9/29/08

Economics

Recent Data

Other

The SEC concedes its role in the collapse of the major brokerage firms:

http://bigpicture.typepad.com/comments/2008/09/sec-brokerage-c.html

A look at the Baltic Dry Index (not good):

http://bespokeinvest.typepad.com/bespoke/2008/09/credit-cruuuunc.html

The high cost of living versus the cost of living high:

http://mjperry.blogspot.com/2008/09/high-cost-of-living-vs-cost-of-living.html

Here is a great summary of the final ‘bail out’ bill versus Paulson’s original proposal and the version that was rejected last Thursday (must read):

http://www.dcexaminer.com/opinion/blogs/TapscottsCopyDesk/Comparison_of_original_Paulson_bailout_to_compromise_proposal.html

Politics

Domestic

Here is the point of view of one of those house republicans who opposed the initial bail out package. He makes some valid points; the tactics that he and his buddies used in the negotiating process is another question:

http://article.nationalreview.com/?q=ZmI5YmJmZTFjYmEzMTJlZGE1YmZhZDc0YWM1MTBiMmM=

International War Against Radical Islam

The Market

Technical

Technical strength by sector:

http://traderfeed.blogspot.com/2008/09/sector-update-for-september-27th.html

Chart porn on investor sentiment:

http://traderfeed.blogspot.com/2008/09/stock-market-sentiment-on-wane.html

Fundamental

It looks like the rescue plan will be passed (see the comparison with prior versions above); and as this is being written, global markets seem to be giving it a Bronx cheer. Of course, a number of foreign banks went into bankruptcy over the weekend and Wachovia is being taken over by Citi this morning with the Wachovia shareholders being wiped out. These developments could be influencing the equity markets. In addition, oil and commodity stocks are suffering some severe whackage, suggesting that investor attention is also focused on the likelihood and potential depth of a recession.

At the moment, my first concern is over how the credit markets react. If credit spreads decline signaling an increase in lending among the banks, that will hopefully spill over into the equity markets later.

Our Portfolios are doing nothing at the Market open. We will watch investors digest the weekend developments; then decide on a course of action. Defense is the current strategy.

News on Stocks in Our Portfolios

Our Portfolios sold two groups of stocks last week. One was the companies serving the industrial sector. This is a good article laying out part of my reasoning:

http://www.zacks.com/newsroom/commentary/index.php?id=8686

Positive comments on Accenture (Aggressive Growth Portfolio):

http://www.thestreet.com/story/10439592/1/accenture-optimistic-about-growth-in-2009.html?puc=_htmlatb

More Cash in Investors’ Hands