There’s a whole lot of bad news, right? It’s ugly stuff. The United States is temporarily in the lead in support for rebel Libyans, unemployment numbers have ticked up slightly, and oil prices are high. (Of course, a conservative news machine suggested, over the weekend, that we buy gas over last weekend “because prices were sure to rise Monday.” Gas prices went down slightly on Monday, proving, perhaps, that news shows should report news, not try to make news.)
Here’s the thing: Despite all the awful news, the market has been on a tear, rising rather than falling. This is written Tuesday morning, and — who knows? — the market may, by the time you read this, give back some of its gains. Maybe yes, maybe no. On the other hand, the principal U.S. index futures are up early Tuesday morning, as are futures in Asia, except Japan. I could argue that — given the commitment toward rebuilding in Japan — that its index should be up and not down. Put another way, as four experts from J.P. Morgan’s Tokyo office recently suggested on a conference call, this may be a buying opportunity for quality stocks. Remember the adage? “Be greedy when others are fearful and fearful when others are greedy?” The J.P. Morgan folks also seemed to think that the terrible problems in Japan would affect maybe 4% of its GDP overall, while the media made it sound as though the reciprocal, 96%, was the outcome. (See my first paragraph about news organizations making news versus reporting news.)
Maybe the market, the virtual flag of capitalism, is bullish regarding the struggle toward more democratic governments in surprising parts of the world.