Tuesday Musings-March 3rd Week

• Technical's and fundamentals don’t matter. Managers buying biggest names simply to stay fully invested. Fast Money calls it a Melt-Up.
• For the Week –We were up. Friday saw the beginnings of the breakdown. India raised rates out of the blue and India ETFs weakened as news cascaded into domestic market causing confusion. Eight Up Days couldn’t make it Nine. Commodities off. Gold can’t hang on. Oil may breakdown further going into this week. Palm can’t compete. The Ides of March brought a mixed market complicated by Senator Dodd who introduced a regulatory bill that, among other things, calls for curbs on banks’ proprietary trading. It also introduces a consumer watchdog to ensure people get clear information on loans, credit cards and other financial products. The four major banks were down slightly on the news. It also removes ‘too big to fail’ concept from government support. Taxpayers may not get 100% of their money back from GMAC while General Motors promises to make good on government bailout payback. GM may show profit 2010. CIT Group, recently emerged from bankruptcy, has a New Book Value well above years prior and still higher than current market. Wednesday stocks continued higher on Bernanke pledge to keep rates low for an ‘extended’ period of time. PIMCO manager El-Erian said there are other methods besides interest rates that the Fed can tighten, notably not renewing the 1.2 trillion dollar mortgage backed security purchasing program slated to expire end of this month. China may float their currency according to recent WSJ report on Thursday.
• Opps, the euro weakened as rift between Greece and Germany widens. Basically Germany is fed up acting as Europe’s ATM and let the rest of the coalition know it. Greece may have to go to IMF. Saturday news was kiss-kiss again. Go figure.
• Watch oil – we may see significant weakness before the summer driving season. Oil up on Wednesday close. Starting to fall apart on Friday. Oh, I already reported that.
• Germany may have to send intelligence teams to snoop on hedge funds that are speculating in the euro. This was said by Germany’s Finance Minister after Spain reported their secret service investigating attacks on their country by unnamed investors.
• Buy and Hold, again, may be dead? Here we go again as more commentators with more time than sense speak of stock picking versus buying a fund or ETF and hanging on while a portfolio manager does the heavy lifting. Many funds are now employing defensive portfolio measures.
• Transports Up! New Home sales at lowest in 50 years. Recoveries in past lead by new home sales.
• Good News – Labor Department reports consumer prices stagnate. Recovery may continue without need of rate hike by the Fed. Inflation cooled in February with the so-called core index increasing 0.1% in line with forecasts, the smallest gain since 2004.
• Hottest job in recession…err..depression is life insurance agent. Traditional companies recruiting like it was the 1950s.
• Cisco new router, introduced this past week, (cost $90,000) could allow everyone in China to make video call at the same time.
• Money markets waived fees valued at millions will take steps to get them back when rates improve. Current money market 0.8% average. Savers lose big after deducting taxes and inflation.
• Legg Mason’s Bill Miller positive about the market and favors tech and financials.
• Dividends are making a comeback.
• 37 Banks closed. This week’s FDIC losses come to $600 million.
• Finally, do yourself a favor and read Michael Lewis’ ‘The Big Short’.