Tidbit Tuesday

Big gain yesterday that was challenged midday by the beefer trading funds, but perhaps some real buyers emerged from their bunkers to take advantage of the dip. The US stock market closed quite strongly.

"Hedge funds are offering to cut fees if investors agree to stay put, in another sign of the changing power dynamics between funds and investors" - WSJ. Will the gullible rich continue to pay for the beefer shell game of "heads I win, tails you lose" to thousands of worthless hedge fund managers ? A fundamental problem for the market is the trillions of dollars being put into speculative, trading funds by the greedy rich, instead of into real investments.

Yesterday's WSJ had a story that European countries recognize that manufacturing in the US is very, very cheap when state incentives are taken into account. Also, I remember another story about how higher fuel costs are affecting "just-in-time" manufacturing tactics. This is part of the "adjustion" process that I wrote about a few weeks ago. High fuel prices will require many changes in standard operating procedures of the past decades. The smart and nimble will do well. The slow and dumb will probably go under or be taken over.

Polls now show Big John ahead of Obama. That's good news. Perhaps the American public is looking closer at the mountebank and recognizing his only skill is speechmaking?

My long term thesis for the big commercial banks gaining profitable market share is working out slowly. Over time, the FNM and FRE conservatorship will shift business to the big banks who will be able to raise prices as discredited competitors such as mortgage brokers have disappeared. Also, the big banks have stable, quality funding. I have large positions in BAC, C and JPM. The BAC and JPM positions now show fine profits. I was early on C, but it is closing in on the green, too.

I'll buy some AAPL if it goes under 150. I was early on GOOG in my 1/2 position and will be patient on topping it off. Otherwise, I expect to hold all positions for awhile

Word of the Day

"Chary" - adjective [$10]
Chary means 1. cautious, wary (chary of employing such people); 2. sparing, ungenerous (chary of giving praise).
Sentence: The common man and woman have regained their natural chary attitude to a politician that is all talk and no action, viz., Obama.