BONDS PRICED TO PERFECTION

Why have stocks, oil and gold been higher lately? How can it be.. people are comfortable when "told" by the media and politicians..daily....the Fed will keep interest rates low for the foreseeable future...like well into 2010....really??? Since when is the most important information on a timely basis issued by these folks?

China's foreign reserves in just six months have jumped another $318 billion.....now some $2.3 trillion....to manage that type of cash flow.....requires some very serious managers....China is buying everything they can on the planet related to hard assets...including gold.

Corporate bonds...in the USA we have sold over $1 trillion of new debt at prices not seen in 20 years....in terms of borrowing costs...Global issuance of $2.5 trillion! Investment grade companies are reducing their need for commercial paper.....and banks in general......this is bad for banks.

These new bonds are not pricing in a declining dollar or rising interest rates....this pending debacle in debt is going to make the DOT COM crash look like a picnic.

"Societies now prefer inflation to deflation." Well said.....it took 30 years to say it....

There is far too much commonality in the global stock markets.....ABB, GS, and PBR all have identical charts looking at ten year trading patterns.....they are three very different businesses...and should not be traded/ invested alike....

The out sized profits for those who have been in the stock market since March will be taking profits to protect gains for the balance of the calender year.....so will we...

Long term....we have a material repricing of real assets underway..to reflect the lower purchasing power of the currencies in which they are dominated...cash will begin to migrate away from the public sector and towards the private sector once again.....I.E...away from bonds and cash and into stocks and hard assets....our theme.

Danny Boy seen here playing ball....his favorite time of the year.