I was Right on the Markets, Wrong on the Economy

Posted on February 1, 2011 at 10:26 am

Today’s market and US economy seem to be suffering from multiple personality disorder:

The outgoing, optimistic Mr. Market is focusing on a slight but steady improvement in job growth and stronger spending, particularly by more affluent consumers.

His gloomy friend, Ms. Economy, says GDP growth remains weak, unemployment looks intractable, and the housing catastrophe will depress overall consumer spending for years to come.

Who’s right? Well, both, of course, and the outcome of their battle will determine how far the current bull market will go and how long it will last.

Count me among the optimistic for the next couple of years, at least, although I think we could see a correction in the weeks ahead, as I’ve written here.

But I’m still looking over my shoulder every time stocks make new highs, because the bears have some powerful arguments on their side – and they’ve often been right.

Here is additional coverage from the St. Peterburg Times:

“The legal action marks another chapter in a storm over the validity of documents foreclose on millions of American homes. Earlier this fall, Bank of America and other temporarily halted foreclosure proceedings because of evidence that many documents errors and fraudulent statements.

Since I’m a put-your-best-foot-forward kind of guy, I’ll begin with what I got right.

Tug of War in the Economy and Markets

Posted on January 26, 2011 at 1:36 pm

The year started on a high note, with a rallying stock market and clear signs of economic recovery. After the near-death experience of 2008-2009, the worst appeared to be over.

That was the zeitgeist when I made my own predictions for 2010, which I’m reviewing a bit early this year. As I re-read those columns, two things became clear: I had my best year ever in anticipating the swings of the market, and I was generally too optimistic about the economy.

Since I’m a put-your-best-foot-forward kind guy, I’ll begin with what I got right.

In “Six Big Predictions for 2010” (January 7th), I focused primarily on the economy, but also touched on the markets

Louise Story has a front page article in the Sunday NYT that is your must read this morning:

“On the third Wednesday of every month, the nine members of an elite Wall Street in Midtown Manhattan.

The men share a common goal: to protect the interests of big banks in the vast derivatives, one of the most profitable – and controversial – fields in finance. They common secret: The details of their meetings, even their identities, have been confidential.

“The sell-offs they trigger would be more like corrections than a second bear market, so for bullish investors they could be buying opportunities.” Right on target.

The most likely victims of such a crisis, I wrote then and in a January 21st follow-up, were “the sovereign debt of the PIGS nations (Portugal, Ireland, Greece and Spain) –perhaps Italy, too.”

Howard Gold

“I am an independent-minded commentator and citizen. Like many of you, I have many criticisms of how decisions are made for us by entrenched politicians of both parties…


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