Now that Wall Street has essentially taken over the US Government and now controls the Treasury printing presses, I doubt they will allow the stock market to go down too much. Look at what happened after Lehman, they just gave the big banks money to boost stock prices. They even lied to the Congress. It can’t work forever, but it can work a LOT longer than many people think. Something unexpected happens, and it will be hello QE 3.
The only thing that can stop the party soon is if the Europeans can’t throw together some kind of their own TARP plan to stop the bond vigilantes’ attack. They had better do it in the next few months. I wouldn’t be a bit surprised if the USA ended up somehow bailing Europe out with some electronically created dollars from cyberspace.
The debt ceiling will be raised using the gang of six plan. Obama was all smiles on TV. You can read some details on the Fox Noise web site.
Apple just keeps making more and more and more money! Their cash hoard increased by $10,000,000,000 LAST QUARTER. 86% of the Fortune 500 companies are testing the ipad for potential adoption.
There is only one thing down the road that the Wall Street/Government complex can’t control, the supply of oil. When that starts to decrease, the party is over. That is at least 4 years away, and maybe 12? That will be when the money printing will REALLY start.

I don’t agree that it all depends on the supply of oil some four to twelve years down the road. Ed.’s sentiments are that it’s all happening now and that armageddon financially is being stoked by what’s occurring in the here and now.

So many commentators are talking about the collapse of the Euro or, alternatively, a restricted EU with deeper integration and, essentially, a United States of Europe. The cutting loose of Greece and, maybe, others will have banking consequences which may affect the world.

The US debt overhang cannot, surely, go on for another four years, let alone twelve, until oil supply is presumed to be collapsing.

Since there’s nowhere safe to put your wealth except cash and bullion at the present time, as Ed. says, then who can say that we have another four to twelve years before financial “armageddon” occurs?

Comment by Bill, near Slidell: “I wouldn’t be a bit surprised if the USA ended up somehow bailing Europe out with some electronically created dollars from cyberspace.”

Bill:

The US FED, together with their agents, JPM and GS, have been bailing out Euroland extensively over the past year. The FED has forked over hundreds of billions (unbeknown to the American people!), while they have also provided funding to JPM and GS to sell CDSs to Europe, in an effort to keep Europe’s sovereign bond rates artificially low; and they’ve been successful until last week, when those sovereign bond rates started ratcheting up quite a bit. Americans don’t realize that JPM and GS have assumed massive counter-party risk in the process, and it will come back to haunt them (until the FED secretly bails out JPM and GS again!).

The die has been cast.

this ‘air’ is surpassing that of ‘06 when houses were flipped at 25% IN 6 MOS.

i’ve never seen(felt) such a ostrich attitude.

it points to the ability of human beings to delude themselves, peter.

but i do hope you are enjoying your view of the lake……water has such a calming effect…..its been my favorite solace since i first saw it in ‘55…..if another boat comes in my anchorage in the bahamas, i go to a new one.

Don’t be surprised if the Dow makes it to my 13,000 year end target as soon as the debt ceiling is increased at the end of July.
Next year the stock markets will set new highs, unless the Europeans shoot themselves in the foot. Germany and France probably won’t let that happen.
As JFK said, man made problems CAN be solved by man.
The coming shortage of crude oil, whether it begins in 4 years, or is pushed out to 12 years by a combination of horizontal drilling with multi-stage fracturing, combined with greatly increased oil exports by Iraq, cannot be changed by human action. You start to decrease the supply of something that now produces 35% of all the energy used, and the economy MUST contract. No financial manipulation can change that. It is physics. Only some new technology can change that. It probably won’t.

My understanding is that Germany will not do a bond haircut again – for Greece or for any other country. Will their constitutional court, reporting in the autumn, allow Merkel to support the eurozone much further? Will an anti-EU party arise in Germany to make it more difficult for Merkel to continue her devotion to the euro?

My point is that to write “will” for the markets setting new highs next year seems to me to be unwise.

I don’t know the context in which JFK said that man-made problems can be solved by man, but this can only be true all the time if we ignore the human cost on every occasion.

The misery, unemployment, hunger and depression of Germany in the 1930s was, indeed, a man-made problem solved by man but the human cost was simply enormous.

The solution for 1930s Germany was racial nationalism produced by Hitler resulting in employment and hope in the building of war materiel. But the cost was 50 million dead human beings.

Whilst I accept that there must be a finite amount of oil under the ground, and whilst I accept that the exponentially increasing size of the global population will one day outstrip the amount of oil obtainable from the ground, I find numeric predictions look like emperors with no clothes on.

Because we don’t know how the oil got itself formed underground in the first place, we can have no idea how much was down there to start with and how much is left. No idea whatsoever!

Deep water drilling is making more places on Earth available for oil exploration, and who knows how much this will finally bring to the surface. We have no idea whatsoever! The arctic is not yet emptied nor even started. How much this will yield, we do not know.

With the IAEA taking Iran to the General Assembly for making weapons-grade uranium; with Israel becoming more and more nationalistically paranoid; with the Arab Spring making their nations more dictatorial; etc, I would have thought that a safer numeric prediction would be that the world will be at war within 4-12 years.

If this happens, then the degree of depopulation will make the consumption of oil much less than now, causing it to last for many more decades than one.

So, I suppose I am sceptical about a great year for stock markets in 2012 and the oil supply shortage occurring in 4-12 years time.