3 key themes for 2013
To do well in the market in the coming year, you must understand the euro, oil and gold.
Three trends that weren't supposed to happen in 2013: a strong euro, weak oil and positive gold. These three trends have to be explored, because they are pretty difficult to fathom but must be fathomed if we are to understand 2013.
First, the euro. We all know that the euro was supposed to be kaput by now, replaced by the deutsche mark, franc, lira and everything else, with the deutsche mark starting the trend. This was a total misread of history and of the denouement of World War II. There's no way that we could ever understand the depth of fear of another war or the guilt the Germans feel. They are simply not going to let this happen. We focused only on the economics of it, not the politics, and the richer countries are willing to lose money endlessly on Greece if that's what it takes, because Spain, Italy and Ireland are coming back, as is the European stock market. The bankers and hedge funds in this country are way too smart for their own good, because they know the numbers but not the history. The euro could go higher still, because I sense that no one large owns it.
Oil is a function of supply. It is beginning to dawn on people that the statistics for the U.S. are far more robust than what the numbers and predictions indicate. Every month, numbers coming out of Texas and North Dakota are much better than people expect. Endless upside surprises, and yet most of the big interests aren't even drilling there yet. The major oils are slow of foot and let the independents in while they focused on unstable areas such as West Africa and Indonesia, both of which will perhaps be confiscated by poor countries that mistakenly gave them rights. The whole federal-lands thing is a big sideshow.
There's talk that natural gas will tighten because of the lack of drilling, but Mark Papa, the best wildcatter there is and the CEO of EOG Resources (EOG), says there's no demand for the stuff, and very few plants are being built to use it. Plus all of the power plants that can convert have already done so. If we could harness natural gas as a surface fuel, I have no doubt that gasoline would be at $2.50 rather fast, but the administration would despise that, because it would encourage fossil fuel use. We are the reason why oil is not going higher. If Iran joined the Council of Nations, oil would go to $75, but it won't, so take that off the table.
Finally, gold, is now finishing up 6% for the year despite predictions that this, the 12th straight up year, would bring the long-expected crash. Gold is the opposite of oil. There's just not enough of it. Go over the quarters of Goldcorp (GG), Agnico-Eagle Mines (AEM), Newmont Mining (NEM) and Barrick Gold (ABX). The costs are astronomical, the finds pitiful and, like oil, the only countries where confiscation isn't an issue are in North America. Everything else is dicey.
In 2013 it will be even harder to find, so gold, I believe, will have still one more up year.
Gold is endlessly described as a hedge against inflation, or a hedge against chaos, or a hedge against deflation, or a hedge against central bank reflation. Gold is a story of the worldwide middle class trying to get its hands on some precious metals to become and feel rich. There's not enough gold being found. Period. End of story.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
More from TheStreet.com
1. - Short the dollar against the Euro
2. - Short bonds
3. - Listen to Cramer and then do the opposite of whatever he recommends
If you want to take it a step further, get used to the ever expanding underground economy that will only grow exponentially thanks to tax hikes and Obamacare. While it's hard to imagine now, the amount of business conducted under the table is going to go through the roof. More and more workers will be paid in cash and won't even be listed on the books. We're going to see a huge increase in the numbers of workers employed through temp agencies. We're also going to see lots of people "hired" as independent contractors - they'll be doing the same work but they'll be responsible for their own benefits, tax withholdings, etc... Look for big increases in usage of websites like Craig's List as people will be bartering and trading and paying cash person-to-person to avoid taxes. In addition, as food prices rise, you'll see more and more people getting their food from places other than the grocery store - they'll be growing/raising their own, fishing and hunting more, utilizing more roadside stands and markets, etc...
The Major Problem....With utilization of a Mobile workforce, Independent contractors, Temporary workforce and Underground employment....Is in my opinion a loss leader to the "Destruction of the Middleclass.".....Not necessarily elimination, but certainly a change in values assigned..
And a much bigger "wealth distribution" to those in control or what is considered the Rich or upper levels of a Society.
The lower middleclasses and the poor will struggle as a undermining portion of a Nation..
The barriers will become harder to break....And the Elite will encumber themselves only to their own.
I think Greece is a good example in recent times...But we are not really close to their plights at this time.....I would sooner compare ourselves to our period of time say 1850s through roughly the 1940s.
Without stabilization, we could fall back to somewhere in those time frames for a large segment of our population...Just getting by..
Brutus....Yes I see a much bigger influx of "independant contractors" and such organizations as "man power" or other "temp agencies"...
Companies and Corporations want to eliminate those departments, that have to handle people, along with training and wasting production time on teaching people the ropes or bringing them into the "company culture". It eliminates benefits,pensions,healthcare,sick time and vacations from the business at hand. And the time is spent more wisely adding to the bottom line...
In many cases it stifles employee organizations and the possibility of Unions entering; The hiring or contracting Workplace....Majority of workers become independant contractors and it's every man/woman for themselves....Competeing for that slot, whether it be temporary or in some cases long term. Legions of workers with no permanent ties to the workplace..
Kinda like hiring "vagabond worker bees" or "soldiers of fortune."
And a "handful or a couple of people" in Human Resources can manage the workforce.
The "Underground Workforce" is becoming much more prevalent....Especially where one breadwinner has a stable taxpaying job with benefits...The other part of the group or pair has the freedom to freelance and add to household income, picking and choosing to work for the man...
This has been going on for 2-3 decades and is getting much worst...
I find the Majority of this group to be somewhat lazy and and mediocre at best with their skills..
But they are accepted because they can be paid less and are hired to to do a specific task for a short time period....Their back-up is the person with stable employment; Otherwise they would starve to death...
There is great advantage to illegal or legal immigrants in this mantra....
And we as Americans in many cases exploit this factor...It's just done quietly.
To do well in the market in the coming year, you must understand the euro, oil and gold.
heres what u need understand....its all KOOLADE!!!
To "support confidence in the markets" the government central economic planners sit behind the curtain pulling the levers and pushing the buttons that keep the stock markets trending gently upward. This year they've decided to engineer a 5-7% gain.
I'm not really sure NEXT Time.....Don't really see any running to the exits...Volume kinda THIN...
Particularily on on stable equities.....Maybe a few losses being taken, others are buying some stocks that are beaten down the last week or so about 3-5%
Other Companies that have came out with prospects or going forward good ratings are being gobbled..
The Market doesn't really have any "stable" guidposts at this time.
And everyone seems to be sitting on their hands and playing "wait and see." ?????
Tog & Brutus
I have seen this trend of companies using hiring agencies in Ontario for a decade now. General laborer and low skill manufacturing (what little is left) use agencies exclusively, it is impossible to be hired full time in those areas. Makes sense as new projects/contracts may last a few months but these days there are no guarantees about work after that.
As far as alternative food sources I have friends who have built large planters in their backyards (average size lots for a home built in the last 10 years) and have started composting table scraps for soil. They are buying maybe 1/2 the veggies and 1/3 the fruit they previously bought.... might have to join in.
Just don't feel this "fiscal cliff" BS is that big of a deal...And trends will remain intact..
With a possible switch and shuffle effect...That will be short lived...
But Kramer may have a better Crystal Ball..........???
I bought mine at WalMart.
Haven't been to a Casino for almost a month....And we have a little Christmas money...left over.
Ms Lilly says she wants me to treat her to a little R&R....We deserve it.
BRUTISBEAR5:Let me set the record straight.Yes, I retired as a teacher when they
offered a buyout if you had 20 years service.I retired and opened a business.I hope to
go public with it in 2 years.Be sure to buy the IPO, Brutis and Classic lady.
The Republican, Neo-Con. Libertarian and Tea Party Fascists plans to take over America will never succeed as long as all us vigilant, just and patriotic Democrats are there to STOP you.
It will NEVER happen under our watch!
God bless Freedom, Prosperity and Justice for all in America!
P.S. DIE WALL STREET, DIE!
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