Silver Lining

Okay, I am the first to admit that I have been a sky-is-falling kind of guy for quite a while, which is against my optimistic grain. Despite the negativity of my posts of late (for three years), I have to say that the market dump today took me off guard. Yes, I had some put options in place and actually made money today, but I was not expecting what happened.

Here is the deal. The bigger international companies in the U.S. are making their money overseas, largely in emerging markets. For the most part, their earnings and profits are not suffering too bad, so for them to take a big hit in the market is, perhaps, not justified. I say "perhaps" as the problems in the EU and U.S. can bleed over to emerging markets readliy but they are not suffering just yet, have a fair amount of cash and, I think, are not deserving just yet a 5% stock hit. But I am not making any stock recommendations.

That said, in time I think these international companies and emerging economies have to be affected by what is going on in the EU, US and elsewhere. We are their prime markets and in time their economies will have to react.

And big corporations still doing well is not necessarily a benefit for U.S. workers. Jobs are being shipped overseas, the growth is overseas and everything else seems to be overseas. It is not leading to U.S. job creation and it will not going forward. So the good news is that the big corporations may still be making money but the bad news is that it is not supporting the U.S. economy. So, judge for yourself, what this means in terms of silver lining. The U.S. will suck wind for years to come in economic conditions even if some companies will dodge the bullet due to emerging market prospects.

Disclosures: I have some put options that I have had for over a year and they did well today, but they are all down over 50% and will likely remain so despite what the market does in weeks to come. I just kept them in the chance that what is happening now would happen.