U.S. stock index futures are pointing to a higher opening
on Monday. The S & P 500 shook off the negative effects of a less than
stellar employment report. Gold is moving higher and the dollar seems to
be weakening.
Today's Economic Calendar:
- 4-Week Bill Announcement 11:00 AM ET
- 3-Month Bill Auction 11:30 AM ET
- 6-Month Bill Auction 11:30 AM ET
- 10-Yr TIPS Auction 1:00 PM ET
News For Thought
Fannie Mae and Freddie Mac continue to limp along. Thirty four percent
of the loans "modified" by Fannie and Freddie Mac are still under water. But
it could be worse since at this time last year 39% of them were under water.
According to Reuters: "More than a third of U.S. residential loans modified by
Fannie Mae and Freddie Mac early last year were in arrears again after six months,
though the default rate has improved, according to the regulator of the two largest
mortgage finance companies. About 34 percent of homeowners with loans guaranteed
by the companies modified in the first quarter of 2009 were at least 60 days
delinquent, the Federal Housing Finance Agency said in a quarterly report on
Friday. That compares with 39 percent of mortgages going bad after the companies
agreed to ease terms of the loans in the last quarter of 2008, the report said." According
to the report: "The re-default measures cover loans modified before the start
of President Barack Obama's Home Affordable Modification Program that gives lenders
a standard blueprint to ease terms of loans for troubled borrowers."
Tales From The Road: San Antonio And The Lack Of Complaining. We spent
a couple of days in San Antonio this weekend, and we felt as if we were in the
Twilight Zone. It's as if there has been no recession in the area, at least in
the parts of town we visited, which due to the city's zoning gives us a fairly
good glimpse of the real town, not the Riverwalk, which is what most tourists
see.
A quick look at the usual variables, highway traffic, construction, restaurants
and hotels showed brisker traffic than we saw in the city last summer, when things
looked fairly stable. A quick look at the local newspaper only had one story
about the local economy. And that was positive as the hospitality sector, a big
contributor to the city's economy, is looking forward to a better year and is
seeing signs of recovery ahead.
We did see some empty businesses, especially some used car dealers. Otherwise,
things looked fairly brisk. More important, few of the folks we spoke to had
anything to say about politics. One retired physician did express some concerns
about health care "reform." But since he was retired all he did was to wich this
active physician "good luck." Since his son beat this scribe's own progeny, the
older fellow was nothing but smiles.
What does this tell us? It seems as if at least some Americans have made up their
minds about the current political situation and the economy and are trying to
get on with their lives. Those who are o.k. are trying to stay o.k. If you aren't
o.k. things may get worse unless you find a job, which is likely to be difficult
as uncertainty about health care and taxes starts to rise as the year progresses.
What's puzzling, though, is that very few people are complaining to the degree
that they were a few months ago. Now, that's a change in the trend.
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As each day passes we have more and more reason to think that
we are caught in an endless loop of "The Twilight Zone."
As our brief "Tales of the Road" item above notes this past weekend was not what
we expected. Over the last few months, we have noted that the mood of the parents
whose kids play USTA tournament tennis, has been increasingly sour. And that
makes sense given the demographics. These are business owners and professinals,
lots of doctors, lawyers, executives and folks who pay taxes.
But this weekend, all we saw was kids playing tennis and parents quietly watching.
Sure, it was cold, even in San Antonio, Texas, where the morning temperatures
were in the teens on Saturday morning.
It's almost as if there is a sense of inevitability and resignation to life as
it is, which makes us think that the population as a whole has come to accept "the
new normal," whatever that is. Sure there are nightmares for some about nationalized
health care and higher taxes. Yet, the usually passionate folks that take their
kids to elite level tennis tournaments were barely there, at least in spirit.
We saw two news itmes this weekend that made us put this whole thing into some
context. One was the piece in the U.K. press about global warming and now global
cooling. It seems as if global warming and cooling are at least partially influenced
by a naturally occuring cycle where the temperature of the ocean at 3000 feet
below the surface and its oscillations are a critical part of the global cooling
and heating cycle. If this theory and observations are correct, the next 30 years
or so will be cooler than the last. The folks who discovered this say that the
hot cycle cooled off in 2007.
If they're right, and this winter gives them a lot of clout at the moment, global
warming and its trillion dollar assault on the U.S. taxpayer has suffered a significant
set back.
The other items is that a new sex robot, named Roxxxy is now available for use
for a $7000-$9000 retail price, excluding a subscription fee. No, we're not kidding.
Here's the link to the article that broke the news on old Roxxx (http://www.themoneytimes.com/featured/20100111/roxxxy-worlds-first-sex-robot-introduced-id-1096658.html).
According to the article, Roxxxy is your honest to goodness, dream come and literal
true sex toy. According to the report: "Created by Douglas Hines, Roxxxy stands
five feet, seven inches tall and weighs 120 pounds. “She has a computer, she
has IO boards, she has servos, she has a battery pack, she has an accelerometer,
she has touch sensors and pressure sensors throughout her body,” said Hines.
“She can't vacuum, she can't cook but she can do almost anything else if you
know what I mean. She has a full C cup and is ready for action,” added Hines."
Any adolescent male from the 1970s and 1980s has to have seen a Melanie Griffith
movie that aired on cable a few years ago titled "Cherry 2000" where Melanie
played a bounty hunter who helps a guy chase down his sex robot "Cherry 2000" in
a post nuclear holocaust "Mad Max" world. The guy eventually realizes that Melanie
is a better deal than the robot and abandons Cherry for Melanie.
So you think this is a weird column? So do we. Now get this, according to the
article, Roxxy was conceived after the 9/11 attacks: "“I had a friend who passed
away in 9/11. I promised myself I would create a program to store his personality,
and that became the foundation for Roxxxy True Companion,” said Hines. He feels
his creation is not only for recreation and fun but also for people with problems
of sexual dysfunction."
Conclusion
If you're a new subscriber, you may be thinking that you made a mistake in signing
on to this surface. But before you hit the jettison button on your new subscription,
read on, because we are going somewhere with this. And yes, it has to do with
the markets.
At no time in the last few years of observation and analysis have we noticed
such a detachment from reality in the general population. It's as if suddenly
everyone's a zombie. We are so exhausted that we are starting to operate at a
different level. It's as if passion and the willingness to interact with life
has suddenly left the general population.
To us it looks as if folks are just going through the motions, putting one foot
in front of the other. Take the kids to the tennis tournament. Eat at the restaurant.
Drive the 500 miles. Stay numb and they can't hurt you anymore.
And if all else fails, you can always find companionship in Roxxxy, the sex robot
that never says no and that thinks that you are always right.
In other words, this rally in stocks could be just a reflex rally in which managers
are in a momentum groove, putting money in the market because they have nothing
else to do with it.
They know higher taxes are coming. They know that health care reform will lead
to unintended consequences. And they know that the politics of global warming
are suspect. Yet, they can't help themselves. They have to put one foot in front
of the other, which for them means to buy stocks.
Frankly folks, we are baffled. And we are concerned. It's rare to see such a
widespread personality change. And we can't really remember the last time we
saw anything like this, so we don't really know where its' headed. But it's clearly
here, Americans are now in a haze.
Yet, it's insane to fight this tape, as momentum markets can be very profitable.
What's our point? Markets are a reflection of people. Just as Roxxxy and Cherry
2000 will prove to be a whole lot less passionate than the real thing, at some
point the put one foot in front of the other market will find its own real thing
and react with some vigor.
And if you're looking for precendent, look to Japan. Men have been dating pillows
with pictures of Anime' characters there for years. Their economy is in the Twilight
Zone, with economic stimulus package after economic stimulus package failing
to ignite any kind of lasting recovery.
You see, what people seem to have forgotten is that life is as much about the
chase as it is about the catch. And if the catch is too easy, you lose your edge.
If you lose your edge then you are easily duped, manipulated, and eventually
defeated and owned.
When that happens, volatility will return and prices will correct. That could
be tomorrow, next month, or next year. Our job is to be aware of it, and make
the necessary changes at the right time. We're awake, and we're watching. No
thanks Roxxxy, we like our girls alive and our weather naturally Chaotic and
self correcting, the way it was naturally designed.
Give us the chase, we'll take care of the rest.
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