Is Miss Market a changeling, one of those offspring of elves and fairies that the wee folk exchange for human babies? Why, just the other day we danced merrily through a meadow of green shoots with her. But when the sun arose the next, we found a slain rabbit in our pot when we attempted to make our morning oatmeal. And there she was, tangled hair and pointed ears, hissing like Catwoman in a field of burnt straw.
Suspicions that the economic recovery on the horizon was a mirage were roused by the Empire State survey of manufacturing conducted by the New York Fed. The data showed a decline in May after two months of improvement. Oil prices fell, as did interest rates, the most recent fear of the financial press. These are not indicative of green shoots. Kev is of the opinion that rising commodity prices and higher interest rates should be cheered as a sign of acceleration in the real economy, not brakes on the recovery.
But the familiar arc of expansion and recession that has marked the post-war period has turned unfamiliar. That’s because the model has been revealed as a changeling as well. As the United States turns from consumption to saving, incomes decline as jobs vanish, which reinforces contraction and the great hunkering down. So despite all the reserves the Fed has pumped into the system, banks find fewer viable businesses to loan to. The liquidity trap is not a tender one.
Yet policy makers surely know this. The cleansing power of a collapse in economic activity and the erasure of iconic American enterprises some call for would be so great as to cut serious gashes in the cord that binds a society together. So Bernanke, et al., must keep pushing on the string, hoping that the trauma of change from consumption to saving doesn’t entirely dissolve the rope to which we are hanging by a thread. The effort of government spending and Fed largesse is aimed at supplying a parachute to slow the descent so the pilot can live to fly another day.
For the investor, this means rewiring the brain. Look for things “to begin stop worsening” as the Bank of Japan said was happening in its latest dispatch. Being nimble and not too greedy will be prized attributes. Waiting for GMGMQ, DXO (oil) and SLV (silver) to get cheap again, keeping PALM and F in the portfolio. Plaxico Burress and Michael Vick look as if they will get a second chance in the NFL soon. So shall we. Miss Market will comb her hair, don the cocktail dress and take our arm.
As we heard Jean Arthur say to Cary Grant the other night: “I’m hard to get, Jeff. All you have to do is ask.”
Showing posts with label GM. Show all posts
Showing posts with label GM. Show all posts
Tuesday, June 16, 2009
Monday, June 8, 2009
Our Little Black Book
Every dog has its day. Hooted at as a malingerer by vengeful packs of yapping pinstriper fans, Carl Pavano pitched nine innings of shut-out ball to lead the Tribe over the Pale Hose last week and enrich Kev. And long spurned by her bitter once-burned suitors, Miss Market continues to tame the bears. Methinks they doth protest too much and will soon be checking their cell phone contacts for her number.
Yet we remain wary, knowing that the coquette has the capacity to lead us on and then pout when she doesn’t get her way. What could cause her to spurn us? Three things: geopolitical/terrorist catastrophe, economic indicators that refuse to validate what Bernanke and others perceive as the incipient recovery and the related discovery that stock prices are ahead of what the economy is promising. Well, I guess that’s two things really.
In any event, what matters in the short run for those with dough at stake is the news flow. Job growth should take a while, but stock prices expect that. Key this week will be Thursday’s release of retail sales data and Friday’s University of Michigan report on consumer sentiment for May. Expectations are that both will point to tentative revival. Also to be monitored is the blitz of U.S. Treasury auctions of notes. The yields necessary to sell them will affect the equity markets as much as the bond markets.
The great deflation-inflation debate is for another day. We’ll get to it eventually, but for now we’re concerned about profits to pay greens fees and Mr. Landlord.
Our darling, PALM, has taken a beating recently, though we’re still significantly in the black. Those wishing to take money off the table would be entirely justified. The Pre phone has been released and the battle with Apple and Research in Motion is joined. News is that Apple is cutting the price of the original iPhone to $99. Let’s get physical.
Brave souls who ventured with Kev into Novavax (NVAX) and GM (ticker is now GMGMQ), have been rewarded. If you bet the ranch on these two you would be considerably better off than if you left Summer Bird out of your trifecta box at Belmont. Both are up more than 30% since purchase May 1 and June 1, respectively. Ford is still a keeper.
But Kev picks losers as well. Sonnanstine pitches a superb game for the Rays tonight at the Yankee Stadium launching pad (NASA should consider blasting space probes to Pluto from home plate), but the homers, like the DJs used to say about the hits on AM radio, just keep on comin.’ I’m swearing off going against the pinstripers at home unless Harmon Killebrew, Hank Aaron, Ralph Kiner and Jimmie Foxx are in the opposing line-up.
Yet we remain wary, knowing that the coquette has the capacity to lead us on and then pout when she doesn’t get her way. What could cause her to spurn us? Three things: geopolitical/terrorist catastrophe, economic indicators that refuse to validate what Bernanke and others perceive as the incipient recovery and the related discovery that stock prices are ahead of what the economy is promising. Well, I guess that’s two things really.
In any event, what matters in the short run for those with dough at stake is the news flow. Job growth should take a while, but stock prices expect that. Key this week will be Thursday’s release of retail sales data and Friday’s University of Michigan report on consumer sentiment for May. Expectations are that both will point to tentative revival. Also to be monitored is the blitz of U.S. Treasury auctions of notes. The yields necessary to sell them will affect the equity markets as much as the bond markets.
The great deflation-inflation debate is for another day. We’ll get to it eventually, but for now we’re concerned about profits to pay greens fees and Mr. Landlord.
Our darling, PALM, has taken a beating recently, though we’re still significantly in the black. Those wishing to take money off the table would be entirely justified. The Pre phone has been released and the battle with Apple and Research in Motion is joined. News is that Apple is cutting the price of the original iPhone to $99. Let’s get physical.
Brave souls who ventured with Kev into Novavax (NVAX) and GM (ticker is now GMGMQ), have been rewarded. If you bet the ranch on these two you would be considerably better off than if you left Summer Bird out of your trifecta box at Belmont. Both are up more than 30% since purchase May 1 and June 1, respectively. Ford is still a keeper.
But Kev picks losers as well. Sonnanstine pitches a superb game for the Rays tonight at the Yankee Stadium launching pad (NASA should consider blasting space probes to Pluto from home plate), but the homers, like the DJs used to say about the hits on AM radio, just keep on comin.’ I’m swearing off going against the pinstripers at home unless Harmon Killebrew, Hank Aaron, Ralph Kiner and Jimmie Foxx are in the opposing line-up.
Monday, June 1, 2009
See the USA in a Chevrolet
You can draw a direct line from the Declaration of Independence to Dinah Shore, who touted GM's most visible nameplate.
Walk through Prospect Park and trod the same ground George Washington skedaddled through in August of 1776 fleeing the British and Hessians who had routed the Continentals in the Battle of Long Island. Kev saw no red coats with muskets there this weekend, just red-shirted young ladies, fearless as only the young can be, playing a game with ball and bat that began in the young republic as something called rounders.
Little has changed in the game since the Knickerbockers played all comers at Elysian Fields in Hoboken. Well, ok, the mound has been lowered, the pitch count has become a much-watched statistic, gloves have become lengthier, and players’ bodies have swollen and shrunk with the ebb and flow of, ahem, B-12 injections. But it is still a kids’ game invested with the American dream of pastoral sublimity – a pastime without a clock, as the seven-hour, 25-inning collegiate affair between Texas and Boston College attested to.
In the meantime, though, the clock ticks in the world of striving and getting. Before you know it, the ground shifts under your feet and all the striving doesn’t result in any getting. The latest tremor is the reorganization of General Motors under the aegis of the taxpayer, but it is not a quake. Largely foreseen, the UAW and bondholders inevitably had to bow to the less-worse than the catastrophic. Proof of the inevitability is the blythe reaction of the stock market. Although four shares of GM will now secure a Big Mac (no fries or Coke), Miss Market cares not a whit and goes merrily on her way, gathering her rosebuds while she may. Just hope my dream of owning a new Corvette does not go aglimmering and I can live my own Tod and Buz Route 66 adventures.
As capricious a mistress as she is, she cannot help but respond to the soft summer cooing of newborn whippoorwills. It brings out the nurturing side of her. The latest song of hope comes from the purchasing managers survey (now the Institute for Supply Management). Its diffusion index rose to 42.8% in May from 40.1%. That still indicates contraction in the manufacturing sector, but not as steep as prognosticators thought. More importantly, the new orders sub-index, an indicator of future activity, rose above 50% for the first time in a year and a half.
Miss Market is also a Yankees’ fan, apparently. She giveth and taketh away. The Tribe let Kev down tonight, issuing too many walks to the pinstripers, giving its latter-day muderers’ row too many chances to rattle run-scoring doubles off the wall. Still have the Dodgers tonight, but Kuroda looks like he wants to issue free passes as well. Already 40-some odd pitches into the second inning, what looms?
Well, Washington escaped to Manhattan and lived to fight another day and father a country that lets us take all the time we need on grass and dirt with bat and ball and leather. The clock is clicking elsewhere. Stay invested in equities and commodities, shun government bonds, and enjoy the open road.
Walk through Prospect Park and trod the same ground George Washington skedaddled through in August of 1776 fleeing the British and Hessians who had routed the Continentals in the Battle of Long Island. Kev saw no red coats with muskets there this weekend, just red-shirted young ladies, fearless as only the young can be, playing a game with ball and bat that began in the young republic as something called rounders.
Little has changed in the game since the Knickerbockers played all comers at Elysian Fields in Hoboken. Well, ok, the mound has been lowered, the pitch count has become a much-watched statistic, gloves have become lengthier, and players’ bodies have swollen and shrunk with the ebb and flow of, ahem, B-12 injections. But it is still a kids’ game invested with the American dream of pastoral sublimity – a pastime without a clock, as the seven-hour, 25-inning collegiate affair between Texas and Boston College attested to.
In the meantime, though, the clock ticks in the world of striving and getting. Before you know it, the ground shifts under your feet and all the striving doesn’t result in any getting. The latest tremor is the reorganization of General Motors under the aegis of the taxpayer, but it is not a quake. Largely foreseen, the UAW and bondholders inevitably had to bow to the less-worse than the catastrophic. Proof of the inevitability is the blythe reaction of the stock market. Although four shares of GM will now secure a Big Mac (no fries or Coke), Miss Market cares not a whit and goes merrily on her way, gathering her rosebuds while she may. Just hope my dream of owning a new Corvette does not go aglimmering and I can live my own Tod and Buz Route 66 adventures.
As capricious a mistress as she is, she cannot help but respond to the soft summer cooing of newborn whippoorwills. It brings out the nurturing side of her. The latest song of hope comes from the purchasing managers survey (now the Institute for Supply Management). Its diffusion index rose to 42.8% in May from 40.1%. That still indicates contraction in the manufacturing sector, but not as steep as prognosticators thought. More importantly, the new orders sub-index, an indicator of future activity, rose above 50% for the first time in a year and a half.
Miss Market is also a Yankees’ fan, apparently. She giveth and taketh away. The Tribe let Kev down tonight, issuing too many walks to the pinstripers, giving its latter-day muderers’ row too many chances to rattle run-scoring doubles off the wall. Still have the Dodgers tonight, but Kuroda looks like he wants to issue free passes as well. Already 40-some odd pitches into the second inning, what looms?
Well, Washington escaped to Manhattan and lived to fight another day and father a country that lets us take all the time we need on grass and dirt with bat and ball and leather. The clock is clicking elsewhere. Stay invested in equities and commodities, shun government bonds, and enjoy the open road.
Monday, April 27, 2009
Tiger, Tiger, Burning Bright
Mr. Inge, third baseman of the Detroit Tigers American League baseball club, is my hero of the day, though he scored no runs and did not drive one in. He didn’t bemoan his just-miss luck. He hit a just-foul double off the wall, a just-foul homerun and then placidly stroked what God gave him from hard-luck CC Sabathia -- a fastball that he solved and scooted into the outfield. Check the box score.
OK, later he was caught stealing after being hit by a pitch and then struck out. Yet he started the double play that pulled the plug on the pinstripers in the ninth -- yeoman’s work in the city that is the poster child of crumbling, but still aspirational, America. Life west of the Hudson goes on. The Yankees had 10 hits, for crying out loud, and only two runs with gobs of runners left on base. No need to break ‘em up until A-Rod returns.
Can the Incredibly Shrinking Three match the moxie of the Bengalese cats of northern Michigan?
The UAW will likely own a majority stake in Chrysler according to the plan that has been hammered out among the USA, creditors and private equity owners. GM is finally smelling the coffee and telling bond holders to take equity or get lost and putting Pontiac to its eternal rest (I can still see the jaunty smile of my father when he cranked up the air conditioning of his brand new baby blue Catalina in the 1960s. I think “Help!” had just been released).
Ford stands tallest, like its home town third baseman Mr. Inge, having secured financing before the credit crunch and refusing taxpayer help. It has missed on a few home-run swings but knocked the mud off its cleats and took a single, thank you.
And we have profited as well from buying Ford common stock because the luck of investing is to settle for the infield hit that can spark a big inning when all the world expects a strike-out. Disclaimer: I’ve been a member of all the world many times. But then, it’s no fun unless somebody gets hurt, even if it’s you.
Verlander threw serious heat for the hometown team. Fastballs can be struck by the weakest among us enough times to plate several runs, yet he gave up zero.
Ford bucked the market today as well. It has further to go. Taking gains is forgiven, but its stock price will be higher this time next year. Will the sub-.500 Yankees?
OK, later he was caught stealing after being hit by a pitch and then struck out. Yet he started the double play that pulled the plug on the pinstripers in the ninth -- yeoman’s work in the city that is the poster child of crumbling, but still aspirational, America. Life west of the Hudson goes on. The Yankees had 10 hits, for crying out loud, and only two runs with gobs of runners left on base. No need to break ‘em up until A-Rod returns.
Can the Incredibly Shrinking Three match the moxie of the Bengalese cats of northern Michigan?
The UAW will likely own a majority stake in Chrysler according to the plan that has been hammered out among the USA, creditors and private equity owners. GM is finally smelling the coffee and telling bond holders to take equity or get lost and putting Pontiac to its eternal rest (I can still see the jaunty smile of my father when he cranked up the air conditioning of his brand new baby blue Catalina in the 1960s. I think “Help!” had just been released).
Ford stands tallest, like its home town third baseman Mr. Inge, having secured financing before the credit crunch and refusing taxpayer help. It has missed on a few home-run swings but knocked the mud off its cleats and took a single, thank you.
And we have profited as well from buying Ford common stock because the luck of investing is to settle for the infield hit that can spark a big inning when all the world expects a strike-out. Disclaimer: I’ve been a member of all the world many times. But then, it’s no fun unless somebody gets hurt, even if it’s you.
Verlander threw serious heat for the hometown team. Fastballs can be struck by the weakest among us enough times to plate several runs, yet he gave up zero.
Ford bucked the market today as well. It has further to go. Taking gains is forgiven, but its stock price will be higher this time next year. Will the sub-.500 Yankees?
Subscribe to:
Posts (Atom)