Although a decline into correction can be unsettling for investors in the short term, over the long run such a condition tends to give way to gains in the one-week and one-year period, according to Dow Jones Market Data.
On average, the Dow gains 2.7% a week after finishing in correction and finds itself at the same level two weeks out, but the index gains 3.3% about a month out, 5.2% in the six months following a 10% fall from a peak and 8.7% a year afterward, based on data going back to 1896.
Now let’s talk about Ukraine. Allow me to set the tone:
If our border was secure and our budget balanced and if inflation was under control and if we didn’t have a drug overdose epidemic and if we didn’t have a war on early treatment of Covid and if we didn’t have children wearing masks in California and if we didn’t have small businesses crumbling over rising prices and if we didn’t have our neighbors to the north becoming a fascist dictatorship and if we didn’t have American families falling apart and if we didn’t have suicide and drug addiction crises in our young people then I would be more open to posture a little more toward sensitivity to the crises in Ukraine.
Who do our leaders represent? And why is this crisis causing such a stir?
Let’s discuss what is happening in Ukraine. First, understand that Ukraine is populated by 50% loyalists to Russia. Second, understand that Ukraine is not a democracy but a dictatorship. Third, understand that this battle is one of interpretation of the borders of Russia and Ukraine and has been a battle for years between the two countries. Fourth Ukraine’s attempt to join NATO was rejected because of all the corruption in Ukraine.
So what is Putin’s end game? Russia’s economy is almost exclusively funded by oil revenues. In 2018 when oil prices were $25 to $30, Russia was struggling and very poor. When Biden closed the US pipelines in his first day in office and rejected so many leases in the south, he opened the door to our oil dependence on foreign entities and to price increases. We were then not controlling our own destiny.
Russia can only make a profit on oil if the price is above $60 a barrel and they make a windfall when prices are above $100. Do you get what is happening? This is really not about Ukraine, but about oil prices. Oil could move up to $115 a barrel very soon. And that gives Putin a platform for pushing his agenda to expand.
One final point. Why are states that depend on oil production and pipelines not rejected the Biden executive action? We have sanctuary cities for immigrants which defies the law. Why not have sanctuary cities for oil production?
Source : Market Watch - Market Extra by Mark DeCambre 2-24-22
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