Wednesday, May 19, 2010

Sure, the Economy Is Just Fine

Sometimes you just gotta shake your head. That was an impressive stick save today on the EUR. Wonder what that cost the US taxpayers?  How bout that stick save on the market after taking out the 1114 low and hitting that nice round 1100 number? PPT double dipping? Boy is this getting expensive.

My favorite news bite of the day come from ZH - US Economy So Healthy One In Ten Mortgages Delinquent (New Record), One In Twenty In Foreclosure "New foreclosures continue at a substantial rate of 1.23%, the 9th consecutive quarter where at least 1% of mortgages went into foreclosure. The total inventory of foreclosures (non-seasonally adjusted) rose to 4.63% of the stock of housing in the MBA's survey (just over 2 million homes in foreclosure)." Can you say Shadow Inventory? Uh hugh, I thought you could. Those numbers are outrageous. I hear on CNBS that TOL may be a good buy.

You gold bugs may want to read this one from Jesse's Cafe American with a magnifying glass - Bear Raid In Gold Results in an Historic One Day Liquidation: Höllenmädchen Merkel und die Straßenschreier  "Next Tuesday is the option expiration for Calls and Puts on the Comex gold futures. There was a particularly large concentration of contracts at the 1200 level which we were watching from Monday when we promised you many market shenanigans in the coming option expiration, for both the mining stocks and precious metals." Uh, I'd mark your calendar for this date. could get interesting.

Denninger's take on the SEC's Circuit Breaker Rule: Idiotic is concise and something you need to understand cause these will come into play sooner than later (possibly sooner than they get implemented). "But when you stop trading in only some instruments and not those that include the subject security as part of a reference basket you create outrageous and insane market distortions that the computers will instantly arbitrage to guarantee themselves a profit while ordinary investors, who are incapable of acting quickly enough to exploit the distortion, are once again saddled with an unavoidable loss created by the so-called "regulations."" Karl has a way with words.

In what I consider a classic post from Mish (he hits on a topic near and dear and ranted about here) Rant of the Day: Putting Money to Work, Where is the Fiduciary Responsibility? "Part of the problem is the fee structure system itself. Typically clients only pay fees when the money is invested. Thus, there is a huge incentive to "invest" whether it makes any sense or not, even in cases the manager is pretty sure it is wrong." Just read on and then go fire your advisor if you are still invested in any C share mutual funds.

Have a great evening and thanks for the views. GL!