Friday, December 11, 2009
IMPORTANT MESSAGE
The Laurel Comment has moved. Letters may now be found at: http://thecoppcomment.blogspot.com/
Thursday, December 3, 2009
December 3rd Edition
Good Morning All,
Last week's Dubai Incident has since proven to be yet another blip on the markets' bullish trendline. Despite warnings of it being the kickoff to a series imminent sovereign debt failures in emerging markets, the smart money took advantage of the "never one cockroach" theorists penchant for historical matchups as it once again trapped the short sellers.
In market parlance, there have long been allusions to bull traps and bear traps; yet what I find interesting these days, is my recently developed theory that what we are now dealing with are ideologue traps, whereby the practicing libertarians and other assorted Wall Street Republicans who desperately pine for a failure of all things Obama, keep getting their respective heads handed to them. For those who doubt the validity of the foregoing, just spend a few days watching CNBC, while paying particular attention to the ubiquitous Dennis Gartman whose role as an expert interviewee belies the performance of his hedge fund launched at the bottom of the market last March. During one of the greatest advances in market history, he has actually posted negative returns; and as for the once reliable Art Cashin, this newly minted permabear (circa 2008) keeps referring to some geopolitical event that will destroy the indexes and the economy. One might be striven to believe that he has tossed out his charts and bought into Nostradamus' musings.
Today we will begin with up markets that will be paying close attention to the Bernanke hearings, while being encouraged by the job summit and the increasingly bullish trendline. The march to 1200 S&P 500 continues.
Commentary
As many long time readers of this letter are aware, the writer holds an unabashed liberal bias on most issues, a view that is somewhat tempered by his hearty pragmatic belief that the doable is more important than the wishful. He is also an admirerer of intellectual curiosity, provided that it is not stifled by too much rigor. He also maintains a healthy distaste for all things ideological; but enough of this third person crap.
Today's treatise includes only a brief mention of Tiger Woods' philanderings, after all "let he who.....cast the first stone" or someting like that. No, today I wish to discuss our other person of colour icon, Barack Obama. What I do believe is important, is the success of the Obama Presidency and its most important initiatives; and how it continues to move both America and the world forward toward a better and more rational understanding of themselves and their increasingly interactive future roles.
It would appear to most sane observors, that the only good thing to come out of the Bush Administration was the situation that created the Obama possibility. The world cannot waste this opportunity. This is not to suggest that criticism Obama be taken from the table, but more simply stated that some political slack needs to be cut if we as a world are to move to a better place. The doable outweighs the dreamable and the time line on an Afghan withdrawal remains an escape route.
" He that troubleth his own house shall inherit the wind "
Proverbs
Bill Copp
Montreal,Canada
December 3 2009
laurelcommentblog
514 795 8450
Last week's Dubai Incident has since proven to be yet another blip on the markets' bullish trendline. Despite warnings of it being the kickoff to a series imminent sovereign debt failures in emerging markets, the smart money took advantage of the "never one cockroach" theorists penchant for historical matchups as it once again trapped the short sellers.
In market parlance, there have long been allusions to bull traps and bear traps; yet what I find interesting these days, is my recently developed theory that what we are now dealing with are ideologue traps, whereby the practicing libertarians and other assorted Wall Street Republicans who desperately pine for a failure of all things Obama, keep getting their respective heads handed to them. For those who doubt the validity of the foregoing, just spend a few days watching CNBC, while paying particular attention to the ubiquitous Dennis Gartman whose role as an expert interviewee belies the performance of his hedge fund launched at the bottom of the market last March. During one of the greatest advances in market history, he has actually posted negative returns; and as for the once reliable Art Cashin, this newly minted permabear (circa 2008) keeps referring to some geopolitical event that will destroy the indexes and the economy. One might be striven to believe that he has tossed out his charts and bought into Nostradamus' musings.
Today we will begin with up markets that will be paying close attention to the Bernanke hearings, while being encouraged by the job summit and the increasingly bullish trendline. The march to 1200 S&P 500 continues.
Commentary
As many long time readers of this letter are aware, the writer holds an unabashed liberal bias on most issues, a view that is somewhat tempered by his hearty pragmatic belief that the doable is more important than the wishful. He is also an admirerer of intellectual curiosity, provided that it is not stifled by too much rigor. He also maintains a healthy distaste for all things ideological; but enough of this third person crap.
Today's treatise includes only a brief mention of Tiger Woods' philanderings, after all "let he who.....cast the first stone" or someting like that. No, today I wish to discuss our other person of colour icon, Barack Obama. What I do believe is important, is the success of the Obama Presidency and its most important initiatives; and how it continues to move both America and the world forward toward a better and more rational understanding of themselves and their increasingly interactive future roles.
It would appear to most sane observors, that the only good thing to come out of the Bush Administration was the situation that created the Obama possibility. The world cannot waste this opportunity. This is not to suggest that criticism Obama be taken from the table, but more simply stated that some political slack needs to be cut if we as a world are to move to a better place. The doable outweighs the dreamable and the time line on an Afghan withdrawal remains an escape route.
" He that troubleth his own house shall inherit the wind "
Proverbs
Bill Copp
Montreal,Canada
December 3 2009
laurelcommentblog
514 795 8450
Tuesday, November 24, 2009
November 24th Edition
Good Morning All,
Markets resumed their two steps forward, one step back routine last week as they once again assailed the previously attained heights of 1100 on the S&P 500, only to give back this hallowed ground through the late weakness inspired by options expiry on Friday last.
Once again the issue for the bears has been the low volume of the advances, while the bulls, among whom I must number myself, remain confused about the effect of the "flash trading" and "dark pool" trades.
What we do know for certain is that a vast horde of late money remains uninvested at this juncture. With this in mind, we have put forth the belief on more than one occasion that a large volume "blow off" rally still awaits us; a rally that may have a temporary pause around December 10th, followed by a renewal after Christmas that moves our favourite average toward 1300 in early March.
Commodities have maintained their royal status during the recent run-up, with gold racing to new nominal highs. Some weeks ago, this letter suggested that the new gold bubble could stretch prices beyond 3000 dollars per ounce. This trade idea is gaining both momentum and credibility at once. The bandwagon has yet to fill up, and even when it does, further hook ups will become available. Rightly or wrongly, this is how markets work. If you don't believe me, read a Nasdaq chart from 1999 to March 2000; or more recently check the ascent/descent of housing prices.
Commentary
Only in America, you say!
Well so it would seem, as Sarah Barracuda's musings heads to the top of the best sellers lists, liberals everywhere wonder whether anyone buying the book can actually read. Oh, strike this nasty statement, it is just the jealous reaction of the yet-to-be-published.
But seriously folks (I like to get folksy at times), how is it that the very people who are most responsible for the present economic crisis can get away with organizing, funding and leading the "Tea Party" movement, a series of gatherings that are mostly attended by their victims, who lustily cheer them on when they ascribe blame for the state of America, to the people who are trying to fix the problems. Worse still, how do a bunch of insurance company lobbyists convince the people they are in the business of screwing, that a much cheaper and universally available government option is bad for them.
Truly a case of dumb and dumber.
"The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity."
W.B. Yeats from "The Second Coming"
Bill Copp
Montreal , Canada
November 24, 2009
laurelcommentblog
5147958450
Markets resumed their two steps forward, one step back routine last week as they once again assailed the previously attained heights of 1100 on the S&P 500, only to give back this hallowed ground through the late weakness inspired by options expiry on Friday last.
Once again the issue for the bears has been the low volume of the advances, while the bulls, among whom I must number myself, remain confused about the effect of the "flash trading" and "dark pool" trades.
What we do know for certain is that a vast horde of late money remains uninvested at this juncture. With this in mind, we have put forth the belief on more than one occasion that a large volume "blow off" rally still awaits us; a rally that may have a temporary pause around December 10th, followed by a renewal after Christmas that moves our favourite average toward 1300 in early March.
Commodities have maintained their royal status during the recent run-up, with gold racing to new nominal highs. Some weeks ago, this letter suggested that the new gold bubble could stretch prices beyond 3000 dollars per ounce. This trade idea is gaining both momentum and credibility at once. The bandwagon has yet to fill up, and even when it does, further hook ups will become available. Rightly or wrongly, this is how markets work. If you don't believe me, read a Nasdaq chart from 1999 to March 2000; or more recently check the ascent/descent of housing prices.
Commentary
Only in America, you say!
Well so it would seem, as Sarah Barracuda's musings heads to the top of the best sellers lists, liberals everywhere wonder whether anyone buying the book can actually read. Oh, strike this nasty statement, it is just the jealous reaction of the yet-to-be-published.
But seriously folks (I like to get folksy at times), how is it that the very people who are most responsible for the present economic crisis can get away with organizing, funding and leading the "Tea Party" movement, a series of gatherings that are mostly attended by their victims, who lustily cheer them on when they ascribe blame for the state of America, to the people who are trying to fix the problems. Worse still, how do a bunch of insurance company lobbyists convince the people they are in the business of screwing, that a much cheaper and universally available government option is bad for them.
Truly a case of dumb and dumber.
"The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity."
W.B. Yeats from "The Second Coming"
Bill Copp
Montreal , Canada
November 24, 2009
laurelcommentblog
5147958450
Tuesday, November 17, 2009
November 17th Edition
Good Morning All,
After a collectively corrective end to October and a further bout of profit-taking in the early part of the new month, markets have staged a strong and broad-based rally. Much of the information source material we choose to rely on for our own comfort has pointed to these few days as being high energy ones. This observation, when translated to present market levels, indicates that this 1100 area on the S&P 500 represents a catalytic point in regard to future performance. In short, we are about to see either a corrective drop from what might be a double top; or a regenerative surge toward my long-held S&P 500 target of 1200, and quite possibly beyond. Naturally, it is the latter case that has our predictive backing.
There has been much discussion in the market place on the subject of enhanced computer trading as it appears in the form of dark pools and flash trading. The subject matter is far too complicated to discuss here, but for those interested in an in-depth analysis, Google awaits. For purposes of this letter it may be sufficient to know that somebody, or manybodies, are getting screwed by these unregulated practices, and that a fewbodies are making out like the bandits they are. This phenomenon has also affected reported NYSE volume, which to my knowledge, does not reflect these abundant trades, thereby making some technical analysis redundant. If anyone can enlighten me on how these cumulative volumes are reported, I would be most interested in hearing from you.
Look for a soft opening today followed by a resumption of the uptrend.
Commentary
The Sunday NYT had a story titled "Naming the '00's", as in the Gay Nineties, Roaring Twenties et al. My suggestion was to simply call them the Idiot Years, a phrase that may be grammatically, or even grammatically incorrect...but that's part of the point, is it not.
And finally, in regard to the recent retirement party, due to the venue and the various comings and goings, we never got around to the speech-making. For those interested, I offer the following observations.
Many of you are aware that the author Mordecai Richler spent a good deal of time at Winnie's on Crescent Street where he was known by some as the resident curmudgeon. During the eight years since his passing I have tried to assume (there has been some competition), not his literary mantle, but the more easily attainable one of resident curmudgeon. May I also add that the recent filming of Mordecai's last novel "Barney's Version" has inspired me to consider a scandalous take on the brokerage industry...hmmmm, how about Billy's Version.
Bill CoppMontreal ,
CanadaNovember 17, 2009
laurelcommentblogspot
514 795 8450
After a collectively corrective end to October and a further bout of profit-taking in the early part of the new month, markets have staged a strong and broad-based rally. Much of the information source material we choose to rely on for our own comfort has pointed to these few days as being high energy ones. This observation, when translated to present market levels, indicates that this 1100 area on the S&P 500 represents a catalytic point in regard to future performance. In short, we are about to see either a corrective drop from what might be a double top; or a regenerative surge toward my long-held S&P 500 target of 1200, and quite possibly beyond. Naturally, it is the latter case that has our predictive backing.
There has been much discussion in the market place on the subject of enhanced computer trading as it appears in the form of dark pools and flash trading. The subject matter is far too complicated to discuss here, but for those interested in an in-depth analysis, Google awaits. For purposes of this letter it may be sufficient to know that somebody, or manybodies, are getting screwed by these unregulated practices, and that a fewbodies are making out like the bandits they are. This phenomenon has also affected reported NYSE volume, which to my knowledge, does not reflect these abundant trades, thereby making some technical analysis redundant. If anyone can enlighten me on how these cumulative volumes are reported, I would be most interested in hearing from you.
Look for a soft opening today followed by a resumption of the uptrend.
Commentary
The Sunday NYT had a story titled "Naming the '00's", as in the Gay Nineties, Roaring Twenties et al. My suggestion was to simply call them the Idiot Years, a phrase that may be grammatically, or even grammatically incorrect...but that's part of the point, is it not.
And finally, in regard to the recent retirement party, due to the venue and the various comings and goings, we never got around to the speech-making. For those interested, I offer the following observations.
Many of you are aware that the author Mordecai Richler spent a good deal of time at Winnie's on Crescent Street where he was known by some as the resident curmudgeon. During the eight years since his passing I have tried to assume (there has been some competition), not his literary mantle, but the more easily attainable one of resident curmudgeon. May I also add that the recent filming of Mordecai's last novel "Barney's Version" has inspired me to consider a scandalous take on the brokerage industry...hmmmm, how about Billy's Version.
Bill CoppMontreal ,
CanadaNovember 17, 2009
laurelcommentblogspot
514 795 8450
Tuesday, November 10, 2009
November 10th Edition
Good Morning All,
Last week at this time, we hinted at the possibility of a Tuesday turnaround in markets, but in a copp out which was quite out of character, we came up short of actually committing to it. Instead we offered the quiet reassurance that the upward trend remained intact and would renew itself no later than mid month. Well my dears, the week that was, proved to be a rather good one for the bulls, bringing markets back to, and in some cases, beyond their former recovery highs making today yet an important flex point for markets.
Ideally, bulls should hope for some early morning profit taking to be absorbed in advance of a moderate confirmation of the week's considerable achievements. Sector performances will also be an important marking point as new highs in gold, copper and other commodities are likely to come under some profit taking pressure sooner rather than later. It is thought by most observers that U.S. dollar weakness is the commodity price generator, so keep an eye on our own resource based currency for clues. Either way, this China trade is likely to be on for some time to come. The simplest way to play this is not through Asian stocks but through our own resource based companies. Mining and oil stocks are ripe for takeover by cash rich internationals and sovereign entities. Even the forest product ne'er do wells are drawing interest. Check out Domtar's trading range par example, while you continue to collect Norbord in Canada and Louisiana Pacific in the U.S.; respectively 13ish and under 7.
A few weeks ago we wrote of gold as being the next bubble, due to the ease with which it can be manipulated. As long time readers of this letter are aware, I am a cynical bull on this subject, having recommended its purchase around the 350$ level some 5 or 6 years ago. My then original target of 1000$ has since been exceeded and I expect my second level of 1500$ soon will be. As most investors are aware these are nominal dollar prices when related to all time highs reached in the early 80's, which are closer to 2300$ when adjusted for inflation. I was not kidding when I recently targeted prices well in excess of 3000$... if the bubble theory proves out. Just remember however, that you cannot eat gold, live in it or make love to it...at least not in a normal way.
Commentary
It is not their recent Gubnatorial victories that should delight the Republican Party, but the loss of their 100 year old Congressional seat in upstate New York. The crazies that occupy the right wing of the GOP who are bent on taking over the entire shooting match, just had a refresher course on how moronic they can be. Moderate Republicans and adult Americans everywhere can rejoice in this defeat of the lunatic fringe led by Palin, Limbaugh and the denizens at Fox network.
On the other hand, Democrats may have cynically wished for such a takeover, as they are all too well aware that only 20 % of the public is actually certifiable and by definition...unelectable.
…or as Bobby Kennedy used to say "20% of the people will be against everything, all of the time"
Bill Copp
Montreal, Canada
November 10, 2009
laurelcommentblog
Last week at this time, we hinted at the possibility of a Tuesday turnaround in markets, but in a copp out which was quite out of character, we came up short of actually committing to it. Instead we offered the quiet reassurance that the upward trend remained intact and would renew itself no later than mid month. Well my dears, the week that was, proved to be a rather good one for the bulls, bringing markets back to, and in some cases, beyond their former recovery highs making today yet an important flex point for markets.
Ideally, bulls should hope for some early morning profit taking to be absorbed in advance of a moderate confirmation of the week's considerable achievements. Sector performances will also be an important marking point as new highs in gold, copper and other commodities are likely to come under some profit taking pressure sooner rather than later. It is thought by most observers that U.S. dollar weakness is the commodity price generator, so keep an eye on our own resource based currency for clues. Either way, this China trade is likely to be on for some time to come. The simplest way to play this is not through Asian stocks but through our own resource based companies. Mining and oil stocks are ripe for takeover by cash rich internationals and sovereign entities. Even the forest product ne'er do wells are drawing interest. Check out Domtar's trading range par example, while you continue to collect Norbord in Canada and Louisiana Pacific in the U.S.; respectively 13ish and under 7.
A few weeks ago we wrote of gold as being the next bubble, due to the ease with which it can be manipulated. As long time readers of this letter are aware, I am a cynical bull on this subject, having recommended its purchase around the 350$ level some 5 or 6 years ago. My then original target of 1000$ has since been exceeded and I expect my second level of 1500$ soon will be. As most investors are aware these are nominal dollar prices when related to all time highs reached in the early 80's, which are closer to 2300$ when adjusted for inflation. I was not kidding when I recently targeted prices well in excess of 3000$... if the bubble theory proves out. Just remember however, that you cannot eat gold, live in it or make love to it...at least not in a normal way.
Commentary
It is not their recent Gubnatorial victories that should delight the Republican Party, but the loss of their 100 year old Congressional seat in upstate New York. The crazies that occupy the right wing of the GOP who are bent on taking over the entire shooting match, just had a refresher course on how moronic they can be. Moderate Republicans and adult Americans everywhere can rejoice in this defeat of the lunatic fringe led by Palin, Limbaugh and the denizens at Fox network.
On the other hand, Democrats may have cynically wished for such a takeover, as they are all too well aware that only 20 % of the public is actually certifiable and by definition...unelectable.
…or as Bobby Kennedy used to say "20% of the people will be against everything, all of the time"
Bill Copp
Montreal, Canada
November 10, 2009
laurelcommentblog
Wednesday, November 4, 2009
November 3rd Edition
Good Morning All,
There is little doubt that our predicted rocket launch toward 1200 on the S&P 500 has been somewhat delayed by the market's abandonment of the high ground that was taken some 10 trading sessions ago. Although the extreme volatility that has typified recent activity has made many investors quite nervous about future trends, it is our belief that the November correction we called for a few weeks ago...has simply come early. One of the major reasons for this late October swoon, and its carry-over into this week, may be attributed to the annual event that has influenced price action for many years. October is year-end for many fund managers, and it is their portfolio adjustments that have led to the triple digit up-and-down moves which have made markets so raucus of late.
We are not so sure that we want to call for a turnaround Tuesday this morning, but we will venture to state that the up trend remains intact, and that the flight toward 1200 S&P and beyond will resume by mid month at the latest. If David Nichols of Fractal Markets is correct, we should see this bullish resumption last through early March, whereupon a seasonal pullback may present itself... from much higher numbers. In short, this week's market has created yet another opportunity for those who have missed the enormous March/October gains, to get on board for the next four months, or five years if they are patient.
Commentary
Some of you may have seen the documentary "Life After People" which premiered on the History channel in January 2008 and has recently replayed. The film explores the idea of what would happen to the Earth, its environment and its structures,for months, years and centuries after people are gone. Interesting as the theme may be, I was struck by the parallel that might be drawn to the present situation in the Middle East . What would happen if all the foreign occupiers were withdrawn? Or worse still, what will happen if they are not?
In essence, people and politics do make a difference; but in the vast realm of time, it is both brief and fleeting by nature, and often, very destructive.
"And everybody praised the Duke,
Who this great fight did win.
But what good came of it at last?
Quoth little Peterkin.
'Why that I cannot tell,' said he,'
But 'twas a famous victory.'
Robert Southey
Bill Copp
Montreal , Canada
November 3 2009
laurelcommentblog
There is little doubt that our predicted rocket launch toward 1200 on the S&P 500 has been somewhat delayed by the market's abandonment of the high ground that was taken some 10 trading sessions ago. Although the extreme volatility that has typified recent activity has made many investors quite nervous about future trends, it is our belief that the November correction we called for a few weeks ago...has simply come early. One of the major reasons for this late October swoon, and its carry-over into this week, may be attributed to the annual event that has influenced price action for many years. October is year-end for many fund managers, and it is their portfolio adjustments that have led to the triple digit up-and-down moves which have made markets so raucus of late.
We are not so sure that we want to call for a turnaround Tuesday this morning, but we will venture to state that the up trend remains intact, and that the flight toward 1200 S&P and beyond will resume by mid month at the latest. If David Nichols of Fractal Markets is correct, we should see this bullish resumption last through early March, whereupon a seasonal pullback may present itself... from much higher numbers. In short, this week's market has created yet another opportunity for those who have missed the enormous March/October gains, to get on board for the next four months, or five years if they are patient.
Commentary
Some of you may have seen the documentary "Life After People" which premiered on the History channel in January 2008 and has recently replayed. The film explores the idea of what would happen to the Earth, its environment and its structures,for months, years and centuries after people are gone. Interesting as the theme may be, I was struck by the parallel that might be drawn to the present situation in the Middle East . What would happen if all the foreign occupiers were withdrawn? Or worse still, what will happen if they are not?
In essence, people and politics do make a difference; but in the vast realm of time, it is both brief and fleeting by nature, and often, very destructive.
"And everybody praised the Duke,
Who this great fight did win.
But what good came of it at last?
Quoth little Peterkin.
'Why that I cannot tell,' said he,'
But 'twas a famous victory.'
Robert Southey
Bill Copp
Montreal , Canada
November 3 2009
laurelcommentblog
Thursday, October 22, 2009
October 21st Edition
Good Morning All,
Markets bivouacked yesterday, taking a much needed respite from their collective march toward higher levels. As readers of this letter are well aware, we like to use the S&P 500 to mark the overall progress of world indices. With this in mind, please note that our projected short-term target of 1200 now appears to be well within reach. This much vaunted event should occur during the first week of November, at which point we would advise traders to step back for a time, or at least until a more definitive pattern emerges. Longer-term investors may wish to stay aboard for the longer journey, which will likely end some five or six years from now; as that is the average length of the modern business cycle...boom to bust.
There continue to be a number of positive fundamental signs indicating that the economy is staging a solid recovery; some now even believe that an upswing of major proportion is looming. Please google ECRI for its economic take on the world. Earnings have also added a much needed boon to the market's positive nature, as roughly 73% have come in ahead of expectation thus far in the reporting season. It is once again notable that the "libertarians" who hold most of the microphones at CNBC are still bearish, and that their idols on Wall Street who brought us much of the debacle in the first place, remain skeptical of all things Obama. It is indeed curious to watch and listen to the most verbally patriotic Americans literally embrace the hope that he and the Democrats will fail in their efforts to stabilize the country that many of their ilk have so willfully destroyed. Remember where we were a year ago and think once again of how the world may have fared under a McCain-Palin administration.
Also of interest was a recent report showing that average home prices in London, England have reached all-time highs, exceeding the previous record set in November 2007. I don't think this represents the outset of a new housing bubble, although similar such growth in Asia may prove to be a longer-term problem. In short, there will be another bubble in some sector, somewhere...but it is too early for it to burst. Gold, an exceedingly rare and rather useless commodity, is showing all the signs of becoming just such a candidate; if so it will likely top out well above 3000$ per ounce, a very long way from here.
In the meantime, refer to my potash stock list of last November, pick up some of my previous gold selections and be aware that China, BHP Billiton and others are hunting acquisitions...even uranium is making a comeback.
Commentary Now that a little time has passed and the brow beating nastiness over Obama's Nobel prize has subsided, I would like to reflect upon what I thought then and now.
The United States , and by proxy, the world, has recently moved from a posture that celebrated war and hubris under Bush-Cheney toward a cerebration of peace and diplomacy led by Barrack Obama. This act of hope alone...is worth the award.Sometimes, what you do is not as important as what you provoke or inspire others to feel. Affect is often the prologue to effect, and we have travelled a great distance in one bold step...that is what the Nobel committee recognized and America , through this gesture has once again resumed its role as World Leader.
"Some see things as they are, and ask why; others dream things that never were, and ask, why not?
The above is a familiar Shaw quote made famous by Ted Kennedy eulogizing his brother Bobby. Bill CoppMontreal , CanadaOctober 21 2009laurelcommentblogspot
Markets bivouacked yesterday, taking a much needed respite from their collective march toward higher levels. As readers of this letter are well aware, we like to use the S&P 500 to mark the overall progress of world indices. With this in mind, please note that our projected short-term target of 1200 now appears to be well within reach. This much vaunted event should occur during the first week of November, at which point we would advise traders to step back for a time, or at least until a more definitive pattern emerges. Longer-term investors may wish to stay aboard for the longer journey, which will likely end some five or six years from now; as that is the average length of the modern business cycle...boom to bust.
There continue to be a number of positive fundamental signs indicating that the economy is staging a solid recovery; some now even believe that an upswing of major proportion is looming. Please google ECRI for its economic take on the world. Earnings have also added a much needed boon to the market's positive nature, as roughly 73% have come in ahead of expectation thus far in the reporting season. It is once again notable that the "libertarians" who hold most of the microphones at CNBC are still bearish, and that their idols on Wall Street who brought us much of the debacle in the first place, remain skeptical of all things Obama. It is indeed curious to watch and listen to the most verbally patriotic Americans literally embrace the hope that he and the Democrats will fail in their efforts to stabilize the country that many of their ilk have so willfully destroyed. Remember where we were a year ago and think once again of how the world may have fared under a McCain-Palin administration.
Also of interest was a recent report showing that average home prices in London, England have reached all-time highs, exceeding the previous record set in November 2007. I don't think this represents the outset of a new housing bubble, although similar such growth in Asia may prove to be a longer-term problem. In short, there will be another bubble in some sector, somewhere...but it is too early for it to burst. Gold, an exceedingly rare and rather useless commodity, is showing all the signs of becoming just such a candidate; if so it will likely top out well above 3000$ per ounce, a very long way from here.
In the meantime, refer to my potash stock list of last November, pick up some of my previous gold selections and be aware that China, BHP Billiton and others are hunting acquisitions...even uranium is making a comeback.
Commentary Now that a little time has passed and the brow beating nastiness over Obama's Nobel prize has subsided, I would like to reflect upon what I thought then and now.
The United States , and by proxy, the world, has recently moved from a posture that celebrated war and hubris under Bush-Cheney toward a cerebration of peace and diplomacy led by Barrack Obama. This act of hope alone...is worth the award.Sometimes, what you do is not as important as what you provoke or inspire others to feel. Affect is often the prologue to effect, and we have travelled a great distance in one bold step...that is what the Nobel committee recognized and America , through this gesture has once again resumed its role as World Leader.
"Some see things as they are, and ask why; others dream things that never were, and ask, why not?
The above is a familiar Shaw quote made famous by Ted Kennedy eulogizing his brother Bobby. Bill CoppMontreal , CanadaOctober 21 2009laurelcommentblogspot
Wednesday, October 7, 2009
October 7th Edition
Good Morning All,
It looks pretty much as if we had our wishes fulfilled with yesterday's round the world market performance. It is worth noting that this positive action came on the heels of an early 4th quarter correction (window undressing?) which had followed an abnormally strong September. Alcoa, one of our early recovery favourites, will kick off earnings reporting season after the close. Since it has had a recent analyst upgrade, one must think the prospects are good for a bullish announcement. Intel reports next Tuesday, but the serious influx will occur during the week of the 19th.
So I guess the question now, is not about a 10,000 Dow Jones, which is less than a couple of good trading days away, but one of how far, how soon? For this prognostication I will refer to my summer long held view that once past 1060 on the S&P 500, market momentum would accelerate buying through to 1200. This is rarely a straight line occurence, but dip buying continues to be the pattern in force.
Gold and the U.S. dollar are now more firmly linked than ever, a truth also seen of oil and other commodities. The trends, until broken are all up; excepting the greenback.
I have been accumulating stock in the company described in the link below since the spring. It is a microcap, sure enough, and may seem to be a silly investment to some; that is until you think of those who recommended AIG at 60$ or....Nortel over 100$. This is a nanotech, a theme that will dominate the years to come. Enjoy the sites, buy the paint or the stock, symbol INTK pink sheets.
Bill Copp
Montreal, Canada
October 7 2009
laurelcommentblogspot
http://www.nansulate.com/nanoblog/
It looks pretty much as if we had our wishes fulfilled with yesterday's round the world market performance. It is worth noting that this positive action came on the heels of an early 4th quarter correction (window undressing?) which had followed an abnormally strong September. Alcoa, one of our early recovery favourites, will kick off earnings reporting season after the close. Since it has had a recent analyst upgrade, one must think the prospects are good for a bullish announcement. Intel reports next Tuesday, but the serious influx will occur during the week of the 19th.
So I guess the question now, is not about a 10,000 Dow Jones, which is less than a couple of good trading days away, but one of how far, how soon? For this prognostication I will refer to my summer long held view that once past 1060 on the S&P 500, market momentum would accelerate buying through to 1200. This is rarely a straight line occurence, but dip buying continues to be the pattern in force.
Gold and the U.S. dollar are now more firmly linked than ever, a truth also seen of oil and other commodities. The trends, until broken are all up; excepting the greenback.
I have been accumulating stock in the company described in the link below since the spring. It is a microcap, sure enough, and may seem to be a silly investment to some; that is until you think of those who recommended AIG at 60$ or....Nortel over 100$. This is a nanotech, a theme that will dominate the years to come. Enjoy the sites, buy the paint or the stock, symbol INTK pink sheets.
Bill Copp
Montreal, Canada
October 7 2009
laurelcommentblogspot
http://www.nansulate.com/nanoblog/
Tuesday, October 6, 2009
October 6, 2009
Good Morning All,
Due to inclement market conditions the rocket launch to higher market highs that was predicted in this letter a few weeks ago has been delayed, not aborted. Although yesterday's 100 point plus rally was a good start toward stabilization from the recent mild correction, I am always wary of "Tuesday turnarounds", so let's see if we can put in a solid all day performance before I give the green light to the 1200 S&P 500 target that I believe is in sight for this often devestating month.
No one need be surprised by the constant berating of all things Obama by the lunatic right, nor should they be particularly distressed by the no idea nasty opposition that has been emanating from the rest of the Republicans. What is difficult to stomach is the nit picking criticisms that have become the new mantra for many moderates. It is indeed strange how quickly people seem to have forgotten how we got here, both economically and militarily. These crises did not appear on inauguration day, in the case of deregulation, it began with the Reagan administration; and as for the wars in the Middle East, we may thank the Bush regime's ignorance and hubris for creating this ongoing waste of lives and of treasure. In short they will not be fixed overnight, a statement that should require little repetition.
Meanwhile the dogs of war appear to be gearing up the media for an escalation of the insane war in Afghanistan. This is where I part company with many of Obama's concessions to the war's advocates. There will be no victory here, history has taught us so. With a massive infusion of men and arms, it may be possible to obtain the appearance of stability for a short while, but in the end few of the "on the ground dynamics" will have changed.
There have been many intelligent columns written on this and other issues; one such observation by E J Dionne follows.
Yes Alice, newspapers still exist. " and the seasons go round and round
and the painted ponies go up and down"
The Circle Game by Joni Mitchell
Bill Copp
Montreal, Canada
October 6 2009
laurelcommentblogspot
No Rush to Escalate
By E.J. Dionne Jr.
Monday, October 5, 2009
At a White House dinner with a group of historians at the beginning of the summer, Robert Dallek, a shrewd student of both the Kennedy and Johnson administrations, offered a chilling comment to President Obama. "In my judgment," he recalls saying, "war kills off great reform movements." The American record is pretty clear: World War I brought the Progressive Era to a close. When Franklin D. Roosevelt was waging World War II, he was candid in saying that "Dr. New Deal" had given way to "Dr. Win the War." Korea ended Harry Truman's Fair Deal, and Vietnam brought Lyndon Johnson's Great Society to an abrupt halt. Dallek is not a pacifist, and he does not pretend that his observation settles the question against war in every case. Of the four he mentioned, I think World War II and Korea were certainly necessary fights. But Dallek's point helps explain why Obama is right to have grave qualms about an extended commitment of many more American troops to Afghanistan. Obama was elected not to escalate a war but to end one. The change and hope he promised did not involve a vast new campaign to transform Afghanistan. It's easy to get enraged over the mess in Afghanistan and with the voices insisting that Obama has no choice but to remedy it by going big and going long. Too many of those who say that Obama is obligated to step up the pace in Afghanistan spent the Bush presidency neglecting that war because their main interest was in waging a new one in Iraq. In his recent report to the president, Gen. Stanley A. McChrystal, the top U.S. commander in Afghanistan, noted repeatedly that the effort there had been "under-resourced." It sure would have been nice if we had settled Afghanistan before beating the drums of war in Iraq. It's also enraging that those who insist on offsetting every penny spent to expand health coverage would never ask the Congressional Budget Office to score the costs of McChrystal's strategy. For the uninsured, they propose fiscal prudence. For war, they offer profligacy. Yet rage is a poor guide to policy. The truth is that Obama has only bad choices in Afghanistan. Obama has said over and over that the war in Afghanistan, unlike the war in Iraq, is necessary. "We are in Afghanistan to confront a common enemy that threatens the United States, our friends and our allies," he declared in March. He cannot walk away from that. But while his March speech was sweeping in certain ways, he defined a limited core objective. "I want the American people to understand that we have a clear and focused goal," he said, "to disrupt, dismantle and defeat al-Qaeda in Pakistan and Afghanistan, and to prevent their return to either country in the future." These are the words that will give Obama room to reconsider his policy. McChrystal argued that the full counterinsurgency strategy he proposes demands that we "elevate the importance of governance" in Afghanistan, and, to his credit, he is brutally frank about its current dismal state. He writes of "the crisis of popular confidence that springs from the weakness of [Afghan government] institutions, the unpunished abuse of power by corrupt officials and power brokers, a widespread sense of political disenfranchisement, and a long-standing lack of economic opportunity." That doesn't even take into account the fraud involved in President Hamid Karzai's reelection. Is this a situation in which Obama should commit tens of thousands more troops for a lengthy war? Should it surprise us that some administration officials are asking why it is that al-Qaeda has weakened even as the Taliban has grown stronger? These skeptics now question whether routing the Taliban is actually essential to Obama's core goal of defeating al-Qaeda. There's a jelling conventional wisdom that if Obama doesn't go all in with McChrystal's strategy, he is admitting defeat and backing away from his earlier pledges. Those who want him to commit now are impatient for a decision. Obama should resist both their impatience and their criticism of his search for an alternative strategy. The last thing he should do is rush into a new set of obligations in Afghanistan that would come to define his presidency more than any victory he wins on health care. Those most eager for a bigger war have little interest in Obama's quest for domestic reform. As he ponders his options, theirs are not the voices he should worry about.
Due to inclement market conditions the rocket launch to higher market highs that was predicted in this letter a few weeks ago has been delayed, not aborted. Although yesterday's 100 point plus rally was a good start toward stabilization from the recent mild correction, I am always wary of "Tuesday turnarounds", so let's see if we can put in a solid all day performance before I give the green light to the 1200 S&P 500 target that I believe is in sight for this often devestating month.
No one need be surprised by the constant berating of all things Obama by the lunatic right, nor should they be particularly distressed by the no idea nasty opposition that has been emanating from the rest of the Republicans. What is difficult to stomach is the nit picking criticisms that have become the new mantra for many moderates. It is indeed strange how quickly people seem to have forgotten how we got here, both economically and militarily. These crises did not appear on inauguration day, in the case of deregulation, it began with the Reagan administration; and as for the wars in the Middle East, we may thank the Bush regime's ignorance and hubris for creating this ongoing waste of lives and of treasure. In short they will not be fixed overnight, a statement that should require little repetition.
Meanwhile the dogs of war appear to be gearing up the media for an escalation of the insane war in Afghanistan. This is where I part company with many of Obama's concessions to the war's advocates. There will be no victory here, history has taught us so. With a massive infusion of men and arms, it may be possible to obtain the appearance of stability for a short while, but in the end few of the "on the ground dynamics" will have changed.
There have been many intelligent columns written on this and other issues; one such observation by E J Dionne follows.
Yes Alice, newspapers still exist. " and the seasons go round and round
and the painted ponies go up and down"
The Circle Game by Joni Mitchell
Bill Copp
Montreal, Canada
October 6 2009
laurelcommentblogspot
No Rush to Escalate
By E.J. Dionne Jr.
Monday, October 5, 2009
At a White House dinner with a group of historians at the beginning of the summer, Robert Dallek, a shrewd student of both the Kennedy and Johnson administrations, offered a chilling comment to President Obama. "In my judgment," he recalls saying, "war kills off great reform movements." The American record is pretty clear: World War I brought the Progressive Era to a close. When Franklin D. Roosevelt was waging World War II, he was candid in saying that "Dr. New Deal" had given way to "Dr. Win the War." Korea ended Harry Truman's Fair Deal, and Vietnam brought Lyndon Johnson's Great Society to an abrupt halt. Dallek is not a pacifist, and he does not pretend that his observation settles the question against war in every case. Of the four he mentioned, I think World War II and Korea were certainly necessary fights. But Dallek's point helps explain why Obama is right to have grave qualms about an extended commitment of many more American troops to Afghanistan. Obama was elected not to escalate a war but to end one. The change and hope he promised did not involve a vast new campaign to transform Afghanistan. It's easy to get enraged over the mess in Afghanistan and with the voices insisting that Obama has no choice but to remedy it by going big and going long. Too many of those who say that Obama is obligated to step up the pace in Afghanistan spent the Bush presidency neglecting that war because their main interest was in waging a new one in Iraq. In his recent report to the president, Gen. Stanley A. McChrystal, the top U.S. commander in Afghanistan, noted repeatedly that the effort there had been "under-resourced." It sure would have been nice if we had settled Afghanistan before beating the drums of war in Iraq. It's also enraging that those who insist on offsetting every penny spent to expand health coverage would never ask the Congressional Budget Office to score the costs of McChrystal's strategy. For the uninsured, they propose fiscal prudence. For war, they offer profligacy. Yet rage is a poor guide to policy. The truth is that Obama has only bad choices in Afghanistan. Obama has said over and over that the war in Afghanistan, unlike the war in Iraq, is necessary. "We are in Afghanistan to confront a common enemy that threatens the United States, our friends and our allies," he declared in March. He cannot walk away from that. But while his March speech was sweeping in certain ways, he defined a limited core objective. "I want the American people to understand that we have a clear and focused goal," he said, "to disrupt, dismantle and defeat al-Qaeda in Pakistan and Afghanistan, and to prevent their return to either country in the future." These are the words that will give Obama room to reconsider his policy. McChrystal argued that the full counterinsurgency strategy he proposes demands that we "elevate the importance of governance" in Afghanistan, and, to his credit, he is brutally frank about its current dismal state. He writes of "the crisis of popular confidence that springs from the weakness of [Afghan government] institutions, the unpunished abuse of power by corrupt officials and power brokers, a widespread sense of political disenfranchisement, and a long-standing lack of economic opportunity." That doesn't even take into account the fraud involved in President Hamid Karzai's reelection. Is this a situation in which Obama should commit tens of thousands more troops for a lengthy war? Should it surprise us that some administration officials are asking why it is that al-Qaeda has weakened even as the Taliban has grown stronger? These skeptics now question whether routing the Taliban is actually essential to Obama's core goal of defeating al-Qaeda. There's a jelling conventional wisdom that if Obama doesn't go all in with McChrystal's strategy, he is admitting defeat and backing away from his earlier pledges. Those who want him to commit now are impatient for a decision. Obama should resist both their impatience and their criticism of his search for an alternative strategy. The last thing he should do is rush into a new set of obligations in Afghanistan that would come to define his presidency more than any victory he wins on health care. Those most eager for a bigger war have little interest in Obama's quest for domestic reform. As he ponders his options, theirs are not the voices he should worry about.
Wednesday, September 16, 2009
September 16th Edition
Good Morning All,
The S&P 500 closed above 1050 last night. This powerful advance has led Asian and European markets higher in what North Americans refer to as "overnight trading". Our often-expressed initial target of 1060 will likely be exceeded at the opening bell, and after allowing for some momentary profit taking, markets should begin their march toward 1200. This will not be a long trek; it will more closely resemble a rocket launch. It is my belief that the little duckies have successfully aligned themselves in conjunction with interstellar activity, sunspots, phases of the moon and any number of Nostradamus' predictions to set the stage for a sharp, strong advance into early October.
Actually folks, I don't really believe that markets act in either an orderly or a random manner; and I certainly don't believe that forces unknown to us have any influence on market behavior (unless of course we are talking about rogue bankers). What I do give credence to is my oft-stated view that bears hold cash they must invest, and that bulls hold stocks they must one day sell. The only question to be asked is; how many are in each group? The answer, as posited in my previous treatise, is thus: the bears who have missed the 50% market gains that were triggered in March must now spend their cash, and they will do so in a hurry. So enjoy the ride and be ready to depart the scene as we approach either 1200 or the second week of October.
Although traders must remain nimble, longer-term investors may rest assured that the five year up cycle has begun in earnest. The signal may have been given by the recent renewed interest in stalwarts such as GE and Alcoa. The tech rally is still game one but own some commodity based stocks including gold. Many have been mentioned in previous letters at much lower prices.
The S&P 500 closed above 1050 last night. This powerful advance has led Asian and European markets higher in what North Americans refer to as "overnight trading". Our often-expressed initial target of 1060 will likely be exceeded at the opening bell, and after allowing for some momentary profit taking, markets should begin their march toward 1200. This will not be a long trek; it will more closely resemble a rocket launch. It is my belief that the little duckies have successfully aligned themselves in conjunction with interstellar activity, sunspots, phases of the moon and any number of Nostradamus' predictions to set the stage for a sharp, strong advance into early October.
Actually folks, I don't really believe that markets act in either an orderly or a random manner; and I certainly don't believe that forces unknown to us have any influence on market behavior (unless of course we are talking about rogue bankers). What I do give credence to is my oft-stated view that bears hold cash they must invest, and that bulls hold stocks they must one day sell. The only question to be asked is; how many are in each group? The answer, as posited in my previous treatise, is thus: the bears who have missed the 50% market gains that were triggered in March must now spend their cash, and they will do so in a hurry. So enjoy the ride and be ready to depart the scene as we approach either 1200 or the second week of October.
Although traders must remain nimble, longer-term investors may rest assured that the five year up cycle has begun in earnest. The signal may have been given by the recent renewed interest in stalwarts such as GE and Alcoa. The tech rally is still game one but own some commodity based stocks including gold. Many have been mentioned in previous letters at much lower prices.
Tuesday, September 1, 2009
September 1st Edition
Good Morning All,
Although markets closed out August with somewhat less than an august robustness, it should be noted that the final numbers still added a sixth month to the recovery rally. Bulls appear to be somewhat worried by the recent volatility in China, while bears, particularly those of an ideological bent, rant on about deficits and bailouts, something they seemed less concerned with when the Bush-Cheney regime was creating both the trillion-dollar war for oil and the deregulatory grounds for the bank debacle.
This letter has been bullish since late October of last year, which for many, though not all, sectors, was a tad too early. But then again we were calling for the end of the world in mid 2006, months before the May 07 peak in bank stocks and the October crash that followed. Time, however, passes rather quickly and the worst things in the world are never permanent. Depressions, recessions and wars each end in time, at least for most "civilized" partners. It has been my view that we were offered a multi-generational opportunity at the end of last year, one which became even greater by March 2009. Some of you might remember the stock lists I first published in late November and added to as the months went on. Should you wish to see them again...ask.
Markets will either correct soon from 1060 S&P 500, or in early October from 1200 plus. Be confident in the future, but remain nimble.
Commentary
The nutbars in America have been out in full force these last months as the demagogic right continues to rally their intellectually-challenged minions in opposition to all things Obama. Health care has been the main focus of much of this insanity as many of the uninsured, the barely insured and the already government insured have marched to the tune of the INSURANCE companies and other assorted lobby groups. Reminds one of the P.T. Barnum dictum "there's a sucker born every minute"...or a customer.
I am also reminded, anecdotally, of a story told to me by a friend, who while visiting Florida last winter was confronted by another resident of his complex with a statement on Canadian medicare. "So you are a Canadian", he stated, "yes", Paul proudly replied. "So you have that medicare, where you have to wait for treatment" he continued. "Well", Paul quietly observed, "I guess we do have to wait for some things, but I have never met anyone who lost their house over it".
To this story may I add my humble suggestions to the American health care debate. Why not just expand the existing Medicare and Medicaid programs, by dropping the age eligibility on the former first to 60 from 65, and then gradually make it inclusive of 55 and 50 year olds. For the latter, which presently covers 40 million of America 's poor, why not just double the maximum income requirement. This could be expensive, but cost savings would accrue from the limits paid on drugs and treatments which are now part of the existing programs. The government could, at the same time, pass "tort reform" wherein caps could be placed on lawsuit settlements, much as they presently are by insurance companies. So much for a life, a lung, a leg, a liver or a linguini. This would stop the unreasonable settlement scam wherein some chain-smoking, wife-beating, child abuser who has spent a life chasing down an unending series of six-packs with shots of bad bourbon, from receiving gazillion-dollar awards for having the wrong diabetic leg amputated...at the expense to entire system.
Although markets closed out August with somewhat less than an august robustness, it should be noted that the final numbers still added a sixth month to the recovery rally. Bulls appear to be somewhat worried by the recent volatility in China, while bears, particularly those of an ideological bent, rant on about deficits and bailouts, something they seemed less concerned with when the Bush-Cheney regime was creating both the trillion-dollar war for oil and the deregulatory grounds for the bank debacle.
This letter has been bullish since late October of last year, which for many, though not all, sectors, was a tad too early. But then again we were calling for the end of the world in mid 2006, months before the May 07 peak in bank stocks and the October crash that followed. Time, however, passes rather quickly and the worst things in the world are never permanent. Depressions, recessions and wars each end in time, at least for most "civilized" partners. It has been my view that we were offered a multi-generational opportunity at the end of last year, one which became even greater by March 2009. Some of you might remember the stock lists I first published in late November and added to as the months went on. Should you wish to see them again...ask.
Markets will either correct soon from 1060 S&P 500, or in early October from 1200 plus. Be confident in the future, but remain nimble.
Commentary
The nutbars in America have been out in full force these last months as the demagogic right continues to rally their intellectually-challenged minions in opposition to all things Obama. Health care has been the main focus of much of this insanity as many of the uninsured, the barely insured and the already government insured have marched to the tune of the INSURANCE companies and other assorted lobby groups. Reminds one of the P.T. Barnum dictum "there's a sucker born every minute"...or a customer.
I am also reminded, anecdotally, of a story told to me by a friend, who while visiting Florida last winter was confronted by another resident of his complex with a statement on Canadian medicare. "So you are a Canadian", he stated, "yes", Paul proudly replied. "So you have that medicare, where you have to wait for treatment" he continued. "Well", Paul quietly observed, "I guess we do have to wait for some things, but I have never met anyone who lost their house over it".
To this story may I add my humble suggestions to the American health care debate. Why not just expand the existing Medicare and Medicaid programs, by dropping the age eligibility on the former first to 60 from 65, and then gradually make it inclusive of 55 and 50 year olds. For the latter, which presently covers 40 million of America 's poor, why not just double the maximum income requirement. This could be expensive, but cost savings would accrue from the limits paid on drugs and treatments which are now part of the existing programs. The government could, at the same time, pass "tort reform" wherein caps could be placed on lawsuit settlements, much as they presently are by insurance companies. So much for a life, a lung, a leg, a liver or a linguini. This would stop the unreasonable settlement scam wherein some chain-smoking, wife-beating, child abuser who has spent a life chasing down an unending series of six-packs with shots of bad bourbon, from receiving gazillion-dollar awards for having the wrong diabetic leg amputated...at the expense to entire system.
Wednesday, August 26, 2009
August 26th
Good Morning All,
Positive market activity this week has continued to validate our view that stocks are headed higher over the coming weeks with our initial target of 1060 S&P 500 likely to act only as a resting point along the way to 1200. Although there is much bearish talk about the danger inherent in the low volumes that have accompanied this summer rise, the contrarian in me is assured that large volume days and big market moves are yet to come. When this happens, we will enjoy the "blow off" rally that will set up the fall, but that fall will take place from a much higher plateau.
Ted Kennedy's death should remind us all of the history behind the drive for Medicare. It should also be a time to further debunk the myth of Reaganism by remembering that the late idol of the right cut his political teeth opposing its enactment. It is ironic now to watch elderly Reaganites expressing personal terror of having it "messed with". August 26Bill Copp As usual...Paul Krugman, not the CNBC libertarians...is spot on.
August 24, 2009
Op-Ed Columnist
All the President’s Zombies
By PAUL KRUGMAN
The debate over the “public option” in health care has been dismaying in many ways. Perhaps the most depressing aspect for progressives, however, has been the extent to which opponents of greater choice in health care have gained traction — in Congress, if not with the broader public — simply by repeating, over and over again, that the public option would be, horrors, a government program.Washington , it seems, is still ruled by Reaganism — by an ideology that says government intervention is always bad, and leaving the private sector to its own devices is always good.Call me naïve, but I actually hoped that the failure of Reaganism in practice would kill it. It turns out, however, to be a zombie doctrine: even though it should be dead, it keeps on coming.Let’s talk for a moment about why the age of Reagan should be over.First of all, even before the current crisis Reaganomics had failed to deliver what it promised. Remember how lower taxes on high incomes and deregulation that unleashed the “magic of the marketplace” were supposed to lead to dramatically better outcomes for everyone? Well, it didn’t happen.To be sure, the wealthy benefited enormously: the real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007. But the real income of the median family rose only 22 percent, less than a third its growth over the previous 27 years. Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains.And then there’s the small matter of the worst recession since the 1930s. There’s a lot to be said about the financial disaster of the last two years, but the short version is simple: politicians in the thrall of Reaganite ideology dismantled the New Deal regulations that had prevented banking crises for half a century, believing that financial markets could take care of themselves. The effect was to make the financial system vulnerable to a 1930s-style crisis — and the crisis came. “We have always known that heedless self-interest was bad morals,” said Franklin Delano Roosevelt in 1937. “We know now that it is bad economics.” And last year we learned that lesson all over again.Or did we? The astonishing thing about the current political scene is the extent to which nothing has changed.The debate over the public option has, as I said, been depressing in its inanity. Opponents of the option — not just Republicans, but Democrats like Senator Kent Conrad and Senator Ben Nelson — have offered no coherent arguments against it. Mr. Nelson has warned ominously that if the option were available, Americans would choose it over private insurance — which he treats as a self-evidently bad thing, rather than as what should happen if the government plan was, in fact, better than what private insurers offer.But it’s much the same on other fronts. Efforts to strengthen bank regulation appear to be losing steam, as opponents of reform declare that more regulation would lead to less financial innovation — this just months after the wonders of innovation brought our financial system to the edge of collapse, a collapse that was averted only with huge infusions of taxpayer funds.So why won’t these zombie ideas die?Part of the answer is that there’s a lot of money behind them. “It is difficult to get a man to understand something,” said Upton Sinclair, “when his salary” — or, I would add, his campaign contributions — “depend upon his not understanding it.” In particular, vast amounts of insurance industry money have been flowing to obstructionist Democrats like Mr. Nelson and Senator Max Baucus, whose Gang of Six negotiations have been a crucial roadblock to legislation.But some of the blame also must rest with President Obama, who famously praised Reagan during the Democratic primary, and hasn’t used the bully pulpit to confront government-is-bad fundamentalism. That’s ironic, in a way, since a large part of what made Reagan so effective, for better or for worse, was the fact that he sought to change America ’s thinking as well as its tax code.How will this all work out? I don’t know. But it’s hard to avoid the sense that a crucial opportunity is being missed, that we’re at what should be a turning point but are failing to make the turn.•
Positive market activity this week has continued to validate our view that stocks are headed higher over the coming weeks with our initial target of 1060 S&P 500 likely to act only as a resting point along the way to 1200. Although there is much bearish talk about the danger inherent in the low volumes that have accompanied this summer rise, the contrarian in me is assured that large volume days and big market moves are yet to come. When this happens, we will enjoy the "blow off" rally that will set up the fall, but that fall will take place from a much higher plateau.
Ted Kennedy's death should remind us all of the history behind the drive for Medicare. It should also be a time to further debunk the myth of Reaganism by remembering that the late idol of the right cut his political teeth opposing its enactment. It is ironic now to watch elderly Reaganites expressing personal terror of having it "messed with". August 26Bill Copp As usual...Paul Krugman, not the CNBC libertarians...is spot on.
August 24, 2009
Op-Ed Columnist
All the President’s Zombies
By PAUL KRUGMAN
The debate over the “public option” in health care has been dismaying in many ways. Perhaps the most depressing aspect for progressives, however, has been the extent to which opponents of greater choice in health care have gained traction — in Congress, if not with the broader public — simply by repeating, over and over again, that the public option would be, horrors, a government program.Washington , it seems, is still ruled by Reaganism — by an ideology that says government intervention is always bad, and leaving the private sector to its own devices is always good.Call me naïve, but I actually hoped that the failure of Reaganism in practice would kill it. It turns out, however, to be a zombie doctrine: even though it should be dead, it keeps on coming.Let’s talk for a moment about why the age of Reagan should be over.First of all, even before the current crisis Reaganomics had failed to deliver what it promised. Remember how lower taxes on high incomes and deregulation that unleashed the “magic of the marketplace” were supposed to lead to dramatically better outcomes for everyone? Well, it didn’t happen.To be sure, the wealthy benefited enormously: the real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007. But the real income of the median family rose only 22 percent, less than a third its growth over the previous 27 years. Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains.And then there’s the small matter of the worst recession since the 1930s. There’s a lot to be said about the financial disaster of the last two years, but the short version is simple: politicians in the thrall of Reaganite ideology dismantled the New Deal regulations that had prevented banking crises for half a century, believing that financial markets could take care of themselves. The effect was to make the financial system vulnerable to a 1930s-style crisis — and the crisis came. “We have always known that heedless self-interest was bad morals,” said Franklin Delano Roosevelt in 1937. “We know now that it is bad economics.” And last year we learned that lesson all over again.Or did we? The astonishing thing about the current political scene is the extent to which nothing has changed.The debate over the public option has, as I said, been depressing in its inanity. Opponents of the option — not just Republicans, but Democrats like Senator Kent Conrad and Senator Ben Nelson — have offered no coherent arguments against it. Mr. Nelson has warned ominously that if the option were available, Americans would choose it over private insurance — which he treats as a self-evidently bad thing, rather than as what should happen if the government plan was, in fact, better than what private insurers offer.But it’s much the same on other fronts. Efforts to strengthen bank regulation appear to be losing steam, as opponents of reform declare that more regulation would lead to less financial innovation — this just months after the wonders of innovation brought our financial system to the edge of collapse, a collapse that was averted only with huge infusions of taxpayer funds.So why won’t these zombie ideas die?Part of the answer is that there’s a lot of money behind them. “It is difficult to get a man to understand something,” said Upton Sinclair, “when his salary” — or, I would add, his campaign contributions — “depend upon his not understanding it.” In particular, vast amounts of insurance industry money have been flowing to obstructionist Democrats like Mr. Nelson and Senator Max Baucus, whose Gang of Six negotiations have been a crucial roadblock to legislation.But some of the blame also must rest with President Obama, who famously praised Reagan during the Democratic primary, and hasn’t used the bully pulpit to confront government-is-bad fundamentalism. That’s ironic, in a way, since a large part of what made Reagan so effective, for better or for worse, was the fact that he sought to change America ’s thinking as well as its tax code.How will this all work out? I don’t know. But it’s hard to avoid the sense that a crucial opportunity is being missed, that we’re at what should be a turning point but are failing to make the turn.•
Monday, August 24, 2009
August 24 2009
Good Morning All,
After passing the 1000 mark on the S&P 500 early in the month, markets spent the middle part of August in a push me-pull me mode, one that ended last week when the bull side of the investment argument emerged victorious. As this letter has iterated in more than one printing, we believe that this important "benchmark" index will close above 1060 by early September or maybe, early Tuesday. The question of where to next now becomes even more important to those who have come late to this once in a multi-generation banquet. Many of these aforementioned folk, nonbelievers if you will, are still awaiting the arrival of Armageddon or worse, and are thereby holding cash. They may well be right...someday. Meanwhile it may be of greater significance to try to map out a market future rather than an economic one.
If Dave Nichols of the Fractal Report is correct, markets could rise beyond the September cutoff of 1060-1100 to reach a 1250 crescendo early in October. This would nicely coincide with my penchant for a blow off, throw-in-the-towel rally that would culminate in an October currency crisis. The stategy at hand would entail dating some of your favourite stocks as opposed to marrying them. Even though I remain positive about the next five years, markets are shaping up for a somewhat normal year with the potential for a mid to late October crash/correction. Should such a cleansing occur, it would offer both solace and opportunity to permabears on the one hand and alert bulls on the other. The third hand belongs to those who have it firmly emplaced, along with their heads, somewhere in their personal anatomy.
Commentary
The "New Colossus" is a poem by Emma Lazarus whose famous words are etched into the Statue of Liberty - you know the ones..."give us your poor, your tired, your huddled masses...". What it failed to say was give us your mean-spirited and your incredibly stupid, in order that a future America will be able to populate its airwaves with demagogues, its evangelical churches with morons and one of its political parties with the greedy and the disingenuous.
The late Bobby Kennedy was fond of saying that "20% of the people are against everything, all of the time". This homily has since taken on even greater meaning during the health care debate, or should I say rants, wherein a bunch of crazy white people are running around in support of the insurance companies that either just creamed them with unconscionable premiums or took away their coverage. One often repeated anecdote tells of the elder genius who told one town hall meeting to keep the government's hands off his MEDICARE. Crazier still was the Arizona meeting during which one bright light had an assault rifle strapped to his back, shocking the civilized world when we learned that his act was perfectly legal in that state. The first thing I listen for each morning is no news... on an attempt on the President's life.
After passing the 1000 mark on the S&P 500 early in the month, markets spent the middle part of August in a push me-pull me mode, one that ended last week when the bull side of the investment argument emerged victorious. As this letter has iterated in more than one printing, we believe that this important "benchmark" index will close above 1060 by early September or maybe, early Tuesday. The question of where to next now becomes even more important to those who have come late to this once in a multi-generation banquet. Many of these aforementioned folk, nonbelievers if you will, are still awaiting the arrival of Armageddon or worse, and are thereby holding cash. They may well be right...someday. Meanwhile it may be of greater significance to try to map out a market future rather than an economic one.
If Dave Nichols of the Fractal Report is correct, markets could rise beyond the September cutoff of 1060-1100 to reach a 1250 crescendo early in October. This would nicely coincide with my penchant for a blow off, throw-in-the-towel rally that would culminate in an October currency crisis. The stategy at hand would entail dating some of your favourite stocks as opposed to marrying them. Even though I remain positive about the next five years, markets are shaping up for a somewhat normal year with the potential for a mid to late October crash/correction. Should such a cleansing occur, it would offer both solace and opportunity to permabears on the one hand and alert bulls on the other. The third hand belongs to those who have it firmly emplaced, along with their heads, somewhere in their personal anatomy.
Commentary
The "New Colossus" is a poem by Emma Lazarus whose famous words are etched into the Statue of Liberty - you know the ones..."give us your poor, your tired, your huddled masses...". What it failed to say was give us your mean-spirited and your incredibly stupid, in order that a future America will be able to populate its airwaves with demagogues, its evangelical churches with morons and one of its political parties with the greedy and the disingenuous.
The late Bobby Kennedy was fond of saying that "20% of the people are against everything, all of the time". This homily has since taken on even greater meaning during the health care debate, or should I say rants, wherein a bunch of crazy white people are running around in support of the insurance companies that either just creamed them with unconscionable premiums or took away their coverage. One often repeated anecdote tells of the elder genius who told one town hall meeting to keep the government's hands off his MEDICARE. Crazier still was the Arizona meeting during which one bright light had an assault rifle strapped to his back, shocking the civilized world when we learned that his act was perfectly legal in that state. The first thing I listen for each morning is no news... on an attempt on the President's life.
Tuesday, August 11, 2009
August 11th Edition
Good Morning All,
The S&P 500 held above its newly acquired recovery high of 1000 plus yesterday, despite a bout of early week profit-taking. The question now before us is no longer about 1075 by early September, but rather, how much sooner and how much higher? The Fed will meet over the next two days and will not likely change anything or affect markets one way or another. This market is about momentum and unused cash, and until the latter has been somewhat exhausted, the momentum will continue to drive prices upward. Favourite groups are still those I noted last November/December although many other sectors have since joined the fray. Stem cell stocks and other small biotechs have enjoyed a strong summer and I suggest you refer to my list. Opaxa, another stock I own and follow, rose over 400% on Friday after announcing a deal with Novartis. There are many similar buyouts in the offing, as this multi generational opportunity plays out.
I reiterate the opinion that this is shaping up to be a normal autumn prefaced by the current summer rally. Serious profit-taking may make the latter weeks of September fearsome...so be nimble of mind and remember the real lesson of these past two years. Market direction is the only thing you need to know, and for most of us the long term is in sight.
Commentary
The town hall meetings on health care now taking place in the United States have brought much of the Republican leadership to the depths of depravity. Mob rule is a very scary social condition at any time, but when it is encouraged, not just by the Rush Limbaugh assholes of America but by many in elected positions, it can be doubly dangerous. Much of what is going on may even border on sedition. As a Canadian who is well versed through experience in the plusses and shortfalls of our Medicare system, I find the constant misrepresentation of the plan both repulsive and insulting. I am also fearful for America and for the safety of its first adult President in many, many years. This is all beginning to look like an old western movie, you know, the one where the bad rich guy stirs up the lynch mob. Essentially this debate is about the non-inclusive insurance company bureaucrats versus the government bureaucrats. Weirdly, many of those opposing the health care initiative have no insurance themselves. Let's hope that there is a Hollywood ending to the script.
On a more practical front, it would seem that the combination of anti-Sotomayor votes and this continued assault on sanity and conservative principles will further isolate the GOP. Just Google Sarah Palin's comments on health care and as you do, wonder what might have been...I shudder still.
And finally, for all you conservatives out there who disagree with the foregoing...reread Edmund Burke.
Bill Copp
Montreal , Canada
August 11, 2009
The S&P 500 held above its newly acquired recovery high of 1000 plus yesterday, despite a bout of early week profit-taking. The question now before us is no longer about 1075 by early September, but rather, how much sooner and how much higher? The Fed will meet over the next two days and will not likely change anything or affect markets one way or another. This market is about momentum and unused cash, and until the latter has been somewhat exhausted, the momentum will continue to drive prices upward. Favourite groups are still those I noted last November/December although many other sectors have since joined the fray. Stem cell stocks and other small biotechs have enjoyed a strong summer and I suggest you refer to my list. Opaxa, another stock I own and follow, rose over 400% on Friday after announcing a deal with Novartis. There are many similar buyouts in the offing, as this multi generational opportunity plays out.
I reiterate the opinion that this is shaping up to be a normal autumn prefaced by the current summer rally. Serious profit-taking may make the latter weeks of September fearsome...so be nimble of mind and remember the real lesson of these past two years. Market direction is the only thing you need to know, and for most of us the long term is in sight.
Commentary
The town hall meetings on health care now taking place in the United States have brought much of the Republican leadership to the depths of depravity. Mob rule is a very scary social condition at any time, but when it is encouraged, not just by the Rush Limbaugh assholes of America but by many in elected positions, it can be doubly dangerous. Much of what is going on may even border on sedition. As a Canadian who is well versed through experience in the plusses and shortfalls of our Medicare system, I find the constant misrepresentation of the plan both repulsive and insulting. I am also fearful for America and for the safety of its first adult President in many, many years. This is all beginning to look like an old western movie, you know, the one where the bad rich guy stirs up the lynch mob. Essentially this debate is about the non-inclusive insurance company bureaucrats versus the government bureaucrats. Weirdly, many of those opposing the health care initiative have no insurance themselves. Let's hope that there is a Hollywood ending to the script.
On a more practical front, it would seem that the combination of anti-Sotomayor votes and this continued assault on sanity and conservative principles will further isolate the GOP. Just Google Sarah Palin's comments on health care and as you do, wonder what might have been...I shudder still.
And finally, for all you conservatives out there who disagree with the foregoing...reread Edmund Burke.
Bill Copp
Montreal , Canada
August 11, 2009
Tuesday, July 28, 2009
July 27, 2009
Good Morning All,
Markets have now put more than two weeks into the third stage of the recovery rally which began last November; yes I know that lower index lows were made in March, but the process, in my view, really began with the post Obama election decline and subsequent recovery, when stocks in the tech sector traded at "silly" price points.
Investors who bought tech, biotech and agro stocks at that time (refer to my list) fared rather well. Those who missed this first down play were offered a long intermission during the month of February wherein they could assuage their fears through a look at even greater opportunities as banks, oils and other commodities joined the across-the-board rally that followed the aforementioned March lows. This upswing lasted through early June with indexes putting on 40% gains, while many individual stocks doubled or even tripled during this brief period...and then in the face of rising bearish sentiment, the July rally began in earnest.
We often write of "market adages" in this space and we are once more reminded of the two that make up the traders creed; don't fight the tape and don't fight the Fed. The first of these is not all that complicated; it simply means that momentum in any direction will carry prices higher or lower than anyone rationally expects...until it is broken. The second posits the case that lower interest rates and an active printing press will eventually spur economic recovery, a condition that is long preceded by higher stock prices.
The initial recovery from the lows was a reaction by bargain hunters to advantage themselves of those investors who allowed late-in-the-day panic and threats of armageddon to color their judgement. The March wave corrected many of the "silly" price inequities mentioned earlier, while the July explosion has been fed by earnings reports that have come in well above expectation (please refer to June comments). So the question now is...what comes next?
The fuel that bull markets run on are cash and fear, both of which are in plentiful supply. Tops are made when the cash is spent and euphoria has replaced dread. We are nowhere near that point, but we may be in for a refreshing pause as early as this week. Use it to buy in advance of the next major upleg that should take the S&P 500 above 1200 by early September, after which we might experience a more serious and traditional early autumn decline.
Commentary
In America , the Republicans continue to test the borders of sanity as their opposition to the Sottomayor nomination and their embrace of the intellectually-challenged ex-Governor of Alaska so aptly illustrates. Aside from their lock on hypocrisy, they are stupidly throwing away the Hispanic vote along with that of the moderately intelligent...third party anyone?
In Montreal , Earl Jones (our mini Madoff) was arrested yesterday. I suspect that the dollar amounts lost will be much less than the media has estimated. If he had stolen 50 or 100 million, he'd be outta here. Not much comfort to the victims although Registered accounts may still be intact.
Markets have now put more than two weeks into the third stage of the recovery rally which began last November; yes I know that lower index lows were made in March, but the process, in my view, really began with the post Obama election decline and subsequent recovery, when stocks in the tech sector traded at "silly" price points.
Investors who bought tech, biotech and agro stocks at that time (refer to my list) fared rather well. Those who missed this first down play were offered a long intermission during the month of February wherein they could assuage their fears through a look at even greater opportunities as banks, oils and other commodities joined the across-the-board rally that followed the aforementioned March lows. This upswing lasted through early June with indexes putting on 40% gains, while many individual stocks doubled or even tripled during this brief period...and then in the face of rising bearish sentiment, the July rally began in earnest.
We often write of "market adages" in this space and we are once more reminded of the two that make up the traders creed; don't fight the tape and don't fight the Fed. The first of these is not all that complicated; it simply means that momentum in any direction will carry prices higher or lower than anyone rationally expects...until it is broken. The second posits the case that lower interest rates and an active printing press will eventually spur economic recovery, a condition that is long preceded by higher stock prices.
The initial recovery from the lows was a reaction by bargain hunters to advantage themselves of those investors who allowed late-in-the-day panic and threats of armageddon to color their judgement. The March wave corrected many of the "silly" price inequities mentioned earlier, while the July explosion has been fed by earnings reports that have come in well above expectation (please refer to June comments). So the question now is...what comes next?
The fuel that bull markets run on are cash and fear, both of which are in plentiful supply. Tops are made when the cash is spent and euphoria has replaced dread. We are nowhere near that point, but we may be in for a refreshing pause as early as this week. Use it to buy in advance of the next major upleg that should take the S&P 500 above 1200 by early September, after which we might experience a more serious and traditional early autumn decline.
Commentary
In America , the Republicans continue to test the borders of sanity as their opposition to the Sottomayor nomination and their embrace of the intellectually-challenged ex-Governor of Alaska so aptly illustrates. Aside from their lock on hypocrisy, they are stupidly throwing away the Hispanic vote along with that of the moderately intelligent...third party anyone?
In Montreal , Earl Jones (our mini Madoff) was arrested yesterday. I suspect that the dollar amounts lost will be much less than the media has estimated. If he had stolen 50 or 100 million, he'd be outta here. Not much comfort to the victims although Registered accounts may still be intact.
Friday, July 17, 2009
July 17th Edition
Good Morning All,
As we come to the close of the fourth week of the summer that never was in eastern Canada , my arc nears completion. Yet despite such local issues, all has not been lost, because during this same extended time period, markets have been given the room to consolidate their March to June index gains of 40 plus percent by giving back a little, thereby setting the stage for the next leg up.
David Nichols of "The Fractal Market Report" has suggested that the turn which began this week will take the S&P 500 to at least 1060 by early September. I have subscribed to this report for several years and have been made painfully aware of its shortcomings as well as its victories, proving once again that market panaceas are either short-lived or non-existent; with that caveat in mind I will state my agreement with his projections based on both technical and fundamental information.
Early last week this letter posited the belief that markets would rally off the 888 S&P number; we were early by several days and 13 points. This week began with a boom and its current rise has yet to be seriously tested. Yesterday's mixed morning action turned positive in the early afternoon when a new rally was triggered by economist Nouriel Roubini's statement that the recession's end was in sight. Roubini is not everyman's economist; he is one of the few that called the disaster early and predicted its depth. When an economic bear turns bullish, one must take notice.
Also helping the bullish case has been the spate of positive earnings reports, particularly among financials and techs. I have been beating the drum for both these many months, having stated over and over that we have been granted a generational opportunity. We may no longer be at its outset, but we remain in its midst with many miles to go before it exhausts itself. Do not miss it again. Refer to my previous selections if you really need ideas.
Commentary:
This last week has proven very difficult for a diaspora of Montreal-based investors with the revelation that a local funds administrator has disappeared with 50 million or more of widows’ and orphans’ cash. I grew up across the lane from Earl Jones (our minor version of Bernie Madoff) in Montreal’s NDG district; our mothers had morning coffee together for 25 years and even our summer cottages were only 15 minutes apart. The names of many of the victims are familiar even though I have not seen most for many years so I will not venture to criticize their naïveté. Years ago I worked at the same brokerage firm as David Walsh, he of BRE-X fame, and had inherited many of his retail accounts when he left the business to strike it rich. These are not the kind of names one would like to drop in polite company and I do so only to draw attention to the character issue of the people with whom one deals. It is of great importance to know such things. I will finish this prologue to my book (just kidding) with this observation. Both Earl and David began their business careers at Trust Companies, neither had University educations which may or may not matter....because Bernie did.
As we come to the close of the fourth week of the summer that never was in eastern Canada , my arc nears completion. Yet despite such local issues, all has not been lost, because during this same extended time period, markets have been given the room to consolidate their March to June index gains of 40 plus percent by giving back a little, thereby setting the stage for the next leg up.
David Nichols of "The Fractal Market Report" has suggested that the turn which began this week will take the S&P 500 to at least 1060 by early September. I have subscribed to this report for several years and have been made painfully aware of its shortcomings as well as its victories, proving once again that market panaceas are either short-lived or non-existent; with that caveat in mind I will state my agreement with his projections based on both technical and fundamental information.
Early last week this letter posited the belief that markets would rally off the 888 S&P number; we were early by several days and 13 points. This week began with a boom and its current rise has yet to be seriously tested. Yesterday's mixed morning action turned positive in the early afternoon when a new rally was triggered by economist Nouriel Roubini's statement that the recession's end was in sight. Roubini is not everyman's economist; he is one of the few that called the disaster early and predicted its depth. When an economic bear turns bullish, one must take notice.
Also helping the bullish case has been the spate of positive earnings reports, particularly among financials and techs. I have been beating the drum for both these many months, having stated over and over that we have been granted a generational opportunity. We may no longer be at its outset, but we remain in its midst with many miles to go before it exhausts itself. Do not miss it again. Refer to my previous selections if you really need ideas.
Commentary:
This last week has proven very difficult for a diaspora of Montreal-based investors with the revelation that a local funds administrator has disappeared with 50 million or more of widows’ and orphans’ cash. I grew up across the lane from Earl Jones (our minor version of Bernie Madoff) in Montreal’s NDG district; our mothers had morning coffee together for 25 years and even our summer cottages were only 15 minutes apart. The names of many of the victims are familiar even though I have not seen most for many years so I will not venture to criticize their naïveté. Years ago I worked at the same brokerage firm as David Walsh, he of BRE-X fame, and had inherited many of his retail accounts when he left the business to strike it rich. These are not the kind of names one would like to drop in polite company and I do so only to draw attention to the character issue of the people with whom one deals. It is of great importance to know such things. I will finish this prologue to my book (just kidding) with this observation. Both Earl and David began their business careers at Trust Companies, neither had University educations which may or may not matter....because Bernie did.
Tuesday, July 7, 2009
July 7
Good Morning All,
Although markets continued their now five-week long struggle to find direction yesterday, some encouraging signs were seen at day's end, when stocks rallied off their near-term support lows on the S&P 500. The recently established trading range between 888 (the 200 day) and 930 (the formidable breakout point), may have just experienced its last downside test. A close above the latter number could lead to significant gains through September.
In Toronto , the oils and base metal stocks have given back recent gains as U.S. dollar strength has compromised the commodity trade. This too should change quite quickly as the CDN dollar appears to be very oversold. Financials, on the other hand, have retained their resilience, having once again proven the comparative stability of our more regulated system versus that of our neighbour. Banks are like sports events and back alleys...they require referees and policing.
A breakout above the aforementioned 930 will float most ships, but techs and biotechs will still lead. Geron, among others recommended last November at half its present price, continues to spark my interest. (yes I own it)
Commentary
With respect to the political events of this past weekend, it is time once again for people of goodwill all around the world to pause for a moment, drop to their knees and thank whoever or whatever they believe that we are not living under a McCain/ Palin administration. For those who are not believers in any specific entity, thank the American voters. Me anwhile Barack better have another talk with Joe who is yards smarter than Sarah barracuda, but at times just as mouthy.
It is time too for Americans to stop bashing our Medicare system until they commission a poll here asking Canadians if they would exchange systems. One particular silly claim is that of having to deal with bureaucrats. I have had a number of dealings over the years with our much maligned system and have never once spoken to a government representative...the doctors do that. I have however had to deal with insurance company clerks for my private company plan. Just private bureaucrats in America ...there is a difference?
Although markets continued their now five-week long struggle to find direction yesterday, some encouraging signs were seen at day's end, when stocks rallied off their near-term support lows on the S&P 500. The recently established trading range between 888 (the 200 day) and 930 (the formidable breakout point), may have just experienced its last downside test. A close above the latter number could lead to significant gains through September.
In Toronto , the oils and base metal stocks have given back recent gains as U.S. dollar strength has compromised the commodity trade. This too should change quite quickly as the CDN dollar appears to be very oversold. Financials, on the other hand, have retained their resilience, having once again proven the comparative stability of our more regulated system versus that of our neighbour. Banks are like sports events and back alleys...they require referees and policing.
A breakout above the aforementioned 930 will float most ships, but techs and biotechs will still lead. Geron, among others recommended last November at half its present price, continues to spark my interest. (yes I own it)
Commentary
With respect to the political events of this past weekend, it is time once again for people of goodwill all around the world to pause for a moment, drop to their knees and thank whoever or whatever they believe that we are not living under a McCain/ Palin administration. For those who are not believers in any specific entity, thank the American voters. Me anwhile Barack better have another talk with Joe who is yards smarter than Sarah barracuda, but at times just as mouthy.
It is time too for Americans to stop bashing our Medicare system until they commission a poll here asking Canadians if they would exchange systems. One particular silly claim is that of having to deal with bureaucrats. I have had a number of dealings over the years with our much maligned system and have never once spoken to a government representative...the doctors do that. I have however had to deal with insurance company clerks for my private company plan. Just private bureaucrats in America ...there is a difference?
Tuesday, June 23, 2009
June 23, 2009
Good Morning All,
Commentary:
Although the adage "all politics is local" has been attributed by the late Democrat Tip O'Neill to his equally late father, it has since been incorporated into the reportage of all party campaigns; be they state, federal or municipal in nature. Until recently, however, it had never occurred to an American national leader that this theorem also applied to countries, as it has taken over a century of failed U.S. interventions to finally produce a counter policy that might work in Iran.
The criticism of Obama's reticence to become actively involved in the current situation in Iran has come from the usual political and otherwise uninformed sources, a monologue that is at once galling and laughable, considering the incredible mess these same individuals have most recently made of U.S. foreign relations. Worse still are the reporters whose consistent failure to ask the most obvious of questions; such as "what would you propose we do that would make a POSITIVE difference?"
The answer to the Iranian question will be best answered by the Iranian people, who just happen to have some recent experience in regard to revolutions having kicked out the last American puppet 30 years ago. Maybe this time they will get the "change part" right and finally throw off the yoke of fundamentalism. Meanwhile it is quite something to watch the Christian fundamentalists in America and their fellow travellers on the wacky right, scream for a defeat of the conservative leadership in Tehran. Once again, "politics is local", let's keep it that way. Twitter your support if you like but remember that democracy imposed from without... is just another form of tyranny.
Markets
We appear to have reached an impasse during June with several weeks of trendless trading, or non trading were the truth to be known. I am disappointed with the current failure to move toward my early July goal of a 1050 plus S&P 500 as this present market condition may now prevent a summer of leisure. The ancient market truism has once again reared its ego busting head "you may be able to predict the time or the level, but never both together". We will watch carefully over the next few hours or days to see whether the S&P will visit 840 or stage my desired rebound past 945. The themes of techs, biotechs, potash etc remain intact. Commodity stocks have given up 20 to 30% of their recent gains and should once again be under accumulation.
Commentary:
Although the adage "all politics is local" has been attributed by the late Democrat Tip O'Neill to his equally late father, it has since been incorporated into the reportage of all party campaigns; be they state, federal or municipal in nature. Until recently, however, it had never occurred to an American national leader that this theorem also applied to countries, as it has taken over a century of failed U.S. interventions to finally produce a counter policy that might work in Iran.
The criticism of Obama's reticence to become actively involved in the current situation in Iran has come from the usual political and otherwise uninformed sources, a monologue that is at once galling and laughable, considering the incredible mess these same individuals have most recently made of U.S. foreign relations. Worse still are the reporters whose consistent failure to ask the most obvious of questions; such as "what would you propose we do that would make a POSITIVE difference?"
The answer to the Iranian question will be best answered by the Iranian people, who just happen to have some recent experience in regard to revolutions having kicked out the last American puppet 30 years ago. Maybe this time they will get the "change part" right and finally throw off the yoke of fundamentalism. Meanwhile it is quite something to watch the Christian fundamentalists in America and their fellow travellers on the wacky right, scream for a defeat of the conservative leadership in Tehran. Once again, "politics is local", let's keep it that way. Twitter your support if you like but remember that democracy imposed from without... is just another form of tyranny.
Markets
We appear to have reached an impasse during June with several weeks of trendless trading, or non trading were the truth to be known. I am disappointed with the current failure to move toward my early July goal of a 1050 plus S&P 500 as this present market condition may now prevent a summer of leisure. The ancient market truism has once again reared its ego busting head "you may be able to predict the time or the level, but never both together". We will watch carefully over the next few hours or days to see whether the S&P will visit 840 or stage my desired rebound past 945. The themes of techs, biotechs, potash etc remain intact. Commodity stocks have given up 20 to 30% of their recent gains and should once again be under accumulation.
Wednesday, June 3, 2009
June 3rd Edition
Good Morning All,
The market closed last week with an important advance above the S&P 500 resistance level of 915 and continued this bullish mode Monday with a confirmation outburst over 940. The consolidation we witnessed yesterday is likely to continue through Thursday as the technicals prepare for a much sharper breakout toward our early summer target near 1100. This latest push may also be holding back until Air Force One has successfully cleared Middle East air space on its way to the 65th D-Day ceremonies on June 6th.
The Market has proven once again that it is discounting mechanism as final news of the GM bankruptcy came in the face of a 200-plus point Dow Jones advance. Naysayers continue to abound, and this too confirms our belief in our oft-stated adage that bulls are long stock and are therefore potential sellers, while bears are loaded with cash and will one day be buyers. The power of this phenomenon is compounded by those "short the market" that will once again be squeezed by week's end.
The two small-cap oil sands selections we posted Monday are respectively and respectably up 12 and 39%. This is just too easy to go on without pause... forever, so watch the technicals and get ready to take profits in early July when our near-term target is hit.
In the meantime we are working on an idea for a GOP fundraiser to be held in Yankee stadium; it would include Cheney, Rove, Limbaugh, Rummy, Ann Coulter, and others. It could involve waterboarding and other such Abu Ghraib practices, during which a running tote board would provide scrolling odds based on who would break first. We are open to suggestions on who would best act as the Master of Ceremonies. So far Al Gore and Hillary are among the choices...in leather.
The market closed last week with an important advance above the S&P 500 resistance level of 915 and continued this bullish mode Monday with a confirmation outburst over 940. The consolidation we witnessed yesterday is likely to continue through Thursday as the technicals prepare for a much sharper breakout toward our early summer target near 1100. This latest push may also be holding back until Air Force One has successfully cleared Middle East air space on its way to the 65th D-Day ceremonies on June 6th.
The Market has proven once again that it is discounting mechanism as final news of the GM bankruptcy came in the face of a 200-plus point Dow Jones advance. Naysayers continue to abound, and this too confirms our belief in our oft-stated adage that bulls are long stock and are therefore potential sellers, while bears are loaded with cash and will one day be buyers. The power of this phenomenon is compounded by those "short the market" that will once again be squeezed by week's end.
The two small-cap oil sands selections we posted Monday are respectively and respectably up 12 and 39%. This is just too easy to go on without pause... forever, so watch the technicals and get ready to take profits in early July when our near-term target is hit.
In the meantime we are working on an idea for a GOP fundraiser to be held in Yankee stadium; it would include Cheney, Rove, Limbaugh, Rummy, Ann Coulter, and others. It could involve waterboarding and other such Abu Ghraib practices, during which a running tote board would provide scrolling odds based on who would break first. We are open to suggestions on who would best act as the Master of Ceremonies. So far Al Gore and Hillary are among the choices...in leather.
Monday, June 1, 2009
June 1st Edition
Good Morning All,
For the superstitious among you, today marks the beginning of week 13 of the recovery rally. This "generational" opportunity has already brought abundant gains to those who had the courage and wisdom to realign their portfolios in what were very scary times, and although this has been a plus 30% index runup, (far more for many individual stocks), the best may be yet to come.
It appears that everything, excepting GM and the U.S dollar, have enjoyed the most recent ride, with the commodity trade leading last week's surge on the back of the aforementioned dollar weakness. Oil prices appear to have comfortably settled above the 50$ support level and now seem prepared for a run at 75$. This upsurge has brought the oil sands back into play, lending new credibility to some of our old picks in the group. BQI on the AMEX and BCF on the TSX both trade around a buck and have recently raised cash, Petrobank at 36$ remains the class of the bunch. Gold is for everyone, look at MMC.UN 6.70 as a conservative entry.....many more.
Friday's close above 915 on the S&P 500 should signal our much vaunted "blow off" rally toward 1100. We will monitor the progress, even as we trepidatiously view Obama's venture to Cairo later this week.
Dick Cheney has recently been making far too many headlines in his quest to criticize the Obama administration while making a positive case for his own doings, and although I believe he has every right to speak out in his defence, I would prefer that he be forced to do so in a court of law, after being charged with a laundry list of constitutional offences...including sedition.
...and on the subject of right wing, libertarian nonsense, it is a joy to watch the squirming of CNBC commentators and their chosen guests as they continue to critique every move the Obama team makes, cringing with despair on market up days...of which there have been many late.
For the superstitious among you, today marks the beginning of week 13 of the recovery rally. This "generational" opportunity has already brought abundant gains to those who had the courage and wisdom to realign their portfolios in what were very scary times, and although this has been a plus 30% index runup, (far more for many individual stocks), the best may be yet to come.
It appears that everything, excepting GM and the U.S dollar, have enjoyed the most recent ride, with the commodity trade leading last week's surge on the back of the aforementioned dollar weakness. Oil prices appear to have comfortably settled above the 50$ support level and now seem prepared for a run at 75$. This upsurge has brought the oil sands back into play, lending new credibility to some of our old picks in the group. BQI on the AMEX and BCF on the TSX both trade around a buck and have recently raised cash, Petrobank at 36$ remains the class of the bunch. Gold is for everyone, look at MMC.UN 6.70 as a conservative entry.....many more.
Friday's close above 915 on the S&P 500 should signal our much vaunted "blow off" rally toward 1100. We will monitor the progress, even as we trepidatiously view Obama's venture to Cairo later this week.
Dick Cheney has recently been making far too many headlines in his quest to criticize the Obama administration while making a positive case for his own doings, and although I believe he has every right to speak out in his defence, I would prefer that he be forced to do so in a court of law, after being charged with a laundry list of constitutional offences...including sedition.
...and on the subject of right wing, libertarian nonsense, it is a joy to watch the squirming of CNBC commentators and their chosen guests as they continue to critique every move the Obama team makes, cringing with despair on market up days...of which there have been many late.
Wednesday, May 20, 2009
May 20 Edition
Good Morning All,
ReGenesis:
...and so it was written that the value of the investment spectrum would rise for eight weeks and upon the ninth week of its generational adventure...it would rest.
It now appears that this market run reached a short term peak on May 7, the date of the "bank stress test" announcement. It would also seem likely that the sideways movement that predominated week 10 has acted as a refuelling stop for the next upward surge, so even though all the evidence is not yet in, a close above 920 on the S&P 500 would go along way toward reassuring this observor that the "go away in May" theory will be abrogated in 2009.
This eleventh week began with a furious upsurge that has since spent a day of recollection (the TSX was closed Monday, so yesterday was catch-up). In Asia, markets have also shown resilience, with India rising nearly 20% in two days. The ICCI bank (symbol IBN) has now tripled since mid March. In America the tech stocks, which had led the post-November recovery, took a much-needed break in week eight before showing some life late last week. So as previously mentioned...let's look for the confirmation as we are once again on the cusp of change. ..."
and chapters could turn into books"...
Jimmy again.
ReGenesis:
...and so it was written that the value of the investment spectrum would rise for eight weeks and upon the ninth week of its generational adventure...it would rest.
It now appears that this market run reached a short term peak on May 7, the date of the "bank stress test" announcement. It would also seem likely that the sideways movement that predominated week 10 has acted as a refuelling stop for the next upward surge, so even though all the evidence is not yet in, a close above 920 on the S&P 500 would go along way toward reassuring this observor that the "go away in May" theory will be abrogated in 2009.
This eleventh week began with a furious upsurge that has since spent a day of recollection (the TSX was closed Monday, so yesterday was catch-up). In Asia, markets have also shown resilience, with India rising nearly 20% in two days. The ICCI bank (symbol IBN) has now tripled since mid March. In America the tech stocks, which had led the post-November recovery, took a much-needed break in week eight before showing some life late last week. So as previously mentioned...let's look for the confirmation as we are once again on the cusp of change. ..."
and chapters could turn into books"...
Jimmy again.
Wednesday, May 13, 2009
May 13th
Good Morning All,
Nine and a half weeks have passed since the March rally began, and after a really good run to the upside many stocks and the broad indexes are looking a little peaked. The tech sector (my particular favourite) has been undergoing some serious profit taking since the end of week eight, while agriculture and biotech stocks have continued to soar. Joining them, since the announcement of the bank stress tests of last week, have been a number of smaller bank operations and regional entities: CNB, COOP, FITB, SUPR and RF to name a few.
Many investors have remained on the sidelines throughout the rally as their disbelief in markets has been coloured by their reading of current economic headlines. I will not argue the point with the doomsters, beyond mentioning that stock and commodity markets traded to all time highs during 2007 in the face of dire long-term predictions by a few who knew that housing prices had peaked in 2005, and that bank asset statements were fundamentally flawed. It would appear to this observer that a 14,000 DOW or TSX was far riskier than the 6,500 levels we so recently visited. Now we are listening to the many....who don't know dick.
I have written of a five- to eight-week rally that would go away in May for a little while before it resumed its upward course to a 1050-1150 S&P mid-summer high. We have now passed the eight week window and a sideways correction has taken hold; the question before us "is how long will this last and how deep will the move be?" This conundrum cannot be answered with great conviction based on fundamentals at this stage, so we will have to fall back on technicals. For this I will rely on moving averages and David Nichols' "Fractal Report" wherein he states that a breaking close below 893 on the S&P500 would create a short term sell signal. I think this could take us to the 790 level, thereby recreating yet another generational opportunity. If, on the other hand, markets hold and then trade above 930 on this index, the race upward will resume and the momentum trade will be bullish.
Commentary to come at another time.
"If I could just get it on paper, I'd tell you what I think I did." Jimmy Buffett
Nine and a half weeks have passed since the March rally began, and after a really good run to the upside many stocks and the broad indexes are looking a little peaked. The tech sector (my particular favourite) has been undergoing some serious profit taking since the end of week eight, while agriculture and biotech stocks have continued to soar. Joining them, since the announcement of the bank stress tests of last week, have been a number of smaller bank operations and regional entities: CNB, COOP, FITB, SUPR and RF to name a few.
Many investors have remained on the sidelines throughout the rally as their disbelief in markets has been coloured by their reading of current economic headlines. I will not argue the point with the doomsters, beyond mentioning that stock and commodity markets traded to all time highs during 2007 in the face of dire long-term predictions by a few who knew that housing prices had peaked in 2005, and that bank asset statements were fundamentally flawed. It would appear to this observer that a 14,000 DOW or TSX was far riskier than the 6,500 levels we so recently visited. Now we are listening to the many....who don't know dick.
I have written of a five- to eight-week rally that would go away in May for a little while before it resumed its upward course to a 1050-1150 S&P mid-summer high. We have now passed the eight week window and a sideways correction has taken hold; the question before us "is how long will this last and how deep will the move be?" This conundrum cannot be answered with great conviction based on fundamentals at this stage, so we will have to fall back on technicals. For this I will rely on moving averages and David Nichols' "Fractal Report" wherein he states that a breaking close below 893 on the S&P500 would create a short term sell signal. I think this could take us to the 790 level, thereby recreating yet another generational opportunity. If, on the other hand, markets hold and then trade above 930 on this index, the race upward will resume and the momentum trade will be bullish.
Commentary to come at another time.
"If I could just get it on paper, I'd tell you what I think I did." Jimmy Buffett
Thursday, May 7, 2009
May 7 2009
Good Morning All,
Markets have continued to soar well past the breakout number of S&P 870 and brought us closer to yet another resistance level in the 940's. The release of the delayed "stress test" results will take place at the close of business today and this much discussed news may well be used as an excuse for profit taking. Contrarily it may also be used as a starting point for my much vaunted "blow off" rally. The question will be answered shortly, so we will watch today's action with great interest.
As readers are aware, the enclosed list was first published last November/December but it is not a complete view of my suggestions. There have been and continue to be countless other plays, the most important of which are sector ETF's. In the U.S. the FAS and FAZ best represent the bull and bear financials, while the TNA and TZA accomplish the same thing for the small caps.
Commentary
Just a brief mention on the Rove/Cheney view that torture was not just an acceptable practice but an effective one. In the post WW ll period, the Nuremberg trials did not try privates and non-commissioned officers; they went after those who developed and orchestrated the policies of the" holocaust". We are not suggesting that the deeds are similar, even though 4 million displaced Iraqis might disagree; we simply wish to point out that the only people doing time for the crimes in Abu Ghraib and other locations have been the foot soldiers. Those who rewrote the U.S. Constitution have gotten off scot free.
One of the worst decisions ever made by an American President was Gerry Ford's pardon of Richard Nixon; this pardon did not heal America; the wound it left has since festered into the manifestations most recently seen in the Bush administration...we can do anything we like because we will be pardoned....This is precisely why Obama needs to convene a bipartisan investigative committee....this present "reverse Nuremberg" must not be allowed to continue.
And while I am on my anti-libertarian rant...what is wrong with the fact that the wealthiest 2% of Americans pay 80% of the income tax collected; after all they own 80% of the wealth. See the list below and you may join them.
Markets have continued to soar well past the breakout number of S&P 870 and brought us closer to yet another resistance level in the 940's. The release of the delayed "stress test" results will take place at the close of business today and this much discussed news may well be used as an excuse for profit taking. Contrarily it may also be used as a starting point for my much vaunted "blow off" rally. The question will be answered shortly, so we will watch today's action with great interest.
As readers are aware, the enclosed list was first published last November/December but it is not a complete view of my suggestions. There have been and continue to be countless other plays, the most important of which are sector ETF's. In the U.S. the FAS and FAZ best represent the bull and bear financials, while the TNA and TZA accomplish the same thing for the small caps.
Commentary
Just a brief mention on the Rove/Cheney view that torture was not just an acceptable practice but an effective one. In the post WW ll period, the Nuremberg trials did not try privates and non-commissioned officers; they went after those who developed and orchestrated the policies of the" holocaust". We are not suggesting that the deeds are similar, even though 4 million displaced Iraqis might disagree; we simply wish to point out that the only people doing time for the crimes in Abu Ghraib and other locations have been the foot soldiers. Those who rewrote the U.S. Constitution have gotten off scot free.
One of the worst decisions ever made by an American President was Gerry Ford's pardon of Richard Nixon; this pardon did not heal America; the wound it left has since festered into the manifestations most recently seen in the Bush administration...we can do anything we like because we will be pardoned....This is precisely why Obama needs to convene a bipartisan investigative committee....this present "reverse Nuremberg" must not be allowed to continue.
And while I am on my anti-libertarian rant...what is wrong with the fact that the wealthiest 2% of Americans pay 80% of the income tax collected; after all they own 80% of the wealth. See the list below and you may join them.
Monday, May 4, 2009
May 4 edition
Good Morning All,
Commentary
Just pretend for a moment that you had been taking a vacation on the proverbial planet of choice these past ten years, and upon returning you opened the Wall Street Journal and tuned in your new flat screen TV to CNBC or the Fox News Network. Wow, you would have to think....what kind of moron is this Obama guy. In just a little over 100 days he has not only destroyed the world economy, he has set about persecuting hard working, innocent, underpaid BANKERS and fully competent auto executives. Worse still, he is running up huge deficits and blaming the previous administration for his "inherited" problems. And soon he might even convene an investigative committee on the conduct of something called "the war on terror".
I am aware that most of the people who bother to read this letter are not members of the extreme right, although some of you poor souls may remain Republican apologists; nor would I suspect that many of you subscribe to the absurdities of libertarianism, an ideology that ranks behind anarchism in my less than humble view. With this in mind, let us appreciate the dilemma that faces those who must wield power within America and upon the international stage. Let us also understand that it will not be failed ideology (oxymoron) that will provide new and vital solutions to this unique situation...but a pragmatic application of high intellect and good judgement.
Markets
There is no such thing as a single market bottom. Techs and Agri stocks had theirs way back in November, whereas mines, oils, banks, materials and other sectors appear to have found depth at various times during the first quarter of this year. Indexes, on the other hand, seem to have put it all together on March 9th, the point from which our now eight week old rally began.
So as we enter week nine and the month of May, it might be wise to retrieve caution from the wind. There remains a strong likelihood that Friday's close above 875 on the S&P 500 could lead to a fast acceleration toward 950 before Thursday's "bank stress announcement", but a STRAIGHT run to my summer target between 1050 and 1150 seems less probable. Discipline suggests a few weeks of "go away in May" declines should take hold late this week or early next. Low volumes are fast becoming an issue and require monitoring.
"Life and ink, they run out at the same time, or so said my old friend the squid" Jimmy Buffett
Commentary
Just pretend for a moment that you had been taking a vacation on the proverbial planet of choice these past ten years, and upon returning you opened the Wall Street Journal and tuned in your new flat screen TV to CNBC or the Fox News Network. Wow, you would have to think....what kind of moron is this Obama guy. In just a little over 100 days he has not only destroyed the world economy, he has set about persecuting hard working, innocent, underpaid BANKERS and fully competent auto executives. Worse still, he is running up huge deficits and blaming the previous administration for his "inherited" problems. And soon he might even convene an investigative committee on the conduct of something called "the war on terror".
I am aware that most of the people who bother to read this letter are not members of the extreme right, although some of you poor souls may remain Republican apologists; nor would I suspect that many of you subscribe to the absurdities of libertarianism, an ideology that ranks behind anarchism in my less than humble view. With this in mind, let us appreciate the dilemma that faces those who must wield power within America and upon the international stage. Let us also understand that it will not be failed ideology (oxymoron) that will provide new and vital solutions to this unique situation...but a pragmatic application of high intellect and good judgement.
Markets
There is no such thing as a single market bottom. Techs and Agri stocks had theirs way back in November, whereas mines, oils, banks, materials and other sectors appear to have found depth at various times during the first quarter of this year. Indexes, on the other hand, seem to have put it all together on March 9th, the point from which our now eight week old rally began.
So as we enter week nine and the month of May, it might be wise to retrieve caution from the wind. There remains a strong likelihood that Friday's close above 875 on the S&P 500 could lead to a fast acceleration toward 950 before Thursday's "bank stress announcement", but a STRAIGHT run to my summer target between 1050 and 1150 seems less probable. Discipline suggests a few weeks of "go away in May" declines should take hold late this week or early next. Low volumes are fast becoming an issue and require monitoring.
"Life and ink, they run out at the same time, or so said my old friend the squid" Jimmy Buffett
Tuesday, April 28, 2009
April 28th Edition
Good Morning All,
Just when we thought that a certain species had left Washington and parts of Wall Street, it appears their progeny has surfaced in the form of a nasty 'flu bug. Thusly (sic) we began week eight of the tremendous post disaster upswing, one which many have incidentally dismissed as "just a rally in a bear market". Call it what you will, I have enjoyed this generational opportunity and I hope that at least some of you have participated either through my suggestions or those of your own derivation.
Although I do not pretend to be either a medical doctor or virologist, I can still count and read, leading me to conclude (hopefully I might add) that ten days from now the news networks will be otherwise occupied. As for the market effect of the "swine 'flu", cynic that I am, I believe it has provided yet another trading opportunity. We shall begin the day in a downward path and look towards a Tuesday turnaround as we head toward the government release of the stress tests on May 4. Techs continue to lead the way, look for the S&P 500 to broach 1020 by summer, after a May pullback.
Just when we thought that a certain species had left Washington and parts of Wall Street, it appears their progeny has surfaced in the form of a nasty 'flu bug. Thusly (sic) we began week eight of the tremendous post disaster upswing, one which many have incidentally dismissed as "just a rally in a bear market". Call it what you will, I have enjoyed this generational opportunity and I hope that at least some of you have participated either through my suggestions or those of your own derivation.
Although I do not pretend to be either a medical doctor or virologist, I can still count and read, leading me to conclude (hopefully I might add) that ten days from now the news networks will be otherwise occupied. As for the market effect of the "swine 'flu", cynic that I am, I believe it has provided yet another trading opportunity. We shall begin the day in a downward path and look towards a Tuesday turnaround as we head toward the government release of the stress tests on May 4. Techs continue to lead the way, look for the S&P 500 to broach 1020 by summer, after a May pullback.
Monday, April 20, 2009
April 20th Edition
Good Morning All,
During the heady pre inauguration days, I promised you a broad market rally that would last five to eight weeks and would be led by the technology sector. Well as things turned out, the predicted rally did not immediately make itself present, as the February pullback quickly proved by taking indexes significantly lower. It was only after this fear and loathing of all things investment related returned, that markets prepared themselves for the delayed upswing. On March 9th the fun began and the first week of the move took many by surprise. After four weeks, pundits were reporting that this had been the strongest such move since 1933; and after six weeks, the most powerful since 1938. For all but the "historically challenged" it need not be noted that these past events took place during the "Great Depression".
As we now enter week seven of our suggested time frame, it may be time to review what prompted the move and to question its strength and sustainability. First and foremost we must repeat the oldest of market truisms. "when everyone is bearish it means they have already sold and hold cash, when everyone is bullish, they hold stock and little cash". The former are potential buyers, the latter will one day be sellers. Remember also, that CASH is never a permanent, or even a near permanent position for investment managers.
Secondly, the market was waiting for a resolution to the "bad bank" problem; the government actions for which proved to be the March catalyst. These were the conditions that turned market sentiment and the follow-through of weeks two and three provided the all important momentum change. So what now?
As we begin week seven, the same old worries seem to be resurfacing, even though earnings reports have been less onerous than most thought. If it can be said that the fear of "systemic risk", ie. the bank failures, has been either mitigated or eliminated by time and timely actions on the part of government agencies....then the only thing left to worry about is a recession, and frankly speaking ...recessions do end. Thus today's early decline, or rout if you like, is most probably a serious bout of profit taking after the six week, nearly uninterrupted, runup. It may prove to be more than that but don't look for a retest of the old lows because we have come a long way. A careful view might be to step aside until the smoke clears, a more adventurous one might involve staying around for a blow off rally up to 1020 S&P 500.
Fear not , I will not reprint my stock list today...although you might wish to refer to it.
Commentary:
The recent media attention given to Iran, North Korea, Cuba and Venezuela would be humerous if it were not so serious to the radical right. NONE of these countries pose a threat to the United States. The combined might of China, Japan, Europe, Russia and the United States will oppose any perceived aggression of which the worst of them may dream. President Obama has taken great steps towards unifying this alliance of the powerful; and will be so accredited by history.
The most present danger to America and its President lies not from without.....but from within.
During the heady pre inauguration days, I promised you a broad market rally that would last five to eight weeks and would be led by the technology sector. Well as things turned out, the predicted rally did not immediately make itself present, as the February pullback quickly proved by taking indexes significantly lower. It was only after this fear and loathing of all things investment related returned, that markets prepared themselves for the delayed upswing. On March 9th the fun began and the first week of the move took many by surprise. After four weeks, pundits were reporting that this had been the strongest such move since 1933; and after six weeks, the most powerful since 1938. For all but the "historically challenged" it need not be noted that these past events took place during the "Great Depression".
As we now enter week seven of our suggested time frame, it may be time to review what prompted the move and to question its strength and sustainability. First and foremost we must repeat the oldest of market truisms. "when everyone is bearish it means they have already sold and hold cash, when everyone is bullish, they hold stock and little cash". The former are potential buyers, the latter will one day be sellers. Remember also, that CASH is never a permanent, or even a near permanent position for investment managers.
Secondly, the market was waiting for a resolution to the "bad bank" problem; the government actions for which proved to be the March catalyst. These were the conditions that turned market sentiment and the follow-through of weeks two and three provided the all important momentum change. So what now?
As we begin week seven, the same old worries seem to be resurfacing, even though earnings reports have been less onerous than most thought. If it can be said that the fear of "systemic risk", ie. the bank failures, has been either mitigated or eliminated by time and timely actions on the part of government agencies....then the only thing left to worry about is a recession, and frankly speaking ...recessions do end. Thus today's early decline, or rout if you like, is most probably a serious bout of profit taking after the six week, nearly uninterrupted, runup. It may prove to be more than that but don't look for a retest of the old lows because we have come a long way. A careful view might be to step aside until the smoke clears, a more adventurous one might involve staying around for a blow off rally up to 1020 S&P 500.
Fear not , I will not reprint my stock list today...although you might wish to refer to it.
Commentary:
The recent media attention given to Iran, North Korea, Cuba and Venezuela would be humerous if it were not so serious to the radical right. NONE of these countries pose a threat to the United States. The combined might of China, Japan, Europe, Russia and the United States will oppose any perceived aggression of which the worst of them may dream. President Obama has taken great steps towards unifying this alliance of the powerful; and will be so accredited by history.
The most present danger to America and its President lies not from without.....but from within.
Wednesday, April 1, 2009
April 1st Edition
Good Morning All,
.....and welcome to Financial Fool's Day, you know, the one wherein the G20 leaders all meet to figure out who or what, and is or was, responsible for the mess we are in. Few of these present guys were present at the creation of our collective idiocy but fewer still were alert enough to either speak up or act as the debacle unwound. Either way, it is now up to their collective courage and intellect to solve the current problem and more important still, to put in place, proper and enforceable regulations that will (touch wood or G.W.'s head) prevent a future collapse from occurring....well at least diminish the chances of such.
Although there will be much finger pointing during the days to come, little of this activity will be of consequence; what will be important is the "collective" recognition that there are, and will forever be, people in every generation who believe in the creed so aptly stated in the 1987 movie Wall Street that "greed is good". I use this quote not just because it rings so very well, but also because it wonderfully captures the essence of the much ballyhooed "Reagan Revolution", a time during which the seeds of our crisis were sown. The Reagan legacy was all about smaller government and deregulation....the market place, Republicans believed then and continue to espouse now, is the solution to every problem, as it will level the playing field for all, creating prosperity across the globe. Ah the joys of trickle down economics.. eh !
I continue to abuse myself by spending far too much time watching the ideologues on CNBC, and despite the now famous send up by comedian, cum political commentator Jon Stewart, they remain largely unabashed by such criticism. One of theirs' and Wall Street's most interesting rants seems to surround the concept that Main Street, the Democrats and a number of other newly ordained populists are indulging themselves in a form of class warfare. Wow, what a concept that would be....or come to think of it...isn't that precisely what these guys have been waging against the disappearing middle class, lo these many years.
Markets finally staged my long predicted three week rally and after a Monday pause for recollection, moved up on Tuesday. We may spend a little time in the new trading range but the mid term bias should be upward, despite bad economic news and the coming earnings data. When markets go up in the face of bad news, they are showing a clear sign of seller exhaustion. This may only be a "bear market rally" but as history shows, these events can be both broad ranging and profitable. Intel (under 15) yields 3.8% and has no financial problems while Alcoa at sevenish has many, but trades for nearly nothing at these levels.
There are now web sites that proclaim "let the revolution begin" a sure sign of the times. I will however stick to my more moderate mantra; "let's get on with the renaissance".
.....and welcome to Financial Fool's Day, you know, the one wherein the G20 leaders all meet to figure out who or what, and is or was, responsible for the mess we are in. Few of these present guys were present at the creation of our collective idiocy but fewer still were alert enough to either speak up or act as the debacle unwound. Either way, it is now up to their collective courage and intellect to solve the current problem and more important still, to put in place, proper and enforceable regulations that will (touch wood or G.W.'s head) prevent a future collapse from occurring....well at least diminish the chances of such.
Although there will be much finger pointing during the days to come, little of this activity will be of consequence; what will be important is the "collective" recognition that there are, and will forever be, people in every generation who believe in the creed so aptly stated in the 1987 movie Wall Street that "greed is good". I use this quote not just because it rings so very well, but also because it wonderfully captures the essence of the much ballyhooed "Reagan Revolution", a time during which the seeds of our crisis were sown. The Reagan legacy was all about smaller government and deregulation....the market place, Republicans believed then and continue to espouse now, is the solution to every problem, as it will level the playing field for all, creating prosperity across the globe. Ah the joys of trickle down economics.. eh !
I continue to abuse myself by spending far too much time watching the ideologues on CNBC, and despite the now famous send up by comedian, cum political commentator Jon Stewart, they remain largely unabashed by such criticism. One of theirs' and Wall Street's most interesting rants seems to surround the concept that Main Street, the Democrats and a number of other newly ordained populists are indulging themselves in a form of class warfare. Wow, what a concept that would be....or come to think of it...isn't that precisely what these guys have been waging against the disappearing middle class, lo these many years.
Markets finally staged my long predicted three week rally and after a Monday pause for recollection, moved up on Tuesday. We may spend a little time in the new trading range but the mid term bias should be upward, despite bad economic news and the coming earnings data. When markets go up in the face of bad news, they are showing a clear sign of seller exhaustion. This may only be a "bear market rally" but as history shows, these events can be both broad ranging and profitable. Intel (under 15) yields 3.8% and has no financial problems while Alcoa at sevenish has many, but trades for nearly nothing at these levels.
There are now web sites that proclaim "let the revolution begin" a sure sign of the times. I will however stick to my more moderate mantra; "let's get on with the renaissance".
Thursday, March 19, 2009
March 19th 2009
Good Morning All, Markets have had a rather interesting couple of weeks, ones during which they have largely ignored the drumbeat of current negative economic newsin favour of a more macro view of what might be, once the troubles have past. It is at times such as these, as I mentioned in a previous letter, that I have often quoted Yeats' poem "The Second Coming", please look it up if you have not already done so. I have also used past crises to remind readers of the tide of history; and to point out the leaps of human progress that followed such momentous events. Sticking to more modern history, I have most often cited the prospects for gain which followed the Napoleonic Wars when the Industrial Revolution began in earnest; the end of the U.S. Civil War, a period dominated by railways, steel and robber barons; the boom that brought the automobile and the airplane after the Great War later to be known as WW l; or the new science of computers and jet travel that arrived amidst the many innovations that gained prominence during the decades of which we have each been a part. In short, we the human race, are much smarter and much more resourceful than we occasionally appear.
It is also at times such as these that our true natures and spirit become more evident, a time when we discover the fiber from which we are made. Dichotomous as it may seem, there has lately been a rise in volunteership and stranger still, this aroused spirit of giving is most often found among the young and the old and among those who can least afford the luxury of giving. This is not a world populated by the Rick Santellis or the Rush Limbaughs but by the ordinary folk who have been stirred to action because they recognize their own stake in the future world, be it for themselves, their issue or humankind, resides with the good of all. Sadly there are those among us, mostly in their middle years, whose concern is less about "doing good" than "doing well". These are, of course, the careerists who blame everyone else for the bumps in their road to nowhere. There are among them the ranters and the suers, opportunists who seek to gain during hard times at the expense of others. It has been said that we can learn a great deal about someone's character at a poker table or on a golf course; to this I would add....or times such as these.
I could go on about history and humankind's ability to thrust great individuals and leadership to the fore, just when they are most needed, but I won't because you will think I am hyping Barack again....oh okay I am.
On a less serious note, I have once again included my 25 stock suggestions first published in late November and early December 2008. The gains in many of them have been quite striking and although the list is far from being either complete or exclusive, it does embody a practical example of what really has been happening in recent weeks and what will likely occur in the years before us. I have no idea whether any of you have yet advantaged yourselves of this generational opportunity, but I hope you have, as it has been little my way of giving.
Let the renaissance continue.
It is also at times such as these that our true natures and spirit become more evident, a time when we discover the fiber from which we are made. Dichotomous as it may seem, there has lately been a rise in volunteership and stranger still, this aroused spirit of giving is most often found among the young and the old and among those who can least afford the luxury of giving. This is not a world populated by the Rick Santellis or the Rush Limbaughs but by the ordinary folk who have been stirred to action because they recognize their own stake in the future world, be it for themselves, their issue or humankind, resides with the good of all. Sadly there are those among us, mostly in their middle years, whose concern is less about "doing good" than "doing well". These are, of course, the careerists who blame everyone else for the bumps in their road to nowhere. There are among them the ranters and the suers, opportunists who seek to gain during hard times at the expense of others. It has been said that we can learn a great deal about someone's character at a poker table or on a golf course; to this I would add....or times such as these.
I could go on about history and humankind's ability to thrust great individuals and leadership to the fore, just when they are most needed, but I won't because you will think I am hyping Barack again....oh okay I am.
On a less serious note, I have once again included my 25 stock suggestions first published in late November and early December 2008. The gains in many of them have been quite striking and although the list is far from being either complete or exclusive, it does embody a practical example of what really has been happening in recent weeks and what will likely occur in the years before us. I have no idea whether any of you have yet advantaged yourselves of this generational opportunity, but I hope you have, as it has been little my way of giving.
Let the renaissance continue.
Tuesday, March 10, 2009
March 10th Edition
Good Morning All,
I don't normally address you all in this manner but since I am somewhat compelled, for business reasons and the lack of an alternative, to spend much of my day with CNBC in the background, I thought you might enjoy Jon Stewart's take on the collection of smug, self serving, right wing blowhards who dominate the commentary and choose the interviewees. This network now challenges FOX news for leadership in the realm of idiot supremacy.Please open the attached....or don't.
http://www.youtube.com/watch?v=yJObWmN-x9I
I don't normally address you all in this manner but since I am somewhat compelled, for business reasons and the lack of an alternative, to spend much of my day with CNBC in the background, I thought you might enjoy Jon Stewart's take on the collection of smug, self serving, right wing blowhards who dominate the commentary and choose the interviewees. This network now challenges FOX news for leadership in the realm of idiot supremacy.Please open the attached....or don't.
http://www.youtube.com/watch?v=yJObWmN-x9I
March 10th Edition
Good Morning All,
Welcome to another week of gloom and doom…..or renewal and reward if you should so choose. Of course this is not really a choice one might make without significant amounts of fear and trepidation, but the latter option may deserve some consideration at this juncture, even though the economy appears to be going to hell in something larger than a hand basket.
The major market indexes have continued their headlong plunge these past weeks despite my rosier predictions and despite the underlying strength of my favourite sectors: tech, stem cells, agribusiness and gold. It may also be noted at this time that major indexes reflect the banks, the AIG’s and the General Electrics. At some point down the road some of these stocks will be replaced in the DOW and the S&P 500 by other less encumbered companies. A few may disappear through nationalization or outright bankruptcy. Interestingly enough, it may also be said that a further drop in the aforementioned can hardly bring much more distress to these egregious levels as the number zero is no longer distant.
The crux of our current dilemma resides in the foundation of our economic system, ergo the private banks and the Central Banks that provide the currency, liquidity and security with which we buy and sell goods and services. Economics 101 teaches us one principle upon which both the left and right agree. The Velocity of Money is not simply a reflection of our economic well-being but the integral component of its health. The present decline in the rate at which money travels around the economy is largely responsible for the “seizing up” of lending and therefore spending. The cause of this diminishment of lending and confidence has been well documented, the solution is less clear.
Many on either side of the issue believe that the initial answer lies with the creation of a bad bank that would take up the toxic assets that were originally produced by the money center banks and brokerages that have recently undergone shareholder destruction (as opposed to management destruction whose suffering appears to have been mitigated somewhat through their non recouped bonuses), Further to this many wish to combine this basket approach with a change in the “mark to market accounting rules”. It is believed that many toxic assets are actually worth more than their presently assessed value, and that less distressed last trade prices would immediately improve bank balance sheets. Look for a form of this to come about in the coming week or weeks; it will not be called nationalization in America but it will quack like it. This event will send markets much higher.
Over the past 30 years America has seen CEO salaries rise from 42 times that of the average hourly wage earner to 364 times while peaking at over 500 times a few years ago. This destruction of the middle class has had a disastrous effect upon U.S. savings and long term consumer spending, the latter of which has largely been funded by credit card excesses and the phony housing equity boom. The United States has funded its last ten years of growth on such credit expansion, and the plug has since been pulled. History provides many examples of nations wherein 80%, or more, of the wealth, is held by 2% of the population. Think South America or Russia in recent times. Oligarchies such as these always end badly, either through collapse or revolution or evolution. It has been suggested that the policies of Franklin Roosevelt brought about such peaceful evolution during another troubling era. It is now hoped that the policies of the Barack Obama administration may bring about a similar conclusion.
Despite the now famous Rick Santelli rant on CNBC, it was not Joe the pizza delivery guy or Joe the bogus plumber or even Joe the house flipper that caused this mess. It was mortgage lenders, the investment bankers and the bond desks that scooped billions of yet to be repaid commission dollars that were happily responsible. Remember always “to follow the money” and know that Wall Street believes that greed is good and that Republican cant still repeats the mantra, “trickle down works”….but for whom.
Welcome to another week of gloom and doom…..or renewal and reward if you should so choose. Of course this is not really a choice one might make without significant amounts of fear and trepidation, but the latter option may deserve some consideration at this juncture, even though the economy appears to be going to hell in something larger than a hand basket.
The major market indexes have continued their headlong plunge these past weeks despite my rosier predictions and despite the underlying strength of my favourite sectors: tech, stem cells, agribusiness and gold. It may also be noted at this time that major indexes reflect the banks, the AIG’s and the General Electrics. At some point down the road some of these stocks will be replaced in the DOW and the S&P 500 by other less encumbered companies. A few may disappear through nationalization or outright bankruptcy. Interestingly enough, it may also be said that a further drop in the aforementioned can hardly bring much more distress to these egregious levels as the number zero is no longer distant.
The crux of our current dilemma resides in the foundation of our economic system, ergo the private banks and the Central Banks that provide the currency, liquidity and security with which we buy and sell goods and services. Economics 101 teaches us one principle upon which both the left and right agree. The Velocity of Money is not simply a reflection of our economic well-being but the integral component of its health. The present decline in the rate at which money travels around the economy is largely responsible for the “seizing up” of lending and therefore spending. The cause of this diminishment of lending and confidence has been well documented, the solution is less clear.
Many on either side of the issue believe that the initial answer lies with the creation of a bad bank that would take up the toxic assets that were originally produced by the money center banks and brokerages that have recently undergone shareholder destruction (as opposed to management destruction whose suffering appears to have been mitigated somewhat through their non recouped bonuses), Further to this many wish to combine this basket approach with a change in the “mark to market accounting rules”. It is believed that many toxic assets are actually worth more than their presently assessed value, and that less distressed last trade prices would immediately improve bank balance sheets. Look for a form of this to come about in the coming week or weeks; it will not be called nationalization in America but it will quack like it. This event will send markets much higher.
Over the past 30 years America has seen CEO salaries rise from 42 times that of the average hourly wage earner to 364 times while peaking at over 500 times a few years ago. This destruction of the middle class has had a disastrous effect upon U.S. savings and long term consumer spending, the latter of which has largely been funded by credit card excesses and the phony housing equity boom. The United States has funded its last ten years of growth on such credit expansion, and the plug has since been pulled. History provides many examples of nations wherein 80%, or more, of the wealth, is held by 2% of the population. Think South America or Russia in recent times. Oligarchies such as these always end badly, either through collapse or revolution or evolution. It has been suggested that the policies of Franklin Roosevelt brought about such peaceful evolution during another troubling era. It is now hoped that the policies of the Barack Obama administration may bring about a similar conclusion.
Despite the now famous Rick Santelli rant on CNBC, it was not Joe the pizza delivery guy or Joe the bogus plumber or even Joe the house flipper that caused this mess. It was mortgage lenders, the investment bankers and the bond desks that scooped billions of yet to be repaid commission dollars that were happily responsible. Remember always “to follow the money” and know that Wall Street believes that greed is good and that Republican cant still repeats the mantra, “trickle down works”….but for whom.
Friday, February 27, 2009
February 27 Edition
Good Morning All,
The markets can't seem to muster a serious bear rally despite their highly oversold condition; and it is still all about the banks. The Obama budget is out and as "Slate" stated, "he put the money where his mouth is"; and much to the disdain of the CNBC commentators and their chosen guests, he has largely kept his campaign promises. It should be remembered at this time that it was not Dems who got us here, it was the GOP and Wall Street greed. The complaints from the right about the Obama budget are many, but essentially the most discussed concerns are related to taxation changes for the top 2% of Americans, and to a limited degree, the top 5%. None of the contentious items have been explained in detail on any of the complaining networks. In fact, when a talking head interviews a like minded guest, they speak of the tax rise from 35 to 39.5% as if this were going to destroy America's entreprenurial spirit. Think about it; some really smart guy or gal is now going to choose "welfare" over working because they have to pay an additional 4500 dollars on every 100,000 they earn over 250k. Not bloody likely. The other bugbears include the mortgage and charitable deduction clauses in the proposal. Again, these are presented on business television as if they have been totally eliminated, when in fact they have been reduced for people in the 33% plus tax bracket from the present deduction, to 28% in both cases. Example; 1000 dollars of mortgage interest or charitable donation is presently deductible at your tax rate. Under the new tax law, it will be 280 dollars per thousand versus the former 330 or 350 dollars. In Canada we have no mortgage interest deduction and a much better housing market, not to mention a much lower deficit. And once more, let's remember that this is the top 5% of American earners at 33% and the top 2% above that level. There are 300 million citizens of the United States....you do the math. America is greatly in need of some tough love and strong leadership, it is also in need of a little sacrifice and a lot less greedy whining from the already wealthy, not to mention the Trumps of the world. This morning's defacto bank nationalization may well signal a short term end to that crisis, the fat lady is warming up.
The markets can't seem to muster a serious bear rally despite their highly oversold condition; and it is still all about the banks. The Obama budget is out and as "Slate" stated, "he put the money where his mouth is"; and much to the disdain of the CNBC commentators and their chosen guests, he has largely kept his campaign promises. It should be remembered at this time that it was not Dems who got us here, it was the GOP and Wall Street greed. The complaints from the right about the Obama budget are many, but essentially the most discussed concerns are related to taxation changes for the top 2% of Americans, and to a limited degree, the top 5%. None of the contentious items have been explained in detail on any of the complaining networks. In fact, when a talking head interviews a like minded guest, they speak of the tax rise from 35 to 39.5% as if this were going to destroy America's entreprenurial spirit. Think about it; some really smart guy or gal is now going to choose "welfare" over working because they have to pay an additional 4500 dollars on every 100,000 they earn over 250k. Not bloody likely. The other bugbears include the mortgage and charitable deduction clauses in the proposal. Again, these are presented on business television as if they have been totally eliminated, when in fact they have been reduced for people in the 33% plus tax bracket from the present deduction, to 28% in both cases. Example; 1000 dollars of mortgage interest or charitable donation is presently deductible at your tax rate. Under the new tax law, it will be 280 dollars per thousand versus the former 330 or 350 dollars. In Canada we have no mortgage interest deduction and a much better housing market, not to mention a much lower deficit. And once more, let's remember that this is the top 5% of American earners at 33% and the top 2% above that level. There are 300 million citizens of the United States....you do the math. America is greatly in need of some tough love and strong leadership, it is also in need of a little sacrifice and a lot less greedy whining from the already wealthy, not to mention the Trumps of the world. This morning's defacto bank nationalization may well signal a short term end to that crisis, the fat lady is warming up.
Tuesday, February 24, 2009
February 24 Edition
Good Morning All,
Markets continue to be ruled by the banking crisis, and in America, the Wall Street analysts, pundits, practitioners and knee jerk ideologues remain concerned, if not incensed with the word nationalization. The administration also appears fearful of using the "N" word, even as it effectively puts it into practice. In a bid for greater clarification I would humbly suggest that the President incorporate the following phrase into this evening's important address to this worried nation. First used by our own MacKenzie King in W.W.ll and later paraphrased by the new leader of Canada's Liberal party, it would sound something like this; "nationalization if necessary, but not necessarily nationalization".
Markets have been extremely noisy of late and I am not sure that they are truly reflecting the future potential of the world economy. They are certainly reflecting the nation's fears, almost to the point of exploitation. At this moment we may be looking at a generational opportunity.....or the beginning of the end of the world as we have known it. Being of the belief that the world is at a far more advanced place than at any time in history, I find myself in the former, more optimistic camp. It is usually during times such as these that I quote W.B.Yeats' first verse of his poem "The Second Coming" but in lieu of space I will ask those of you who care enough, look it up. Times are tough, but they have been much tougher many times before, times when we were not quite as smart, or quite as civilized.
Stop listening, for a moment, to the people who got us into this mess, and start paying heed to the ones who will get us out of it.
Markets continue to be ruled by the banking crisis, and in America, the Wall Street analysts, pundits, practitioners and knee jerk ideologues remain concerned, if not incensed with the word nationalization. The administration also appears fearful of using the "N" word, even as it effectively puts it into practice. In a bid for greater clarification I would humbly suggest that the President incorporate the following phrase into this evening's important address to this worried nation. First used by our own MacKenzie King in W.W.ll and later paraphrased by the new leader of Canada's Liberal party, it would sound something like this; "nationalization if necessary, but not necessarily nationalization".
Markets have been extremely noisy of late and I am not sure that they are truly reflecting the future potential of the world economy. They are certainly reflecting the nation's fears, almost to the point of exploitation. At this moment we may be looking at a generational opportunity.....or the beginning of the end of the world as we have known it. Being of the belief that the world is at a far more advanced place than at any time in history, I find myself in the former, more optimistic camp. It is usually during times such as these that I quote W.B.Yeats' first verse of his poem "The Second Coming" but in lieu of space I will ask those of you who care enough, look it up. Times are tough, but they have been much tougher many times before, times when we were not quite as smart, or quite as civilized.
Stop listening, for a moment, to the people who got us into this mess, and start paying heed to the ones who will get us out of it.
Monday, February 23, 2009
February 23, 2009
Good Morning All,
Well the bad news, at least for me, is that my most recent letter which called for a market rally last week, not only fell on deaf ears but on fully plugged ones. The good news is that although some stocks may go to zero, the market itself will not, and as indexes fall to lower levels it becomes increasingly clear that we cannot continue the descent at present rates for seven more weeks. So as we begin the second month of the "fix it" Presidency we can look for a relief rally of some sort, the sustainability of which will be dependent on the reception given the Obama budget and the quasi nationalization of CitiGroup and Bank of America.
I am still in southern Florida where the class system of America is as visual as it gets. Interestingly though, it appears that the gap between the super wealthy and the much larger group, which is quickly beginning to include almost everyone else and is growing wider by the day, may not include attitude...fear and anger have been mutualized. The sense of hope that was ignited by the Obama victory has been somewhat mitigated by the attack dogs on the right who appear to control the business networks, Fox news and talk radio. It will be a sad day for us all if we lose the print media one day down the road where someone may well rant, but they can not scream.
The President, through all this, has remained calm, adult, personable and patient. His fault lies, in my opinion, in trying too hard in his quest to broaden the tent by appealing to his opponents' better instincts....my advice, stop, because as Gertrude Stein famously said about Oakland; "there is no there, there".
This niceness may of course be part of a grander plan, the one in which our Machiavellian Prince Barack practices the art of bait and switch, by giving them enough rope from which they may collectively swing.
It is necessary at this time, for Obama to show strong and unyielding leadership, leadership that purveys a sense of hope and a promise of renewal. He is more than capable of so doing and this crucial week is likely to bring new impetus to the great plan; or as I prefer to call it...the renaissance.
Meanwhile, even my late November, early December selections took a drubbing and although most remain somewhat higher than their outset prices, they are significantly below their peak prices....opportunity knocks.
Well the bad news, at least for me, is that my most recent letter which called for a market rally last week, not only fell on deaf ears but on fully plugged ones. The good news is that although some stocks may go to zero, the market itself will not, and as indexes fall to lower levels it becomes increasingly clear that we cannot continue the descent at present rates for seven more weeks. So as we begin the second month of the "fix it" Presidency we can look for a relief rally of some sort, the sustainability of which will be dependent on the reception given the Obama budget and the quasi nationalization of CitiGroup and Bank of America.
I am still in southern Florida where the class system of America is as visual as it gets. Interestingly though, it appears that the gap between the super wealthy and the much larger group, which is quickly beginning to include almost everyone else and is growing wider by the day, may not include attitude...fear and anger have been mutualized. The sense of hope that was ignited by the Obama victory has been somewhat mitigated by the attack dogs on the right who appear to control the business networks, Fox news and talk radio. It will be a sad day for us all if we lose the print media one day down the road where someone may well rant, but they can not scream.
The President, through all this, has remained calm, adult, personable and patient. His fault lies, in my opinion, in trying too hard in his quest to broaden the tent by appealing to his opponents' better instincts....my advice, stop, because as Gertrude Stein famously said about Oakland; "there is no there, there".
This niceness may of course be part of a grander plan, the one in which our Machiavellian Prince Barack practices the art of bait and switch, by giving them enough rope from which they may collectively swing.
It is necessary at this time, for Obama to show strong and unyielding leadership, leadership that purveys a sense of hope and a promise of renewal. He is more than capable of so doing and this crucial week is likely to bring new impetus to the great plan; or as I prefer to call it...the renaissance.
Meanwhile, even my late November, early December selections took a drubbing and although most remain somewhat higher than their outset prices, they are significantly below their peak prices....opportunity knocks.
Tuesday, February 3, 2009
January 31st 2009 Editon
Good Morning All,
The following article was brought to my attention by one of you (thanks for the feedback Phil). I thought it described one of the many areas in which the enormous potential of stem cell research can be brought to bear. As many of investors are fast becoming aware, markets are forward looking instruments, and what could be more forward looking than owning some of the companies that are engaged in the scientific investigation of new and better solutions to the world's ills. The Obama Presidency has kicked off an entire new and growing interest in such progress, as recent price appreciation in this sector has proven. It is my belief that many of these companies will be successful while others will fail, so as I wrote last November, "own a basket" and trade within it. I have added two additions to my list and yes I do own all or some of them.
In my opinion, the President's attempts to reach out to the Republicans have failed and it is now time for him to move on. He stated in his inaugural address that it was time to "dust ourselves off"; well if I may be so bold...it is time for the President to dust off the GOP.
The following article was brought to my attention by one of you (thanks for the feedback Phil). I thought it described one of the many areas in which the enormous potential of stem cell research can be brought to bear. As many of investors are fast becoming aware, markets are forward looking instruments, and what could be more forward looking than owning some of the companies that are engaged in the scientific investigation of new and better solutions to the world's ills. The Obama Presidency has kicked off an entire new and growing interest in such progress, as recent price appreciation in this sector has proven. It is my belief that many of these companies will be successful while others will fail, so as I wrote last November, "own a basket" and trade within it. I have added two additions to my list and yes I do own all or some of them.
In my opinion, the President's attempts to reach out to the Republicans have failed and it is now time for him to move on. He stated in his inaugural address that it was time to "dust ourselves off"; well if I may be so bold...it is time for the President to dust off the GOP.
Friday, January 30, 2009
January 30, 3009 Edition
Good Morning All,
The world has now entered the post Bush era, a time during which we shall see much in the way of change, both in America and around the world. The first of what I hope will be many Obama years began a little over a week ago, and already we have seen the implementation of many important actions of both a macro and micro nature, the most empowering of which have been the initial steps taken toward the return of constitutional practice and the "rule of law".
Despite yesterday's market decline, amidst an endless stream of terrible economic news, the major indexes staged their best recovery week since the first days of 2009; and no, folks, none of this activity had anything to do with the hodgepodge of proposals laid out in the Harper budget, the silliest of which was the home renovation idea. As I understand it, a new bureaucracy will be created to return some money to people who spend $10,000 on home-work. Well I, of course, don't personally know anyone who has paid their fix-it man or general contractor sous table, but I have heard stories of such tsk tsk goings on. If stimulation is what Harper or Iggy are looking for, why not just simply cut the GST/PST sales tax on building products for one year; and while they are at it, do the same thing for the automotive industry and home furnishings. Simple is often better.
The Obama stimulus package will be passed by the Senate in what I hope will be an enhanced form that does not include more useless tax cuts. These GOP guys had better begin to realize that they lost the election because their silly mantra of tax cuts for the already wealthy, trickle down, and deregulate were a major part of the problem and are thereby not the solution. Demanding dividend tax credits and capital gains exemptions at this "such a time" is patent nonsense. An extension of retroactive capital loss claims makes infinitely greater sense and would be April, impactive.
The stem cell stocks jumped again yesterday, and underneath the broader indexes, the mid and small cap companies have fared much better than the blue chips. We are entering a new era wherein science will be a dominant theme; one in which research and development will hold sway over ideological claptrap and religious cant. The Captain of this recently launched ship of state has said so and I believe his word. I also believe that his devotion to common sense solutions will bring much needed confidence to a world and a nation in dire need of intelligent, adult leadership.
This is not a time for fear but for bold action, investments included.
The world has now entered the post Bush era, a time during which we shall see much in the way of change, both in America and around the world. The first of what I hope will be many Obama years began a little over a week ago, and already we have seen the implementation of many important actions of both a macro and micro nature, the most empowering of which have been the initial steps taken toward the return of constitutional practice and the "rule of law".
Despite yesterday's market decline, amidst an endless stream of terrible economic news, the major indexes staged their best recovery week since the first days of 2009; and no, folks, none of this activity had anything to do with the hodgepodge of proposals laid out in the Harper budget, the silliest of which was the home renovation idea. As I understand it, a new bureaucracy will be created to return some money to people who spend $10,000 on home-work. Well I, of course, don't personally know anyone who has paid their fix-it man or general contractor sous table, but I have heard stories of such tsk tsk goings on. If stimulation is what Harper or Iggy are looking for, why not just simply cut the GST/PST sales tax on building products for one year; and while they are at it, do the same thing for the automotive industry and home furnishings. Simple is often better.
The Obama stimulus package will be passed by the Senate in what I hope will be an enhanced form that does not include more useless tax cuts. These GOP guys had better begin to realize that they lost the election because their silly mantra of tax cuts for the already wealthy, trickle down, and deregulate were a major part of the problem and are thereby not the solution. Demanding dividend tax credits and capital gains exemptions at this "such a time" is patent nonsense. An extension of retroactive capital loss claims makes infinitely greater sense and would be April, impactive.
The stem cell stocks jumped again yesterday, and underneath the broader indexes, the mid and small cap companies have fared much better than the blue chips. We are entering a new era wherein science will be a dominant theme; one in which research and development will hold sway over ideological claptrap and religious cant. The Captain of this recently launched ship of state has said so and I believe his word. I also believe that his devotion to common sense solutions will bring much needed confidence to a world and a nation in dire need of intelligent, adult leadership.
This is not a time for fear but for bold action, investments included.
Friday, January 23, 2009
January 23, 2009 Edition
Good Morning All,
Congressional Republicans have continued their grandstanding this week through the delay of several cabinet appointments that will happen anyway. I do not oppose due diligence in any area, but it does appear to this observor that delaying, or, as it were, holding up the Eric Holder appointment to the office of Attorney General is a little over the top, particularly when one considers the tenure and practices of Alberto Gonzales. President Obama stated in his speech that it was time to put away childish things...it is long past time.
Geron Corporation, one of my stem cell recommendations of November last, is up strongly this morning on news that the FDA has approved the first human clinical trial of embryonic stem cell therapy. It is likely no coincidence that this has occurred in the post inauguration days. Others in the group are moving in sympathy and will each trade much higher over the coming weeks. Please consult my list for names and google the story.
Congressional Republicans have continued their grandstanding this week through the delay of several cabinet appointments that will happen anyway. I do not oppose due diligence in any area, but it does appear to this observor that delaying, or, as it were, holding up the Eric Holder appointment to the office of Attorney General is a little over the top, particularly when one considers the tenure and practices of Alberto Gonzales. President Obama stated in his speech that it was time to put away childish things...it is long past time.
Geron Corporation, one of my stem cell recommendations of November last, is up strongly this morning on news that the FDA has approved the first human clinical trial of embryonic stem cell therapy. It is likely no coincidence that this has occurred in the post inauguration days. Others in the group are moving in sympathy and will each trade much higher over the coming weeks. Please consult my list for names and google the story.
Thursday, January 22, 2009
January 22, 2009 Edition
Good Morning All,
Okay, all long term Obama fans and recent converts, you can breathe now, because George really is gone, and the tide of common sense that went out with his arrival eight seemingly interminable years ago has begun its return to America, bringing with it both a sense of hope and an opportunity for renewal. As the new President has warned on an increasingly frequent basis, the times ahead will not be easy; nor will the solutions to the past travesty of mistaken and misapplied policies be simple or perfect in either their design or their implementation. Yet what we do know for certain is that the United States and the world will be far better served by this adult leader and his pragmatic cabinet than ever we were by the collection of self-serving ideologues they have replaced.
Today should see the final important cabinet approvals that will include the woebegotten Treasury Secretary Timothy Geithner, who received an important endorsement from Paul Volcker the excellent Fed Chairman who preceded the highly overrated Alan Greenspan. Whatever Timothy may have done (how could someone named Timothy be bad), his credentials on Wall Street are Triple A, for whatever that is worth these days. Assessing the value of such things, at least on a short term basis, was easy, even for the GOP, who have realized that this is no time to pick a fight with the the incoming missile of public popularity that has swelled for all things Obama. Markets began to reflect this wave of confidence yesterday as they combined with good news from IBM and some significant insider buying in the beleagured banks to post recovery gains, the continuation of which I would expect to see over the coming weeks as we approach the 1150 S&P 500 target this letter projected last November. Yes I know I said it would occur by mid to late January, but I also cautioned that "getting both the number and the day right" was an improbable task. We now need to close strongly above 860 for this thrust to achieve technical approval, a level that may be forthcoming today.
The world economy is not likely to show signs of recovery for some time to come as they await the return of open and liquid credit markets. It has been noted here that the LIBOR rate and the attendant TED SPREAD have shown signs of improvement in recent weeks, and that these are important monitors of the velocity of money, a term that should enjoy increasing analysis in the popular press; google all of the above for your Economics 101 course... you know, the one that Bush failed. Markets, however, as this letter so often reiterates, are predictors of the future, and express the buying or selling, not of past Christmas ghosts but of future realities...so get out of your present malaise and look forward.
In Canada next week's budget should offer both fiscal stimulus and a possible retreatment of the income trust issue. Look to these latter gifts (maybe for your tax free accounts) and to my favourite Canadian infrastructure company Aecon around $10.50 up from $6 in November. Investment banking is coming off its worst year in recent history so look for a ton of new issue product and a spate of merger and acquisition activity. GMP.UN in the low 5's will be a slam dunk beneficiary of such largesse. And just one more point....Barack's Chief of Staff Rahm Emmanuel is set to become a household name in the coming years but it won't be in the same way that H.R. Halediman or John Erlichman's was. Oh, and I nearly forgot...own some gold shares.
Okay, all long term Obama fans and recent converts, you can breathe now, because George really is gone, and the tide of common sense that went out with his arrival eight seemingly interminable years ago has begun its return to America, bringing with it both a sense of hope and an opportunity for renewal. As the new President has warned on an increasingly frequent basis, the times ahead will not be easy; nor will the solutions to the past travesty of mistaken and misapplied policies be simple or perfect in either their design or their implementation. Yet what we do know for certain is that the United States and the world will be far better served by this adult leader and his pragmatic cabinet than ever we were by the collection of self-serving ideologues they have replaced.
Today should see the final important cabinet approvals that will include the woebegotten Treasury Secretary Timothy Geithner, who received an important endorsement from Paul Volcker the excellent Fed Chairman who preceded the highly overrated Alan Greenspan. Whatever Timothy may have done (how could someone named Timothy be bad), his credentials on Wall Street are Triple A, for whatever that is worth these days. Assessing the value of such things, at least on a short term basis, was easy, even for the GOP, who have realized that this is no time to pick a fight with the the incoming missile of public popularity that has swelled for all things Obama. Markets began to reflect this wave of confidence yesterday as they combined with good news from IBM and some significant insider buying in the beleagured banks to post recovery gains, the continuation of which I would expect to see over the coming weeks as we approach the 1150 S&P 500 target this letter projected last November. Yes I know I said it would occur by mid to late January, but I also cautioned that "getting both the number and the day right" was an improbable task. We now need to close strongly above 860 for this thrust to achieve technical approval, a level that may be forthcoming today.
The world economy is not likely to show signs of recovery for some time to come as they await the return of open and liquid credit markets. It has been noted here that the LIBOR rate and the attendant TED SPREAD have shown signs of improvement in recent weeks, and that these are important monitors of the velocity of money, a term that should enjoy increasing analysis in the popular press; google all of the above for your Economics 101 course... you know, the one that Bush failed. Markets, however, as this letter so often reiterates, are predictors of the future, and express the buying or selling, not of past Christmas ghosts but of future realities...so get out of your present malaise and look forward.
In Canada next week's budget should offer both fiscal stimulus and a possible retreatment of the income trust issue. Look to these latter gifts (maybe for your tax free accounts) and to my favourite Canadian infrastructure company Aecon around $10.50 up from $6 in November. Investment banking is coming off its worst year in recent history so look for a ton of new issue product and a spate of merger and acquisition activity. GMP.UN in the low 5's will be a slam dunk beneficiary of such largesse. And just one more point....Barack's Chief of Staff Rahm Emmanuel is set to become a household name in the coming years but it won't be in the same way that H.R. Halediman or John Erlichman's was. Oh, and I nearly forgot...own some gold shares.
Tuesday, January 20, 2009
January 20, 2009 Edition
Good Morning All,
As there is little new I can add to the overwhelmingly thorough coverage of this most important inauguration week, I will instead reflect upon the points of change which I believe to be most important. Since I took my first tentative steps toward the possibility of an Obama Presidency in a letter I wrote away back in the fall of 2007, much has come about, both to Obama and to the America that dared to embrace him, and although in these closing days it appears to be all about one man, it has also become evident through time that this dream has grown to be increasingly inclusive of the caring and hopeful people who may not have supported or voted for him, or even voted at all.
This change of which everyone speaks is not just transitional. It is transformational, for whatever happens henceforth, nothing will ever be remotely the same in American or, dare I say, global politics. The change in Washington and in America is one in which pragmatism will replace the strictures of ideology, where ideas and curiosity will overpower the rote of Republican cant, and where the solutions to the complex problems of the world will be addressed with knowledge and thoughtfulness, not just the simple reactions of tax cuts, deregulation and military might that have gotten us to this present place of enormous danger.
The going, as Barack and the rest of us are wont to repeat, will be difficult and "the climb will be steep" but we have collectively taken a step back from the abyss and and have begun the ascent. Were I a person of religious faith I would indeed offer a prayer for both his safety and our future, metaphorically I suppose I already have.Let the renaissance begin.
As there is little new I can add to the overwhelmingly thorough coverage of this most important inauguration week, I will instead reflect upon the points of change which I believe to be most important. Since I took my first tentative steps toward the possibility of an Obama Presidency in a letter I wrote away back in the fall of 2007, much has come about, both to Obama and to the America that dared to embrace him, and although in these closing days it appears to be all about one man, it has also become evident through time that this dream has grown to be increasingly inclusive of the caring and hopeful people who may not have supported or voted for him, or even voted at all.
This change of which everyone speaks is not just transitional. It is transformational, for whatever happens henceforth, nothing will ever be remotely the same in American or, dare I say, global politics. The change in Washington and in America is one in which pragmatism will replace the strictures of ideology, where ideas and curiosity will overpower the rote of Republican cant, and where the solutions to the complex problems of the world will be addressed with knowledge and thoughtfulness, not just the simple reactions of tax cuts, deregulation and military might that have gotten us to this present place of enormous danger.
The going, as Barack and the rest of us are wont to repeat, will be difficult and "the climb will be steep" but we have collectively taken a step back from the abyss and and have begun the ascent. Were I a person of religious faith I would indeed offer a prayer for both his safety and our future, metaphorically I suppose I already have.Let the renaissance begin.
Thursday, January 15, 2009
January 15, 2009 Edition
Good Morning All,
Investor bids on world markets have all but disappeared over the past six days, leading this short term bull toward an internal debate over the question as to whether I am totally wrong (impossible), or temporarily mistaken about the timing of my prognostications. Ahh it would be unhindered peace and progress, t'were it not for the quandaries this life is wont to present to our world of fun and frolic.
One answer to the present dilemma may reside within the lessons taught to each of us through the exercise of life and living. If, for a moment, we can chase back in time to our early days when we were first introduced to the realities of the David and Goliath world that would become our existence, you know (as Caroline Kennedy might say), the years in which we began to understand whether we were going to be freedom fighters, nasty bullies or simple tribespeople. For my part I was an early Darwinist who quickly realized that my survival and prosperity resided not with my physical skills, but with the agility of my tongue and its ability to sway (or as some critics might suggest) manipulate potential opponents through minduse. To carry the story a little further and thereby get to the point of this seemingly strange metaphorical diversion, permit me, for a sentence or two, to dwell upon the physics lesson first learned in Sunday School.
As a child I was not one disposed to the abuse, torture or murder of small animals and feathered creatures nor do I believe that I ever owned or operated a slingshot, but I was an observant little fellow who quickly grasped the aforementioned principle behind David's weapon of mass destruction. Elasticity by its very nature must be stretched before its power can be released, and the farther the pull back the greater the forward thrust will be. Markets, similar to the underestimated slingshot are presently enjoying such a pullback and they are aimed not just at the ceiling but o'er the roof. Realistically though, we must remain aware of an even more important law of physics...gravity.
Short term problems with a couple of Barack's cabinet appointments will soon be overcome as the holdup appears to based more upon opposition posturing than it does on substance. Meanwhile things continue to look very bleak on the economic front just as do the prospects for sanity in the Middle East. There is little good news about these days excepting the comforting thought that we are about to deal with the Reagan legacy of deregulation and the inherited Bush debacle of everything, instead of simply living with the seemingly interminable mess. Despite all of this, it is not whether we get an Obama rally it is when and I suspect that we are due, if not today, then very soon after.
On another Barack watch note, it was interesting that he invited a number of conservative media types to dinner on Tuesday evening. Yesterday morning, Larry Kudlow, the extremely annoying, ideological boor who is given far too much air time on the increasingly absurd CNBC business network was absolutely ecstatic over the meeting, gushing on about Obama as if he were some sort of ......may I say it....Messiah. This from cable television's most reactionary conservative. If Barack can win these guys over with pragmatic posings or supposings....well he reminds me of that little boy who realized his personal strengths at an early age. Just get the job done son.
Investor bids on world markets have all but disappeared over the past six days, leading this short term bull toward an internal debate over the question as to whether I am totally wrong (impossible), or temporarily mistaken about the timing of my prognostications. Ahh it would be unhindered peace and progress, t'were it not for the quandaries this life is wont to present to our world of fun and frolic.
One answer to the present dilemma may reside within the lessons taught to each of us through the exercise of life and living. If, for a moment, we can chase back in time to our early days when we were first introduced to the realities of the David and Goliath world that would become our existence, you know (as Caroline Kennedy might say), the years in which we began to understand whether we were going to be freedom fighters, nasty bullies or simple tribespeople. For my part I was an early Darwinist who quickly realized that my survival and prosperity resided not with my physical skills, but with the agility of my tongue and its ability to sway (or as some critics might suggest) manipulate potential opponents through minduse. To carry the story a little further and thereby get to the point of this seemingly strange metaphorical diversion, permit me, for a sentence or two, to dwell upon the physics lesson first learned in Sunday School.
As a child I was not one disposed to the abuse, torture or murder of small animals and feathered creatures nor do I believe that I ever owned or operated a slingshot, but I was an observant little fellow who quickly grasped the aforementioned principle behind David's weapon of mass destruction. Elasticity by its very nature must be stretched before its power can be released, and the farther the pull back the greater the forward thrust will be. Markets, similar to the underestimated slingshot are presently enjoying such a pullback and they are aimed not just at the ceiling but o'er the roof. Realistically though, we must remain aware of an even more important law of physics...gravity.
Short term problems with a couple of Barack's cabinet appointments will soon be overcome as the holdup appears to based more upon opposition posturing than it does on substance. Meanwhile things continue to look very bleak on the economic front just as do the prospects for sanity in the Middle East. There is little good news about these days excepting the comforting thought that we are about to deal with the Reagan legacy of deregulation and the inherited Bush debacle of everything, instead of simply living with the seemingly interminable mess. Despite all of this, it is not whether we get an Obama rally it is when and I suspect that we are due, if not today, then very soon after.
On another Barack watch note, it was interesting that he invited a number of conservative media types to dinner on Tuesday evening. Yesterday morning, Larry Kudlow, the extremely annoying, ideological boor who is given far too much air time on the increasingly absurd CNBC business network was absolutely ecstatic over the meeting, gushing on about Obama as if he were some sort of ......may I say it....Messiah. This from cable television's most reactionary conservative. If Barack can win these guys over with pragmatic posings or supposings....well he reminds me of that little boy who realized his personal strengths at an early age. Just get the job done son.
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