MARKET COMMENT June 3, 2009 Some have predicted a “Zombie Summer” which might be right as investors await proof that a real economic recovery is in the offing. But, just when you thought they might break this camp job they’ve been working on we got the obligatory “stick save” into the close. Evidently job losses were “worse than expected” and some noted bulls thought the market was expensive which is pretty funny since most of the financial media still report PEs incorrectly. Bloomberg, which should know better, has PEs at 15 for the S&P 500 by using operating earnings which omits unusual items (losses and writedowns?) making stocks look cheaper than they are if just using GAAP trailing earnings. The latter would put PEs at astronomical levels greater than 30. So as things go it’s however TPTB want ...

MARKET COMMENT May 13, 2009 Retail sales and foreclosure filings were, ahem, “worse than expected”. Markets have been looking toppy and moving around on light volume as indicated in previous postings. But dip buyers have been persistent even when the news was bad but spun as “better than expected”. Not so today. Breadth was decidedly negative but volume remains modest. ...

MARKET COMMENT Those of us who are long, and/or were dragged into positions kicking and screaming, just have to accept the fact you can’t fight the tape or more powerful forces exceeding your own basic logic. So am I, or are we, weak minded? Maybe, but I’d say we’re just systematic. The market reminds me greatly of May 2003 when a rally began in earnest off what really were double bottoms of October 2002 and March 2003. Then, as now, a rally was fueled by low interest rates, money printing and the start of a new bubble this one in housing. As we’ve often stated, politicians and the officials they pressure will always choose inflation over making hard choices. It’s the Achilles Heel of democracy where short-term performance is rewarded at the ballot box since the Sheeple ...

April 29, 2009 Stock markets spiked higher early and added to the momentum after the Fed non-announcement. However, there was plenty of profit-taking from the highs of the day into the close. Typically a Fed-day yields heavy volume but that wasn’t the case today as volume remained relatively light. Breadth was extremely positive. Markets never make sense and this is when hindsight kicks-in to provide logic. You get terrible GDP data (dare we say “worse than expected”) and you’d think well, that’s it for this rally. But, the bulls still have the tape. They looked inside the numbers and spun low inventory data as bullish since businesses will have to restock. Or will they? That’s not for us to say. Furthermore, it’s the end of the month and time to get out the green ...

MARKET COMMENT April 28, 2009 I wish my Money & Banking class in college was this easy—hell, even gym was hard by comparison to current bank stress tests. Basically it’s an open book test allowing banks to set their own evaluations on some toxic waste and hope investors take it all in stride. The false and misleading statements from CEOs like BAC CEO Ken Lewis are, in ordinary times, shocking. These days it passes for business as usual. “We don’t need any capital….we’re sound...we can return TARP money today…and so forth.” So, BAC and C do in fact need more capital. Who knew!?! Today markets were pulled lower by iffy stress test results and pushed higher by better than expected (there’s that bullish slang again) consumer confidence numbers. Volume remains light and one would imagine more action will result ...