Coolhand's Market Analysis

We've seen some pretty serious market events the past few months or so and it just seems to keep getting worse. I've been monitoring the analysis I receive from Stratfor and they have so far not presented any material that would indicate we are getting close to turning the corner. Unfortunately, the economy was the one area they gave themselves an "F" in out of all the geopolitical events they covered last year.

That didn't necessarily mean they didn't have a clue about the economy. I think it means that the situation was so convoluted on a global scale that it was exceedingly difficult to accurately gauge how things would play out. For Stratfor, using the past to predict the future fell far short as a means to discern when our economy would begin to heal.

And I don't see it getting better any time soon either. As bad a shape as our own banking sector is in (and it's bad) the rest of the world (specifically the economic powers) are in worse shape. The EU in particular loaned billions to emerging markets throughout it's geopolitical sphere (as if buying our own toxic assets weren't bad enough). Many countries are teetering on failure and in danger of following the path of Iceland, except there will be more of a domino effect if these failures begin to occur, which would then impact major economic powers. And the IMF has no where near enough capital to prevent it. It's hard to envision the global economy getting better without the EU.

As for our own economy, it seems our administration has tried just about everything to try to turn things around and nothing has had any real effect, other than to make a bad situation seemingly worse.

So what's it going to take? I think the answer has been out there for a long time. Let the companies fail that deserve to fail. Don't attempt to bail out any one. Sure, it'll be painful, perhaps very painful. But the day of reckoning has to come sooner or later.

Unfortunately for politicians, that's akin to political suicide. And therein lies the problem.