Call It The Wile. E. Coyote Market

Wile e. Coyote

Another day, another rally, AND another dour report from David Rosenberg about all the speedbumps and pitfalls facing investors.

Today the Gluskin-Sheff economist characterises the market as a Wile E. Coyote market, with all of the obvious imagery that entails.

Among the risk factors: Debt bombs, persistent unemployment, and a second leg down in housing.

As always, the best way to approach this, in our opinion, is to look at the facts (if you’re bullish) and figure out why you’re not worried.

First of all, oil is spiking.

And that oil spike is built on a lot of speculative froth

Meanwhile, real estate still faces a monster overhang.

And houses prices still have way more to fall

Which is a big problem, since this is still a huge chunk of the Baby Boomer balance sheet

Meanwhile, unemployment persists.

That's going to present social risks, since the length of unemployment remains so high.

It's particularly bad among males

meanwhile, the state and local situation hasn't improved.

And what about that debt ceiling risk?

Or just the global debt bomb in general?

Yes, defaults happen. A lot.

obviously the euro periphery is the most likely location.

That's having a big impact on periphery economies.

And have you seen food inflation?

Or just general inflation in China?

That will force tightening in China.

Maybe the Chinese market is telling us something.

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