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Why This Rally Is Unsustainable

Don't forget that a large amount of IRA money is added in April. That comes in mostly through mutual funds. Fund managers HAVE to put that money to work so it goes into the market and with a rising trend in place it serves to drive a weak market ahead. Why is it that the mechanics of the market are so rarely discussed in the mainstream media????

This Recession Isn't Over: Now for the Hard Part

The US consumer is reverting to their mean spending level. This level is NOT what the past 2 decades represent. Hummers, McMansions, Luxury Vacations are not something most consumers should have ever purchased. The real rub here is that these items were not purchased with cash but with debt and now that debt is being destroyed at a rapid pace. As the consumer retrenches the banks are pounded, consumer spending plummets and savings increase.
The question is when does this change, why will it change and how will it change? DO NOT EXPECT A "RECOVERY"- expect a shift to a "new normal". A normal that does not include spending 130% of your disposable income. The consequence of that is consumer spending will stay far below historic norms (last 25 years) and that is a tremendous drag on both the US economy and the world economy. So despite the rantig of almost every pundit do not look for inflation. Stay with either a short term outlook on equities or plan to hold them for 25 years. If you can't commit to that leave them alone. Look at bonds and preffered stocks and then only to the highest rated issues. As far as TIPS go I would rather own oil or gasoline as a hedge aginist inflation. Cash is still king and may continue to be for quite some time.

In Praise of Suze Orman

SUZE ORMAN GIVES GENERAL ADVICE THAT IS OFTEN DANGEROUS. FOR EXAMPLE SHE TELLS PEOPLE TO NEVER USE A HOME EQUITY LOAN TO PAY OFF CREDIT CARDS BECASUE THEY CAN WALK AWAY FROM CREDIT CARD DEBT. THAT IS FINE UNLESS YOU DEPEND ON A CLEAN CREDIT REPORT FOR EMPLOYMENT. THAT IS MORE PEOPLE THAN YOU MIGHT THINK, EG NURSES THAT WORK AROUND NARCOTICS. SHE NEVER TEMPERS HER ADVICE, SHE LEAVES THAT FOR THE LISTENER TO FIGURE OUT AND AS YOU POINT OUT THOSE LISTENERS ARE NOT THE SMARTEST.
ALL YOU HAVE TO HEAR FROM OL' SUZE IS THE INTERVIEW SHE GAVE TO CNN MONEY 6/19/2008. SHE RECCOMENDS EEM USO AND XME. THAT IS EMERGING MARKETS, OIL AND MINING ETFs. SHE IS THEN ASKED IF THOSE ARE BUBBLES. SHE GIVES AN UNQUALIFIED "NO, I THINK IT ABSOLUTELY POSSIBLE THAT YOU COULD SEE OIL GO TO $150 OR $160." THAT IS DIRECT QUOTE, I HAVE THE ARTICLE IN FRONT OF ME. THAT IS VERY IRRESPONSIBLE ADVICE. THE SHAME OF IT IS NO ONE HOLDS HER FEET TO THE FIRE ON IT. SHE HAS NO ACCOUNTABILITY. IF YOU LIKE SUZE YOU MUST BE AS STUPID AS SHE.

Don't Be Fooled, We've Been Here Before

We are seeing deflation outside of residental real estate- commercial real estate, autos, food, energy (some of the deflation took place lasst year). Nothing changes in the economy until the banks work through the deleveraging process, that means deflation. Open your eyes- GM is laying off 39000 more people, Chrysler is talking more layoffs, corporate earnings beating estimates is simply a function of lowered estimates and cost cutting- not growth, unemployment is still increasing, home prices are still falling, there is the "shadow home inventory" to work off, commercial real estate has just started it's deflation, credit card defaults are at all time highs- where do you see growth (not improvement but growth) coming from? Bet on the banks getting the crap knocked out of them- watch FAZ.

Recession Is Over: Long Live Depression

Often I don't agree with Mr. Schiff but this piece is on the money. The cash for clunkers program is a bunch of hooey... my tax dollars helping some moron buy a new car so he can increase his debt. Nice... At least I have my assult rifle..

California: The Haves and Have-Nots

1. Establish a more expedient means of applying the death penalty
2. Enlarge the number of crimes that are eligible for the death penalty
3. Remove EVERY illiegal immigrant
4. Increase the estate tax to 100% of every dollar over 2 million with 75% going to Fed and 25% to State Gov

U.S. Government vs. the Stock Market

This week is the first week the new administration has a chance to implement plans to fix the economy. I agree with you that it is a titantic struggle between the "let me fix your problem" gov and the actual news. Last week was a great example of the market being irrational. The worst employment report since 1974 and the market goes up based on the hope the US Gov is going to fix things. That is a joke. I try not to trade trends that buck reality so stayed out of it. There is no question that the only way to play the market is go short, the only question worth asking is when to get in.... For now my bet is to trade the ultra short ETFs and time my trades in hours and minutes. Buy and hold? Good luck with that... unless you are Warren Buffet and have Goldman calling you with a special deal you better learn to hit and quit it or get out while you have the shirt on your back.

The Inflation / Deflation Debate

Does it really matter how much money is in the system if people are not spending it? Of course, the anwser is NO. I am glad that you acknowledge that the gold market is just a casino and not the final solution to our monetary woes. But until the US consumer returns all assets will continue to decrease in value. Is this not deflation???

Deflation: It's Starting to Get Silly

As usual by the time the fed announces their intention to fight a trend it is well under way. For most Americans their house is the largest asset they own and it has been deflating for over 2 years. For year the government told us there was low inflation while home prices soared now there is deflation as they fall. There is nothing the fed or anyone else can do about that. The American consumer has stopped spending like a drunken sailor becasue they are in grave (is there any other kind?) danger of losing their job and the one asset they felt was safe is now tanking. There wil be pain as this happens but the long term is much brighter. Americans are learning what their granparents knew, savings is good thing to have and a home (that you live in) is not an investment or a piggy bank.

The Next Leg of the Crisis: Unavoidable Catastrophe

I am no optimist but I disagree that all the money the gov has printed is bursting to get out... The coming financial regulation is going to put a damper on that busting, as is the high unemployment rate, as is asset devaluation of assets (own any commrcial real estate?) as is anemic consumer spending, as is growing foreclosures of residentaol real estate, as is rising bankruptcies rates, as is growing defaults of both consumer and commercial debt...
So no flood of money... no price inflatio... no failure of dollar... sorry but that dog won't hunt.

The Debate About 'Green Shoots'

Jimmy- Your jobs numbers are wrong- week ending May 2nd was revised to 605,000 and the week moving average went UP to 630,500 certainly NOT an indicator of a slowing decline. You need to get your fact straight before you write. I don't have any stats to back this up but I don't buy your "turnover" rate of auots... really when was the last time you saw a 27 year old car on the road? All I can see are lots full of new cars not selling. Finally, if you are looking to ol' Barry to pick the bottom of the market I can't imagine you actually making money in the market.

The Myth of Deleveraging

You are wrong, the consumer is deleveraging. The amount being charged to credit cards is falling, credit is being withdrawn and salaries are being cut. Retail sales continue to decline as evidence the consumer is through spending like a drunken sailor. All the talk about mortage modifcations is just talk. Very few are really being modified. It is a case of what the Gov wants us to think is going on and what is really going on... the ship is not righting itself, it is really taking on more water. Don't believe what you hear in the news....

Banks Not Lending Anymore? Simply Untrue

Thank you for telling people the truth. One thing that is a constant drag on our economy are the talking heads that all too often use fear mongering to drive their rating and readership.

Buffett's Latest NYT Op-Ed: The Greenback Effect

Blah Blah Blah... Tell Warren to cram it. Sure he tells America to buy equities- HE IS TALKING HIS BOOK! WB is probably the greatest stock picker of all time, in the past he has always refrained from offering opinon on the economy. He should go back to that line of thought. THERE WILL BE NO INFLATION UNTIL THE VELOCITY OF MONEY INCREASES DRAMTICALLY... That is a long, long, long way off in the future. America is in a deflationary sprial. Are you paying more or less for a car, a house, milk or gasoline as compared to last year? Are you making more or less that last year? (That is assuming you are still working).
LESS PEOPLE ARE WORKING, THOSE THAT ARE WORKING ARE MAKING LESS MONEY AND THE MONEY THEY ARE EARNING THEY ARE USING TO PAY OFF DEBT OR FOR SAVINGS. How does this add up to inflation of prices? Warren know this but does not want to admit to you and me.
DEFLATIONARY DEBT DESTRUCTION!
"those city jobs are gonna fast and they ain't comming back"

The Real Crisis Is Food: Beginning of the Bull for Agriculture

Oh boy! Another crisis that will cause social unrest and change the very fabric of society. What you are not taking into consideration is that the US has much excess food production capacity. We actually pay farmers not to farm so that in the event a food shortage develops we can bring extra capacity on line. Also consider that we have will soon have the boomers retired and they will be consuming less as they age and eventually they will die. When that happens we will have a declining poppulation. Not that ag is bad bet, in a bear market it is solid idea. But price and timing are of great importance. Listening to anyone tell you to buy anything is only 10% of the equation. If ol' Jim could tell me to buy Monsanto at $x amnd sell at $y I would be impressed. notice that never happens, the "experts" say buy oil NOW! or buy X NOW!. Jim Rogers is a busted watch, say something often enough and sooner or later you will be right. A year ago he was big on the dollar failing. Where is that now? Rogers will be right about the dollar at some point in the future, as he will be about food but when will that be? Remember in the long run we are all dead and that the market can remain wrong longer than you can remain solvent...