Obama Fightback = Market Rally

PUBLISHED: 17 Oct 2012 @ 21:42 | Comments (0) | More info about Clem Chambers

Tuesday 16^th was a cracking day for the portfolio. It is currently overweight with banks and Trinity Mirror, all of which rallied.

I’m distrustful of big winning spikes especially when things hang in the balance, because the move often heavily reverses as the start of a big, opposing directional move.

We will know on Wednesday. If it crashes it will be Obama whose lame performance in the last debate stopped the markets in their tracks.

Whilst US Presidents are pretty impotent in general, the overwhelming gravity of the US sovereign debt and the twin deficits mean whoever wins won’t be able to do much in four years.

No wonder Obama shows so little enthusiasm in the first debate.

Presidents have little real power, accept the ability to start wars. As politicians crave power it is therefore no wonder that a President starts wars; it’s the only lever they have to pull.

Politics aside, I prefer a rallying market so my wallet hopes Obama will fight back.

The long term outcome is the same. The west will flush its debts in due course, spiking hard assets in the process.

This means being long on assets in general and equities in particular whilst shorting cash, ie borrowed up as far as is prudent.

It takes nerve to lever up in the recession of a lifetime, but better to go long at the bottom than at the top.

Meanwhile happy days; for now.

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