Ok, I admit it - I enjoyed today. Being agnostic on which way the market goes with our top line strategy, I just care that the market do something and preferably in the near term direction we're weighted. Based on that not so nice close (someone showed up right at time at 3:46 PM to rally the SPY 0.5% in 8 minutes, which then proceeded to be sold by HAL9000) and the reversal midday I would not want to be go to sleep tonight being a long only fund manager. But tomorrow is a new day to waste taxpayer money creating an air of prosperity with SPY futures buying. I wish someone would stop wasting my tax dollars.

We are in day 12 of our 4 week reporting period and the first 10 days we went nowhere, actually trailing the market - the past 2 days (11, 12) have been very nice. I obviously don't have a nightly NAV but for reference today the Russell 1000 was down about 2% and we were up about 2%, so a 4% swing in 1 day and your performance metrics take a nice turn in 1 session. Sun Tzu told us to wait in the weeds to strike, so we have been. Most of our gains come in concentrated periods and it requires the market to not put us to sleep like it had been doing the previous few weeks.

On a different topic, a reader mentioned gold in one of our comments late last week - I have been keeping an eye on it, but performing better has been silver. Silver was up 2 of the latter 3 days last week, up almost 4% yesterday and up today. I don't know what it means (if anything) yet... but it is an interesting development.

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p.s. speaking of wasted tax dollars, based on what the NAR (national association of realtors) released today 1.8 to 2.0 M of home sales this year will be using the $8000 tax credit - that is roughly a 20% Cash for Clunkers Home sales ratio considering we'll be selling about 10M new and used homes in the US this year. That's about $16 Billion more to put on our IOUs. I ask you again - if we did not steal from our future generations to fulfill the selfish needs of people today, just imagine how the housing recovery would look. And thats with 5.1% mortgages (only due to hundreds of billions of Fed purchases), and FHA mortgages at 3.5% down (many of which will be in default in 2012-2014 because we have a whole new class of home buyer with NO SKIN in the game).

Even more pathetic is the NAR only believes 350,000 incremental sales came from the tax credit, meaning the other 1.5M+ of cash for housing clunker sales simply stole from future demand and pushed it into today. EXACTLY like cash for clunker cars - a big waste of money and more debt for another generation to worry about. The majority of both car buyers and home buyers would of eventually come around to buying a home (or car) when they were good and ready - but to stoke GDP figures in the now, we're hand feeding them like a baby bird money we don't have. And the market (which could care less about costs in the future) is giddy over this. It's all just disgusting - but this is your taxpayer supported and subsidized economy (and market).

You have to love their (NAR) headline propaganda - this was the title of today's new release: Pending Home Sales on a Record Roll. And don't forget, they implore you to send more of your taxpayer money so everyone can buy a new home in 2010:

To ensure that housing has a broad stimulus to the overall economy and stays on sound footing, we’re encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences.

Clearly the Realtors association has our national interest in their hearts when they speak of new and improved tax credits necessary for stimulus.

  • Assuming four-fifths of those (subsidized) homes were sold by realtors at a 5% fee, and that the average home price is $150,000, then the tax credit has put $2.6 billion in the pockets of brokers.

If there ever was an organization based on Kool Aid, its the NAR - they probably have the only economist on staff who gets things more wrong than those inside the Fed. Then again both organization are more about public propaganda and never have to answer to anyone when they are wrong for multiple years in a row [Oct 10, 2007: Realtors Group Lowers Forecast but Chief Economist Lawrence Yun Still on Kool Aid]

No position