This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Vito Racanelli (Barron’s): The easy money has been made, November 2, 2009. The choppy action last week suggests the going gets much tougher from here. In a year in which the market has jumped far off its lows, the bull has so far talked the talk of earnings growth. It’s time to walk the walk.

• Edward Harrison (Credit Writedowns): Bullish data, recoveries, crashes and the psychology of forecasting redux, November 2, 2009. Is a double dip or crash a baseline scenario? No, not necessarily - but it is increasingly likely. So, as bullish as I believe the data are, I am more worried about a bad outcome, not less.

• Andy Kessler (The Wall Street Journal):

...

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Vito Racanelli (Barron’s): The easy money has been made, November 2, 2009. The choppy action last week suggests the going gets much tougher from here. In a year in which the market has jumped far off its lows, the bull has so far talked the talk of earnings growth. It’s time to walk the walk.

• Edward Harrison (Credit Writedowns): Bullish data, recoveries, crashes and the psychology of forecasting redux, November 2, 2009. Is a double dip or crash a baseline scenario? No, not necessarily - but it is increasingly likely. So, as bullish as I believe the data are, I am more worried about a bad outcome, not less.

• Andy Kessler (The Wall Street Journal):

...

The longer the rally persists, the more dangerous it becomes.

The S&P 500 is up almost 60% since March. The Dow just had its best quarter since ’98.

Yesterday, the Dow slipped 29 points. Is the rally finally rolling over? Or is this a genuine bull market, just taking a pause?

If it is a real bull market it’s a funny-looking bull – one that is missing parts!

For example, corporate earnings are missing. P/E ratios are rising far above the corporate earnings that support them. This puts the market 35% overvalued on a cyclically-adjusted P/E basis, says Smithers & Co.

And if you look at it in terms of its “q” ratio – a comparison of capitalisation and replacement costs – the S&P is even more overvalued. As for emerging markets, “they’re off the charts,” says the Financial Times.

Another missing part is the consumer. This from David Rosenberg:

“ Consumer confidence not only

...

Bank of America Corp. (BAC) and Citigroup Inc. (C) were told by federal regulators to raise more capital after government “stress tests” revealed that the banks were not adequately protected against additional deterioration in the economy, published reports said yesterday.

Officials insist that neither Bank of America nor Citigroup should be viewed as insolvent, but people familiar with the situation told The Wall Street Journal that the capital shortfall amounts to billions of dollars at BofA. It is not clear how much of a shortfall Citigroup faces.

Analysts anticipate that some regional banks also will be required to raise more capital.

Banks that need more capital will have six months to accumulate the additional infusions by selling assets, selling more shares, or converting preferred government shares into common stock. If they are unable to build their capital through public and private sectors, the banks may again dip into taxpayer-funded government coffers.

Bank of America

...

Tuesday February 17, 2009
Navivest

Stocks have opened down sharply lower, with broad-based losses being shown across market sectors. The Dow Jones Industrial Average is down 251.53 or 3.20%, the Nasdaq is down 53.91 points for a loss of 3.51%, while the S&P 500 is down 30.16 points, or 3.65%.

The tone of the market got decisively negative, after the New York Federal Reserve issued its Empire State Manufacturing Survey report for February. The report, showed that the index dropped to an all time low of minus 34.65, from a minus 22.2 in January. Economists had been forecasting the index to come in at minus 22.2 for the month.

According to the New York fed, “the Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in February.”

The report heightens fears that the recession might be worsening, causing investors to flee equities for safer pastures. Gold is

…

President-elect Barack Obama today announced more details of the economic team that will be advising the new president. I find these quite encouraging.

The Wall Street Journal reports:

Speaking at a news conference in Chicago, Mr. Obama unveiled the team that will lead his administration's response to the slumping economy and battered financial markets, confirming that New York Federal Reserve President Tim Geithner will be nominated to replace Henry Paulson at the Treasury Department.... In addition to Mr. Geithner, Mr. Obama said former Treasury Secretary Larry Summers will head his National Economic Council, while economist Christina Romer will lead the Council of Economic Advisors and Melody Barnes will be director of the Domestic Policy Council.

I'm particularly reassured to hear that Larry Summers will head the National Economic Council. How much power this position involves will depend on how the internal White House politics play out, but potentially this

...

Monday November 24, 2008 Navivest

With the rumored appointment of Tim Geithner, the current New York Federal Reserve President, as Obama’s Treasury Secretary, stocks turned around late Friday and staged an impressive rally.

We expect that we will get some strong follow through on that today and won’t be surprised if we see gains for most of the Thanksgiving shortened trading week as there is some major news coming out of the Obama camp, with regards to the economy.

Today, we will be getting actual word of the make up of Obama’s economic team and hopefully, the team passes muster with Wall Street and stocks shoot up further.

On Sunday’s Meet The Press, a member of Obama’s transition team, William Daly, suggested that because of the current economic climate, Obama may not only be willing to hold of on raising taxes, but also letting President Bush’s tax cut, which favors those in

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Friday November 21, 2008 Navivest

NBC News is reporting that President-elect Barack Obama, will announce his economic team on Monday and that New York Federal Reserve President Tim Geithner has been tapped to be the new Treasury Secretary in the new administration.

NBC broke the news at about 3PM. At that time the Dow Jones Industrial Average was down about 26 points, but started rallying as the news got disseminated. The rally held and we ended up closing 494.13 points on the Dow (6.54%), 68.23 points on the Nasdaq (5.18%) and 47.59 points on the S&P 500 (6.32%).

Unfortunately, even with the late 6.5% rally on the Dow, that index is still down 945.02 points for a loss of 11% - in one week!

We have been calling for this rally for the latter half of this week and we are hoping that with the announcement of the Obama economic team, we

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After a weekend in which the deepening U.S credit crisis sent one top investment bank to bankruptcy court and a second into the arms of a “White Knight” suitor, U.S. stocks yesterday (Monday) recorded their worst day since the 9/11 terrorists attacks seven years ago. Indeed, the Dow Jones Industrial Average plunged more than 504 points, its biggest one-day point decline since Sept. 17, 2001 – the day the markets reopened for trading after the attacks on New York and Washington. Wall Street entered last weekend anticipating a government bailout of Lehman Brothers Holdings Inc. (LEH), but exited with Merrill Lynch & Co. Inc. (MER) agreeing to sell itself to Bank of America Corp. (BAC) for nearly $50 billion – and with Lehman announcing it will seek bankruptcy in a bid to avoid a total ...