Friday, April 25, 2008

You know I dont buy these indicators so...

Consumer sentiment has not been this low since 1982 just before the start of the 190’s -1990’s Great Bull Market!

Thursday, April 24, 2008

Oliver Twist

Like Oliver Twist once said,”I want more”, first there were maze riots in Mexico now there is rice hording at Sams Club,I haven’t had this much fun since Johnny Carson started the toilet paper shortage rumors in the 1970’s …yikes and just like the seventies “the Saturday Night Fever’ portfolio is staying alive set up to take advantage of raising inflation a weak currency ,more onerous and stupid regulation and higher taxes. The sector focus is and should remain Energy, Precious Metals, Commodities and Agriculture .There is nothing as much fun as making money of other people’s foolishness especially when there is so much foolishness to go around, it looks like easy pickings. Again stick with the “Saturday Night Fever”, portfolio which is made up of sectors that thrive in a higher inflationary environment and the self inflicted shortage that over regulation, higher taxes and price controls always brings about.

Short term in an odd twist the US dollar has staged a rally today, my guess is that the FED is about to curtail its interest rate cuts which as I have stated time and time again were the wrong medicine applied to the current banking crisis. Since the Bear Stearns debacle the FED seems to have sharpened its focus on the secondary market for mortgage backed securities which is the real center of the problem.

In the short term you may want to lock in some gains on Ag ,Energy and Precious metals as the dollar rallies, or use the weakness as a buying opportunity depending on your portfolio and cash situation. Banks and financials have also started a counter rally though it still seems like a bounce and again the road to recovery is littered with “almosts” so its best to do a lot of home work.Remember commodity cycles are punctuated with enormous corrections along the way.

The strong Euro is also killing European manufactures and curtailing EURO exports as wells as the tourist trade which Europe is so over dependent on. The ECB may soon be facing a slowdown of similar magnitude to the US so it’s not much of a stretch to expect significant rate cuts. I think the ECB is a bit behind the curve and should have been cutting rates already.

Friday, April 18, 2008

“what were they thinking”?

We seem to be hearing the words earning surprise way to often, in fact so much so that this blogger is often left wondering “what were they thinking”? But last nights earning announcement truly was a surprise to virtually all market observers. After being written off and maligned the previous day Google knocks the cover off the ball with home run numbers and with a little help from Citi and Caterpillar are giving the market a huge boost this morning. Again I have always been a bit skeptical of the recession is going to slow down internet traffic. I hold a counter theory which is that inflation and economic slow down coupled with higher energy prices feed the very strengths of the internet and give the net an even greater competitive advantage. The internet is low cost interactive entertainment, it creates customized solutions of a mass produced scale and it clearly saves on energy costs because you don’t even have to leave your house, finally business gain and enormous amount of information about their customers or lack of customers.

While the shorts stampede like elephants running around a bath tub the big picture suggests that there is even more evidence that the US economy is moving form the global buyer of last resort to the global producer of first resort. I know the current political landscape seems more suited for 1977 than today but that trend and its coming failure should only be seen as a bump in the road. The unintended consequence may even speed the process of the US moving from net consumer to net producer. The embracing of information and communication technologies continues to reshape the US business environment even though the media and government seem totally unaware. The new model has man merged with and using technology to find business opportunities in a more fulfilling self employed business structure. We are becoming the land of independent business technology contractors and wealth is know being created from a kitchen table with a lap top and a website.

Monday, April 14, 2008

Be very quite it’s earning season heheheheheheheheh

Be very quite it’s earning season heheheheheheheheh and so far it has brought us much disappointment, with the economy slowing you would be wise to expect earning to slow, but in the usual fashion many annalists are surprised by this very fact. GE falls short; it happens to the best of us from time to time. The question remains as to why GE has so underperformed and underperforming market since 2000. American Airlines ground even more flights, and the real question is why would anyone use that airline for any reason what so ever? Even before this incident their customer service makes getting an IRS audit looks inviting. I mean lets face American Airlines has ranked lower than the IRS in customer satisfaction for over 20 years running and it is also considered one of the top 5 worst run companies by this blogger for well over 20 years.

Sunday, April 13, 2008

Saturday Night Fever

With the continued creep of the idea that protectionism more regulation and more taxes are “good” and the specter or raising inflation and a slowing to morbid economy I continue to recommend the Saturday night fever portfolio which worked well the last time the erge to over regulate and over tax were in vogue in the 1970’s: focus on commodities, agro ,energy and precious metals. Look to ad on weakness!

Thursday, April 10, 2008

April 15

Remember all 2007 IRA contributions are due by April 15, 2008 !

Wednesday, April 09, 2008

it is just not feasible in most areas to cut back on driving

It continues to amaze me when many analysis’s in the mainstream media site the mantra that a slowing economy is going to cause a significant decrease in demand of energy, barring a major depression in America most people need cars to manage there everyday lives, it is just not feasible in most areas to cut back on driving, the car is a necessity not a luxury. Sure higher fuel efficiency helps but the fact of the matter is that most people drive to go to work and drive to go to the grocery store ,so unless there are massive layoffs and unemployment jumps into the 30% level or everyone goes on the zone diet ,demand for gasoline is simply not very elastic.

Monday, April 07, 2008

to be or not to be ........

The obsession over weather to call the current stage of the US economy a “recession” is reaching epidemic proportions; news flash if the past is any indication by the time the Government pronounces a recession, the recession is already over. Remember the market trades on future economic activity not present; the old saw being that the markets trades 6 months head of the general economy.

Friday, April 04, 2008

Mr Bernanke goes to Washington

So the question of the day is, till now after every time the FED chair has testified before congress the market has sold off within a day or so. No sell off could imply the “bottom” or as I would prefer to say the lack of a sell off my signal that the steps being taken are truly the right steps to stabilize the financial system. Not the bottom but the beginning of the end of the banking crisis.The FED, the market, wall street and the regulators look like they are finally applying the right medicine to the crisis . Early efforts by the FED looked misplaced but recent events seem to be addressing the problem.

As for the economy I don’t want to rain on anybodies parade but employment is a lagging indicator not a leading.

Tuesday, April 01, 2008

The Quarter is over and once again now for the kitchen sink…

European banks look to take some major write downs today, while the US ponders trying to “manage” ie…socialize the financial system. The increase in Commodity margin requirements may take some of the froth out of surging commodity pricing but let’s face it in a higher inflationary environment commodity prices will continue to increase and any short term drop in pricing still suggest a buying opportunity . For the investor looking to play it safer the treasury TIPS and Municipal Bonds look to be of good value. I still like energy, mostly natural gas, agro, commodities and metals and some transports like rails. Banks and financials remain under suspicion, at the moment I am willing to let the “John Reed” effect continue to work its way through the financial system ,but again I caution its not over till everyone stops saying its over .