A long, intimidating, immense and rational derangement of all the senses
So, it’s mid-March 2013 and, the S&P 500 is at 1550, right where I said it would be nine months ago. […] I see the S&P continuing to frustrate the majority (that is what markets do). It may hit 1560-1580 prior to actually having a legitimate correction of 5-10%. There is so much liquidity awaiting deployment upon a pullback that the pullback will be quick. Later in the year, it’s very likely we’ll see 1600-plus on the S&P (September-November). In my view, the market will be a good sell at that point, so will many credit products. There is no way the Fed can shift its policy stance concurrent with having to immunize a $4 trillion balance sheet going into the end of a fiscal year. 2014 is likely to be challenging.
Enjoy this while it lasts. […]The People’s Republic’s big issues will start in fiscal years 2013-2014. China Merchants Bank, for example, is already seeing a bigger rise in bad-loan provisioning and lower good-loan growth than Western equity analysts think. The CEOs of two large Brazilian companies, Vale and Petrobras, are starting to plan for China to “hit a wall” in 2015-2018. Essentially, China will look OK through April 2013 then big problems will hit the country.
Europe will not implode.
