I have to tell you, the world is messed up. It took me a few days, but I figured out this gun issue is very similar to the mania psychology we experienced with stocks in 1999 and real estate in the middle of the last decade. We are a bubble culture and seem to go from one mania to the next. Originally, we all wanted protection from the bad guys. Now the biggest threat is no longer from the criminals. You can’t tell me Adam Lanza was a criminal. His record was clean up until the time he pulled the trigger. Let’s keep in mind that for a mania or bubble to exist the participants have to deny the possibility that a bubble exists. By Wayne LaPierre coming out the way he did on Friday by suggesting the answer to the problem is by having even more guns by way of arming people in the schools proves this entire gun psychology has crossed the line into a form of psychosis or paranoia. According to Bill O’Reilly the main reason people don’t want to give up their assault weapons is because they fear the government. So let’s say they do decide to put an armed guard in every school in the country. Aside from the fact there was an armed guard at Columbine which did nothing to stop that bloodshed, according to what I heard it would take at least $6.5 billion to cover every school in the country. This at a time when the same political party who supports the NRA is calling for massive spending cuts. Where exactly is the money going to come from? Wouldn’t this money be better spent tracking the mentally ill? Suddenly we have a country where the mentally ill are more dangerous than the criminals or terrorists but nobody is really talking about how to solve those problems.
But none of this has much to do with the stock market. All I know is Newtown is likely to be the watershed event that pops the gun psychology and we are likely to see meaningful reform. Mr. LaPierre’s response is a hysterical move from a desperate organization that is likely on the wrong side of history on this issue. But only time will tell.
I suspect the market could be all over the map this week. Be careful and don’t take the intraday swings too seriously. There aren’t enough people working to give us a meaningful, lasting move.