Insulation comes in many forms.
A friend several years ago told me as a poor kid growing up in the upper Midwest on those frigid, frozen tundra one mile morning walks to school he and his buddies use to put either newspaper or cardboard inside their coats to insulate themselves against the bitter cold.
Insulation is one of the things investors in the U.S. markets are hoping will keep the U.S. economy from joining the deflation parade many pundits worry is staring much of the rest of the globe squarely in the face.
Part of that hope emanates from Wall Street over the recent drop in oil prices. Nearly everyone knows by now that cheaper energy prices puts more money aflame in would-be consumer pockets. Tied thereto is the belief that lower oil prices foreshadow weaker global demand for hydrocarbons in general--that is, slower growth.
And since the savings rate of individuals has been reportedly ramped up since the big recession, it's the Street's hope this will make consumers less wary and more willing to part with some of their savings at the pump.
Some equity gurus take a different tack, claiming that it's not about weaker demand at all but as the Financial Times recently noted, "a positive supply-side shock." This is another way of saying investors are ignoring any macro risk for the nonce.
Macro risk so thought many hedge fund gurus was supposed to be the theme of the market in 2014. It didn't happen. Whether what didn't happen in 2014 will arrive a year later in 2015 is anyone's guess. At this point a lot of money is riding on the U.S. economy being able to insulate itself from all the deflation doom and gloom.
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