September 09 -- Please Remain Calm

Below is an except from this month's MoodCompass:
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The last few months have seen global society move from the brink of despair to a hopeful optimism that things may actually be starting to get better (even while jobs and homes continue to be lost). Wall Street has given new meaning to irrational exuberance, as bullish sentiment indicators reach extremes that exceed the levels of the market peak of October 2007. There are rumors expressed by some commentators that there never even was a recession to begin with.

In March, we cautioned to look for such an extreme in optimism in the months ahead, as it would be the signal that things would be about to get really bad. We are here now. September is a month of paradox, confusion, turbulence, and cross currents. It is a month where hope continues to push forward, as reality persistently slaps it down. There could be large stock market declines as well as huge market rallies as people struggle to find their bearings. There are indications of high economic concerns on a global scale, yet concurrent concerns about inflation are not out of the question. Another crisis regarding the fate of the U.S. Dollar may reappear, while the Dollar builds a solid foundation from which to rally from in the coming months.

In the geopolitical arena, there is increasing violence likely in Nigeria and more civil unrest likely in Iran. Either of these could cause supply concerns in the energy markets. There is a general deterioration in the desire for cooperation among nations, most notably from Russia and the Middle East arena. Global relationships could also deteriorate with Afghanistan, Pakistan and even India. The United States could begin to show an increasingly unfriendly tone this month as well.

In the natural world, it’s the peak of hurricane season, increasing the likelihood of tropical storms and cyclones. There is also a curious indication of concerns with disease outbreaks in Asia which merits watching. Overall, September should be an interesting, if not painful month, as we all try to orient ourselves to a shifting, changing reality. Global leaders should be working overtime to ensure us that all is well, and above all to “please remain calm.”

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http://anewstory.org/markets/Sep09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)