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Close: The market turned south today under the weight of several items that implied negative implications for the economy... The Trade Balance widened to -$42.5 bln (consensus of -$40.0 bln) - its second largest in a year - as exports fell 0.2% in December... The University of Michigan Consumer Sentiment Index for February also fell short of market expectations - falling to 93.1 in its preliminary reading (consensus of 103.3) - and threw cold water over the indices' initial attempts at rallying at the open...

Although the latter development wasn't that disturbing - considering the weak link between consumer spending and sentiment, it was enough to incite a broad-based pullback in stocks... Other developments also prompted traders to lighten positions ahead of the three-day weekend... Reports of a 'mysterious powder' at a New Jersey post office (which later tested negative) and a fire alarm at a Senate Building (prompted by a burnt bagel) were enough for traders to take some profits from the week's strength... As a result, the Nasdaq finished the week with slight losses, and the Dow and S&P 500 ended the week with slight gains...

 

So consumer sentiment is not that distrurbing. But a fire alarm caused by a burnt bagel is. :mellow:

Slight losses indeed, but the NQ erased the whole week's gains. Anyone who donged the NQ after Friday and held was underwater as of today's close.

OK everyone, now let's review:

 

In 1999, when the stock market was going parabolic, what impact would a burnt bagel have had on the New York Stock Exchange?

 

To say this is Bubble II is to ignore an ocean of differences between this bull rush and the last one. This one is perpetually at the tipping point, and only massive criminal interventions have kept it from crashing already. Mark's commentary today is all about intervention. I know what they're doing, and I know what the consumer's are thinking and feeling, and I know this is NOT 1999...no matter how much the charts and the numbers might lead one to fall for the ruse. The public knows they've been lied to on a few too many topics lately, and they're not even 1/2 as convinced that this is a real bull market as they were in 1999.

 

The World in 1999, and the Market in 1999, Vs. the World today and the Market today - as different as the Moon and Mars.

 

1999: "New Economy Bull"

 

2004: "Suspended Disbelief Bull"

 

We are in the land of unintended consequences amid the grandest experiment ever conceived.

 

"Sell before May and go away."

 

The boys are gonna front-run the exit.

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This is a real conversation. I didn't make this up. A phone call with my mortgage broker friend. Her name is Lisa. We got on the subject of stocks and RE.

 

Mark:

 

"Do you still have your CSCO?"

 

Lisa:

 

"Yes, I have 1000 shares"

 

Mark:

 

"Did you see it go to $29 last week?"

 

Lisa:

 

"Yes"

 

Mark:

 

"Why didn't you sell it?"

 

Lisa:

 

"Because my 1,000 shares used to be worth $80,000, and I can' sell it now at such a huge loss."

 

Mark:

 

"How did you feel when it was trading at $8 last year?"

 

Lisa:

 

"I'm in it for the long term"

 

Mark:

 

"What if it goes back down to $15?"

 

Lisa:

 

"I'll never sell it."

 

Mark:

 

"You'll sell it. You'll sell it at $5 when you can no longer take the pain. That's a typical retail investor. Panic out at the lows."

 

Lisa:

 

"Mark, there is a house here in Beverly Hills. You and I should buy it together. Its only $400,000, but it needs a total rehab."

 

Mark:

 

"I'm not interested in buying any real estate, at any price right now. Its going to crash."

 

Lisa:

 

"I'm in the mortgage industy, and all the experts, all the rich people, everyone I know says RE is going to keep going up."

 

Mark:

 

"Why is that?"

 

Lisa:

 

"Because there is no supply. Too many buyers. Not enough homes."

 

Mark:

 

"Yeah, sounds like CSCO in Feb. 2000. At $70/share, there was a shortage of sellers. Everyone wanted to buy. CSCO was going to $200."

 

Lisa:

 

"Mark, you really need to go in with me on this house. We'll double our money."

 

Mark:

 

"Sorry. I wouldn't be able to sleep at night owning real estate at these prices. When prices start to drop, 2 years worth of gains will be wiped out in 6 months. Just like CSCO."

 

Lisa:

 

"So, Mark, what are you doing with all your money?"

 

Mark:

 

"I'm buying gold."

 

Lisa:

 

"Are you crazy? Its over $400/oz."

 

Mark:

 

"You are right. Nobody wants to buy at $400. They won't buy at $500. And won't be interested at $600, either. When gold goes over $1,000, then everybody will be buying it, at any price."

 

Lisa:

 

"I sold my GFI stock today. Its gone nowhere for 6 months after you told me to buy it."

 

Mark:

 

"I doubled by GFI position today."

 

Lisa:

 

"What makes you think its going up?"

 

Mark:

 

"Its a technical reason. A Pots and Pans formation. Too complicated to explain."

 

Lisa:

 

"Sounds difficult. I think I'll stick to real estate. Everybody knows its going up."

 

Mark:

 

"What about your CSCO?"

 

Lisa:

 

"I'm holding it for the long term"

 

Mark:

 

"Might be OK if you were 22-years old. But at 45, you don't have much time to wait around."

 

Lisa:

 

"I'm not worried. I'll get rich on real estate. When I retire, CSCO will be back up to $80, where I bought it."

 

......................................

 

This is s true story. I could not make this up. Conversation happened an hour ago.

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You should start an investment news letter: The Contrarian Lisa.

 

Just pretend Lisa is an acronym for some sort of esoteric black-boxed Coppock-Curvish gobbeldy goop that no one will ever question. Something like:

 

Lambda Integral Sequential Analysis (L.I.S.A)

 

Every month, you'll have a 5 minute telephone conversation with Lisa, ask what she and her friends are buying, what they hate, what they're holding, and dress the nonsense up in Opposite-World with colorful adjectives.

 

You'll make an absolute fortune.

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Plunger-

 

Word! Well said!

 

as always. ;)

Tanks Doc!

 

Mark...the most valuable thing you have written is that simple converstation with your friend Lisa.

 

That should be a letter to the editor in the Wall Street Journal.

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Guest bullseatshitndie
......................................

 

This is s true story. I could not make this up. Conversation happened an hour ago.

that is priceless. you it on the head. i can see it now, everyone will be selling csco and the rest of the crap in low single digits only to take that $ and buy gold over 1k. that will conclude the end of the bear market and the end of the gold bull.

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Lambda Integral Sequential Analysis (L.I.S.A)

 

Every month, you'll have a 5 minute telephone conversation with Lisa, ask what she and her friends are buying, what they hate, what they're holding, and dress the nonsense up in Opposite-World with colorful adjectives.

 

 

Oooh...Oooh..... don't forget to find out what she's wearing.

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MTG:

http://139.142.147.218/StockChart_ImageOnl...=INX&ref_rate=0

 

Forensically Speaking, This screamer of a mortgage lender is showing us that

 

A: Lower Mortgage rates do not equal higher profits than 2003

 

OR

 

B: The shit is about to hit the fan, the Ten Year Yield is about to bounce off the bottom of the channel and ramp rates higher...

 

OR

 

C: BOTH OF THE ABOVE

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