I bought shares in an inverse (short Russell 2000) fund today. I also bought some put options. With no budget, no debt ceiling agreement, and no spending cuts, I just couldn't help myself. Tax hikes on top of Obamacare tax hikes? This is good news?
This ain't a fiscal cliff. This is an abyss. Our current debt to GDP is anywhere between 103 to 105% depending on who you ask. Our current burn rate (1Qfiscal2013) is annualized at 1.5 trillion with rising interest rates and 4 trillion worth of treasuries this year that have to be refinanced. Do you really think this market can go up from here especially since the government just swiped 60 billion in discretionary funds? The last piece of "good" news came today.
So I did the only thing a good contrarian can do when the market is up ridiculously. I sold it short.
They (the Fed) are furiously injecting cash and monetizing the debt just to keep this zombie market afloat. And even corporate America is out of tricks. I'd like to see how business can improve margins at the end of this manufactured bull market.. that would be a neat encore.
They need a Deux Ex Machina ending. That is all they got left.
And with that we can close the books on the first quarter of Fiscal 2013, in which US public debt grew by $366 billion, some $122 billion per month on average.