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"Rose-colored glasses"? or "A thousand years of rain"?

Foreign Affairs article, just posted on Twitter, is a sobering reminder of how even human tragedy isn't enough at times to mitigate political motivations!  Especially appropriate posting by FA given events today in Japan and Hawaii.

Markets continue to show signs of unease, and as technicians might say, consolidation from previously over-extended levels.  That said, one has to wonder why markets were unravelling when oil was surging towards $110/bbl and not rallying now that oil is settling down.  Or why fears of a "Day of Rage" in Saudi Arabia caused markets to sell off, yet now that the sun has set in Riyadh with relative calm, the markets are not more positive.  Finally, has all the recent economic data that has shown very encouraging signs of a resurgent economy especially in the US not been flashing on all radar screens?

Now, before I get bear-mail reminding me of Moody's downgrade of Spain and other PIIGS issues, or the US muni situation which is likely to be a continued drag on growth, or the hiking of rates in many EM countries to thwart inflationary spikes, or the impact that even recent levels of oil might have on slowing global consumption.....all duly noted!

But one has to assess at what point the markets have priced in all of those headwinds and if the pricing has been of 'headwinds' or 'gale force winds'???
As always, each investor/reader will have to opine for themselves, and this note is only meant to be thought-provoking, not investment advice.  I, for one, am accepting of the "consolidation" mode and more focused on the longer-term positives that are more likely to benefit equity valuations.  But each investor should be doing a thorough weighing of both the global good news with the global bad news especially at times like we've experienced recently where the market acts on one day as if it's seeing the world through rose-colored glasses, then on other days it's acting like we're in for a thousand years of rain!


(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
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