in view to boom times. The beverage industry (think Southern Comfort) would enjoy a huge binge. He also noted that very, very soon no port workers or airline personnel would show up for work, meaning airports and seaports would close and there would be no foreign trade. “No foreign trade,” this often prescient observer opined, “no trade deficit with China. Domestic manufacturers of all kinds with flourish.”
Is there a way small investors can tap this stock market bonanza? You betcha. For years the only thing that mattered to the market was quarterly results, which only multi-million dollar bonus recipients declared they could guess accurately. But with only a three or four day window to guess at, even ordinary Joes and Janes will be encouraged to take a shot, goosing up a raging bull market still further. And who could possibly advise against risking kids’ college money or retirement savings with no more need to worry about long-term (longer than a week) to worry about?
Don’t forget bonds, too, in your world ending investment plans, suggest the pros. Just a few hours ago the head of a major bond rating agency indicated he might change all debt ratings to AAA. “Why the hell not,” he reportedly said. With everyone’s credit score now 800 because of the same attitude in personal credit rating land, it’s also mall time, baby — though shoppers should keep in mind that others in the stores might be crazed pillagers, heavily armed, and not afraid to die.
There are those, of course, who might wonder why any sane person would have the slightest inclination to meet certain near-term doom while playing the stock market. My answer? Since an incredible and utterly inane upward market has been underway over the last 18 months, in stark contrast to an obvious and unmistakable downward spiral in the general economy in this same period, the stock market offers a comforting distraction, a joyous idiocy, to minds that might otherwise have to face up to awful truths.
So turn up the AC and let’s all get happily Dow—ed. What is happiness, after all, but dying rich?
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