Francisco Martin's  Instablog

There were many who tried the expedition without adequate equipment and many died doing so. I see this very recent bear rally as exactly that. No strong fundamentals, no volumes and too many pundits calling a new bull market.

Less bad doesn't mean good enough to begin a new bull market. Earnings based on drastic cost cuts doesn't mean sustainable long trending corporate bottom lines.

It all happened a little too fast too soon and what goes up like a rocket must land hard.

See you soon back on earth Houston!  

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No doubt, this recent rally has been very strong and in all honesty, it has flabbergasted me as well. The latest unemployment report showed a better than expected result as continued jobless claims diminished by more than 140,000.

Yes, everything looks better in a less than perfect world. Everybody is talking about green shoots and the probability of a recovery in the second half of 2009. Obama is literarily trying to overhaul the current US healthcare system and Geithner is content with his latest work.

What the media is not really telling us is the fact that the only reason unemployment numbers actually decreased, was not due to a stellar performance of our current administration, but rather the fact that thousands are not eligible any longer to receive unemployment benefits. 26 weeks is the most one is qualified to receive unemployment benefits or until one lands a new job. It seems like a very long time – six months – but in an economy where jobs are being shed instead of built it is actually a very short time window to get back into the labor force.

The very same is true for existing home sales. The media once again is touting the tremendous improvement in the sales figures, not really considering the fact that sales are only escalating due to below-market value trades, spurred by increased foreclosure activity by banks. These properties are not necessarily being bought by families but rather investors looking for a long-term investment in the hope it will pay in two to three years from now.

Therefore, a retest of the lows might sound exaggerated as an Armageddon-like scenario might not be in our cards. We now know that the world’s interest is vested in keeping things rolling and consequently more stimuli are expected, should we get close to the March lows. I instead expect a retrenchment of around 15% for the Dow Jones Index before a longer-term advancement can take root.

If you have noticed, the global markets are defining a new reality that is just valid for the valuation of securities. I call it illusory "glass half-full" theory. Numbers are bad, but for some very strange reason, the media calls it - Less Bad! I tend to eliminate vulgar expressions but in this particular case I can't help it but calling it by its name "Bullshit"!

I know, the media has already identified this phenomenon as the fact that people want to be lied to in bad times. Come on, please, spare me from this nonsense and at best self serving propaganda. People want to know the truth, even if what they are being served is smelly and disgusting. They deserve the truth. After all, we are just playing with our tax dollars and possibly with our children's futures.

This recession is not over and all the talk is not going to change that. Printing more money and incurring record deficits won't help us spend our way out of this mess. We need concrete plans that are easy to implement without the bureaucratic bullshit that is invading our Government. Practicality is what we need, not more theoretical blabla.

I hear some people saying it is unpatriotic to hold off investing in stocks or shorting this market. Why the hell is that unpatriotic. It is un-American to tell your people a lie in the hope that things will get better based on what it is "hope".

What is the basis for a 40% rally in less than two months? Miraculously, we have beaten the worst recession since 1929. Wow, that is amazing!

WAKE UP FOLKS!!

It ain't over until jobs are actually created and banks stop being such money black holes. A bottom in real estate values is also something I would like to see and I am not talking about "better" sales due to increased foreclosure sales.

2009 won't be the cake walk Mr. Obama and tax cheat Geithner depict. And that my friends is a promise.
 

Dear Mr. Bernanke and Mr. Paulson,

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OK, the mortgage mess got us into a global recession that is probably comparable to the Great Depression. What most seem to underestimate is the fact that other time bombs are ticking and ready to explode any minute now. What are those high explosive contraptions?

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