What should strike fear in the global growth bulls was GE’s profit from home and business solutions dropping a whopping 41 percent.  That statistic in itself speaks mounds, saying that the growth many in expected is just not present.  If Americans are not building houses and not renovating houses, then they in fact not spending money where it needs to be spent for a recovery.  General Electric in the current quarter is looking for growth abroad and excluding a recessionary Europe which they see weakness in.  General Electric admits their is a problem in Europe, when will the financial markets?  Many claim Europe has not had an effect on our markets, but it already has.  Comparing the concerns raised by GE to those raised in the Export To Where? article, the earnings that about global growth should raise questions.

“Face reality as it is, not as it was or as you wish it to be.” – Jack Welch

The Greece debt issues have been shaping investors and traders daily routines for quite some time.  With the shift in focus from the U.S. economic issues to that of Europe many have forgotten about our countries own dire financial situation.  Talking down another countries economic decisions and dire positions comes with ease.  As we in the U.S. claim we will not make the Greece mistake, we fail to realize that we are in the midst of making that mistake.  The welfare state of Greece has many striking similarities to that of the great United State.  The issue that should strike fear in the minds of all of us is that the U.S. does not have a lender of last resort like the Greeks.  The concern that the debt ceiling struck in the financial markets in the last year will likely resurface in the future as it becomes election season.  When the national debt comes to the forefront in the coming months, the situation will look much dire, because in fact it is. This also can be related to Greece, proving that throwing money at the issue does not merely solve it, but may in fact be a hindrance down the road.  Below is Rick Santelli putting our national debt in a simplified household debt form and putting the realistic perspective on the dire predicament.

“The time to repair the roof is when the sun is shining.” – John F. Kennedy

With the continued unknown outcome of the situations abroad, uncertainty runs rampant throughout the financial markets.  Many have tried to quantify the effects of certain negative outcomes on the markets, but these estimates are rarely accurate.  As I suggested in Another Greeceful Weekend many will try to advocate things are fine when they are not. When the market turns to have its pullback, which many bears have awaited, what point is opportune to get back in the market?  For quite some time buying on the dip has been quite beneficial to many investors, but this strategies future is questionable.  The real deciding factor in the pullback story is the catalyst that causes the market to trend lower (or drop off completely).  When markets have come as far and gone so aggressively as they have in the recent past, when a reversal occurs it will likely be a dramatic one.  To clarify, a reversal is not one of these days when we are down a little bit off some not great news, a reversal is when some real negative news comes out.  The world appears to be much more investor friendly this year then last, but recall everyone opinions before the markets sold off last summer.  If you don’t recall, things were rosy, look at the decline in jobless claims last year, everything seemed to be in a full fledged recovery.  The rosy picture turned harshly negative and combined negative news had a intense effect on the market.  Negative news will once again surface again and most likely when you least expect it.  Be apprehensive of buying the dip because the bottom may be falling out from under you.

“I like to listen. I have learned a great deal from listening carefully. Most people never listen.” – Ernest Hemingway

And they say Greece will be just fine…

“Failure is simply the opportunity to begin again, this time more intelligently.” – Henry Ford

For the past few months the bulls have had their day, with continual moment upwards and not a pullback in sight.  The volatility of last year all but seemed to vanish as a new calendar suggest a brand new market.  Did the S&P just happen to switch its style up, or is the old volatile S&P of last year hidden behind the mask of good economic news?  With so many investors calling the S&P to higher and higher levels, one just has to wonder, is this not a mere replication of what we saw last year?  The retail investors seems to get caught in the trap over and over again with all the experts saying candidly that we will move higher levels.  We at some point will move to the new highs, but will do so with fewer economic headwinds.  The events around the world are by no means settled and only look to get worse, both economically and politically.  All the good economic news has surely made investors feel warm and fuzzy on the inside, but when bad news comes out once again (which it will, because it always does) the bullish world will see a short and sudden death.  Those suggesting that the market will continue to infinity and beyond in the coming months and years are just plain wrong.  The U.S. led the world into the great recession and we must wait for the rest of the world to experience this economic downturn before the U.S. is able once again to lead the world into a recovery.  With that being said, the increased bullish sentiment we have seen is a mere red  flag that investors need to be leery of.

“I always tried to turn every disaster into an opportunity” – John D. Rockefeller