Keith Springer

Keith Springer
Contributor since: 2011
Company: Springer Financial Advisors
Thanks. I love "Wag the Dog"!
Thanks Jeff, I appreciate your comments but this article was just a brief follow-up to my Tuesday article that was very in depth and technical. I am very conscious of the fact that quality makes this site what it is.
The investment climate is incredibly simple at the moment. It’s not earnings, inflation or economic data investors are looking at right now. It’s words they are waiting for. At the moment, all eyes are on Ben Bernanke and his financial puppeteers to see what he will say on Friday when the Jackson Hole summit wraps up. Can Super-Ben save the world again (albeit temporarily) or is he just rearranging the chairs on the Titanic?
The market is getting a little reprieve from the Greek crises, but it certain to only be temporary. The problems there are the same that are in most of the developed world including here – The aging US population which is naturally spending less as it ages, which occurs at the end of every generation, and the extremely over-indebted population that simply has no money! These are exactly what I discuss in my new book, Facing Goliath: How to Triumph in the Dangerous Market Ahead.
Keith Springer
Author of Facing Goliath: How to Triumph in the Dangerous Market Ahead.
Things are getting pretty bad out there and the government isn’t even coming close to addressing the core problem. Without government stimulus, the economy will continue shrinking. The issue is clear – when the Fed stops printing money it is the exact same as implementing a monetary tightening program! But none of that solves the main issue.
The normal demographic cycle of our rapidly aging population, which naturally spends less as people get older coupled with a massively over-leveraged population, is going to continue to be a drag on the economy. Given what is going on right now, investors need to understand where we are and where we’re going so they can not only protect their money, but also profit from it.
Keith Springer, Author
Facing Goliath – How to Triumph in the Dangerous Market Ahead
The markets are in limbo again today, waiting to see if the Fed will initiate another Quantitative easing program to combat the slowing economy. My bet is that they will continue with QE Mini-Me, but not another huge round of direct stimulus. This will hold back stocks until something comes along to drive stocks higher, most likely next quarter’s earnings.
As the unrest in Libya continues to freak the bejeesus out of everyone, all eyes are on Saudi Arabia to see if the global unrest takes them down as well. It’s quite simple. If Saudi goes, it will be complete mayhem, and oil will spike to $150 a barrel. Basically what Bill Murray was talking about in Ghostbusters: dogs and cats living together… mass hysteria! Could it happen? Yes. Is it likely? NO!
The concern here is that higher oil prices can do three things:
1.Drive up worldwide inflation
2.Threatens political stability in neighboring countries….and Wisconsin
3.Bring another global recession which it did last time when it went to $160 a barrel
China barks at inflation, but clearly their bark is harsher than their bite. Faced with growing inflation, China raised the one-year lending rate and the one-year deposit rate by a quarter point to 6.06% and 3% respectively. Although this looks tough and is making the U.S. Stock market nervous, the deposit rate still remains 2 percentage points less than the pace of consumer inflation. Clearly they will have to raise rates further to truly combat inflation.
As the world watches Cairo Egypt, the stock market is deciding whether these geopolitical events will be the catalyst for a correction. There is a tug-o-war right now between the positives of strong earnings and positive economic news vs. the unrest in Egypt and if it could spread to Asia. The longer term trend for stocks remains positive and a correction should be shallow.
The markets are holding tight in the face of renewed tension over the European crisis. Although Europe’s woes are important, corporate earnings are more important, and they have been and will continue to be stellar. That’s what will drive stocks higher. Not until earnings estimates start to come in below estimates and or earnings disappointments become prominent, will the rally be over.

2 things I’m watching closely. One that we have had 3 negative January’s in a row and we have never had 4. And two, the market has been up double digits the last 2 years and have never had 3 in a row. That said, I expect the market to finish off well in January, correct once earnings season is over and continue higher making its year high somewhere by the summer.
Stocks continue to fly high in the face of good corporate earnings and should continue to do so as earnings will keep on pumping higher. We are well overdue for a correction, which probably won’t come until after earnings season is over. The wildcard right now is Europe. Their debt crisis is nowhere near over, but if they can keep the problems out of the headlines, stocks and bonds will continue to do well.
It will prove to be a temporary setback. Apple earnings should be great. In fact, Jobs’ announcement was most likely timed to come out at the same time that earnings come out, because earnings will be better than expected and that will take the attention off of him.
It took a little while to digest the ADP jobs report showed 297k new jobs. That report initially had the market worried that it might be too much of a good thing which would ultimately make Bernanke and his Federal Reserve troupe stop the presses. However the Fed minutes still show there is risk to the downside and therefore little risk of the Fed or support from Obama’s boys to stop the Quantative easing program. We’re in the Goldilocks period right now. Enough growth to keep the economy from failing but not enough to generate too much inflation.
The market is digesting the new tax compromise. It will certainly increase growth next year and Help stocks, but the cost will be enormous and will raise interest rates. Refinance that loan now if you need to.
Do our lawmakers know no limits to our nations credit card?
All Aboard Helicopter Ben’s Chopper... President Obama hopped on board the chopper by extending the “Bush tax cuts”. This coupled with Fed Chairman Bernanke’s comments that he will continue throwing money at the economy for as long as it takes. Knowing that there will be no tax hikes and that there will be a QE3, QE4 and a QE5 if necessary, will keep this stock market humming? However, in the short term I would expect a brief correction as the market is overbought, which should prove to be a good buying opportunity.
Finally admitting that the economy stinks, he came out and said point blank to expect QE3. I guess that is his admission that QE2 likely won’t work. Although that’s dire for the economy in the long term, it will help the markets in the short term. Investors need to be invested here, but careful as to what to own. Look at our current newsletter for more information.
Fuel for the fire! Helicopter Ben is at it again. Finally admitting that the economy stinks, he came out and said point blank to expect QE3. I guess that is his admission that QE2 likely won’t work.
Keith is one of the smartest, most inciteful advisors and analysts alive today!