|
Grizzly's
Growlings Back Issues
Monday Morning Market Musings 01/25/99
Let's Make a Deal
In his State of the Union address two years ago, President Clinton looked directly into the television cameras and mouthed these words: "The era of big government is over."In last Tuesday’s State of the Union address, President Clinton dished out enough goodies, handouts, subsidies, and outright gifts to make Monte Hall jealous. In all, Clinton proposed some 25 new federal programs and expansion of some 25 others, unleashing more than $3.4 trillion in new federal spending.
Maybe it’s not too late to change the charges pending against him in the US Senate. Apparently Bill Clinton is as at-ease about lying about his vision of government as he is about lying about sex.
In an ultimate dose of doublespeak, President Clinton proposed spending the bulk of the budget "surplus" on "saving" the Social Security system. The irony here is that there is no budget surplus. Clinton and his minions are using outright deceptive and dishonest legerdemain with the government’s ledgers to create the illusion of a surplus. Indeed, it is the current surplus of some $80 billion in the supposedly "off-budget" Social Security Trust Fund that Clinton is using to justify recanting his promise that "the era of big government is over." If you keep the current Social Security "surplus" off the books, there remains a budget deficit of some $40 billion.
Most disturbing for both Bulls and Bears is Clinton’s proposal to allow all those wise and well-intentioned bureaucrats in the Social Security Administration to buy some $700 billion in stocks with our social security money. Seems the Social Security sages are just not satisfied with the 3% or so real return they’re getting on T-Bonds.
The percentage of bullish investment advisors has once again surged above 60%. If you throw in President Clinton & Company’s bullishness, you know THE top in the equity markets can’t bee too far away, if we haven’t seen it already. By the time the government recognizes a trend, it’s almost always just about over. Where were these "expert investment advisors" back in 1982 when the DJIA was languishing around 777? Social Security would really be secure if they had gotten us in, then.
Fortunately, Federal Reserve Board honcho Alan Greenspan knows better. The official opposition of Sir Alan of Greenspan should be enough to put the kibosh the whole enchilada.
The DJIA is now down over 5% from its high just two weeks ago. Five percent drops are a dime a dozen, but keep in mind that every ten percent correction starts with a five drop, and every twenty percent "bear market" begins with a ten percent correction.
Just as they did last July, the Elliott Wave patterns potentially are saying, " THE top is in." We continue with our ongoing overall outlook for US stocks: FULL CRASH ALERT!
