The End Game

So where do we go from here… Some wild guesses. Down from here, erratically, into the fall until the consensus is pretty sure that Obama won’t be coming back, then a rally based on hope into the election, probably without a really convincing bottom. However, it will be time to sell bonds and cover shorts in stocks, if not even go long. If Romney wins, then the rally will continue. If not, not.

Assuming Romney, the rally will probably last through the first quarter of 2013 until it becomes clear that he’s not going to fix anything either. Then time to be long bonds and short stocks again, a long drop, probably into 2014, punctuated by increasingly panicky Fed and executive interventions, ending up with a panic bottom somewhere around S&P 400.

Turmoil and opportunity will ensue. Things might even start to be fixed.

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