I'm Stinkin In The Rain

We hope you had a great weekend. We did. It was not exactly what we had planned or hoped for, but pleasant just the same. After breakfast with the guys and heading home to Jack's game, Devin took Jack shopping for the detail work on his man cave. That was when I was working on the blog, cleaning up some of the portfolios, and catching up on some reading.

When Dev and Jack got home I was pleasantly surprised to finds out she wanted to go out for dinner. We went to . . . . ya you guessed it Hanna's. It was a lively evening as Devin and I watched the LSU/Alabama game during dinner. The meal was scrumptious. A nice light salad and then another salad. Ben has asked me not to mention THAT salad so I won't. But the Buratta Cheese, Prosciutto, and Pear was really good.

I am still protecting my liver from the ill affects of alcohol, so I enjoyed a concoction of cranberry juice, orange juice and a splash of club soda. Don't know what I am going to call the drink once I perfect it. Maybe something like, "Coulda Hada Cab". Really I don't miss the alcohol, but the meals do not seem complete with a diet coke or an Ice Tea. Except for that, my little ride on the wagon has not been that bad.

We got home and we finished watching the heartbreaker of LSU beating Alabama in overtime. Great game. Then I watched TV and finished reading the IBD, Barron's, and WSJ.

This morning we were expecting a serious rain storm, although I have never met a silly rain storm? The guys met at breakfast and I was scheduled to play. It was bit iffy, but we went for it. Now I have not swung a club in a month and I had not warm up. I was stinikin up the place. (No Ben, no more than usual.) I was not worried as I had brought a new case of balls out so I have 17 balls to loose.

Now we made it through 7 holes before the skies parted and the rain came. Tim and Tom, my partners wanted to plod on, but I had done my bad weather golf days in Michigan. I sad adieu and headed for the clubhouse. I surprised my bride by calling her telling her I was on the way home. Jack had not had breakfast yet so I was instructed what to get the child and to pick up a diet coke for Devin. It was nice to see her in her jammies, watching some gushy Hallmark Channel movie with the fire place on. Once that was over she scurried way to visit her big animals at the stable to make sure they had not floated away. Great weekend.

Then the terminator of fun entered the front door and set the house in motion. We had Halloween stuff to pick up and put away, a house to put back in order, and some more stuff to put in storage. We got in about 4 hours of work and finished just in time to watch the last 39 seconds of about three football games and to start this blog.

After lugging away on the blog for about an hour we had huge CARB fest. We had Tacos, Rice, and Beans. Comfort food. Then Devin and I sat on the couch watching Blue Bloods as Man Child cleaned the kitchen. It took him a while, but he did a great job.

Here are a couple of shots of the construction we are dealing with.

What Goes Sideways Must Come Sideways

We discussed a little about the sentiment in Barron's in yesterday's post. Of note was the unusal opening article by the Editor in Chief Randall Forsyth called That Old Euphoric Feeling. Again he compared the goings on at the IMF and the G-20 to the events of 1919 and 1945 in the Treaty of Versailles and The Marshal Plan and pointed out the debt defined in the Marshall plan in 1945-1946 was equal to 398 Billion in today's dollars and it took 50 years to settle. The dollar amount on the table in the Eurozone Debt is 4.2 trillion. Not a warm and fuzzy feeling. It would be contagion with a capital C.

But let us look beyond the pall of doom in the Mr. Forsyth's article. Mr. Santoli reminds us that all is not lost. He points out the US debt market is open for business and function quite well. That would not be the case if folks much smarter than us thought the fear of uber contagion was upon us. He also points out some very healthy data points like light truck and auto sales volume is back near the pre-recession levels, non-defense durable goods order are very strong, and consumer debt as a percentage of disposable income is in a manageable sweet spot. He also explains a heady market metric that compares market value to net asset value and indicates it is in a healthy range. He then discusses employment, but we will mark him down on this point as he and so many of the fiscal pundits insists in using U-3 employment data driving the 9.1% figure we hear so often. The real number, the people who are out of work and can work and have given up looking for work is the U-6 number and is closer to 17%. He then tries to make a good story for real estate and then suggests that 5 year window will show some positive results. Rental income is up 28% over last year. All in all a good reassuring article that all is not bad in economy land.

Beverly Goodman does a great cover story on how to play the lull in Brazil. Andrew Bary pimps Cablevison. Tiernan Ray tries to make case for investing in First Solar and RIMM. Mark, Veverka downplays Groupons amazing blast off. Cark Weinberg does a great nuts and bolts explanation of what is happening in Greece (Caution Major Econ Alert). Vito Racanelli has an article that was about the jobs report on Friday. He spent about one paragraph saying it was not as nice as we had hoped (dah!) and then jumped into Greece and Eurozone. By the time I was done, I was hoping for a mention of the Kardashians or Dr. Murray. (Not really just kidding.)

This week is a relatively quiet week in US Econ Data Points. Not many straight edges to build a puzzle.

Monday

We have the US consumer debt report and it looks like it should increase after falling quite a bit last month. This sounds bad, but if people loosen the purse strings, it is good for the economy. Unfortunately that is the only data point to watch tomorrow, so look for the talking heads to be looking East to Europe for sound bites to move the market. Our guess is a market with little volume down about .5%

Tuesday

Nothing. Look to Europe and see wear the rumors take us. My guess is The Greek PM will submit his recognition on Tuesday or Wednesday. Look for a 1 point hit on the news.

Wednesday

Mortgage bank applications will probably be up a bit with looser money and historic low rates. Read the report close as it will be refi money and not new notes. No impact on the market. Bernanke has some comments at an event at the opening of the market. I am sure he could set the tone of the market for the day. Look for a nice little spike in Wholesale trade prices and inventories. The EIA tells us how much oil is under the hood. We are looking for another low volume day to the upside 1%.

Thursday

The Bank of England will say nothing new about interest rates, but complain about how pitiful the British Economy is. With fairly stable oil prices and no recent surge in commodities look for an international trade figure in line with last month. No change is good change. We will have the weekly jobless claims and it would be nice to see it stay below 400,000, but we think not. Import prices report on Thursday and those that know are looking for a drop of about .2%. We see it staying in line with last month's number at a positive.3%. We close out the day with the EIA Nat Gas report. We are still working off a glut and there should be no surprises until next month with the early cold blast we had in the East last week. Friday is a Holiday so look for the big boys to clean their portfolios so volume should be above average and the market should contract about 2%.

So unless we have some out of the park earnings next week (JWN Nordstrom's to beat, SYY Sysco to miss, CSCO Cisco to miss, DIS Disney to beat just barley) and Europe solves all of their problems, look for a week that is 2.5% down. Kinda like this week.

Now for my secret system I have been teasing you with. Well I have now back tested 45 equities and have found a few wigglers. (That would be stocks that either perform worse than the "system" or worse than what we did with those equities. Don't get me wrong, it is still an impressive string of improved returns, but not as flawless as I had originally thought. The system does not work well on channeling stocks. Those are equities that regularly go up and go back down. ASGN is a great example. Russ turned me on to the stock and we have done well with the last run up. It performed poorly in the back testing because it is reliable to go back down after it hits the 11-12 dollar range. Hint-you might look at puts for ASGN for the next 6 months)

If you want to live in the NOW, try listening around the noise. 

Salve Lucrum