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
Thursday, October 22, 2009
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.
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