Wednesday Outlook: Commodities, Emerging Markets

<< Return to page 1- Buckle Up




















































Frankly, the market is a mess and it means staying out for the most part since stops are too hard to establish and positions difficult to maintain. Lots of old relationships are diverging from each other and that just adds to the confusion.

No one seems on-board with a stimulus plan and the new president is showing his lack of executive experience. Maybe he’ll catch on soon as to how things work. And, what about his team’s good vetting procedures? Daschle was always a scumbag with a smile and lobbyist wife. So he didn’t pay his taxes and that’s not okay, but it is okay to have the tax cheat in chief leading the IRS. How about Nancy Killefer who was picked to be the new Chief Performance Officer but had tax problems? Lastly(?) there’s RINO Larry Gregg who voted to kill the Commerce Department (sounds like a good idea) only to take the job as its Secretary. Good grief! Only in DC.

Anyway, we’re back from our little trip to DC and I’m at my post. I really don’t like DC at all… could ya tell? I look at all these agencies with all their grand edifices and know they’re not accomplishing much other than putting in the time and wasting money. The Department of Agriculture has to be the biggest complex after the Pentagon. What do they do? I was told when there that they’re responsible for food safety among other things. Funny, and here we have a peanut salmonella outbreak. Good job!

Okay enough ranting.

There’s a lot more news to come this week from the economy. Tomorrow is the ADP employment survey, ISM data and Treasury auction announcements. Thursday, it’s more employment data, chain store sales and factory orders. Then we conclude the week with the official unemployment situation. So, if I were you, I’d keep my seat belt buckled at all times.

Let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in: GLD, TLT and TBT.

Comments

[atitagain:]

what good do you do all day besides trading stocks trying to make a dime? I'm not a huge fan of DC either but whether we are on wall st. or main st., we are all scumbags nonetheless.

Feb 04 06:32 AM

[patio:]

David can speak for himself, but what he does here at SA is bring constantly updated data, excellent data, sprinkled with some much needed humor and the occasional concise opinion. If he trades, at least he is doing it with his money, or money entrusted to him willingly, unlike the DC crowd.
I don't trade, I'm here to learn, to safeguard my money in an increasingly unclear future. I read everyone's opinions, and try to come to my own conclusions, and I never miss David's columns.
SA is invaluable, as things are changing so rapidly- forgt buy and hold for some time, I wish it weren't so.


On Feb 04 06:32 AM atitagain wrote:

> what good do you do all day besides trading stocks trying to make
> a dime? I'm not a huge fan of DC either but whether we are on wall
> st. or main st., we are all scumbags nonetheless.

Feb 04 08:28 AM

[PDL27:]

Very small comment, Dave... It was Willie Sutton, not John Dillinger, who made that remark about "that's where the money is". But I agree with your sentiment. Thanks for your chart analysis.

Feb 04 08:50 AM

[Maxe Paul:]

I love reading your weekly updates. I think you were a bit far off about us Aussies going back to state capitalism!, Our states couldn't run a backyard barbie if they tried. Kevin is spending up big though, and there are free shrimp for everyone, oh, and a sausage sandwich to go with it, your all invited!

Feb 04 09:01 AM

[RSAAKS:]

I enjoy David's posts, one of my favourites on SA. Especially because it is loaded with facts in a very concise format. Thank you for the posts David

Feb 04 09:24 AM

[kelm:]

Reason to short bonds is pretty simple. There is $2.5 trillion in US treasuries coming to auction this year vs $890 billion last year and most major governments in the world are also planning massive debt auctions. Supply and demand - too much supply so prices have to drop significantly to attract buyers. The Fed can tr and drive the rates lower but the morr debt that is auctioned the harder they will have to work to effect any real change in rates through intervention. This will also play into the dollar's level causing it to drop.

Disclosure: long TBT, PST, CEF, TGLDX, UDN

Feb 04 10:26 AM

[dc1:]

Please show the person who has not cheated or made a mistake on their tax return. That person does not exist.

Feb 04 11:26 AM

[OldLimey:]

I guess if he makes money he pays taxes. No matter how worthwhile their actual job, NO public servant in any country does anything other than recycle taxes. (Nice expression that - 'public servant'. Showing my age.)


On Feb 04 06:32 AM atitagain wrote:

> what good do you do all day besides trading stocks trying to make
> a dime? I'm not a huge fan of DC either but whether we are on wall
> st. or main st., we are all scumbags nonetheless.

Feb 04 11:51 AM

[User 86999:]

Shorting the bonds means we're betting that the interest rates will go up, but Bernanke has emphatically made it clear that the rates will not be allowed to move higher anytime soon. They will buy all the treasuries they have to buy in order to maintain the rates under their control. Hence, there is the dilemma.



On Feb 04 10:26 AM kelm wrote:

> Reason to short bonds is pretty simple. There is $2.5 trillion in
> US treasuries coming to auction this year vs $890 billion last year
> and most major governments in the world are also planning massive
> debt auctions. Supply and demand - too much supply so prices have
> to drop significantly to attract buyers. The Fed can tr and drive
> the rates lower but the morr debt that is auctioned the harder they
> will have to work to effect any real change in rates through intervention.
> This will also play into the dollar's level causing it to drop.
>
>
> Disclosure: long TBT, PST, CEF, TGLDX, UDN

Feb 04 12:05 PM

[corley10:]

It seems the market has been very resilient the past three days. Does this look like a bottom or another false rally?

Feb 04 12:36 PM

[AndrewBaker:]

Another useful article from David. Looking at the charts he posts helps me a lot and gets me thinking in other ways about my own positions: really helpful.

Feb 04 04:14 PM

[Nathaniel C:]

Hey David-- I finally realized why politicans love income taxes--because they do not have to pay them. Only us slaves.

Feb 04 05:24 PM

[alivewweb:]

I like this idea:

>>>Inspired by House Ways and Means Chairman Charles Rangel (D-NY) and Obama Administration Treasury Secretary Timothy Geithner, two high profile government tax cheats:

patriotroom.com/articl...


Texas Republican Congressman and former judge, John Carter, has introduced legislation that gives ordinary Americans the same special privileges accorded to Democrat Charlie Rangel and our newly minted Democrat Treasury Secretary Tim Geithner.

As long as you pay your back taxes, all fees and penalties will be waived.

All U.S. taxpayers would enjoy the same immunity from IRS penalties and interest as House Ways and Means Chairman Charles Rangel (D-NY) and Obama Administration Treasury Secretary Timothy Geithner, if a bill introduced today by Congressman John Carter (R-TX) becomes law.
Carter, a former longtime Texas judge, today introduced the Rangel Rule Act of 2009, HR 735, which would prohibit the Internal Revenue Service from charging penalties and interest on back taxes against U.S. citizens. Under the proposed law, any taxpayer who wrote “Rangel Rule” on their return when paying back taxes would be immune from penalties and interest.

“We must show the American people that Congress is following the same law, and the same legal process as we expect them to follow,” says Carter. “That has not been done in the ongoing case against Chairman Rangel, nor in the instance of our new Treasury Secretary Timothy Geithner. If we don’t hold our highest elected officials to the same standards as regular working folks, we owe it to our constituents to change those standards so everyone is abiding by the same law. Americans believe in blind justice, which shows no favoritism to the wealthy or powerful.”

Carter also said the tax law change will provide good economic stimulus benefits, as it would free many taxpayers from massive debts to the IRS, restoring those funds to the free market to help create jobs.

Democrats' hypocrisy has come back to bite them. Can Rangel oppose the bill? Can Geithner? When you cheat, you lose the moral high ground. There is nothing more antithetical to a Republic than to have one rule for politicians and a harsher one for the people.

And yet, unless this bill passes, that is exactly what we have.
<<<

Feb 04 07:27 PM

[Homer II:]

David,

I echo the appreciation for your charts and comments, as others have said, particularly when you show some issues with two (or three) different time intervals. It really assists my thinking for where things stand, and may be headed, and ultimately clarifies my planning.

And, I was surprised as well by Sen Judd Gregg, (R)NH taking the Comerce cabinet position. He is one of the best finance and business people in that body and we will miss his fine work there.

Feb 05 04:25 AM