Thursday Outlook: Commodities, Emerging Markets

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That’s it for today. I don’t think there are many people telephoning their brokers wanting to buy stocks. Many investors are looking for help and the old industry maxims (stay the course; stick with the plan; buy the dip; average down, etc.) are becoming tiresome.

The Obama mortgage plan was greeted with a shrug. In the after hours trading, H-P announced disappointing earnings and markets continued to sell-off.

It may indeed take a government takeover of banks to start the repair work. I don’t know about the auto industry but the government should be very cautious about throwing another $30 billion to GM.

I don’t know what spark it will take to get markets moving higher again other than a temporary oversold bounce.

I got some hate mail yesterday regarding my comments that the government is too big. I stand by that statement and pose these questions: Just how many Departments of Agriculture do we need? We have the one really, really big one (have you seen the size of that building!) in DC with lots of regional and state offices. Then, of course, we have 50 different State Agriculture departments as well. This is a depression era holdover agency and I really don’t know what they do. I know they control the FDA which is supposed to monitor food safety. But it’s been written that they turned most food inspections to the states. Of course we have a peanut salmonella scare to show for that.

Is education better since we now have a Department of Education matched by 50 different state agencies?

Do we have more energy because we have an Energy Department now?

These questions answer themselves objectively I would think.

Anyway, it’s not my mission to go off the rails into politics but it’s just one of those annoyances. Besides, I’ve got this PC and blog and I can state my opinions. Holy cow!

Let’s see what happens.

Disclaimer: Among other issues the ETF Digest maintains positions in IEF, PST, TLT, TBT, FXE, DRR, GLD, DGP, DBP, and GDX.

Comments

[bthomas:]

Dave,
Thanks for the diligence despite the ssdd syndrome. You're always my first read. Perhaps less government. Perhaps agencies which do their jobs? A Department of work ethic enforcement? We can dream. Can't we? Ah! Idealism.

Feb 19 07:10 AM

[CautiousInv...:]

The markets are eerily quiet and I think they are looking for a reason to go lower. The only possible catalyst I see today is new unemployment claims.

Feb 19 08:12 AM

[Sentinel:]

Yeah, it does seem that the Market is in what was described laughingly in the movie "Twister" (I used to be a meteorologist) as the "Cone of Silence!" This quiet period happened right before the onset of a tornado.

I think we'll slosh about a bit at this range and then fall towards 4000 by the end of the year as it becomes painfully clear that we are in a new-fangled Depression and The Messiah is not exactly walking on water anymore plus the fact that not only are our banks but we as a nation are insolvent. But like the Titanic, it takes a while to sink the ol' lady.

We may then pop up to say 9,000-11,000 late in the year when all the blathering Cornucopians on CNBC and the Wall Street Journal start calling a bottom. Then the wheels finally come clean off when it is finally in not only the sub-conscious American mind but on the TV screens every night that the economy is still not getting any better and the National Layoff Festival and the Credit Card defaults and the Foreclosures continue and the Municipal, Private, Corporate, Financials bankruptcies continue unabated if not accelerated and finally we realize that the American Dream, if it were an Emperor, has no clothes.

Then look out Dow 1000-2000....perhaps less.... in 2010. And only then could we see a return to sane pricings on everything from goods and services to houses.

The only bugaboo in the bushes is all that Monopoly Money Bernanke is printing in the basement of Treasury to keep him from becoming the Fed Chairman who presided over a deflationary depression. Would kind of suck to have your reputation as an expert on the Great Depression tarnished in such a way.

Good Morning Merry Sunshines out there.

Feb 19 09:26 AM

[cma:]

Who is the constantly mentioned "Chucky"?

Feb 19 09:38 AM

[d8473572:]

Dave, please add MOO back to your list. I think that we will be looking at agi again when the drought in the southern hemisphere becomes more pronounced.

Feb 19 10:09 AM

[Emerald:]

"Chucky" is the consumer, hence the consumer ETF. Today, Chucky is also the crazy mad doll of the movie.


On Feb 19 09:38 AM cma cma wrote:

> Who is the constantly mentioned "Chucky"?

Feb 19 10:47 AM

[User 241055:]

Love your comments and all this data in one place.

Thanks!

Feb 19 01:04 PM

[popey:]

This quite simply is brilliant summarizing and is an excellent resource. Well done !! Also great commentary and funny at time too. 5 stars.

Feb 19 04:17 PM

[basehitz:]

Dave,
I always look for your stuff, I rarely comment. Thanks for straight talk to offset the BS artists misleading others to benefit themselves. Whether they're motivated by advertising dollars (CNBC) or fund managers talking their book or "analysts" with conflicts of interest . . . etc.

You and others kept me skeptical last fall migitaging the damage. Now it is gettng harder to lay off discounted leaders (e..g., CSCO, NOK, INTC). Yet I know if it breaks, it takes everything down. Still, I will slowly buy on days of indiscrimate selling. With yesterday's critical break points, today (Friday) or by next week could produce what I hope will be a buying opportunity, not the next leg down to oblivion.

Feb 20 06:41 AM

[adamnb:]

Also note the drought in China.


On Feb 19 10:09 AM d8473572 wrote:

> Dave, please add MOO back to your list. I think that we will be looking
> at agi again when the drought in the southern hemisphere becomes
> more pronounced.

Feb 26 05:48 PM