Dow 11,000 eh? It seems that the equities markets have now completely lost their minds. As much as I wish for a recovery, this is simply not a sustainable solution. A few weeks back we were afraid of bad news, and almost as if someone flipped a switch, everyone is now praying for more bad ( economic) news. Why? So that qe2 can get underway. This corresponds with my “pain management” theory. This country is simply looking for more painkillers, and is largely uninterested in solving any issues at the fundamental level.
Now, part of me is hoping for a complete 360 from bernanke, such that we’ll actually tighten monetary policy and blow all these overzealous morons out of the water. Oh wait, that includes me too.
Something else I’ve been playing with is the relationship between the Chinese stimulus circa 2009, china’s infrastructure/high speed rail spend, and the demand picture for related commodities like iron ore/steel and aluminum. I’m wondering if it is a good idea to shrink the timeline for any macro plays on iron ore and coking coal, to minimize the effects of a possible drop off in demand from China. Still have to wrestle this out, but it’ll probably be my next project.