Random thoughts

Pretty much everyone agrees that bailing out the banks back in 2008 was the right thing to do. I'm not so sure. The banks lobbied fiercely for repeal of Glass-Steagall and won. Having won that battle they then proceeded to do all the things Glass-Steagall prevented them from doing for 70 years and promptly ran the car in the ditch. I, personally, would have let them go under and dispersed their assets to the next tier of banks that were healthy and been done with it. Once the banks were bailed out the Fed was stuck with a bunch of zombie banks with trillions of dollars of dead assets on their books so they were forced into a series of QE's to help fatten the bottom line of the zombie banks. QE is nothing more than a transfer of wealth from the savers and retirees to the banks. Every saver and retiree in America took a massive pay cut with the zero interest rate policy while the stock market took off like an out of control rocket. This brings us up to date to where we are which is the Fed is between a rock and a hard place. If they try to return to normal interest rates the markets tank, the banks tank and it's down the toilet we go. If they keep doing what they are doing we just jump off a higher cliff a little farther down the road but either way it's over a cliff. All of which leads us to where are we today? I was sure we were going to have a correction last fall. It didn't happen. We may get a minor correction in early 2014 or not. In either case the market is going to to explode to the topside. Before 2016 ushers in we will probably top 20,000 on the Dow. Gold will go down to 1000 before it goes up to unimaginable heights. By 2016 the wheels come off and we usher in a whole new system. I don't know what that system will be but I'm pretty sure we are going to finally have a third party in this country which means whoever wins an election will have to form a coalition with one of the other two parties to rule effectively. So much for pontification and prevaricating. In my Model Portfolio I am out of everything but one short position on oil which, the way it is going, I may get stopped out of next week. Chart of SCO and the Model Portfolio below. 

  

SCO	100	29.61	32.28	-0.21	$-21.00	$+267.00	+9.02%	$3,228.00
Total					$ -21.00	$ 267.00	9.02%	$ 3,228.00