ETF Wrap-Up: Governments Worldwide Not Scoring High Points With Stock Investors So Far

Whether federal, state or local-government is too big! That’s my general belief but it’s a contrarian view as people want more, (save me) not less, government.

I wrote in the conclusion of Thursday’s blog, and to subscribers over the weekend, I expected a Tuesday gap open lower if the market closed lower on Friday ahead of a three day weekend. This can often occur and we got it in spades today.

The following video replay of Friday’s podcast Greg Newton and I discuss last week’s market action (dated already?) featuring Geithner’s speech, Obama’s little “stick save” on Thursday, broken sector relationships (oil contango, dollar/gold, etc), bond auctions and so forth.

In part 2 we discuss current high PE ratios and a possible developing Ponzi scheme.

Stocks fell apart amid currency jitters in Russia which spilled over to Eastern European markets and the euro. Also Japan’s finance minister resigned as some accused him of being drunk while attending the G-7 meeting. Given how crummy the situation is in Japan why not slam shots of grappa while in Rome? Stocks in the US were made nervous by all this plus a poor Empire State Manufacturing Survey.

That will wrap things up for today. Remember, tomorrow we interview Emerging Markets Monitor (London) in a podcast tomorrow. It will no doubt be posted on Thursday.

Obviously things are going poorly everywhere around the globe. The US government and other global authorities are trying their best to micro-manage the situation. They’re obviously not scoring high points with investors so far. As was stated in our podcast well by Greg Newton, “the markets are not going to be cured overnight.” Authorities know, or should know the extent of the problems but are taking baby steps to resolve them. A more forthright approach may be better received. My belief is that they’re scared to confront the issues head-on.

Are governments too big? Yes, in my opinion they are. It’s at the core of many problems. Can the size of government be reduced? Sure, but not with current leaders-not a chance in hell.

Let’s see what happens next.

Disclaimer: Among other issues the ETF Digest maintains positions in: QQQQ, IEF, TLT, GLD, DBP, DGP, FXE, DRR, EEM, EWZ and FXI.

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