The rally may end any day, but it didn’t end yesterday. Stocks rose 127 points, as measured by the Dow. Oil closed at $66. Gold rose $2.50.

We said we were doing some serious thinking this week. Maybe it is the season. But more and more, our thoughts become grayer. Less black. Less white. Less hard. Less soft.

A few years ago, it looked to us as though the world financial system had gone to war. We cheerfully awaited the victory parade. We figured Mr. Market would whup the feds good and hard. It hasn’t happened so far.

On one side, are the forces of a natural market correction… following a long, long period of expansion. The easier money gets, the more people tend to mis-spend and mis-invest it. Then, inevitably, their mistakes must be corrected. That’s what bear markets and recessions are for.

But the feds don’t like bear markets or recessions.

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A New Era in the Defense Industry: Lock And Load On Profits

by Tony Daltorio, Investment U Research

Over the past year, stocks of companies in the defense industry have taken a beating, down thirty percent… forty percent… or more.

Valuations have taken an even harder knock, with forward price-to-earnings dropping to just under nine times 2010 earnings… their lowest levels since the early 1990s, when the end of the Cold War led to the US cutting defense spending by more than half.

Today, investors fear a repeat performance, and let’s face it: The recon doesn’t look good.

Reports show that while the defense budget edges towards $600 billion a year, the supplemental budgets – which fund current operations – will actually decline sharply as the US winds down operations in Iraq and wages a more limited campaign in Afghanistan.

By 2010, total spending on research

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The markets have been choppy over the last couple of days. This is hardly surprising, with one of the most bizarre quarters in living memory drawing to close. To say recent indicators are a “mixed bag” is an understatement Consider the following (hat tip, Dave Rosenberg, Gluskin Sheff):

British GDP shrank 2.4% in the 1Q (more than the 1.9% shrinkage expected) The VIX – a widely used measure of market volatility is – fell 25 points. But it’s still 25% higher than average. US equity trading volume is also down – signaling a lack of demand… and a possible sagging in the recent bear market rally US Treasury yields have remained more or less unchanged over the month of June despite the boys at the Department of the Treasury flooding the market with an impressive $176 billion in new issuance Crude oil prices are up over $71 a barrel. Meanwhile, the IEA has lowered ...

For Immediate Release

Chicago, IL - June 12, 2009 - Zacks.com releases the latest Industry Outlook. Today's interview is with senior analyst Steven Ralston, who talks about the Consumer Staples Industry, including Altria (MO) and Reynolds American (RAI).

A synopsis of today's Industry Outlook is presented below. The full article can be read at http://at.zacks.com/?id=2678.

Additional regulation of tobacco products by the U.S. Federal Government is now expected. On June 8, 2009, the U.S. Senate again passed legislation, empowering the U.S. Food and Drug Administration (FDA) to regulate cigarettes and other tobacco products. In the last several years, the House had not passed a similar bill, but in April, the House finally passed a comparable measure, indicating a more stringent regulatory framework for all domestic tobacco companies in the future.

The tobacco companies are losing product liability law suits. In late

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The stock market has begun to discount a recovery from the global recession. Prior rallies after major declines of similar magnitude (such as after the recession in the mid-1970's and the depression in the 1930's) were sharp and unrelenting. It is expected that stocks in the Consumer Staples sector will underperform as cyclical stocks discount the recovery.

OPPORTUNITIES

During market declines, stocks in the Consumer Staples sector have traditionally performed better than the stock market, and especially cyclical companies. The fundamental explanation is that food, beverage, household products and cosmetics companies manufacture and market brand-name consumable products, most of which are considered essential to daily life, such as food, drink, toothpaste, deodorants, toilet paper, etc.

Since product demand is relatively stable, the companies should report earnings in line with expectations and, hence, the stocks have outperformed. Generally speaking, food companies generate earnings growth at a mid-to-high single-digit rate. Beverage companies, however, are

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The stock market has begun to discount a recovery from the global recession. Prior rallies after major declines of similar magnitude (such as after the recession in the mid-1970's and the depression in the 1930's) were sharp and unrelenting. It is expected that stocks in the Consumer Staples sector will underperform as cyclical stocks discount the recovery.

OPPORTUNITIES

During market declines, stocks in the Consumer Staples sector have traditionally performed better than the stock market, and especially cyclical companies. The fundamental explanation is that food, beverage, household products and cosmetics companies manufacture and market brand-name consumable products, most of which are considered essential to daily life, such as food, drink, toothpaste, deodorants, toilet paper, etc.

Since product demand is relatively stable, the companies should report earnings in line with expectations and, hence, the stocks have outperformed. Generally speaking, food companies generate earnings growth at a mid-to-high single-digit rate. Beverage companies, however, are

...

The stock market has begun to discount a recovery from the global recession. Prior rallies after major declines of similar magnitude (such as after the recession in the mid-1970's and the depression in the 1930's) were sharp and unrelenting. It is expected that stocks in the Consumer Staples sector will underperform as cyclical stocks discount the recovery.OPPORTUNITIES During market declines, stocks in the Consumer Staples sector have traditionally performed better than the stock market, and especially cyclical companies. The fundamental explanation is that food, beverage, household products and cosmetics companies manufacture and market brand-name consumable products, most of which are considered essential to daily life, such as food, drink, toothpaste, deodorants, toilet paper, etc.Since product demand is relatively stable, the companies should report earnings in line with expectations and, hence, the stocks have outperformed. Generally speaking, food companies generate earnings growth at a ...

Is actually the name of an econblog off of which Alpha.Sources get a substantial amount of backlinks. However, it is also a fitting emblem on a day when the hitherto biggest automaker in the world (GM) finally, one is tempted to say, files for bankruptcy. Of course, it will not sink into the eternal wastebin of companies gone bust, but rather emerge as a "new" GM, significantly slimmer and with significantly more state capital (and ownership). 60% is the current number flying around concerning the stake of the US federal government whereas Canada will control 12% according to Bloomberg in exchange for a 9.5 billion loan.

General Motors Corp., the world’s largest automaker for 77 years, will file for bankruptcy today, and emerge with majority ownership by taxpayers and liabilities reduced by more than 50 percent, the U.S. government said. The “new

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Doing the planning and making the right contacts is a critical aspect of moving into a government oriented/industrial sector. Knowing where and who can often make the difference in landing a company’s portion of government or industrial contracts. If an investor can find a company that seems to have these right moves in place, they stand to profit handsomely.

IX Energy Holdings Inc., a full life cycle provider of renewable energy products, works to manufacture and implement renewable energy solutions for both the US federal government and private industry. Perhaps the company’s largest strength is its model to make renewable energy sources simpler and less prone to damage while increasing efficiency.

The company’s recent agreement to work jointly with Aurora Energy might be a case in point. In this particular agreement, the company is investigating “ground source” opportunities to increase efficiencies related to solar power. Put more simply, the two companies are

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A trillion dollars used to be a sum that never naturally came up in normal conversation. Now all of a sudden, it's the standard unit we seem to be using to talk about our economic problems and what we're trying to do about them. Fortunately, I think I finally got a handle on what $1 trillion really means.

A trillion dollars is about the total amount collected in income taxes by the U.S. federal government in fiscal year 2006-- $1.04 trillion, if you're curious to use the exact number. That gives me a simple rule of thumb for personalizing these numbers. If I want to know what an additional trillion dollars in government borrowing or spending will mean for me, I just imagine what it would be like to pay twice as much in federal income taxes for one year.

So, for example, with the President's

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