INTENSIVE CARE for an AILING ECONOMY
emergency measures for a patient suffering from severe acute recession syndrome. thats what the president announced today. unprecedented FED intervention has failed to revive the patient. the first round of tax cuts didnt do the trick either. now the doctor has authorized further treatment including "pump priming" and a second course of tax relief. mr. president, your treatment plan better work or else you will lose the patient and the office of the president.
as a chorus of leaders tout our fundamentally sound economy that is strong, productive and resilient, further measures are being put in place to fix our ailing economy and get it back to a 'satisfactory' pace of growth. if it works, the world will be a better place. if it doesnt, the world will be worse off then it is now. the same way that cardiac stimulation shocks used to revive a cardiac arrest cause damage to the heart it restarts, so to will the deficit spending and budget deficits cause damage that will need to be addressed whether or not the repair strategies are successful. the president will be able to lay claim to whatever the outcome is. the question is will he still be in office to continue his efforts to fix what is wrong.
the answers will become more obvious as time goes on. some of the answers rely on the outcomes and vice versa. the president has chosen his poison. i hope he gets to enjoy it.
have a grateful day!
larry
Wednesday, May 28, 2003
NOTHING THAT COULD GO WRONG DID!
we won the war. we got a tax cut. we havent had a terror attack on U.S. soil. the FED has established omnipotence over inflation and DEFLATION and has "many tools" to deal with whatever else could cause economic problems. oil is flowing at less than $30/barrel. SARS is under control. AMR averted bankruptcy. wall street "settled" the largest fraud case in the history of the world, without being shut down. india and pakistan renewed political relations. north korea stopped threatening to mass produce nukes. israel and the palestinians are on the "road" to peace. and the bear market ended. did i forget anything?
now that all the uncertainty of the uncertainties is out of the way, we can all get back to hopeful forecasts and cautious optimism. ah, forget all this "hopeful" and "cautious" stuff, the market is clearly trying to tell us something about the future and its all good. nasdaq stocks back to 1990's multiples and investors and portfolio managers are back to chasing performance. valuations are getting "stretched" but there is no lack of stragtegists changing their tune about what is really happening in the economy. so with the wall street machine back in business, investors have just about forgotten how they lost all their money and are back to "buying the bull" and speculating with what money they have left for fear they will miss the new bull market.
used to be that everthing that could go wrong would go wrong and never has everything that could go wrong gone right!? except for now. scary to think that this may all be a perception rather than a reality. as bad as the news and problems seemed to be just a few short months ago, is as good as it is now. or as some would say, "less bad". it is all relative and as the optimists want us all to do, think positive and good things will happen, they hope.
in every single forecast by every single forecaster, hope is the dominant verb used to modify every single forecast of good things to come. with the added hedge of "if there is another terror attack, all forecasts are off". but with the country under an "orange", or high risk, alert of a terror attack, how can a forecast ignore that warning and revoke the outlook if a terror attack were to occur? who cares. stocks are cheap and cars are cheaper. 0% financing is available and being used in boatloads to buy well, eveything including boats.
in any event, momentum is back for not only stocks but for the president and for world peace. if this momentum continues and is not just a "relief" from all the bad news from the past 2-3 years, then this could really get exciting. on the other hand, if this is all just a pause in a long term decline of geopolitical harmony and economic prosperity, then the next batch of news will be percieved very badly and all the momentum will reverse in a very bad way.
for now, enjoy the warm and fuzzy springtime feelings and smell the flowers. if the good news and hopeful optimism fades for some reason(s), things will get very bad very fast. and not many things need to go wrong to put us right back to the days of gloom from last october. once again, i'll hope for the best and be prepared for the worst.
have a grateful day!
larry
we won the war. we got a tax cut. we havent had a terror attack on U.S. soil. the FED has established omnipotence over inflation and DEFLATION and has "many tools" to deal with whatever else could cause economic problems. oil is flowing at less than $30/barrel. SARS is under control. AMR averted bankruptcy. wall street "settled" the largest fraud case in the history of the world, without being shut down. india and pakistan renewed political relations. north korea stopped threatening to mass produce nukes. israel and the palestinians are on the "road" to peace. and the bear market ended. did i forget anything?
now that all the uncertainty of the uncertainties is out of the way, we can all get back to hopeful forecasts and cautious optimism. ah, forget all this "hopeful" and "cautious" stuff, the market is clearly trying to tell us something about the future and its all good. nasdaq stocks back to 1990's multiples and investors and portfolio managers are back to chasing performance. valuations are getting "stretched" but there is no lack of stragtegists changing their tune about what is really happening in the economy. so with the wall street machine back in business, investors have just about forgotten how they lost all their money and are back to "buying the bull" and speculating with what money they have left for fear they will miss the new bull market.
used to be that everthing that could go wrong would go wrong and never has everything that could go wrong gone right!? except for now. scary to think that this may all be a perception rather than a reality. as bad as the news and problems seemed to be just a few short months ago, is as good as it is now. or as some would say, "less bad". it is all relative and as the optimists want us all to do, think positive and good things will happen, they hope.
in every single forecast by every single forecaster, hope is the dominant verb used to modify every single forecast of good things to come. with the added hedge of "if there is another terror attack, all forecasts are off". but with the country under an "orange", or high risk, alert of a terror attack, how can a forecast ignore that warning and revoke the outlook if a terror attack were to occur? who cares. stocks are cheap and cars are cheaper. 0% financing is available and being used in boatloads to buy well, eveything including boats.
in any event, momentum is back for not only stocks but for the president and for world peace. if this momentum continues and is not just a "relief" from all the bad news from the past 2-3 years, then this could really get exciting. on the other hand, if this is all just a pause in a long term decline of geopolitical harmony and economic prosperity, then the next batch of news will be percieved very badly and all the momentum will reverse in a very bad way.
for now, enjoy the warm and fuzzy springtime feelings and smell the flowers. if the good news and hopeful optimism fades for some reason(s), things will get very bad very fast. and not many things need to go wrong to put us right back to the days of gloom from last october. once again, i'll hope for the best and be prepared for the worst.
have a grateful day!
larry
Friday, May 23, 2003
MASTERS of the MARKETS SPEAK...what do they know?!
used to be a day when warren buffet spoke, people not only listened they emulated, imitated, agreed and got on board. george soros had that power as well. bill gross, always the mellow bond guy, never too interested in speaking out about stocks, was revered as a voice of sensibility in an unsensible market. like what these guys say means something? just because they are worth billions and manage billions of others peoples money doesnt make them gods. or does it?
lately, what they say upsets most people and incenses others. not because what they say is right or wrong but because what they are saying doesnt make them feel good about the economy or the stock market or dividend policy or the u.s. dollar. sensitive subjects to be sure but if these successful financiers have an idea that is important and applicable, why now are they irrelevent? because it doesnt stoke the markets and make stock prices go up?
watch out if these market movers do what they do best. normally, these "smart money" guys dont say things that go against their trading strategies or what they are doing with their billions. pooh-pooh them all you want, next time we hear from them someone will be right and if history is any guide, its probably going to be them.
in the past, it didnt matter what they said or why they said it, it was seen as important information and a valid veiwpoint. in fact, when one of these "masters" graced us with their insights and intelligence, it was looked for by others to guide their decision making process with regards to business and personal financial matters. not anymore. at least not right now. much more fun to jump on the optimistic bandwagon, get long the market and ride the wave with all the other small fish hoping the bull is back. heeding the warnings of these market masters may be worthwhile.
funny how we listen when we hear what we want and ignore what we dont want to hear. might be the best time to be listening!
have a grateful day!
larry
used to be a day when warren buffet spoke, people not only listened they emulated, imitated, agreed and got on board. george soros had that power as well. bill gross, always the mellow bond guy, never too interested in speaking out about stocks, was revered as a voice of sensibility in an unsensible market. like what these guys say means something? just because they are worth billions and manage billions of others peoples money doesnt make them gods. or does it?
lately, what they say upsets most people and incenses others. not because what they say is right or wrong but because what they are saying doesnt make them feel good about the economy or the stock market or dividend policy or the u.s. dollar. sensitive subjects to be sure but if these successful financiers have an idea that is important and applicable, why now are they irrelevent? because it doesnt stoke the markets and make stock prices go up?
watch out if these market movers do what they do best. normally, these "smart money" guys dont say things that go against their trading strategies or what they are doing with their billions. pooh-pooh them all you want, next time we hear from them someone will be right and if history is any guide, its probably going to be them.
in the past, it didnt matter what they said or why they said it, it was seen as important information and a valid veiwpoint. in fact, when one of these "masters" graced us with their insights and intelligence, it was looked for by others to guide their decision making process with regards to business and personal financial matters. not anymore. at least not right now. much more fun to jump on the optimistic bandwagon, get long the market and ride the wave with all the other small fish hoping the bull is back. heeding the warnings of these market masters may be worthwhile.
funny how we listen when we hear what we want and ignore what we dont want to hear. might be the best time to be listening!
have a grateful day!
larry
Thursday, May 22, 2003
ORANGE ALERT...again!?
i just put away my gas mask and survival kit. the department of homeland security instituted the terror alert system in order to warn americans of the level of danger of a terrorist attack in this country. since the system has been in place, the level of alert has been raised four times from yellow to orange. three times the level was lowered without a terror attack occuring, thank you very much. currently, we are under our fourth orange alert status, due to an elevated amount of "chatter", which i will assume means that the FBI, CIA, and others are hearing things that make them nervous, but my guess is that not too many people are paying much attention to the warning system anymore. the boy who cried wolf comes to mind and unfortunately, the department of homeland security is damned if it does and damned if it doesnt.
talk about CYA on a scale none of us can really imagine. on the one hand they dont want to panic the country and get people crazy about being the victim of a terrorist attack. on the other hand, they dont want to ignore warnings that they feel could foreshadow another 9/11 and be called to the carpet for keeping it to themselves. yet, the system seems flawed at its very foundation. how do you warn people about the dangers of an attack without having to answer to the consequences of what you really want, which is that nothing bad happens?!?!?
the answer is that the system should be scrapped and the nation as a whole should be on a continuous high state of alert due to the fact that we are at war with people who use terror as their weapon of choice. none of us change our behavior due to the higher alert status and most people i speak to about the system think its dumb. its not like i grab my gas mask or survival kit when i leave the house if we are at an orange vs a yellow level of alert. so whats the point. theres nothing i can do about a terrorist attack so dont warn me about it. i'm prepared for an attack because the president says we are at war. now if the local forecast was for rain, i would probably grab an umbrella, but only if it was 50% chance of rain. as for a terror attack, it will probably blow over.
have a grateful day!
larry
i just put away my gas mask and survival kit. the department of homeland security instituted the terror alert system in order to warn americans of the level of danger of a terrorist attack in this country. since the system has been in place, the level of alert has been raised four times from yellow to orange. three times the level was lowered without a terror attack occuring, thank you very much. currently, we are under our fourth orange alert status, due to an elevated amount of "chatter", which i will assume means that the FBI, CIA, and others are hearing things that make them nervous, but my guess is that not too many people are paying much attention to the warning system anymore. the boy who cried wolf comes to mind and unfortunately, the department of homeland security is damned if it does and damned if it doesnt.
talk about CYA on a scale none of us can really imagine. on the one hand they dont want to panic the country and get people crazy about being the victim of a terrorist attack. on the other hand, they dont want to ignore warnings that they feel could foreshadow another 9/11 and be called to the carpet for keeping it to themselves. yet, the system seems flawed at its very foundation. how do you warn people about the dangers of an attack without having to answer to the consequences of what you really want, which is that nothing bad happens?!?!?
the answer is that the system should be scrapped and the nation as a whole should be on a continuous high state of alert due to the fact that we are at war with people who use terror as their weapon of choice. none of us change our behavior due to the higher alert status and most people i speak to about the system think its dumb. its not like i grab my gas mask or survival kit when i leave the house if we are at an orange vs a yellow level of alert. so whats the point. theres nothing i can do about a terrorist attack so dont warn me about it. i'm prepared for an attack because the president says we are at war. now if the local forecast was for rain, i would probably grab an umbrella, but only if it was 50% chance of rain. as for a terror attack, it will probably blow over.
have a grateful day!
larry
Monday, May 19, 2003
DONT WAKE A HIBERNATING BEAR
funny thing happened on the way to dow 5000. the market took a u-turn to revisit the heady days of the 1990's. oh what a feeling...for the bulls. so buy the dips and go with the mo' because the bottom is in and the rally is for real. god help the portfolio managers who miss this rally because it wont just be performance that counts but outperformance. any bears left speaking out against the promised 2nd 1/2 recovery, take 3, or stocks are cheap after 3 down years just take a powder and get patient because this may last some time. good news is good again and bad news is good again too. the FED's on the markets side and has assured us that things will get better or else, they'll try something creative and new. whatever it takes just trust us and close on your new house. we are in a bull market, i think?! so get out there and spend, i mean enjoy!
nevermind the complacency reflected in the VIX which is setting new annual lows or the rise in bullish sentiment to its highest level in well, a very long time. not to worry about weak industrial production, contracting ISM readings or limp retail sales data. remember its always darkest before the dawn. personal bankruptcies setting new records yet credit couldnt be easier to come by. no need to fret over silly things like a terrible employment market or multi-decade lows in capacity utilization. remember those stats are "lagging" indicators, except if its your job being lost or your factory being shut down.
and that pesky issue of deflation that has so many financial uppity ups worried about a "japan style" pricing decline coming to our shores and messing things up for us here, hogwash. we have a "fundamentally sound" economic system that cannot succomb to such primitive forces. and this thing about the dollar being strong, is that the budget deficit or the trade deficit problem? i can never get that straight. as long as i can pay my american express with dollars i'm OK.
forget all that mumbo jumbo about economic data, debt, deficits, dollar or deflation, this market has the power and dont be the only one left behind worrying about the, well the things to worry about when theres money to be made. recent gains have made veteran dot comers blush and stalwart bears cry. just watch out for those nasty bull market corrections!
have a grateful day!
larry
funny thing happened on the way to dow 5000. the market took a u-turn to revisit the heady days of the 1990's. oh what a feeling...for the bulls. so buy the dips and go with the mo' because the bottom is in and the rally is for real. god help the portfolio managers who miss this rally because it wont just be performance that counts but outperformance. any bears left speaking out against the promised 2nd 1/2 recovery, take 3, or stocks are cheap after 3 down years just take a powder and get patient because this may last some time. good news is good again and bad news is good again too. the FED's on the markets side and has assured us that things will get better or else, they'll try something creative and new. whatever it takes just trust us and close on your new house. we are in a bull market, i think?! so get out there and spend, i mean enjoy!
nevermind the complacency reflected in the VIX which is setting new annual lows or the rise in bullish sentiment to its highest level in well, a very long time. not to worry about weak industrial production, contracting ISM readings or limp retail sales data. remember its always darkest before the dawn. personal bankruptcies setting new records yet credit couldnt be easier to come by. no need to fret over silly things like a terrible employment market or multi-decade lows in capacity utilization. remember those stats are "lagging" indicators, except if its your job being lost or your factory being shut down.
and that pesky issue of deflation that has so many financial uppity ups worried about a "japan style" pricing decline coming to our shores and messing things up for us here, hogwash. we have a "fundamentally sound" economic system that cannot succomb to such primitive forces. and this thing about the dollar being strong, is that the budget deficit or the trade deficit problem? i can never get that straight. as long as i can pay my american express with dollars i'm OK.
forget all that mumbo jumbo about economic data, debt, deficits, dollar or deflation, this market has the power and dont be the only one left behind worrying about the, well the things to worry about when theres money to be made. recent gains have made veteran dot comers blush and stalwart bears cry. just watch out for those nasty bull market corrections!
have a grateful day!
larry