The Facts

John Maynard Keyes famously said that when the facts changed, he changed his mind.

1) Rising interest rates are catching the leveraged crowd off guard. Buyer beware.

2) Nancy Pelosi and gang have now (as expected) shown they can't lead. This does not help the Presidency or America. Further indecision suggests the inmates are running the asylum.

3) The suggested pull back in capital spending by the major oil producers will accelerate the peak oil (production) theme. This will surprise people with higher oil prices...the supply siders are calling for a decline.

4) China statistics are showning accelerating growth...the bears have this story also wrong.

5) The housing story is now the complete opposite of the 2003- 2005 time period...everyone was talking bullish then...now more than everyone is bearish....watch for the crowd theory to be proven wrong again.

6) The "street" is saying now is the time for growth stocks to start to out perform value stocks...as well as large cap/ over small capitalized companies...the funny thing is we have been asking many people over the past week what is a growth stock and what is the difference between growth and value and no one can give us the right answer.

7) The two critical currencies to fund the carry trade that so many hedge funds are using to fund their leverage are the Swiss Francs and Japanese Yen...both are very strong now as they have to be covered with rising global economic strength and interest rates..so the "boys" have to sell everything that is long and leveraged...stocks, gold and oil..

Best bet is to stand aside right now and enjoy the summer unwinds going on now and let this market digest a great four years...the facts are changing!

Danny Boy seen here really likes summer....he likes to lay down in the grass and weeds.