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Goldata Financial
Dedicated to above average returns in the stock market.
STOCK MARKET COMMENTARY
January 19, 2010
From Elliot
Goldberg, Registered Investment Advisor, Goldata
Financial
Last week, more evidenced surfaced that the
probability of a short-term breather in the market’s ascent continued
to increase. Positive earnings reports from Intel (INTC) and JP Morgan (JPM),
previously a catalyst for a move higher, led to “selling on the
news” Friday and turned a flat week into a meek loser. China did not
help as its central bank announced tightening steps (raising reserve
requirements to pull money out of circulation) to dull speculation and its
own brand of liquidity. The Fed continued to tell us that they will keep the
liquidity train running indefinitely and imply that deficits don’t
matter. And I continue to believe them as they have every incentive to
continue as long as the bond vigilantes and foreign lenders don’t
revolt and force rates higher. This “sugar high” of liquidity has
created a modern-day “era of good feeling” that has allowed those
currently with jobs to exhale after the frightening experiences of the last
16 months. However, our biggest problem continues to be the lack of focus on
creating jobs. Continued extensions of unemployment benefits keep the natives
from becoming restless and other government programs only encourage more to
become dependent on their elected officials to rein manna down on them.
Diversions such as punishing bankers over bonuses (it’s not your money
--- they paid the TARP back, with interest) only deflect focus from the
failure of the administration to acknowledge failed job-producing policies to
date and an unwillingness to abandon paying back their constituency for
getting them elected. Obama’s statement “We want our money
back… and we’re going to get it” brings thoughts of
burnings at the stake in the central plaza --- it makes the electorate feel
good, but doesn’t solve anything. The true ideology of the Administration
continued to be exposed by the failed promise from the 2008 presidential
election concerning a new era of “shared sacrifice and working together.”
You’ll recall the Administration’s proposal to tax those who have
“Cadillac” health insurance plans as those plans encourage
abusive health care spending. Apparently, some must share more than others as
a result of a meeting this week between union leaders and the White House
where it was reported that union members and state workers will be exempt from
this tax until 2018. Disgusting! It now appears that the Administration’s
game plan is to deflect and blame others as opposed to adapting policies that
have proven to create jobs. Perhaps it will take November’s elections
(throw the bums out) for more movement on this front. Game plan: Stops will
continue to be raised on positions as there is always the possibility of more
juice that can be squeezed from this orange. Volatility perked up on this
past week’s down days and I have started to use it as a hedge where
appropriate. We are now into earnings season and our friend, volatility,
should awaken.
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