Troubling Tuesday – Cliff Diving into Global Uncertainty

European shares are following Asian stocks down this morning as EVERYONE is freaking out over the US Fiscal Cliff while trying to deal with troubles of their own – notably Japan's total debt approaching 1 Quadrillion Yen (1,000,000,000,000,000), possible property taxes in China, the ongoing Greek crisis, rising inflation, declining confidence (Germany's ZEW survey was way off), implementation of Basel II (not by the US, we are putting it off indefinitely) and declining global oil demand.

And that's just this morning's headlines!  

That's quite a wall of worry we're building here but I will point out that, back home, the NFIB US Small Business Optimisims Index is up 0.3 to 93.1, not fantastic but back to levels on the way back to where we were in the early part of this century, despite being dragged down by a record number of businesses who are concerned about future conditions (23%).

Of course, if you listen to the MSM (or even look at the picture at the top of this page), you'd be concerned about future business conditions too.  The bottom line is that small businesses are generally bullish about their current business – they are hiring, they are planning to make capital outlays, they have job openings to fill, they feel it's a good time to expand – even earnings are improving…  

But they are SCARED.  They are scared because they are told to be scared by the media and, as investors, we need to separate the reality of improving conditions from the fantasy of the end of the World as our Congress takes us over an imaginary cliff.  

IN PROGRESS

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