12/17/10…never go shopping

…never go shopping!

TB’s Quote of the Day: “Wonderful,” said Rep. David Obey, a Wisconsin Democrat. “Just what we need: further exacerbate income inequality in this country.” Worsen the deficit when there was a chance to mitigate the cost of the stimulus. It’s later than we think! TB

…on an empty stomach is the old adage. Why? Because you buy everything you see and that is what it appears is happening in the stock market. But more of concern to TB is the correlation of asset classes mentioned yesterday…mainly due to focusing on the wrong points…rally on the RUMOR of the tax cuts but fading the closer they come to fruition – the NEWS.

As David Obey says in today’s quote…rather than marginally tax a few millionaires and billionaires (the top 1% now controls over 75% of the wealth in this country so wealth gap concerns are not a myth). Anyway, today we are back to Europe concerns…but they should be GLOBAL concerns and like charity should begin in the home.

Volume was just over 1 billion shares yesterday while advance/declines and breadth were mirror images of Wednesday. Great gains for the month/quarter but where to now. Even the individual stocks reverse daily…is that a sign of strength?...of outright buying…or mere day trading? TB chooses the latter.

A friend sent David Kotok’s commentary from Cumberland Investments on bonds/gold/currencies and has charts going back to Oct.12 Cumberland charts and what we see is that the rate increases are not just in the U.S. but global and there is a similar correlation in gold in terms of the local currency.

Kotok concludes and has solid support from others that the strength of the stock market rally is out of proportion to the economic growth that will come from it…perception stronger than reality. He further sees a correction sometime in the second quarter but in the meantime investing in sovereign credits could be painful. While spread product (corporates, emerging market debt, etc.) is clearly outperforming governments, the sharp uplifting of yields has hurt them too.

Time to take a break, eat some lunch, then return to your shopping? Could be a good idea.

. . . - - - . . .    . . . - - - . . . (S.O.S.)

TB shoveled the three feet of snow off his patio…covered too! Fortunately, that should not be an ongoing problem and it merely added to the depth of the surrounding snow. Sun is supposed to come out today and make for a nice weekend. Meanwhile, they are trying to fix up TCF stadium for the Vikes to play…the way things are going for them a bye might be in their best interests.

Have a great day!

TB

Trader Bill thinks it is clear to anyone reading these missives that they are merely commentaries...as he sees it...and do not necessarily reflect the views of anyone other than his own. Information is gathered from sources he has found reliable, but no guarantees of accuracy are implied. These are merely observations of events in the marketplace offering in an attempt to offer a non-mainstream viewpoint. Copyright TBD Capital LLC, December 17, 2010.

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