Thursday, August 28, 2008

Now for something completely different :GDP REVISED UP TO 3.3% in Q2

GDP REVISED UP TO 3.3% in Q2 surprising many but not this blogger who has speculated for some time that US and global growth rates would be far higher than most economist had predicted. Mean while Fannie Mae reshuffles executives and the proverbial deck chairs on the Titanic and Barak Obama prepares for Nuremberg. Once again we exit from the summer doldrums making premature funeral arrangements for the American consumer.

Again focus on the big picture:

1) the US economy is stronger than most assume
2) Banking finance and real estate continue to contract
3) While even with improved strength of the dollar exports continue to boom
4) Unemployment lags with job creation coming in export dependent and energy sectors
5) Kitchen table lap top entrepreneurs continue to sprout up and go unnoticed
6) Yes inflation will be higher than we are used to ,but not at 1970’s levels
7) Long term the US Economy will move away from the consumer of last resort to the world and export
8) The current 1970’s mind set is a generational thing with roughly 4 years left in the cycle
9) And finally this current election is more like the McGovern election than anyone in our life time you do the math

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Wednesday, August 27, 2008

the VIX ,If you’re not confused you’re not paying attention.

If you’re not confused you’re not paying attention. Trading continues to be dominated by the VIX and low summer volume which further exacerbates market volatility.

During the past year the Volatility Index (VIX) has done a good job of forecasting market tops and market bottoms. When the VIX has risen above the 30 level ,this has been followed by significant rallies ranging from 6% to 15% However when the VIX has dropped to around the 16 level we have seen substantial sell offs occur ranging from 11% to 17% .

(VIX) is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge"” from

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Monday, August 25, 2008

Real “real” people, the madness of crowds and continued confusion….

Let the “Real” Real people stand up and take a bow. Be wary of those who look to make stock recommendations who have no experience or qualifications. Every time the main stream types pick up the stock picking torch it signals a market top. Bear market rallies are particularly dangerous, best to keep your eyes on the long term prize.

In this bloggers view the fall season should see a firming of energy prices with the summers 20% correction in energy ,commodity and AG stocks signaling the end of a correction phase in these sectors and a global economy that will show it self to be more resilient than common wisdom gives it credit for. Demand will firm and stabilize.

I would remain cautions on banks and financials given the current continued credit contraction. Let’s face it banks make money by loaning money and if they don’t loan I am not sure how they are going to dig themselves out of the current bad debt crisis.

Keep a watchful eye on “Bear Traps” or when oversold sectors bounce from significant oversold positions. These rallies have a tendency to suck you in and leave you hanging on the top tick. Unless the fundamentals change then the sector is saddled with the same problems that sold it down to begin with.

And finally the 1970’s style policies and physiology is in tact and here to stay till the next generational change. Look for a continued mirror of that decade for investors.

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Wednesday, August 06, 2008

You can’t inflate your self out of this one

Given the so so volume yesterday I am still holding the position that this is a counter trend rally, not the beginning of a new bull market.

There are some Long term positive trends:

-Export boom
-Technology Migration of Work from Home Revolution or Kitchen laptop revolution causing huge new business formation
-Energy Boom: drilling, oil services, building nuks, infrastructure, and so on adding vast numbers of new jobs (all predicated on a major change in US energy policy)

But perhaps it’s the politics of the rush to the bottom or the search for the lowest common denominator, but the latest “inflate your tires “rhetoric with the assumption that everyone is driving around on flat tires is just too stupid for comment! Next we are going to be told that if we don’t eat we are going to be hungry or if we don’t breathe we will suffocate. Given the nature of the demeaning insults hurled towards the public, its no wonder there is no confidence in the US economy and no perceived leadership from our elected officials. I am beginning to think that if the mainstream media continues this paparazzi style coverage of Mr. Obama the public at large will become quickly disenchanted and the mainstream media will continue to expedite their demise.

Tuesday, August 05, 2008

when it comes to energy and food its all about politics

So is this the end of the commodity boom or is this a correction on the long road to higher food, energy prices and inflation? Many will argue on one side or the other of the supply and demand curve, but my view is that when it comes to energy and food its all about politics. And the politics are very simple; since the 1970’s the US has embarked on a policy of adding no new available supply of energy. Instead choosing to view the amount of energy available as a pie to be divided up but not added too, a sort a zero some game. No new domestic drilling, generation, transmission and so on has been the net result. Supply constraints have been made up for by importing more and more foreign oil while domestic energy resources ,coal ,oil ,natural gas, nuclear and so on have been suppressed in hopes that higher prices would lead to some new form of non polluting ,cheap, non carbon based usable wonder energy ie… “the promise of fantasy energy” .

If we have learned one thing from our European friends that have endured excessively high energy prices for several decades is that energy consumption and use are a function of technology, and life style not price. No one in America seems ready to give up their SUV and trade it in for a horse and carriage. America after all is a country founded on the ideals of economic mobility, and “mobility” of the individual not class being the key idea. Even though many in the political class seem to want to eliminate this fact from American life the general population and this blogger have other ideas.

Energy prices have been determined and will continue to be determined by the politics of availability, Weather by accident or design if the world’s largest economy would make a major change( ie …try to increase the availability) in it’s energy policy it would have a major impact on glabal energy prices for decades to come.

Monday, August 04, 2008

Once again I would like to thank everyone for all the referrals I have received this year.

Once again I would like to thank everyone for all the referrals I have received this year.

Over the years many of my clients have asked me to speak with one of their friends or colleagues concerning my Customer Centered Philosophy and Private Client Asset Management Services. I consider it an honor and a privilege and have been happy to accommodate their wishes. For your future reference, I want you to be aware of the standards by which I comply with such requests.

First, confidentiality is the cornerstone of my business. Each of my client relationships is distinctly separate and totally private.

Second, thoughtful and courteous service is guaranteed. This is a people business.

Finally, I will never give advice and counsel to a client without thoroughly understanding his or her needs.

My purpose in writing this letter is to let you know that if and when you would like me to speak with a friend, relative or associate, you will feel comfortable with my professional standards.

Best Regards,

James J Foytlin
Horwitz & Associates
54 Washington Place
Ridgewood NJ 07450
toll free 1(866)492-3959
phone 1(201)301-2780
cell 1(201)966-7788