Arnold has spent several hours (nearly asleep) observing former Governor Jon Corzine’s testimony before Congress regarding the failure of MF Global and the disappearance of up to $1.2 billion in CUSTOMER funds. Mr. Corzine’s response is “I did not intend…” And coincidentally when Attorney General Eric Holder testified to Congress last week he said, “it has to do with your state of mind.” So perjury is not perjury, if I say so, according to Attorney General Holder and Governor Corzine. If I say that I did not intend to do whatever (you fill in the blank) and/or your state of mind indicates that you did not intend for it to happen, then it’s OK. I am sure that serial killers are studying these assertions. So that means no matter what crime has been committed, the defendant says, “I did not intend that” or “my state of mind was,” and no defendant will ever be convicted again. This is another great legal development!
The European nonsense is now following what the Federal Reserve started in 2008 and 2009. Previously Germany had said no, but now Europe is toast. There will be some small short term benefit, then watch out below! Simply stated, one can not borrow him or herself (or a country or continent) out of debt. When you have a debt crisis, more borrowing makes it worse not better. This would seem pretty obvious except to bureaucrats.
- The DJIA should have a strong year end rally. Then early next year the stock markets should turn down.
- Gold looks to have peaked; which would suggest that gold too, will start to fall next year as well.
- Interest rates on 30 year Treasuries have not risen much; there should be some further increase in rates.
- Oil is still at or near $100 a barrel; and does not look to be heading to $120.
- The dollar has been relatively strong and should become stronger after the first of the year.
- Real estate pricing looks weaker into next year and valuations should resume falling next year.
- The economy has looked stronger into the fourth quarter and should become weaker in the first quarter.
Arnold