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  • The Daily View: Alcoa Earnings, Europe, Education, Krugman, Stocks, And Healthcare [Edit or Delete]0 comments
    Apr 11, 2012 12:49 PM | about stocks: UGA, PCLN, AAPL

    The blowout Alcoa earnings is incontrovertible proof that the liberals were wrong, yet again, about the supposed 'global slowdown' and 'China hard landing'. The trade since March 2009 has been to bet against the sentiment of the blogs. So if the blogs are bearish on the economy, go long stocks. If the blogs say oil is a bubble, buy oil. Etc.

    Should we worry about housing, the labor market, regional surveys, or Europe? I said it a dozen it times and I'll repeat it again: No. What matters to Wall St. is specifically profits and earnings, fed policy, exports, consumer spending and productivity. The overblown Europe crisis in 2010 & 2011 failed to metastasize to the overall economy as so many incorrectly predicted it would. Go ahead and pull up a chart for IBM (considered to be highly dependent on Europe) and you will see it is near historic highs. Retail Select Spider ETF (XRT) is close to historic highs.

    There is no student loan bubble, tuition bubble, or textbook bubble. It's about supply and demand. There's huge demand for textbooks by people trying to get ahead in a super competitive labor market and the publishers have pricing power due to the inelastic demand for textbooks. The liberals keep seeing bubbles, crisis and recession where none exists. College is a waste of money unless you plan to major in science, math, or computer science. The reason why the liberals want to see the economy contract, for the fed to raise rates and the one percent fail is that they have nothing to show for their overpriced liberal arts degree except student loan debt, eviction notices and food stamps. They resent the success of the one percent and want to bring the world to their level through fiscal restraint and regulation. Leftist blogs like Huffingtonpost, Zerohedge, and BusinessInsider have thousands of readers but have been ineffective at changing monetary policy. Policy makers, on the other hand, don't have blogs but they call the shots. I give the 'do-nothing' congress two thumbs up for doing just enough to piss off every liberal in America. The culture of entitlement and crisis ended in 2008. A new era is upon us of hypercapitalism and proactive policy engineered to keep recessions and bear markets as brief as possible though occasional interventions in the otherwise autonomous free market.

    Why are people like Paul Krugman, Richard Koo and Gary Shilling so negative? Because they never created anything cool or interesting. As academics or pencil pushers they have spent most of their lives sitting on the sidelines watching other people get rich, and rather than join in the fun instead they dismiss these participants as irrational or as con men. Though their eyes, the only way one get rich honestly and rationally is to become an academic, a career leftist politician, or a bureaucrat. These liberals live in a constant state fear of financial instruments, creative destruction, technological progress, the rich, the fed, and right wing talk radio. They want not a meritocracy but a mediocrity where those who stand out are hammered back into place like one of those pegboard toys.

    Will we see a return of the May stock market swoon? No way. 2012 will be like 2009 where the market keeps going up for the entire year with only minimal pauses.

    Just keep buying the dips in AAPL UGA and PCLN. Interest rates & taxes never going up again. The left is still waiting for crisis & recession and it refuses to happen. Nine months ago the left said LNKD was a bubble and its still 100% higher than its IPO. A decade later, the Bush tax cuts are here to stay. They never going to expire in our lifetime. The buffet rule will also fail.

    Oh, and $109 oil and dow 13500 is just around the corner. Record high oil prices and extreme pain at the pump won't prove recessionary, much to the dismay of the gloomers and various pundits. Liberals fantasize about oil shocks, gas lines, upheaval, and crisis and yet history has shown the prevailing trend of wealth creation and economic stabilitiy is the most probable one.

    The deficit is not an issue, but I actually support forcing people to buy insurance, as does Romney. For decades low income earners have been taking advantage of the healthcare resources and its time something was done about it by making them buy insurance or pay a hefty fine. Everyone should be forced to get coverage, unless you can prove you have the means to pay for healthcare out of pocket, but even millionaires get insurance. It's the most democratic and free market way of addressing the healthcare issue. These non-compliants will need healthcare eventually, and when they are not uninsured or under-insured we, the tax payers, have to pay for their bills. Failure to buy insurance should be punishable by wage garnishment, liens, or other means.

    Stocks: UGA, PCLN, AAPL
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