About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, March 20, 2008

Stock Market Quickie

The market powered ahead again today. I pointed out the
interesting oversold earlier in the week and have also
discussed how damaging the frothy run -up in commodities
was to the market p/e and real incomes. We have witnessed
a sharp break in oil and other key rotgut that sharply
demotes the shorter term inflation outlook and has triggered
a nice relief rally in stocks.

The break in the commodities composites, the mini - blowout in
gold and the bounce in the $USD are short term pluses for the
equities market. How long this sudden ugly turn for commods and
the metals will last is too hard to say right now. However,
with the US in a downturn and energy usage dropping, it should
come as no surprise that we are seeing corrections in hard
assets and commods. I have commented frequently on the froth
in these markets in past weeks.

It would be amusing if the primary dealers were now long the $USD
in the wake of the Fed's decision to fund their liquidity needs.
Almost as if the Fed was going long the US dollar to break the
bubbling in commods and hard assets. But we know nothing like
that ever happens, right?

I am going to swing away from the super shorter term commentary to
focus on the evolving environment in the months ahead. But I do
thank the boyz on the Street for the profitable bounce.

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