No doubt you’ve already started to fatigue from the “cutesy” holiday references, abounding wishes of glad tidings, long lines at the stores, etc. Tis the Season and all that…
Being that we’re entering the end of the year, it’s certainly time to take stock and reflect. Now I could sugarcoat everything and seek to focus on the positives out there, which would certainly go with the season… But frankly I don’t think it would serve you so much…nor be all that fun. So I’ve elected to go with more of a “Tim Burton” approach and offer up a bit of a twist on the classic 12 Days of Christmas.
Without further adieu…
1st Lump of Coal—Partridge in a Pear Tree (aka – Fiscal Cliff ): No doubt the looming fiscal cliff has earned top honors this year, surpassing the European sovereign debt crisis that nobly reigned during the past several years. While our European brethren fought the good fight once again this year, doing their damndest to spoil the markets for the rest of us, the fact is that when our leaders put their mind to it, no government can be more dysfunctional or wasteful that that found right here in the good ol’ U.S. of A. Damn Skippy!
2nd Lump of Coal—Two Turtle Doves (aka – The Pols): As the saying goes, it takes two to Tango…or tussle. Without getting political or taking sides, truth is we have two parties that time-and-again prove they are interested only in serving themselves and besmearing one another. While it makes for good theater, fact is the elephants and donkeys are engaged in dangerous gamesmanship for the sake of scoring points. Meanwhile, the peeps that actually drive this economy (along with the rest of the world) are held hostage as the two sides DANCE toward the Fiscal Cliff.
3rd Lump of Coal—Three French Hens (aka – The Troika): While some might guess Lagarde, Sarkozy and Hollande, three French nationalists whom have collectively factored huge in the European debacle, the Troika, as it is not-so-affectionately known (especially amongst the Greeks), is comprised of the European Commission (EC), European Central Bank (ECB – let’s call them what they really are – German Savings and Loan) and the International Monetary Fund (IMF). The primary function of the Troika is that of heading up efforts to “kick the can” down the road far enough to allow for the crisis to resolve itself.
4th Lump of Coal—Four Calling Birds (aka – Sovereign Debt Crisis and Treasury Secretary Geithner): This is a tough call as both are deserving. The debt crisis slipped from its 1st Lump perch, but given it now enters its 4th year (the Greeks announced the problem with their “books” in late 2009), it surely deserves continued recognition. As for Geithner, he’s earned special recognition because of the role he played throughout the entire crisis and more particularly due to the four years he failed to pay Social Security and Medicare Payroll taxes…Nothing political here—just don’t sit well and would seem to sum up rather appropriately the whole sorted tax and spending mess we are in when you consider the fact that the individual in charge of our beloved IRS actually failed to pay his fair share. Just sayin…
5th Lump of Coal—Five Gold Rings (aka – Global Economic Meltdown): What hasn’t been said already— that’s a gold ring for each year that’s passed since the crisis began unfolding back in 2008.
6th Lump of Coal—Six Geese a Laying (aka – Goose Egg): As in what short-term treasuries and money markets are paying you to park your money with them. Even a 1-yr CD pays pittance at just over 1 percent. Factor taxes and inflation (which will come roaring back one of these days) and it’s clear that playing it safe is proving to be a costly endeavor.
7th Lump of Coal—Seven Swans a Swimming (aka – Apple Swan Dive): The sweetheart of the market for some time has been AAPL…a common mantra in the past couple years has been “As goes AAPL, so goes the market.” The stock traded to an all-time-high just over 700 in September, but has since reversed sharply, down roughly 119 points or nearly 17 percent. Some are
wondering if AAPL has suddenly become a black swan…
8th Lump of Coal—Eight Maids a Milking (aka – Milked Investors): What buy-and-hold investors have experienced by following the advice of the so-called experts within the financial services community who’ve warned them of the perils of doing anything other than parking their money and forgetting about it. To gain perspective, one simply has to take a gander today at the bellwether S&P 500 index, which is sitting just shy of where it ended December 31, 1999, at 1,469.25. When you consider the collective fees paid by the masses for this advice…milked pretty much sums it up!
9th Lump of Coal—Nine Ladies Dancing (aka – Anemic Recovery): As in the nine quarters we’ve danced along at a clip of at least 2 percent or more in GDP growth since emerging from the 2008-09 recession. If you factor in the other five quarters (total of 13 quarter of positive growth since the recession), GDP growth has clipped along at 2.22 percent…anything but impressive.
10th Lump of Coal—Ten Lords a Leaping (aka – Disgraceful Jobless Rate): 10 percent unemployment rate is what we topped out at in October 2009. For perspective, consider the fact that unemployment sat in the area of 4.5 percent for much of 2006 to 2007. Moreover, it was at 5 percent heading into 2008. From there it went on to double over the next 21 months… staggering by any measure and nothing to joke about…
11th Lump of Coal—Eleven Pipers Piping (aka – New Debt Added): As in the nearly $11 trillion in national debt added since the start of the new millennium. That right, we started 2000 in the red by roughly $5.6 trillion (give or take several hundred million) and our national debt has since climbed to $16.2 trillion…
12th Lump of Coal—Twelve Drummers Drumming (aka – FOMC): The Fed, headed up by Bernanke and his posse—12 voting members in all. This crew and the one prior (Greenspan’s tenure) have been debasing the dollar and coming up with every type of creative tool imaginable to stimulate employment and economic growth…to no avail. Much debate as to the effectiveness of quantitative easing initiatives in terms of whether they saved us previously or will work to stimulate growth in the future. What is painfully clear is the fact the Fed has truly run out of effective ammo to counter anything bad that might happen from here forward if the economy takes a southbound header…not a pleasant prospect when you circle back to the 1st Lump of Coal—the Fiscal Cliff….
Well, there you have it—if that don’t cheer you nothing will…Doh! Hey, the good news is “we ain’t Greece.” I’ll take a stocking full of coal over being in their shoes any day of the week!
Merry Christmas, Happy Holidays and a Prosperous New Year!
Louis entered the biz in the late 80s and spent over a decade working as a trader, instilling him with unique insight into trading and the markets. In 1998 he switched gears to become the group editorial director for a large network of award-winning, trading-focused newsletters. In 2002 he became the founding editor-in-chief for two financial trade magazines—each served approx. 40,000 independent financial advisers nationwide. He’s appeared on business TV, in the business press and on numerous biz-focused radio programs in the past. He writes market commentary and analysis most days and trades on a daily basis.