Bits and Trends

Amazon has good numbers ... perhaps more evidence of economic substitution of online orders for driving to the mall or store ?

Gasoline demand is still flat ... it's been flat for weeks ... no "summer driving season" is visible from the demand numbers.

So to again borrow and modify words of Ricky Ricardo of "I Love Lucy" fame, "there's a whole lotta adjustin' going on ..."

The housing and GSE reform bill seems to pass soon - a good thing, in my opinion. Despite what pundits say, to me, a lender would be a fool not to accept a 15% writedown in the loan amount to avoid a foreclosure. Foreclosure costs are large and losses typically are much more than 15%. By taking the 15% hit, the lender can get out entirely with an FHA takeout.

I also like the Democratic provision to give some money to cities and towns to buy foreclosed properties ... even though most of it will surely go to political friends.

The GSEs get a temporary credit line from Treasury of unlimited size ... but get a strong regulator finally. This is good.

I still hear pundits still talking about a US recession ... I guess they are redefining that term, as do the inflation-mongers. And the "stagflation-mongers". In my thinking, 2+2 = 4 still. Not 3.5. Logic and words and definitions matter. It's NOT different now.

All this boomer and X-er and rich man's angst is silly. The world is doing fine ... still. Hank Paulson's and Ben Bernanke's leadership in DC is preventing the panic of the rich from crushing the common man. Economic momentum continues to be positive. Many adjustments are necessary but can be made over time.

Actions

None. For Alpha Fund, I own large postions in BAC (double-sized), JPM, C, GE and CCJ. I am patient as major rotation is occuring ... I want good entries. I look to re-buy CVX, DVN, RIG and FCX when selling dries up; and in the Internet group AAPL (under 150) and GOOG (under 450).

For Krypto Fund, no actions indicated.

PS: I guess I'm not as patient as I thought. After checking the prices & charts, I will re-buy "starter" positions in CVX, DVN, FCX and RIG at today's open. These positions are about 1/5-1/4 of my planned size. I'm doing this to force myself to pay attention to these daily now.

Word of the Day

"Encyst" - verb, transitive and intransitive [$10] (Biological)
Encyst means to enclose or become enclosed in a cyst.
Sentence: The housing bill being considered and likely to be approved in Congress is expected to encyst FNMA, Freddie Mac and the Federal Home Loan Banks with an emergency, unlimited line of credit from the Treasury.

"Abysm" - noun [$100 and $1000 depending on the meanings]
Abysm means ($100) a superlative of abyss; ($1000) 1. the great deep, the bottomless gulf, believed in the old cosmogony to lie beneath the earth, and supposed to be, specifically, b. an imaginary subterranean reservoir of waters; c. hell or the 'bottomless pit', the 'infernal regions'; 2. any deep, immeasureable space, a profound chasm or gulf (literary and figurative).
Sentence: The leadership of Ben Bernanke and Hank Paulson has, so far, saved the common man's economic life from an abysm opened by the panic of the rich.

Humor: Obama's election could lead the US into the abysm of spiralling stagflation, excessive taxation and class and racial division and strife reminiscent of the 1960s and 1970. Perhaps that could be called the spectre of "Obama's Obysm". Go Big John !!!