Market Commentary
By Charles Payne, CEO & Principal Analyst 

I wanna run, I want to hide
I want to tear down the walls that hold me inside
I want to reach out and touch the flame
Where the streets have no name

I want to feel sunlight on my face
I see the dust-cloud disappear without a trace
I want to take shelter from the poison rain
Where the streets have no name
Where the streets have no name
Where the streets have no name
—U2

"For the record U2 and the individual band members have a totally clean record with every jurisdiction to which they are required to pay tax and have never been and will never be involved in tax evasion" 
—The Edge to the Baltimore Sun

When U2 saw its taxes leap to $1.1 million in 2006 after only having to pay $46,500 in 2005, the band did what any smart band would do ... moved its corporation to a cheaper tax domain. The move to Amsterdam must have saved the band hundreds of millions on the more than $1.0 billion it’s raked in since then. It's always better to find a place where the accounts have no names to shelter hard earned bucks. 

Read more at Wall Street Strategies 

Market Commentary
By WSS Research Team 
By Carlos Guillen

After some instability earlier in the trading session, equity markets are on track once again to reach new record highs. Despite a second day of lacking economic drivers, investors have not been dissuaded from jumping into stocks, and today comments from a Fed official have tipped the scale in favor of equities.

Federal Reserve Bank of St. Louis President James Bullard said earlier today that the central bank should continue its bond buying because it's the best available option for policy makers to boost growth that is slower than expected. This has once again served to give investors further confidence that the Fed will very likely continue with its easy monetary policy trajectory. According to Bullard, quantitative easing maneuvers have been improving financial conditions and can be adjusted as needed, and as such should remain active. 

Later in today's trading session, New York Fed President William Dudley will also offer his views and insights into the outlook for the Fed's asset-purchase program. And more importantly tomorrow, Fed Chairman Ben Bernanke will testify before Congress, and the minutes of the most recent meeting of the Fed's monetary-policy committee will be released.

Read more at Wall Street Strategies 

Now that the market has entered into the short squeeze phase flatfooted bears will speak of its irrationality as further proof it’s going to end up battered.  In the meantime we enter this week with the raging bears demurring: “Look Ma, still standing.”

Yes, they are standing only because most have tons of money but outside of media and industry hype- declining credibility.

Still, I worry about all the whining from the naysayers and chorus of folks that say the crash is around the corner, because corrections happen but while millions of investors wait, million have missed an opportunity of a lifetime.   The thing is we could be on the cusp of something that last a very long time, albeit with occasional shocks and pullbacks.  The key will be a new administration and GOP control of the House (maybe even the Senate, too) after midterm elections.

Read more at Wall Street Strategies 

Morrie: I've been looking all over for you

Jimmy: How are you? Merry Christmas

Morrie: Listen, I need the money

Jimmy: Morrie, relax, okay? It's Christmas - "Jimmy, I need the money"

Morrie: I'm relaxing, I need the money

Morrie (to Henry): I did what I had to do. I need the money

Henry: Not tonight, Morrie

Morrie: Listen, I did my caper. He owes me. Everybody's flashing the stuff

Scene from "Goodfellas"

Based on true events, "Goodfellas" is one of the best gangster flicks in history. There's one character, Morrie Kessler, who gets insider details that lead to the biggest heist in the history of New York-the Lufthansa heist. Morrie was mostly a degenerate gambler and no match for his gangster companions who refused to share the loot and eventually stick the heist mastermind with an ice pick through the back of the head.

There are several morals to the story, including the fact that most robberies with lots of participants (read: more than one person) are eventually found out. Another cautionary tale is about running with the wrong crowd and going for the easy money. That brings us to three big news events this week. Two are huge bank robberies and the other is possibly individual investors warming up to the stock market.

Read more at Wall Street Strategies 

Yesterday, retailers looked great which begs the question- why?  Of course there are a lot of investors and "would-be" investors are asking the same question about the market rally in general.

The thing is even though Americans are living in the moment, not seeing any reason to save money or invest in things like a home or retirement, they are creating a unique opportunity for retailers.  With savings plunging this year, even slight increases in household debt leaves enough cash to hit the mall and live for today.

This was the case in March as measured by the Federal Reserve's report on consumer credit.  The $8.0 billion increase was the smallest increase in the past eight years and driven mostly by student loans.  Those loans, along with auto loans, are being induced by the federal government.

Credit card debt actually decreased by $1.7 billion as debit card use continues to explode.  Once again, people are simply living in the present and living within their means.  Yes, the wounds of the Great Recession continue to reverberate, but it's mostly people afraid to take risks.

Read more at Wall Street Strategies 

Market Commentary
By Charles Payne, CEO & Principal Analyst 

Much has been made this week about the so-called morning after pill that allows women to effectively abort within hours of sexual intercourse. There is the social argument that goes hand and hand with abortion, but there is another angle to this current story that is not only heartbreaking but has major economic implications. Allowing girls as young as 15 to purchase the pill over-the-counter, no questions asked, on one hand some argue this saves them from becoming pregnant and having to enter parenthood at such a young age.

The more practical point is this actually gives girls that may have been intimidated the green light and eventually result in early parenthood that overwhelmingly means single parenthood. This is not only an economic dungeon for the mother but also her children growing up in poverty and squalor. It's a mean-spirited cycle where the would-be heroes actually doom girls and young ladies to a life of dependency. Some believe that's the goal anyway, but even if it's a sincere position, in the end its backfires miserably.

Read more at Wall Street Strategies 

Knowledge may give weight, but accomplishments give luster, and many more people see than weight.

Earl of Chesterfield

When President Bush declared "Mission Accomplished" he was just a little early and in the end the mission was simply to leave.  The exit was out of his hands but the question remains- what was the mission?  (I still can't believe they didn't use the Powell Doctrine of an overwhelming force cleaning out all the nooks while keeping on key personal of the Iraqi military.)  There's no doubt that whatever the mission was at the beginning it became something else later.

When President Obama bragged about pulling the economy out of the ditch I scratched my head and wondered if he would follow up that line of thinking admitting it came out of one ditch and slipped into another.  The exodus from the jobs market and massive government spending to spike the last GDP into the November elections painted a false narrative.  These days we hear nothing about jobs only about those petulant children of the Republican party that can't grasp common sense.  Certainly when it comes to fixing the economy the mission is far from accomplished.

This brings us to Federal Reserve chairman Ben Bernanke.

What the hell is the goal of all this money printing?  Last September the Fed added $40.0 billion in monthly buying of mortgage backed securities to his bag of tricks.  Then he bumped it with an additional $45.0 billion of Treasury securities.  The numbers are jaw-dropping, surely this could be defined as shock and awe but the results have only been awful.  Officially the Fed has a mandate that covers employment and inflation but there is no mistake Bernanke is trying to spark a revival in the housing market.   On all three fronts Bernanke has the kind of false facade that makes for great backdrops for declaring victory.

Read more at Wall Street Strategies 

He warns the head of parties against believing their own lies.

Dr. Arbuthnot

Well, it's too late to warn politicians on either side of the aisle in America about believing their own lies.  There's a perverse Adonis-like affliction that sees our political leaders fall head over heels for their own words even as their drip out their mouth.  Oddly, the people disbelieve almost all they hear unless its election season and then they take their guy at face value.  Still, it's been a long time since a politicians in America has gotten the masses to rally around something important...one nation, under God, indivisible, with liberty and justice for all.

It's a contradictory situation but then again we are a nation of contradictions. 

Very rich but with scores of poor people.  The best universities in the world but freefalling grades among the k-12 education system.  The land of unlimited lawyers and two million prisoners.  A nation built on an amazing Constitution which many are trying to dismantle mostly by using the freedoms in the Constitution.  It's an odd time in the country that is being ripped apart but the people hired to heel it.  For many these contradiction are breeding a certain kind of contempt.  Being pulled in all directions makes all paths look crooked.  We have become a nation of skeptics, dizzy from non-stop spin and frustrated and fading hope.

Contradictions of the Market & Economy

As we head into Friday's jobs report each day brings greater confusion and more questions than answers when it comes to the economy and the stock market rally.  The slew of revenue misses have been amazing and yet stocks continue to rally higher more or less on the word of chief executive officers that say nothing has changed for the entire year, implying any shortfalls in the first quarter will be made up in the second half of the year.  It's an interesting leap of fate the market seems willing to risk.  Of course for many there is no risk to the market as long as the Federal Reserve continues to print money.

I continue to believe the Fed impact on the market is slim at the moment although there is an impact of fresh money trying to get ahead of that impact of the Fed extraordinary efforts to spark economic growth.   I think the actual Fed0-induced top comes with the usual pomp and circumstances and just about every will be drunk with glee.  Right now there are too many bears and too little volume in the stock market to point a bubble on the verge of bursting.

Contradictions:

Case - Shiller Index saw amazing year to year home pricing gains for the month of February.  For the first time since 2006 January and February saw all 20 cities with year to year gains. Moreover, there were eight cities that enjoyed month over month gains and double digit year over year gains.  Yet despite the obvious momentum in home prices ownership rates continues to plunge.

Read more at Wall Street Strategies 

Being Mean (adjective) -Cruel, spiteful, or malicious.

Means Testing (noun) - (Social Welfare) a test involving the checking of a person's income to determine whether he qualifies for financial or social aid from a government.

Finally Congress got its act together and passed a couple of bills without the clock a second from striking midnight or passing a deadline.  The Highway bill and extension of cheaper student loans aren't perfect bills, but they remove the kind of bickering that sent the stock market into a nosedive and took a listless economy closer to recession.   There is passage of the highway bill, which both parties consider a jobs bill.  I cringed when Barbara Boxer brought out the lame save that it will create 3.0 million jobs.  Yuck, what a stupid saying.  Be that as it may, these are done deals.

Student Loans

All spring long, President Obama made the rounds at colleges beating up on Mitt about allowing interest on college loans to increase.  Those Stafford loans are means tested and set aside for low and middle income students.  Means testing is going to be a critical instrument in reforming entitlement programs, although not enough alone to save social security and Medicare.  I get it with not giving these loans to rich kids, but income-driven policies have limited many of the programs of this administration from housing to taxes.  Be that as it may, in the end is holding loan rates low the kind of lure that will get a lot of those low and middle income students in deeper trouble later in life?

In other words, isn't it kind of mean to suck in students for degrees that may not have market value or produce income to justify the overall cost- plus interest?

Student loans are now at $1.0 trillion and counting, having surpassed credit card debt.  The government has pushed out the private sector which does leave open the notion of massive forgiveness down the road or getting corporations and rich people (even those that didn't go to college themselves) to pay off the debt.  Before that part of the liberal Utopia kicks in, payments and reality will, and it’s going to kick hard.  There are 37 million Americans with college degrees and for the first time ever, more than half of unemployed have some college credits.

So, the new question dripping off everyone's lips these days is whether college is worth it anymore.  I think the answer is yes, but, so, too, Liberal Arts professors.  By the same token, we should be honest about who should go to college and while we are at it, instead of playing the political blame game, put pressure on colleges to reel in costs which has outpaced inflation by a couple of solar systems.  For what it's worth, extending the 3.4% interest o n Stafford loans will save the average grad $100 a year for a decade.

Years from now, millions of today's college grads will think Congress was cruel, spiteful and malicious for luring them into these cheap loans.

Today’s Session

Wow the market has been all over the place this morning down on reports the JP Morgan loss could hit $9.0 billion.  Interestingly this kind of scuttlebutt, from piece in NY Times, actually helps to make unwinding the trade more difficult and more costly.   Congress will be thrilled with this news, especially in the face of today’s decision on Obamacare.  In the meantime those dark clouds over banks have gotten even darker.  Coupled with stories that Barclays manipulated LIBOR for its own company gains and it’s a tough day for Wall Street.  Even British Prime Minister David Cameron is weighting in saying there are “serious questions” for the company’s management.

This has set a negative tone not helped by another huge initial jobless claims report of 386,000.

Yet the market has bounced a couple of times this morning on rumors that Germany would accept Euro Bonds but Angel Merkel is still alive so that noise was squashed.   There is hope something big and meaningful happens in Europe this week, the ECB cuts rates next week and our Federal Reserve does the same shortly thereafter (presumably after another disappointing jobs report).