Risk On

After a slow start waiting for Europe to close, the “risk on” crowd poured it on. A hot jobless claims number and the Philly Fed encouraged them to resume the buy, buy, buy mentality. Central banks around the world are flooding their economies with liquidity and a lot of it is finding its way here.

But nothing is fixed. The U.S. economy is on life support, and Europe is tipping into a deep recession. Just check out these auto sales numbers for January:

  • Portugal -47.4%
  • France -20.7%
  • Italy -16.9%
  • Belgium -16%
  • Cyprus -17%
  • Greece -13.3%
  • Germany -.4%
  • UK unchanged
  • Spain +2.5%
  • Ireland +1.5%

Not good. But hey, the printing presses are running. Doesn’t matter if things look good or not as long as the money is flowing. Or at least that’s what the crowd seems to believe. I’m on the other side. It’s called the pain trade. And there’s a reason for that.

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