This most influential blog seems to have quite a following at Barron's now. Mike Santoli at Barron's borrowed my thinking for his column in this week's edition, titled, "Can the S&P handle 1200?" I have written for months that 1200 was a logical place for stocks to go in a "return to normalcy" Here's how he phrased it: "Tough as it may be to place much faith in such a target, the 1200 level is of particular interest and importance. That's about where the market was when Lehman Brothers failed. Other indicators have reverted to pre-Lehman levels, as popularly noted -- including the pace of job losses, interbank lending conditions, spreads on auto-loan securities and volatility indexes."
That's also where the market was before the panic caused by the beefers and shorts. Now that Ben has dealt with most credit market problems, with commercial real estate being last and in process, a return to normal economic conditions should be at hand barring new troubles.
Worldwide economic conditions are improving. From FT: "Business confidence is surging across European manufacturing, with the UK and Italy taking the lead, according to reports on Monday that also highlight the turnround in countries such as Brazil and China. Optimism about production trends is back at levels seen before the intensification of the global slowdown late last year, and points to a clear growth in manufacturing activity by the middle of 2010, the latest KPMG business outlook survey shows. The results are the latest evidence of a synchronised global rebound, possibly at a faster pace than expected until recently."
Copper prices seem to have a clear uptrend for now. At some point they'll level off, but if US housebuilding ever recovers - maybe another year - that metal will surge to the old high, in my humble opinion.
And one more sign of a return to normalcy: (WSJ) "Yanks Get Their Swagger Back
With Red Sox Streak Broken, Planets Are Realigned. ... How do we know the Yankees are playing well again? Because they're annoying. That's how it is with the Yankees: When they're playing poorly, they're strangely lovable in their vulnerability and fear of failure. But when they're rolling, like they are now after four straight wins against the Red Sox, they're ruthless."
I read that A-roid made a game winning hit. It's about time he earned his pay. The Red Faces ... oops ... Sox need to loosen their collars. Hmm David Roidtiz says some bad supplements caused his positive drug test. Sure ...
Doing nothing. Krypto Fund is doing well. Lately it's significant real estate holdings and REITs (via VNQ - the Vanguard real estate ETF) have perked up. In the last bull market (out of the 2002-3 bottom), those stocks performed very, very well. Real estate is a distinctive asset class and needs to be treated as such. If conditions just return to normal, VNQ will provide excellent gains.
Word of the Day
"Ersatz" - adjective [$10]
Ersatz means being a usual artificial and inferior substitute.
Sentence: The SEC has announced more hearings on short selling. I expect that corrupt agency will provide the same ersatz regulation as it has done for years as it operates out of the pockets of Wall Street.
Le Mot du Jour
"Conjoncture" - noun, feminine; and "Conjoncturel, -elle" - adjective.
Conjoncture means situation, circumstances (economic).
Conjoncturel means linked to the present economic climate.
La Phrase: La conjoncture dans le monde entier s'ameliore.
Sentence: The economic situation all over the world is improving.