Daily Investment Interpretations

October 21, 2010


2010-10-21 (Thursday Night):   The markets went up and then down and then back up again, eking out small daily gains: Blue chips bounce back, Dow sets sights on bull-market high,.and Who's buying and selling this rally?    The NASDAQ Composite inched up 2.88 points (0.09%) to 2,459.57  The Dow posted a gain of 38.6 points (0.35%) to close at 11,146.57, and the S&P 500 tacked on 2.09 points (0.18%) to end at 1,180.26. Oil dipped to  $80.64 a barrel, while Gold shrank to $1,326. The VIX fell 0.52 to 19.27.
    The good news came this morning: 
    Leading indicators edge up in September  
    U.S. weekly jobless claims drop 23,000  
    Philly Fed index returns to positive territory  
    Beige Book: U.S. growing at modest pace    
    Bullard favors open-ended bond purchases  

    Darrell Delamaide's Whose revolution? discusses claims by one of the Tea Party's founders that elements within the Republican Party have hijacked the Tea Party movement to help get themselves elected. “'This was nothing other than the Republican Party stealing the anger of a population that was fed up with the Republican Party’s own theft of their tax money at gunpoint to bail out the robbers of Wall Street,' Denninger railed in his blog and in a television appearance. 'Sarah Palin, Newt Gingrich and groups such as Tea Party Patriots have diverted the movement from its focus on the “rampant theft' of taxpayer money to other conservative preoccupations such as “guns, gays, God,'” Denninger said."
    "The attacks this week follow the recent widely noted report in the New Yorker about how the billionaire Koch brothers are funneling money to the supposedly grassroots movement to further their own anti-tax and anti-regulation goals. The disclosure this week that the Kochs are scheduling another in a series of secret meetings to plot strategy – Supreme Court justices Antonin Scalia and Clarence Thomas apparently have attended in the past – only fanned the flames further."
    "The goal, in the words of NAACP chief Jealous, is to have a tea party that will take part in 'a reasoned political debate without the use of epithets, the threat of violence, or the resurrection of long discredited racial hierarchies.'"
    "In other words, we still have a dream."

    Nutting: Why GOP would do nothing for economy  "The deficit is at record levels right now, mostly because of the effects of the worst recession in generations, which temporarily lowered revenues and led to temporarily higher spending for stimulus, relief and the bailouts. We’ll have to pay interest on that borrowing for a long time, but the long-term budget costs of this recession are minimal, compared with other factors, especially if we’re able to get the economy growing again soon.
    "In the medium term (the next 10 years or so), the main causes of the projected deficits are the Bush tax cuts, the costs of the wars, and the drug benefit. The tax cuts alone account for about 55% of the projected deficit at the end of this decade, according to the Center on Budget and Policy Priorities.
    "In the longer run, excessive growth in health-care costs is the primary reason for the projected deficits. If we don’t get health-care spending under control, we’ll have massive deficits for the next 50 years, no matter what else we do. Read more about our budget problems."
    "But let’s remember which side the Republicans were on when health care was being debated: The side of doing nothing about rising costs."

    Opportunities in Africa  
    Why bond buys won't help (video)  This financial expert argues that even if the Fed is successful at lowering long-term interest rates with its Quantitative Easing II program, QEII won't increase borrowing in the U. S. because interest rates aren't what's keeping borrowers from borrowing.

    My investment advisory service had a couple of hours today when their investment signals flipped to "buy" before falling back to "neutral".