Archive - Sep 6, 2010 - Blog entry

"Sometimes the cheapest situations are the ones that everyone agrees are cheap, but there's no catalyst. We think cheapness is its own catalyst and if you can be patient, sometimes for a year or two, you'll be rewarded. Our patience and the investor base we built that allows us to be patient is a big advantage."

Last week I forecast that stocks would either re-test 1,040 and breakdown or rally to 1,100. Stocks once again opted to accomplish both of my forecasts falling to test 1,040 on Tuesday before starting the mother of all ramp jobs Tuesday afternoon into Friday.

All in all, stocks rallied over 5% in the span of 72 hours. The move started off as the most obvious manipulation in history, with stocks exploding higher in the final 15 minutes of trading in August to insure that the Dow closed the month above 10,000, which appears to be the proverbial “line in the sand” that the PPT has drawn (more on this in a moment):

No matter how the Obama Administration tries to spin it, employment numbers are soft and getting softer. There do not appear to be any basic economic factors that would cause employment to rise. Here is a look behind the numbers.

Both the U.S. and EU governments allege that a planned tax cut by Taiwanese government on domestic rice wine will create an unfair competition to imported whisky, cognac and brandy,and have threatened to file a WTO case against Tawian. As battle clouds are gathering at the WTO, it seems high time for some quick cross-cultural understanding....on rice wine.

Last week, the assorted regulatory freaks were busy patting themselves on the back, and our intrepid printer-in-chief himself made the rounds Thursday morning with appearance no. 2 of his Whip Deflation Now tour. Stay tuned to learn which deceased Fed Governor stated at the Sep *2002* FOMC meeting in no uncertain terms that there was in fact a housing bubble underway.

An autopsy on the Failures of the Obama administration. A major error by devoting one third of its massive $870 billion stimulus program to tax cuts, which in this environment, will get saved, not spent. Easy money is creating new bubbles around the world, especially in China (FXI) and commodities, that will only end in tears.