And then we have the first five days of January rally, the so-called "January Effect Rally." And to then we have the traditional rally in the last part of January and we're just off to the races...
Median home prices are rising and it's clear that existing home statistics are getting better -- and don't look at the fact that we have a million new foreclosed units coming to market in the first quarter now that all the legal hurdles have been cleared. So we don’t have to worry about that because there's plenty of liquidity around. And that's not going to weigh on prices like it did the last four years.
The timing then is helping the shills because the Unwashed, I mean less sophisticated investors, are taught to buy in December. They're taught that we have the Santa Claus rally then we have the End of December rally because there won't be any tax loss selling, etcetera and so on.
Now the fiscal cliff kept getting in the way of the traditional yearend rally so the shills had to come up with a way to manage that issue, and the way they've been able to do it is by taking what little statements have been made publicly out of the White House or John Boehner's office and adding a lot into it that they haven't actually said.
The fiscal cliff issue, of course, is not bogus -- but the timing of its promotion is. This concept of putting in an artificial deadline of December 31 has been sold to the public strictly for political reasons in order to keep pressure on both the White House and Congress to work out a deal by a certain deadline, even though it is a deadline that is completely artificial, which they, the White House and Congress, have imposed.
Why? Because it creates "drama" -- and "drama" sells.
Drama always sells whether it's general media or entertainment media or financial media. Everything has become drama in media and it doesn't make any difference any more what venue it is.
Have the lives of the Unwashed, I mean less sophisticated investors, really become that boring? The Congress and the White House both know that the markets are going to have a knee-jerk reaction rally on any resolution even if it's a bad resolution because the drama they have created over this means that even a bad resolution is going to result in a relief rally in the markets.
The Republicans who normally wouldn't go along with something like this have gone along with it. Why? Because when some sort of fiscal cliff deal is going to be reached by the end of the year. But it's going to be half-assed deal that's going to be maybe $2 billion in revenue raising and maybe $2 billion in spending reductions. Maybe.
And they're not going to have any resolution yet on the debt ceiling limit. That's going to be another whole drama played out in February. The net result is that the proverbial can gets kicked down the road for another six months -- or even until the end of the year.
However the problems aren't being solved -- and they're not even being addressed. Now this suits both Republicans' and Democrats' agendas. The Democrats get the gravy out of it to at least be able to tout a "resolution." The Unwashed, sorry, less sophisticated investors, don't know enough economics to know that actually nothing has been resolved. And the Republicans get a knee-jerk rally to short into...
For the rest of this exclusive column by independent political/ economic analyst Al Martin, click on to Al Martin Raw.
* AL MARTIN, author of "The Conspirators: Secrets of an Iran Contra Insider," is an Independent Political-Economic Analyst with 25 years of experience as a trader on NYMEX, CME, CBOT and CFTC. He is also currently trading the commodity futures market day and night and has a teleconferencing service to facilitate transactions in the markets. This is a service for independent market-experienced traders.
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