Wall Street Strategies'  Instablog

"I hope that as the largest economy in the world and an issuing country of a major reserve currency the United States will effectively discharge its responsibilities."

It seems like every time a leader of a foreign nation calls out America our stock market goes higher. I can assure you it's not a sign that investors are rallying around the flag. On the contrary, it's a sign that while our nation is in the midst of a Main Street economic crisis, investors are betting against the flag, against the nation, and against the notion that somehow the United States can snap out of it. So, multinational stocks are higher, lifting the broad market. However, the message is clear. I don't think that U.S. investors are convinced the powers that be are effectively discharging responsibilities. Instead of wallowing investors are finding ways to capitalize. Let's face it, Nero had the pleasure of fiddling alone while Rome burned; these days the populous wants to fiddle along with the masters of our universe. Of course, most people aren't in the mix as far as the market is concerned as they are on the outside looking in, some by design and others because they are trying to douse that fire. Volume is problematic to be sure, but it has been all year long. That, among many other things, has kept investors at bay but as dubious as this rally might be you have to take advantage.

"With all its alluring promise that someone else will guarantee for the rainy day, social security can never replace the program that man's future welfare is, after all, a matter of individual responsibility." - Harold Stonier

As the nation shifts to a society where people are told that it's their right to have someone else pay for their healthcare, I sense the development of a new social underclass. In the "new normal" people that always worked are being lulled into giving up. In the new normal, small businesses are expected to match the ability of large business and pay for healthcare insurance even as they are paying taxes for being rich. This effectively dampens the entrepreneurial spirit. But more and more the nation is being told don't worry about a rainy day someone else will pay for social security, healthcare, your mortgage or rent, and your food. Could this be what the Premier of China is really concerned about, the fact that as they try to awaken the entrepreneurial spirit (right now there is record bank lending in China) just as we are demonizing businesses and telling them to prepare for an onslaught of regulations, rule changes and taxes? China, like Saudi Arabia, understand all too well the notion of keeping the goose that laid the golden egg alive but now the goose is destroying itself. Despite it all, the stock market continues to rally because it's more of a bet on the rest of the world than the United States.

"Liberty means responsibility. That is why most men dread it."- George Bernard Shaw

This is a strange time indeed. Each week someone from a different part of the world openly challenges America. Last week it was a high-ranking Indian official explaining the purchase of 200 tons of gold by saying our economy has collapsed. If this were some ant like Hugo Chavez it wouldn't be a big deal, but these are the hottest economies in the world and they're calling us out because we are going the wrong way.

The Market

Blue chip names helped to power the Dow Jones Industrial Average and S&P 500 higher than the NASDAQ Composite yesterday as investors picked more quality names. The Dow actually broke out to a new 2009 high point. Although volume was lackluster there could be a sense the train is leaving the station. There have been two 200-point sessions in the last three sessions. It's bewildering in so many ways, and yet cannot be denied in the near-term.

One of the more interesting aspects of yesterday's session was the action in retailers. Deep discounters like Family Dollar (FDO) and high-end retailers like Nordstrom's (JWN) enjoyed solid sessions as did most of the sector. I understand spin and the game of expectations that often drive the share prices of underperformers higher, and great companies lower, but this is something. New high for the Retail Index!

Written by Charles Payne, CEO and Principal Analyst of Wall Street Strategies (wstreet.com) providing independent stock market research to over 30,000 subscribers, in more than 60 countries. Mr. Payne is a regular contributor to the Fox Business and Fox News Networks. For more information about Mr. Payne, please refer to the company’s website www.wstreet.com.