Earnings Earings Everywhere

It never ceases to amaze me; last week I mentioned that the market had been alternating between up and down weeks. This fact became widely know and as always once we all know something is going to happen, it doesn’t. Concern is now shifting to earnings this week and while the doomsayers are speculating about the demise of corporate earnings, I would suggest that the strong earnings growth of the last 5 odd years seems to be nowhere near abating. The question remains as to when equity markets will begin to recognize this fact with higher equity valuations.

Why is April 15th Tax Day?

Why Are Taxes Due on April 15th ,this year April 17th

Congress passed the Sixteenth Amendment to the Constitution, which allows for the implementation of personal income tax, on February 3, 1913, and chose March 1 of the following year as the filing deadline. The deadline was changed to March 15 in 1918, and, to April 15 in 1955. Moving back the date from the end of the tax year served two purposes -- it gave the IRS more time to handle the work and, more importantly, more time to hang on to your money before issuing you a refund.

U.S. Constitution: Sixteenth Amendment:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Earnings News in full Swnig

Its all about earnings and I suspect corporate earnings will be a bit stronger than many suspect.

The FED's job is to worry about inflation

A lot of investors seemed shocked to learn that the FED is still very concerned about inflation. May I take this moment to remind you that one of the FED’s primary functions is to ensure price stability, so to put it another way the FED’s job is to worry about inflation? I would be much more concerned if the FED wasn’t focuses in on inflation.

Folks no reason to think otherwise : the FED will stay on hold for the remainder of this year

Alternating between ups and downs

Since the sell off at the end of February the market has developed an interesting pattern alternating between down and up weeks trending higher. If this pattern continues then this week could be a down week for the market so we shall see what happens

Thinking about investing;

Thinking about investing ;

Correlation doesn't equal causation...On Wall Street like many other industries there is a tendency for the conscientious to pronounce a knee jerk causal relationship between the specific events or data point of the day and then to take comfort in a particular action in the stock market. Equity Markets react too many variables, both perceived and concrete. Long term investors should be very cautious in accepting these causal relationships because over time the links often prove tenuous at best. It is good to remain skeptical of any conscientious in causal relationships because they often prove inaccurate. The point being that these artificial causalities can often influence your investment decisions creating faulty premises and failed investments.

The tendency of us mere mortals to think in a purely linear fashion and make assumptions that the rate of change we see before our eyes to day will remain the same indefinitely. This causes investors to make assumptions about what drives the market. Investors often make this mistake when they want to buy a stock that has gone up a lot. Over time the rate of change fluctuates and as they like to say around here past performance is no indication of future performance.

Big News I have been chosen for a test shoot for the HDTV Channel TV show
,“Wall Street Warriors”

http://www.mojohd.com/video/?sid=8&eid=4


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in the news

Corporate profitability rose to its historically highest level at the end of last year as manufacturing and service sector companies benefited from strong sales growth combined with lower energy prices and subdued wage pressures. (FT)

April 4, 2007 -- While the TV networks and advertisers haggle with Nielsen over the best way to track commercial viewing, Google is doing an end run around the ratings giant with a new system that will tell advertisers how many people watched their TV spots and for how long. (NY POST)

PHILADELPHIA (AP) — A man who contended that he was not required to pay income tax, and whose case led to an indictment against actor Wesley Snipes, was sentenced Tuesday to 27 months in prison.

The New York Coal Trade Association, headquartered in New York City, recently held its 94th annual banquet and meeting at the New York Hilton. One of the guest speakers was Bob Murray, founder and CEO of Murray Energy Corporation and probably one of the few CEOs brave enough to challenge the militant climate control movement that threatens the future of America's economy. In his speech, he dared to say that he regards Al Gore as the shaman of global doom and gloom. He is not joking when he says, "He is more dangerous than his global warming."

The heavy condemnatory breathing on the subject of global warming outdoes anything since high moments of the Inquisition. ( William F. Buckley)

DENVER - The 2007 Atlantic hurricane season should be "very active," with nine hurricanes and a good chance that at least one major hurricane will hit the U.S. coast, a top researcher said Tuesday. (AP)

Europe has eclipsed the US in stock market value for the first time since the first world war in another sign of the slipping of the global dominance of American capital markets. (FT)

DETROIT (AP) - Toyota's U.S. sales jumped 11.7 percent last month, boosted by record hybrid sales and strong overall car sales, while industry leader GM's total slipped 4 percent, Ford posted a 9 percent decline and DaimlerChrysler fell 4.1 percent. The U.S. division of Japan's Honda posted a double-digit increase.

BAGHDAD (AP) - The Iraqi government announced plans Tuesday to shorten the curfew in the capital by two hours, saying security had improved enough to let residents stay on the streets until 10 p.m.

The infamous or famous FED Model indicates that equities are the cheapest in 20 years

The infamous or famous FED Model indicates that equities are the cheapest in 20 years and some fund managers report to being wildly optimistic. As many of you know I have been wildly optimistic about equity valuations since 2000 to no avail. I generally like to blow against the wind and it makes me a bit uncomfortable with this growing choirs of raging bulls. But let me repeat once again, the stock since 2000 has barely outperformed cash and on an adjusted real basis underperformed cash .This is simply unheard of . By my calculations the DOW Jones Index should be somewhere around 13400 just to be even with inflation .Corporate profits though appearing to be decelerating make up the largest part of the GDP in years. Enormous pools of cash are sitting on the sidelines and in corporate and hedge fund coffers. Like the early 1980’s buyouts and takeovers are rampant. What we all seem to be looking for is the catalyst that will spark a new bull market. You gotta think this market has got to move higher from hear.

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Its about Oil again ....

The reemergence of the Middle Eastern premium …yes that’s the ticket; it seems that it won’t be long before the advance in oil prices will begin to take its toll on global markets and cut short the current rebound rally.

It time for the TALK again ,the Fund Manager Full Employment Act (Asset Allocation theory)

Another hole in the Fund Manager Full Employment Act (Asset Allocation theory) has popped up in recent months, according to Bloomberg News, ”The average daily correlation of returns for Morgan Stanley Capital International's World and Emerging Markets Indexes has climbed to the highest since at least 1988. The S&P 500 and Japan's Nikkei 225 Stock Average, along with the Nikkei and Europe's Dow Jones Stoxx 600 Index, are tracking each other's daily returns by the most since at least 1987, data compiled by Bloomberg show. Shares in the U.S. and Europe have the second- highest correlation in 20 years.” Also according to the same source this year, the average daily correlation between the MSCI World gauge tracking developed markets and MSCI's measure of emerging markets increased to 0.87, according to Bloomberg data, which dates back to 1988 for that comparison. A correlation of 1 means stocks are in lockstep, while minus 1 indicates stocks are moving in opposite directions. So it seems proof that global markets are more correlated than ever before. As I have said many times when your broker gives you the talk (Asset Allocation Theory) better take a walk.

Out of the Office Next Week

I will be out of the office Tuesday the 20th till Monday the 26th on business if you need me give my cell a buzz at 1(201)966-7788. I can carry on a full range of business.

lender of last resort

March 13,2007

Hello,
The Sub prime mortgage market continues to be the point of contention. The issue now is to gauge the depth of how far reaching into the over all financial system. At this juncture with interest rates still very low and many of the defaults concentrated I am not sure we will see the contagion that many fear. The structure of mortgage companies suggest to me that the net of effect of the current sub prime debacle will be to slow down the real estate business even more as lenders raise credit standards and perhaps hurt some of the providers of capital to sub prime lenders or lenders of last resort. This should provide investors with many opportunities to pick up financials and some backs at discounts, but do your home work !

Ok so you didn’t panic .Weather you stayed cool or are just in plain denial now is the time to reposition your portfolio for the next move. Investors need to have an action plan. Rank your holdings into one of four groups,

The stocks you want to buy no matter what.
The Stocks you'd buy if they dropped in price.
The stocks you'd sell if they moved higher.
The stocks you want to sell. Period

Now is the time to sell stocks you want to sell, period and use that cash to reconfigure your portfolio.

James Foytlin
Investment Representative
Horwitz and Associates
1(866)492-3959

geez its the weather silly

The Market is down a bit early today apparently being done in by the continued deterioration in sub prime lending and the fact that economists continue to be surprised that retail sales were slow in the seasonable slow and very cold and stromy February . The late day sell off looks like the market didn’t make a true low and is still searching for a bottom, perhaps somewhere under 12000.

in the news

Russia warned Iran Monday to expect delays in launching the country's first atomic power station, adding to mounting pressure on Tehran to compromise with the international community over its controversial nuclear programme. Amid signs of frustration in Moscow over Iran's combative stance, state contractor Atomstroiexport announced that Iranian financial problems mean a probable set-back in completing the power station at Bushehr in southern Iran. "Insufficient financing of the project means that there is a real delay in the timetable. The delay will probably be two months, according to experts," Atomstroiexport spokeswoman Irina Yesipova told AFP.

MINNEAPOLIS - A North Pole expedition meant to bring attention to global warming was called off after one of the explorers got frostbite. The explorers, Ann Bancroft and Liv Arnesen, on Saturday called off what was intended to be a 530-mile trek across the Arctic Ocean after Arnesen suffered frostbite in three of her toes, and extreme cold temperatures drained the batteries in some of their electronic equipment. (YHOO NEWS)

Hollywood has a thing for Al Gore and his three-alarm film on global warming, “An Inconvenient Truth,” which won an Academy Award for best documentary. So do many environmentalists, who praise him as a visionary, and many scientists, who laud him for raising public awareness of climate change.But part of his scientific audience is uneasy. In talks, articles and blog entries that have appeared since his film and accompanying book came out last year, these scientists argue that some of Mr. Gore’s central points are exaggerated and erroneous. They are alarmed, some say, at what they call his alarmism. (NYT)

GENEVA (Reuters) - The Internet's key site identity system is in mounting danger from new techniques that could cause havoc by turning it into a free-for-all market, the World Intellectual Property Organization WIPO warned on Monday.

Federal Deficit Down Sharply This Period

Mar 12 09:29 PM US/EasternBy MARTIN CRUTSINGER
The deficit for the first five months of the budget year is down sharply from a year ago as the growth in government tax collections continues to outpace growth in spending.
The Treasury Department reported that the deficit from October through February totaled $162.2 billion, down 25.5 percent from the same period last year.
That improvement came even though the deficit in February hit $120 billion, up 0.6 percent from last February's deficit of $119.2 billion.
The government had larger-than-expected surpluses in December and January.
For the budget year that began Oct. 1, revenues are up by 9.3 percent to a record $954.4 billion.
Spending for the period also set a record at $1.117 trillion, but that 2.3 percent rise was slower than the growth in revenues, resulting in a lower deficit.
The Bush administration is forecasting that the deficit for this year will total $244 billion, a slight improvement from the $248.2 billion actual deficit for the 20006.
However, the Congressional Budget Office is more optimistic, forecasting that the deficit for the current budget year should decline to $214 billion. That forecast assumes that Congress will approve President Bush's supplemental spending request for the war in Iraq.
The $248.2 billion deficit for 2006 was the smallest deficit in four years and down significantly from the all-time high, in dollar terms, of $413 billion in 2004.

some interseting quotes and interesting news

BAGHDAD (AP) -- The leader of the al-Qaida-affiliated Islamic State of Iraq has been captured in a raid west of Baghdad, an Iraqi military spokesman said Friday. Abu Omar al-Baghdadi was captured Friday in a raid in Abu Ghraib on the western outskirts of Baghdad, said Brig. Gen. Qassim al-Moussawi, spokesman of the Baghdad security operation. U.S. officials had no confirmation of the capture.

“The Bolsheviks are already in Congress and could storm the White House," (Jim) Cramer (of CNBC) said in reference to Democrats.

WASHINGTON, March 9 (UPI) -- Environmentalism is a religion that is based more on political ambitions than science, the president of the Czech Republic warned Friday.

March 7 (Bloomberg) -- Nick Leeson, the rogue trader whose wrong-way bets on Japanese stocks ruined Britain's oldest merchant bank, said he may go back to trading full-time with only his own money at stake.

March 7 (Bloomberg) -- An Eastern European crime ring netted at least $733,000 in illegal profit using trading accounts at TD Ameritrade Holding Corp. and six other firms, in the biggest fraud yet uncovered by a U.S. probe of online stock manipulation.

Goldman Sachs partner Duncan Niederauer, slated to join the Big Board as president and co-chief operating officer early next month, has floor traders ticked off over a remark he made several years ago in which he said in effect that he didn't want his stock trades completed by "five guys named Vinnie." (NEW YORK POST)

March 9, 2007 -- Those e-mails clogging inboxes with stock picks that promise instant wealth aren't just annoying, but in fact may be illegal, Securities and Exchange Commission officials said yesterday after announcing a massive crackdown on so-called Internet spam. (NEW YORK POST)

The role of nuclear power in Europe received an unexpected boost yesterday as EU leaders hailed a landmark climate change deal to reduce greenhouse gas emissions and switch to renewable fuels. (TIMES ON LINE)

"We're getting results back that indicate we're getting very strong immune responses in these individuals these people who received our (AIDS)vaccine," said Don Hildebrand, the president and CEO of GeoVax Inc., the company spearheading the research in collaboration with Emory, the Centers for Disease Control, and the National Institutes of Health.

perhaps there is just too much bull?

Ok I’ll admit it yes I got a buy signal and yes I was aware of the low volatility and investor apathy toward risk ,but what I thought out weighs all was the sheer fact that the US market has so significantly under performed since 2000 and has by my measurements not even keep up with inflation ,while the economy has steamed along very nicely. What do I think now ,well I think that we will come roaring out of this correction when its finished .The DOW looks like it needs to go a bit under 1200 and the S&P looks to go a bit under 1320. As for NASDQ the jury is still out for me but my first guess is 2300 then as low as 2150-2100. My biggest issue again is there is just way to much bullishness especially by Wall Street firms…

Darkest be fore the dawn or just too bullish ?

Again I would pint out that I have been very hesitant on emerging markets for some time and simply couldn’t understand the continued out sized gains in this sector. With much of the emerging world being captivated by the creeping red disease it has been very hard to justify the recent level of activity. So China gets a margin call and Ka-boom .Meanwhile the USA is still waiting for the other shoe to drop and given the last several years the darkest hours are always a precursor to large gains I would suggest that once this is over the market may make a significant move up ward .Remember better to buy low and sell high than buy high hoping to sell higher. The one thing that continues to haunt me is the level of optimism, people are just too bullish and it scares me.