Creeping Me Out Man

Q UPP Index correcting as compared to the July posting Hopefuls Force Rally. Bulls are clearly on the run but one cannot help to notice the complete despair of every news outlet and their now constant coverage of each housing report. Too many bummers man.

The Bulls are insufferable during the good times and the Bears are such deep dark 'your mother hates you' folk that it is hard to enjoy a break in the market.

We are closer to value now but flash crash and other useless information creeping confidence.

Hedged Expectations

What will create a bubble in Treasuries? A hint is in an article from Market Watch about how hedge funds have been and are increasingly piling into the Treasury market. Those supposedly most adapt at determining opportunity in higher risk markets are settling for some degree of certainty do mainly to the horrible job they have done over the last three years and their clients insistence on no lock ups and some kind of a return.

New York Times has a piece regarding the continued difficulty in the mortgage market especially delinquencies in home equity loans. Apparently 11.1 billion in home equity loans has been written off and an additional 19.9 bill in home equity lines of credit has been swallowed by the banks. Wall Street continually pushes the notion the worst is over and share prices have already considered the bad news. But the need to have a reason to construct a bull scenario however is tough if general public obligations restrict sustained consumption in virtually all areas.

Two Treasury Secretaries Visionless

Previous Treasury Secretaries Rubin and O'Neill both stated in an interview broadcast today that another round of stimulus was unnecessary and ultimately the troubled economy would gradually become stronger on its own. Now this is not surprising since both have been proponents in the past of financial deregulation and a blind faith in the market's ability to figure things out, as it did when it figured out assets of almost every class were no good after deregulation allowed leveraging of worthless bundles of debt. Prudent financial stewardship will work, according to the two Secretaries, though neither could quite see the recovery horizon, or for that matter, see now much current market equity prices are supported by notions of future stimulus.

Without an additional dole, the road to recovery will be much longer than the two are predicting, especially if market players figure that being ahead of the investment curve is a sell and not a buy.