A DAY LATE

Most have heard the old saw a day late and a dollar short.

Well, when it comes to the Federal Reserve it's much worse than a day late and a lonely dollar short. The Fed is always behind the curve, a fact Sir Alan Greenspan, the former clarinet player, proved repeatedly. 

All the Bernanke easy money has done little to cut unemployment. The shrinking work force should get most of the credit for any drop in the unemployment numbers. If you check U 6, the comprehensive yard stick of unemployment, it's close to 14%.

Bubbles now forming in real estate, bond and equity prices threaten this artificial, phony, pumped-up recovery. And Bernanke has the look and demeanor of a guy getting ready to kick the can to the next poor bureaucratic slob who will sit on the chairman's throne.

In the case of this monetary charade, like one of those old grade B flicks, the bad stuff hits the fan after the last villain has hit the road. 
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WHAT SOME DISCARD

What some discard others presumably want.  Here's an interesting read. Know that the author, Frank Holmes, is a longtime gold fund manager.

http://www.futuresmag.com/2013/07/09/the-asian-giant-stampeding-into-gold?eNL=51dc3163fc746ffa44000213&ref=hp&utm_source=DailyMarketFocus&utm_medium=eNL&utm_campaign=FUT_eNL&_LID=287557&t=commodities&page=2

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THE SECOND HALF

So let's take a look at the so-called second half. 

There are some expected drags on the market like the EU mess, China slowdown concerns and the US where equities for the most part were on fire for much of the first half.

That first-half US performance could cool off more than many anticipate. Many see the possible tapering of QE as a threat to a stock market that's been artificially pumped higher by easy money. 

There is also trouble in several emerging markets of late that some believe are tied to the Federal Reserve when it begins cutting back on QE. Those markets until recently provided an economic lift to many investors, especially those searching for yield.

On the other hand, cutting QE sends a signal, right or wrong, the world's largest economy is well enough to start standing on its own. That translates into more demand and more demand translates into increased use of energy and other things like basic materials that have lagged during the SM's bull run.

So what's the point. In short, look to the laggards that have been the market orphans to date. As we've written before, the bargains, if any exist, aren't usually found where everyone's looking.
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GLOBAL BUBBLE BUSTERS

Central bankers everywhere else are watching these experiments closely, among them Ben Bernanke, chairman of the U.S. Federal Reserve. He and his counterparts around the world, seared by the worst financial crisis in 75 years, are searching for ways to halt borrowing binges before they morph into bubbles, and to push lenders to shore up their defenses before the next crisis arrives.

The above is a quote from today's WSJ. Economists, God love 'em, even have a new term for these acts of interference: "macroprudential tools."
http://online.wsj.com/article/SB10001424127887324069104578527683704380960.html?mod=ITP_pageone_0
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ONE PERSON'S SUPPER

One man's supper is another man's slop.

Contrary to that old saying about what's good for the gander is good for the goose doesn't seem to hold up well in today's economic global scene.

http://www.bloomberg.com/news/2013-07-08/what-s-good-for-u-s-china-japan-leaves-emerging-markets-losers.html
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                                                         IF THEY DON'T
If  they don't get you one way, they will find another. And that's what the rising trend in something called "forced arbitrage" is all about.

http://www.moneytalksnews.com/2013/07/08/forced-arbitration-when-your-rights-get-the-runaround/?utm_source=newsletter&utm_campaign=email-2013-07-08&utm_medium=email
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MEXICAN MARKET MAY OFFER KEY

Here's an interesting read one could with a little imagination label correlation.

http://www.minyanville.com/sectors/global-markets/articles/Mexico-Markets-Face-Impending-Risk-mexico/7/8/2013/id/50668?camp=newsletter&medium=email&from=recapemail
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CALL THEM BROKE

You could call them the Big Three or the Little Three or PGC or CPG.

Or you could just call them broke, Portugal, Greece and Cyprus. After the market closed Monday the EU forked over another 3 billion euro tranche to Greece to keep the balloon afloat for another quarter.

These three will undoubtedly need more aid as the summer wears on and German elections begin capturing more media attention. It is widely expected German Chancellor Angela Merkel will be re-elected. She is known for taking a less than sympathetic stance about bailouts.

And more elections in Portugal could also capture investor attentions.  As for Cyprus it is expect with the nation's falling economy and banking problems the tiny country will need more money than previous predicted.
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DB UNION

DB could well stand for Deadbeat Union as in soaring bad debts plague the EU, according to a story in today's WSJ.

In the face a a continuing shrinking economy business owners are calling on what you to be known as  the low man or the repo guys. We once knew a guy who reposed cars for a major bank. It can be a frustrating, nasty business.

Judging from the WSJ Piece it's also a costly one. It's also an insight on EU small businesses and capital starvation.

http://online.wsj.com/article/SB10001424127887324251504578579190607237804.html?KEYWORDS=Debt+collectors
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DON'T LOOK NOW

You may soon be paying to cash your paycheck or pay card. It's another way big banks have figured out how to screw workers. They've enlisted the help of employers to steal some more money and your elected officials, left and right, who are owned by the banks, sit there with their usual response: "Duh!"

http://www.moneytalksnews.com/2013/07/05/prepaid-cards-are-replacing-paychecks-at-more-companies/?utm_source=newsletter&utm_campaign=email-2013-07-06&utm_medium=email
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                                     RISING INTEREST RATE OPPORTUNITIES

Cyclical stocks have been the market’s best performers during lengthy periods of rising rates. Research firm Birinyi Associates studied nine such cycles since 1962 and found that the technology, industrial and materials sectors averaged double-digit gains in the six months after interest rates started to rise, while the utilities and telecommunications sectors lost ground and consumer staples lagged the S&P 500.

http://www.marketwatch.com/story/why-rising-yields-wont-derail-dividend-stocks-2013-07-08?pagenumber=2

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AN EXCERPT: HABITS

Habit is either the best of servants or the worst of masters.

                                                              Nathaniel Emmons

Webster’s defines habit as a thing done often and hence, usually done easily; a custom; a pattern of action that is acquired and has become so automatic that it is difficult to break.

“I am your constant companion. I am your greatest helper or heaviest burden. I will push you onward and upward or I will drag you down to failure. I am completely at your command. Ninety percent of the things you do might just as well be turned over to me, and I will do them automatically. I am the servant of all great people and, alas! of all failures as well. I am not a machine, though I work with all the precision of a machine, plus the intelligence of man. You can run me for profit or run me for ruin—it makes no difference to me. Take me, train me, be firm with me, and I will place the world at your feet. Be easy with me and I will destroy you. Who am I? I am Habit.”

                           Anonymous

We all accumulate habits, some good and some not so good. But it’s always the same: Your choice. Whether you’re working out or just trying to live your life, choose your habits carefully.  And on those days when you find your spirit flagging a bit, try to remember something the author Somerset Maugham wrote years ago: “The unfortunate thing about this world is that good habits are so much easier to give up than bad ones.”

Habits play an important role in our investing whether we realize it or not. Buying at the top and selling at the bottom is widespread among retail investors. Swimming always with the crowd is a confirmation habit. It often provides a false sense of validation, a feel good factor.

I started this book out with a piece about habits because they play such a large role in our lives.  All of us are forming habits daily. Habits are like the saying, “Be careful what you wish for.”  Habits fill vacuums.

So be extra careful what you’re leaving unattended. It just might get filled with a habit.

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