December 16, 2012
Weekly Market Outlook
By Keith Schneider
The market waffled this week, marginally down as it contemplates whether or not we do a Thelma and Louise over the fiscal cliff. It's hard to conceive that the current circus will prevail, but of course it could. The market however, is holding up rather well all things considered. It's telegraphing that we will be hitting the brakes before we go over the edge. So, as we go into the the final innings regarding the fiscal cliff amid both political parties being held hostage to dogma, they should be asking of themselves some basic questions and exercise flexibility.
Churchill in 1908, said the following when faced with a similar quandary to those currently on Capitol Hill when he was President of the Board of Trade:
"Socialism seeks to pull down wealth; Liberalism seeks to raise up poverty. Socialism would destroy private interests. Liberalism would preserve them, by reconciling them with public right. Socialism would kill enterprise; Liberalism would rescue enterprise from the trammels of privilege and preference. Socialism assails the preeminence of the individual, Liberalism seeks to build up a minimum standard for the mass. Socialism exalts the rule, Liberalism exalts the man. Socialism attacks capitalism, Liberalism attacks monopoly."
Churchill was an aristocrat, but changed parties several times, especially early in his career by challenging his aristocratic roots in supporting the beginning of the British welfare system. He believed that a balanced approach was possible. He was flawed and sometimes on the wrong side of history (India's independence for instance) but correct on the most important things, most notably, never appeasing the Nazis and helping those severely impoverished. One could say his biggest dogma was doing what he thought was right and not just taking the party line. Churchill often compromised and quickly adjusted to events as he saw them change. Our politicians on both sides need to take notice, read something written over 100 years ago by one of the worlds greatest leaders and abide.
This week's market actions have brought us some interesting divergences. The broad based S&P 500 held onto its bullish market phase but the narrower based NASDAQ 100 slipped into a bear phase and is looking ripe for continued weakness. This week's video will cover these anomalies as well as an emerging sector.
Have a great weekend
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