What to watch for, however, is the bounce-back. Remember that when companies warn, they do bounce back now. Sometimes they climb to an even higher level vs. where they came from. That's been particularly notable in Darden (DRI) of late, which has been on fire in a world where gasoline is too high and employment is too low but yield is just right.
So, at this very moment you may think all is going wrong for the U.S. in terms of the actual statistics that determine and gauge an economy. You may think that the economy is decelerating and that there are nothing but shortfalls ahead.
But what you should be thinking about are capital flows to the U.S. from countries that are self-destructing. Europe's doing nothing to ease the pain of the austerity mandates. There are no continental initiatives. The only real imperative that I see the governments subsidizing is renewable energy, yet the number of jobs that creates is astonishingly low, and the efficiency of it is questionable at best. The Japanese are betting that the existing less-than-wealthy depositors and investors will stay with them as they try to inflate into gross domestic product growth. But the wealthy? They would have to be nuts or incoherent to keep their money in the yen. That country is insular, but capital flows sure aren't.
We know that the wealthy in Latin America are taking no chances. It wasn't as if Hugo Chavez, the late Venezuelan president, was ever repudiated by these regimes when he was alive. There's no mass move toward capitalism.Finally, China? What can I say? The new president, Xi Jinping, has his work cut out for him, but wealthy Chinese are anxious to put their money here. This is not a sobering picture for the U.S. Previously, the single biggest impediment keeping people on the sidelines had been the endless parlor game of guessing which month the Fed would pull the plug on the liquidity. As we know from when sequestration kicks in, next month's employment number should be worse than this past one, so the jeremiads from the "he has to let up on the liquidity" bunch will be silent. That's a benign moment even if you are worried about earnings -- and that moment is not going away anytime soon. At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the stocks mentioned.
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