Camden

Week in Review, Part I: Global Economics, International and U.S. Equity Markets Overview

Thanks for posting. While your comments on black-box trading were somewhat insightful, they also seemed a bit naive. So what if stocks in certain sectors go up and then down day to day! Should one buy because they move one way or the other on a given day? Of course not. Thousands of stocks are now 25% or more above their lows. Many are up 50% or more. If one is worried about black-box trading and not willing to look beyond the daily meandering of the sectors then one is not going to see the tremendous opportunities in front of them.

I hope you post those charts again in the future. It's good to get a big-picture look at what is going on. Looking at the weekly S&P it is clear the market still has A LOT of upside before getting anywhere close to a even 50% retracement of the 2008 crash. Also interesting is the recent out-performance of the Russell 2000 stocks. That move seems to be rolling over.

Marc Faber on the Economy, Gold, WWIII

Mr. Faber scoffs at the idea of the coming stimulus package and calls it a disaster. He thinks we should just leave the "market" alone and let it do what it will. He conveniently omits the fact that government spending is always a large part of the market – it is not some "outside force" manipulating the market, it is a portion of the market increasing it's share. Government spending is really no different than personal spending when it comes to the health of the economy with the exception that over time debt has to be repaid. If Mr. Faber is not an advocate of deficit spending then logically he would not be an advocate of anyone using credit to spend. Would he suggest the world rid itself of credit entirely?

Mr.s Faber's approach would likely lead to a deflation spiral in which people spend less causing companies earnings to shrink causing more job losses causing people to spend less... an ugly, long lasting cycle.

Mr. Faber sounds good and he has been a keen observer of economic bubbles around the world, but his theory about capitalism needing to be free of what he calls "government intervention" is nonsense. This stimulus package will provide not only jobs and start to rebuild the the country's infrastructure which is in great need of repair, but also make the economy more efficient through better technology, better schools, less expensive energy, new research and discoveries. The benefits of the stimulus will be real and long-lasting. They will provide a much stronger foundation for economic growth after this downturn. This country has been given the wake-up call it needs to finally get to work re-building the country. Instead of a disaster as Mr. Faber would describe it, the stimulus plan will be a true blessing to everyone in the country and the world. The U.S. economy leads the world economy and it will lead the way out of this world-wide recession.