The stock market is about to finish the best July since 1989. The S&P 500 is up over 8% this month, its best month since April and best July in 20 years. After yesterday’s 1% rally, the index is up to 987. Baring catastrophe today, the S&P will register its fifth consecutive monthly gain.

With data like this? C’mon:

The U.S. economy shrank at 1% annualized rate in the second quarter, the Commerce Department estimates today. Since that’s better than the 1.5% contraction the Street had predicted, we see headlines of “The Pain Is Easing,” and “Recession Easing” left and right. True, the latest GDP number is better than that of previous quarters, but here are some of the stats that really got our attention:

The U.S. economy has now contracted four quarters in a row, the worst streak since the Great Depression GDP has contracted 3.9% in the last year, the worst fall ...

Resource legend tips his hat to three soon-to-bubble sectors… The housing market has “bottomed out” says PNC… our gentle retort… Alan Knuckman with an economic indicator far superior to unemployment: chicken sales… Our panel of “whiskey shooters” on the worst-case scnerio… how to get out of Dodge if the dollar collapses… Britian now REALLY in crisis… recession, taxes cause wave of pub shutdowns…

Let’s make some trades this morning. We asked Rick Rule, a living legend here in Vancouver, what’s the next bubble market? “The Canadian market does not care about small oil and gas companies,” he told us yesterday. “Which means that small Canadian O&G companies are selling for 50-60% of net asset value. They are very, very, very cheap. They are unloved, with no finance options and no trading liquidity… and I love that. This value is free. There will be much money made in small-cap

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Stocks fall again… Rob Parenteau on what it will take to move markets higher… Are U.S. equities turning Japanese? Two charts that might have you thinking so… The ultimate indicator? One d-list data point that’s marked the end of recessions since 1970… President, mainstream media wake up to debt dilemma… our executive sounds off… Plus, a sector still “growing explosively,” despite the recession…

Hmmm… Is this the beginning of the end for the “sucker’s rally”?

Mr. Market’s suffered two rough days in a row. Since Monday, the S&P 500’s down 3.5%. The Dow has fallen two days in a row as well — its worst two-day streak since the March bottom, in fact. Best Buy — of all places — currently offers the best look into the market’s mood. The purveyor of plasma TVs and other adult toys revealed a 15% drop in quarterly profits yesterday. While the

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I’m confident that the trend for REITs will be down through the end of 2009. That’s why I suggest buying the UltaShort Real Estate ProShares ETF (NYSE: SRS. Current price $18.52) as a way to profit from weakness in the REIT sector. But fasten your seatbelt! SRS will be volatile!

REITs may appear cheap, but they are very dangerous to hold right now. A basic tenet of corporate finance is that a company or a sector is only creating value for shareholders if its return on invested capital (ROIC) exceeds its weighted average cost of capital (WACC). If its WACC exceeds its ROIC, it is destroying value. This describes the situation facing the REIT sector for the next few years.

Most REITs cannot float unsecured debt at anything less than 10% or 12%, so their cost of capital is high and rising. At the same time, due to the

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I’m confident that the trend for REITs will be down through the end of 2009. That’s why I suggest buying the UltaShort Real Estate ProShares ETF (NYSE: SRS. Current price $18.52) as a way to profit from weakness in the REIT sector. But fasten your seatbelt! SRS will be volatile!

REITs may appear cheap, but they are very dangerous to hold right now. A basic tenet of corporate finance is that a company or a sector is only creating value for shareholders if its return on invested capital (ROIC) exceeds its weighted average cost of capital (WACC). If its WACC exceeds its ROIC, it is destroying value. This describes the situation facing the REIT sector for the next few years.

Most REITs cannot float unsecured debt at anything less than 10% or 12%, so their cost of capital is high and rising. At the same time, due to the

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A.F. analysts clash… can the niche retailer survive the credit crunch?…Crisis begets steadfast citizens… Americans move about the country at lowest rate in 47 years…A long-term outlook on the American stock market…The latest sector to catch Chris Mayer’s attention…U.K. launches historic spending spree, hikes taxes to 50%..

If the credit-strapped suburban mall culture is truly on the rocks, how long do you think this can survive:

Lady Amaranth, Goth Temptress

Among our analysts, a debate brews at the heart of the current consumer conundrum: “Cutting-edge apparel retailer Hot Topic,” writes Wayne Burritt, about the purveyor of goth clothing and lip-piercing paraphernalia, “is loaded with attractive fundamentals and technicals, while its call options offer an oversized premium. Hot Topic is a mall and Web-based specialty retailer that has a proven track record in the often-fickle teen

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“Negative growth,” says newspapers.

Yes, dear reader. Stocks are advancing to the rear…and economies are growing…smaller. How we love these oxymorons! If only we could age negatively…and eat all we wanted and gain minus pounds!

The commentators have it all wrong. Look on the bright side. The world economy is not in a period of negative growth. It’s in a period of positive collapse! That’s why the Great Depression was so great, after all. What’s positive about this depression is that it is clearing away a generation’s worth of mistakes, misallocations of resources and misplaced confidence.

Stocks are down more than 20% this year. The U.S. economy is retreating at more than 6% per year. Britain is walking backwards at a 2% pace. And Japan? Wow…when it comes to negative growth, the Japanese are experts. Their economy is growing negatively at more than 12% per year. If this keeps up, by the time

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While American stocks stumble, Shanghai soars… why Chinese equities are bucking the global trend… More data disasters… ADP jobs report, auto sales register scary declines…Tired of shaking down U.S. taxpayers, GM aims abroad… EU begged for Detroit dollars…Obama, Bernanke talk up Uncle Sam’s book… Eric Fry on how rampant inflation still seems inevitable…Chuck Butler takes a stab at the $10 trillion question: “How long will this dollar strength last?”

There’s always a bull market somewhere, the cliche goes. Today — and so far in 2009 — Shanghai’s been a surprisingly good spot to place your bets.

The Shanghai Composite climbed another 6% yesterday. Rumor has it the Chinese government is considering doubling its own economic “stimulus” package, from around $580 billion to $1 trillion… maybe more.

There are a couple data points being published lately that have traders excited. The Chinese

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Inflation threats are right around the corner. Eric Fry of the Rude Awakening examines 6 ETFs and how to prepare for the “near-certain arrival of inflation.” He says now is the time to be wary of price increases and these ETFs act as an “insurance policy” to hedge against them.

This from Eric:

The flaming embers of inflation have already landed atop the thatched roof of American finance. And yet, investors can still buy inflation insurance on the cheap. In the next 1,373 words, we’ll examine a few of these “insurance policies”to assess their virtues and drawbacks.

Since a powerful new inflationary trend is very likely to occur, the prudent investor should probably take steps to guard against it. “But wait a second!” some readers be saying. “What if a powerful deflationary trend occurs first?”

Good question. It might. But we’d begin preparing for inflation anyway. Why not prepare

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HIDDEN VALUE

Dear Value Seeker,

“This parrot is no more! It has ceased to be! It’s expired and gone to meet its maker! It’s a stiff! Bereft of life, it rests in peace! If you hadn’t nailed it to its perch it’d be pushing up the daisies!”

At this stage in the game, we turn to the collective wisdom of Monty Python’s Flying Circus.

Of course, they were talking about dead parrots. But they may as well have been talking about the US financial system.

Yesterday, the feds unveiled an $800 billion plan to bailout indebted consumers and mortgage holders.

Now, $800 billion sound like a big number to us. But the feds may just be “spitting in the wind” with this size of war chest, according economist Michael Darda.

Speaking to Bloomberg, Darda said, “Banks won’t be throwing a lot of loans out there when they fear

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