Archive for September, 2009

Even Paranoids Have Enemies

Wednesday, September 30th, 2009

Most folks welcomed the arrival of the Treasury Department’s inflation-linked securities, known as Treasury Inflation Protected Securities, or TIPS.  For the grammatically-anal among you–card-carrying member, myself–you buy TIPS and you buy aTIPS; it’s not plural or singular, just what they are.  You can click on over to TreasuryDirect, via this link, to see learn how TIPS work (using it as a plural sounds so much better, sort of like a futures contract does).

Some Trilateral Commission/conspiracy types, however, were skeptical since it left the fox guarding the hen house.  The principal amount of a TIPS is adjusted each month for the change in [__]flation–”in” or “de,” and the interest payment goes up or down, accordingly.  The Consumer Price Index for all items–doesn’t exclude energy and food prices–is used for the inflation adjustment.  So Uncle Sam calculates the factor that determines the interest payment and the maturity value of the security, and it’s on the hook for the potential increase.  Suffice it to say, for the cynic there’s plenty of reason for the government to prefer deflation as it relates to TIPS.

Never happen, right?  ‘Government’s wouldn’t do that, would they.

You’ll have to decide that for yourself, but the following might help. 



Can Apple be stopped?

Wednesday, September 30th, 2009

I’m of the opinion that Microsoft long ago stopped innovating, resorting, instead, to copying and trying to improve–often succeeding–what others produce.  On the other hand, Apple never seems to stop innovating.  And here’s the latest example.



Iran, Nukes, War & Markets

Monday, September 28th, 2009

If it sounds like too impressive a headline for this venue, where you’re more used to thoughtless analysis, it is.  I’m including below, verbatim, a dispatch from Cumberland Advisors, on whose e-mail distribution list I am by some good fortune.  I asked David Kotok, the Chief Investment Officer there, who wears glasses, has no hair on top, and has a beard–in a word, he looks smart–if I could reproduce the letter here, and he graciously agreed.  Read on, and relish the thoughtful analysis, after which we shall return to our regularly scheduled insights that are patently obvious. (more…)


Wkly. Rcp. & Otlk. – 09.25.09

Friday, September 25th, 2009

Tower Private Advisors


  •  No multimedia extravaganza this time
  • Bunch of negative signs
  • Mushy economics

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Inventory Rebuilding

Thursday, September 24th, 2009

So we brought in the Senior Market Strategist from Federated Investors in Pittsburgh, PA., Linda Duessel.  All in all, she delivered a nice presentation to the two groups.  No one should have left the meeting unable to sleep, but each was made aware of some longer-term challenges the economy and markets face.

Overall, her view on stocks was pretty sanguine, at least for the next 190 points in the S & P 500, a cool 13.2% move*.  Beyond that she expressed some concerns that the longer-term might present some hurdles–and she wasn’t afraid to couch the future in the context of Japan’s lost decades, that markets could go sideways for a while, echoing our own thinking (click here for it). 

*  That’s a move that should encounter a couple of stiff resistance zones, but that’s what happens when one multiplies earnings estimates by a P/E — BAM! — 1,250.  To be fair she said 1,250 was the confluence of several estimation methodologies, something that gave her comfort.

As for why the economy’s going to start looking better?  What else? inventory rebuilding, the salvation of all dismal scientists.  In brief, and ad nauseum, businesses have worked–and continue to work–inventories down so low, relative to sales and history, that at the first whiff of strength in sales–or fear of missing sales–they’re going to reload the warehouses so as to not miss out. (more…)