Volatility

Volatility may subside temporarily until new administration - resulting from higher index prices. But next year - when the new administration proves they are as clueless as the current administration - volatility will resume with a vengeance.

Just as FCX cut dividends - others will follow, earnings will continue to suffer, thereby index prices will succumb to more reasonable expectations. What is reasonable? 600 on S&P - could be by way of an overcorrection below that though.

The market pundits that argue stocks lift prior to end of recession are correct - the average recession has a 6% selloff prior to entering, a continued 22% decline to mark a 28% correction, then a rise around 2/3'rds the way through. But, coming out of the last recession - stocks ultimately drifted lower for years as earnings continued to disappoint. "Yeah, but the market is all knowing and has priced this into the equation." Vehemently disagree - arguably the largest credit creation in history will not go down in history as "average recession."

Immediate take - with all the short term rates nearing zero, 10 year lowest in 50 years, and 30 year at all time low - bonds are telling equities to get lost. I believe this is due to seeking safety prior to new year and will reverse. But until that trend reverses - equities and bonds will not rise together - one will give up the ghost.