The Counter-Narrative

The market is staging a furious rally this morning on the heels of a – are you ready for this? – Alcoa earnings report.

But seriously folks, we’re in earnings season now and earnings have been one of the few bright spots here in the Balance Sheet Recession.  And that’s got a lot to do with today’s enthusiasm.

You already know everything that can go wrong (Euro breakup, China crash, credit ratings downgrades, new leg down in housing etc).

So by all means keep those issues in mind while I spin the counter-narrative.  Not a prediction, just a reminder that we’ve gotten pretty negative – even dyed-in-the-wool perma-bulls like BlackRock’s Bob Doll are now saying “muddle-through”, this is a great sign.

Your counter-narrative here:

China slows and then stops slowing.  Slack from their real estate deceleration is picked up by the burgeoning Chinese consumer as the party’s Grand Plan to stoke internal demand within shows some signs of coming together.  China goes from tightening to stimulus and the GDP growth rate stabilizes in the mid-to-high single digits.

Europe forcibly restructures Greece, bails out Italy’s banks, they have a recession everywhere except Germany and in the end, nothing is solved but nothing is shattered either.  The rest of the world learns the truth about how unimportant Europe has become to the global economy.

The Sensex (India), Shanghai Composite (China) and Bovespa (Brazil) get their sh*t together and stop going down.  Rate cuts stop the downward slide and an amelioration of US investor fears lead to net inflows to emerging market stocks again.

US GDP growth and hiring surprise everyone.  Corporations pass the baton to the consumer, who is sick and tired of being sick and tired.  Home prices bottom and move higher in almost half of the Case-Shiller 20-city index.  Foreclosures leave the market faster than previously thought.  The rate of spending to fix up homes accelerates.

Treasurys stop rallying on bad news overseas and bad news overseas stops getting our attention.  Half a trillion in erstwhile “risk-off” capital comes pouring out of bonds and into stocks.

Iran stops sabre-rattling and dicking around with the Straight of Hormuz as it faces a reprise of the Green Revolution within it’s own cities.  Oil prices settle back down to natural supply/demand levels in the mid-80’s which acts like a tax cut for the American consumer.

100,000 troops come home and begin to build lives for themselves and their families.  They start businesses and buy foreclosures and speed the velocity of money around the economy with a gush of pent-up desire to consume after years in the desert.

Obama and Romney run neck-and-neck into the election.  Congressional approval ratings climb off of multi-decade lows as unemployment creeps down to 7.5%.  Gay stuff and abortion end up becoming more important come November 2012 than “the economy” in voters mindsets.  Again.

The Nasdaq takes out an 11-year high, the Dow and S&P take out 2011’s mid-year highs.

Anyway, these aren’t “reasons to be bullish” or “outrageous predictions” or anything corny like that – they are simply the narrative we are not hearing from anywhere – even from the bulls.

It’s worth thinking about what can go right sometimes.

 

 

 

 

 

 

 

 

 

 

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. video transitions blender commented on Sep 16

    … [Trackback]

    […] Read More here on that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  2. https://blazingtraderapp.com/ commented on Sep 27

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  3. bitcoin evolution review commented on Sep 28

    … [Trackback]

    […] Read More here to that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  4. bitcoin wealth loophole commented on Sep 29

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  5. winnipeg used motorcycles commented on Oct 16

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  6. auto gallery used cars commented on Oct 16

    … [Trackback]

    […] Here you will find 93216 more Information on that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  7. site to buy dumps with pin commented on Nov 16

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  8. exotic weed for sale commented on Nov 21

    … [Trackback]

    […] Read More Information here on that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  9. online banking commented on Dec 05

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  10. Azure Devops commented on Dec 18

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  11. replica watches commented on Dec 29

    … [Trackback]

    […] Here you will find 77019 additional Information on that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  12. replica whatches commented on Dec 30

    … [Trackback]

    […] Find More here to that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  13. game slot online terbaik commented on Jan 18

    … [Trackback]

    […] There you can find 44319 additional Info on that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]

  14. cheap wigs commented on Jan 19

    … [Trackback]

    […] There you can find 89688 more Info to that Topic: thereformedbroker.com/2012/01/10/the-counter-narrative/ […]