Washington, DC -- (ReleaseWire) -- 12/01/2015 --The Bermuda Triangle. The Dragon's Triangle. Devil's Graveyards. In the 1970s, Dr. Ivan Sanderson identified twelve "vile vortices," areas of the globe that supposedly abound in 'magnetic anomalies,' bizarre animal behavior, mysterious disappearances. Even Amelia Earhart was supposed to have fallen prey to one of these phenomena.
Watching the markets this past week, I can only wonder if we've ventured into yet another vile vortex, a financial one where rationality and science disappear, only to be replaced by wishful thinking and nonsense masquerading as understanding of the economic fundamentals. After the tragic terrorist attacks in Paris, the Fed's statement that they intend to raise interest rates in December, and weeks of sub-par macroeconomic indicators and earnings reports, global equities markets responded by having the best week on average of the year. Is this what it feels like to fly into the Bermuda Triangle during a storm?
The S&P 500 grew approximately 3.5 percent. Germany was up 3.8 percent. London grew 3.5 percent. All of this, of course, completely out of sync with macro global business and economic numbers. For example, The Wall Street Journal reported on November 8th that China's exports fell 6.9 percent and imports fell by 18.8 percent in October year over year, and China's stock market closed up 3.61 percent for the week last week. And on November 9th the Journal also reported that Japanese corporate earnings are now down negative three percent year over year, and their markets this week closed up 2.19 percent. There's even more. Reuters reported on November 3rd that U.S. factory orders declined one percent, after a downward revision of 2.1 percent in August. If the market should be navigating based on the fundamentals, then why doesn't it want to correlate with economic reality? Clearly our compasses are being affected by some strange magnetic anomaly.
Yet another thing the markets seem determined to ignore are the minutes from the Fed's last meeting, indicating a strong intention to raise interest rates in December. At basically zero percent interest rates, and after having been continually propped up by central bank money-printing, the economy is still barely limping along at an ever slower pace, and then the Fed says, "We're planning on raising rates." Does a rational, truly free market respond to that by running up over 2 percent? Not in any sane world. And that's not even considering the seemingly callous lack of response to the tragic loss of well over a hundred lives in Paris.
A report from Pew Hispanic that was recently released showed that more Mexican immigrants, legal and not, have left the United States since 2009 than have entered. Not because of enforcement or politics, but because of economics. The employment situation in the States continues to be difficult, and Mexico's economy has improved more since the 2008 crisis than ours. Median household income peaked nearly 15 years ago in 81 percent of American counties, and even those counties that got a boost from the oil shale boom peaked a year ago.
What exactly does the Federal Reserve even do? They're navigating us through this Devil's Graveyard, flying in circles while all the while telling us that we're making forward progress. Here's the news: the tank is running out of fuel, and investors need to be looking for their parachutes and flotation devices, calibrating their own compasses. What preparations are you making?
For over a quarter century, the experienced advisors of Bennett Group Financial Services, LLC have been successfully guiding clients through the complexities of wealth management. Bennett Group Financial Services provides individual investors, corporations and foundations with holistic investment strategies using unique portfolio solutions across a breadth of asset classes. Our unique vision and insight into market trends makes Bennett Group Financial Services a much sought after expert resource with regular appearances on Fox News Channel, CNBC, Bloomberg TV, and MSNBC as well as being featured in Business Week, Fortune, The NY Times, The NY Sun, Washington Business Journal in addition to our highly regarded weekly talk radio program - Financial Mythbusting. Through attentive service and prudent, thoughtful advice, Bennett Group Financial Services, LLC strives to consistently provide its clients with the highest quality of guidance and personalized service available.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett.
Dawn Bennett Writes Article, "The Market's Vile Vortex" Regarding the Markets