SNIFFING AROUND

Sniff were it smells the worst.

And the odor in closed end muni-bonds funds is growing, especially for closed end funds that employ some leverage in their efforts to ramp up yield.

Bad smells usually indicate some decay. Fear about things like too much leverage, government interference and interest rate changes are just a few scaring muni bond investors away from these funds.

President Obama has mentioned more than once he'd like to cap the tax-free benefits of municipal bonds. It shouldn't surprise; that's what class-warfare generals do. And we're not saying it won't happen. 

But many of these states are essentially bankrupt. With the exception of most ideas from bureaucrats and policoes, nothing occurs in a complete vacuum, something these folks never seem to understand. 

Fewer buyers could mean less revenue and higher interest rates for state and municipal sellers. Few things are foreseen. In the meantime, here's an article to help you decide whether you want to start sniffing.

http://www.marketwatch.com/story/high-yielding-closed-end-muni-funds-see-doors-shut-2013-04-12?pagenumber=2

COMMERCE WARS

Talk about currency and trade wars has ramped up since Japan kicked off it new QE program,

Some of this in time may prove noteworthy.

But there's another, more subtle war going on closer to home. In the past few weeks three states, Mississippi, Maine and Texas orchestrated invitations to gun manufacturers who ply their trade in those blue, PC-righteous, eastern seaboard states.

Two other states, Arkansas and Florida, recently extended an offer to other gun manufacturers in Connecticut.

The message is loud and clear: "C-mon down!"  Texas Governor Rick Perry is the latest to roll out the welcome mat. Smith and Wesson is in Connecticut, the so-called Constitution State, the same state that pilloried one of its longstanding, local manufacturers a few years ago for wanting to move to avoid the state's oppressive tax rates.

Politician there, including the former attorney general, a wealthy guy who now represents Connecticut as a member of the good old boys club of the US senate, resorted to severe name calling, accusing the company of being a traitor, un-American because the firm proposed a move to Bermuda..

How un-American is it to move to another state? Just maybe we're going to find out.

If gun store owners and every gun-purchasing fan of S&W sent e-mails and made pubic announcements that they will no longer buy S&W products until they leave Connecticut, gun owners and the rest of us might regain some of the power these despots have usurped over the years.

To clear the record we don't belongs to the NRA and never have.  This isn't about the NRA. It's about wealthy, elitists, eastern seaboard bullies like Mayor Bloomberg forcing their beliefs and so-called values on the rest of us. It's not about race, creed or religion. It's about power. Raw, ugly power.

The longer you wait to make a stand the less power you'll have when that day comes to a venue near you.

http://news.yahoo.com/texas-governor-connecticut-gun-maker-come-down-213053466.html

THE PARTY CONTINUES

What's a high unemployment figure?

That all depends on where you reside. In places like Spain and France double digit figures are worrisome.

In another part of the EU, up north, 7.7% is getting up there, a figure the Netherlands reportedly breached in February where, according to a recent WSJ piece, unemployment has been steadily rising for the last two years.

The Netherlands it seems late last year reclined into another recession for the third time in four years. Recessions are the worst nightmare for austerity pushers. But they're best buddies of the kick-the-can crowd. 

The EU's budget guidelines call for keeping deficits within 3% of GDP for 2013, a figure Dutch officials recently admitted they will miss, forecasting a figure closer to 3.3%. Instead officials rolled out a plan with $4.5 billion in new cuts for 2014 when the deficit is expected to grow to 3.4% of GDP.

In the meantime the government announced, it's adopting a wait-and-see mode to see if the cuts will be necessary. The government hopes improving exports will make the cuts unnecessary. 

Along the way they're planning to cut the duration of unemployment benefits by one month every quarter in 2016 and leaving the amount received unchanged. Initially they had planned to cut the duration from three to two years and lower the amount people receive in the second year.

Consumer sentiment continues to decline and austerity pushers appear to be weakening in face of rising public pressure. To quote Prime Minister Mark Rutte: 'We are taking a breather."  

Given that since the crisis hit this has pretty much been a north versus south dilemma from the beginning, look for a lot more breathers in the future. No bureaucrat wants to sing those famous, much needed words of an old Willie Nelson tune:

"Turn out the lights. The party's over. They say all good things must end."

WEEKEND READS

Who Is Right?
http://www.fool.com/investing/general/2013/04/12/bad-news-everyone-is-right.aspx

Taxes Reform
http://www.bloomberg.com/news/2013-04-10/for-168-billion-we-should-get-a-better-return-caroline-baum.html

Do It But Not Too Much
http://www.marketwatch.com/story/us-again-says-china-not-a-currency-manipulator-2013-04-12?link=MW_popular

Reduce Debt Talk From EU
http://www.reuters.com/article/2013/04/13/us-g20-eu-japan-idUSBRE93C08D20130413

There  Are  Dividends And There Are Dividends
http://online.wsj.com/article/SB10001424127887324010704578416662412780012.html?mod=WSJ_hps_sections_markets

Capitalism And North Korea
http://www.bloomberg.com/news/2013-04-09/why-capitalism-won-t-change-north-korea-s-regime.html

Commodities Turn Down
http://www.futuresmag.com/2013/04/12/commodities-slump-as-death-bell-rings-stocks-slip?ref=hp&t=commodities&page=2

You Decide
http://www.fool.com/investing/general/2013/04/12/bad-news-everyone-is-right.aspx

FRIDAY READS

Is It Working?
http://www.reuters.com/article/2013/04/11/us-japan-economy-abenomics-idUSBRE93A13B20130411

London Housing Prices Soaring
http://www.bloomberg.com/news/2013-04-11/u-k-house-prices-reach-five-year-high-as-london-s-lead-widens.html

A Different Take On Housing http://www.businessweek.com/articles/2013-04-10/cheap-mortgages-are-hiding-the-truth-about-home-priceshttp://www.businessweek.com/articles/2013-04-10/cheap-mortgages-are-hiding-the-truth-about-home-prices

Bullish Now
http://www.futuresmag.com/2013/04/11/economy-bears-turn-bulls-seeing-3-gdp-for-us-few-s?ref=hp&t=financials&page=3

Here's Some Honey For You
http://venturebeat.com/2013/04/11/show-me-the-honey-e-commerce-startup-sweetens-online-shopping-by-saving-you-money/

Your Brain And Your Biases
http://www.marketwatch.com/Story/story/print?guid=D7B08E52-A1FC-11E2-980E-002128040CF6

GOVERNMENT SUBSIDIES

They're called entitlements when the poor receive them.

Recently the Italian government seized over a billion dollars of assets from the mafia. No surprise there. It's an organization in business, like any other, to accumulate assets and to make money.

What did surprise Italian authorities was one of those assets--renewable energy. Included in the government's mafia-linked haul were 43 wind and solar energy companies.

For years the US mafia was reportedly in the trash business. After all people need to do get rid of their trash. They also need energy. In some ways energy and trash are probably more interconnected today than ever. 

So besides utilitarian reasons and perhaps some altruism what's the attraction? Government subsidies. That's where the money is, a fact practically everyone knows. And for the mafia there's the apparent added goodie, money laundering.

Economists spend gobs of time and other folks' money studying so-called leading indicators. It might be much more efficient and much cheaper to just find out what the mafia is doing.

http://www.isaintel.com/2013/04/08/renewable-energy-the-mafia’s-newest-playground/

THURSDAY READS

London House Prices Soaring
http://www.bloomberg.com/news/2013-04-11/u-k-house-prices-reach-five-year-high-as-london-s-lead-widens.html

Household Wealth In EU
http://www.testosteronepit.com/home/2013/4/9/total-fiasco-germans-are-the-poorest-cypriots-the-second-ric.html

More Smoke From Washington?
http://news.investors.com/ibd-editorials/041013-651427-obama-budget-is-worse-than-everyone-thinks.htm?ref=HPLNews

How To Beat The Bond Market
http://online.barrons.com/article/SB50001424052748704567604578410513369288892.html?mod=BOL_hpp_dc

YTC Bonds: One Bond Guru's View
http://www.minyanville.com/trading-and-investing/fixed-income/articles/Why-You-Shouldn2527t-Hate-All-Bonds/4/10/2013/id/49188

Rising Land Prices
http://online.wsj.com/article/SB10001424127887323820304578412632432865220.html?mod=ITP_moneyandinvesting_0#articleTabs%3Darticle

Bullish With Warnings
http://www.marketwatch.com/story/new-highs-in-sp-500-are-very-bullish-2013-04-10

Rail or Pipeline
http://fuelfix.com/blog/2013/04/10/killing-keystone-seen-as-risking-more-oil-spills-by-rail/#comments

BIT BY BIT

I heard the story, bit by bit, from various people, and, as generally happens in such cases, each time it was a different story. Edith Wharton, Ethan Frome.

You'll have a difficult time finding a better piece of advice for understanding what goes on in markets. It's a different story every day. And through various sources and bit by bit over time you'll get an understanding of what moves them.

Yesterday real estate magnate Sam Zell put in an appearance on CNBC and unleashed a rare commodity these days, the truth. The truth unfortunately gets the same reception as whistle blowers, especially when it comes to MSM.

In the early part to the last decade, just before the tech bubble popped, Zell appeared at a conference in Century City where he spoke. At the time he was owner of lots of property in Silicon Valley. Might still be.

 Someone ask him if he took part of the lease payments in shares of those hotter than hot technology darlings that were posting new highs every 20 minutes. His answer was quite revealing.

He responded he'd done something like that earlier in his investing life and got burned. Not this time around. Leases are leases. He wasn't interested in what could be called, depending on one's viewpoint, technology PIKs.

Zell's response that evening shocked many. Taking those shares in payment seemed such a no- brainier. After all, wasn't that what all those people who quit their jobs and rushed off to work in the valley were doing? Most of them had to be pretty smart people.

Here's link to his recent shocking revelation.

http://www.zerohedge.com/news/2013-04-10/sam-zell-stock-market-feels-housing-market-2006

http://www.cnbc.com/

THIS SHOULD PUMP UP YOUR CONFIDENCE IN OFFICIALS

One Wall Street wag is really in the wrong business. He recently penned a blog warning Cyprus could be the next Detroit.

Now we don't claim to be particularly devout. But we hope nobody tells Cyprus. We don't have any idea how much Paxil is available on that tiny Mediterranean island. But talk about bummers.  

In case you've not been paying attention the Motor City just went bankrupt, though for now it's being called technically something else. A lot like California it's a place that's been run by the Democratic party since the days of The Edsel, one of Ford's most memorable snap, crackle and flops.

Now before anyone gets their panties twisted into a big Murphy, the facts are the facts. And here's another fact. Michigan Governor Rick Synder, a Republican, apparently with sloppy due diligence, vetted Orr before picking him, a fact that raises issues about Synder. But now questions are surfacing about a possible conflict of interest with the Washington law firm where Orr was once a partner, JonesDay.

On another burner Orr apparently had some back taxes due, taxes he claimed he only found out about recently when he read about it in the newspapers. Orr was appointed as emergency manager in-March this year.

Here's a quote about Orr from Wikipedia:

Between 2009 and 2012 the state of Maryland’s Office of Unemployment Insurance filed four liens against Orr's $1 million Chevy Chase, Maryland, home, for unpaid taxes on child care for his two children. Two liens totaling $15,797.68 from 2011 and 2012 were listed as unpaid at the time of Orr's appointment as Detroit emergency manager. Upon learning of what he described as an "embarrassing" oversight, Orr stated that he promptly paid off the liens the same day.[22]
[edit] 

Orr's hiring might represent a conflict of interest. Here's a link to the rest of the story from today. 

http://www.wxyz.com/dpp/news/region/detroit/detroit-city-council-examines-contract-between-city-and-em-kevyn-orrs-old-law-firm

WEDNESDAY READS

Lithium Battery Rethink
http://www.reuters.com/article/2013/04/10/us-boeing-battery-lithium-ion-idUSBRE93904420130410

Beware Of The Obvious
http://blogs.wsj.com/marketbeat/2013/04/09/the-great-rotation-that-isnt-so-great/

Hope Nobody Tells Gloria Allred
http://www.guardian.co.uk/world/2013/apr/09/feminism-destroy-russia-patriarch-kirill

Another Currency Swap
http://blogs.reuters.com/globalinvesting/2013/04/09/dim-sum-looks-tasty-for-africa/

Wake Up And Smell The Dependence
http://www.thefiscaltimes.com/Columns/2013/04/10/Thatcher-Was-Right-A-Dependent-Society-Will-Fail.aspx#page1

Dow 18,000?
http://www.marketwatch.com/story/why-well-see-dow-18000-before-this-bull-run-ends-2013-04-09

Wasted Revenue
http://www.newsmax.com/US/billions-wasted-gao-report/2013/04/09/id/498682

Rising Too Fast
http://t.ritholtz.com/bigpicture/#!/entry/are-home-prices-are-rising-too-fast,516423c2d7fc7b5670a36101