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.
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