THE MARKET RUNS THE SHOW

In a recent post, Dial Up Your Counter-Intuitive Intuitive Barometer, we stated the market, not the Fed, runs the show.

Well, here's a piece from The Big Picture that makes the case quite plainly. Check out the charts. In all the clamoring, jockeying for position and media mesmerizing it's almost always the one hardly anyone saw coming.

What's key to remember is those officials who really think they're running things really think they're running things. It's their gray matter, manipulations and presence. They are the light and the way.

http://t.ritholtz.com/bigpicture/#!/entry/the-fed-and-hyperinflation,532ea2ca025312186ce846d8/3%

DON'T FALL ASLEEP AT THE TAX SWITCH

If you like annually visiting your friendly proctologist, you'll love this bipartisan proposal.

It's another classic example of the camel getting its nose under the edge of the tent. The first step came several years ago when Congress cut the mortgage interest deduction for homes priced at one million or more. The latest proposal suggests cutting it to $500,000.

But that's not the funny part. One elected wag had the contempt to play the analogy card, suggesting in these difficult economic times the government could put those usurped funds to "good use." That's what we now know they did with all the money they garnered from the first restriction.

Not that long ago one could deduct the interest one paid on new car loans, credit cards and the like. They confiscated those deductions in 1987. This is the slippery slope of dangerous stuff. Get this in your head and keep it straight: deductions are anathema to all governments.

Fall asleep on this one and, like the line in country song about the guy's girl, "You won't even know she's gone."


http://www.marketwatch.com/story/should-congress-limit-mortgage-deduction-2014-03-22?link=MW_popular

FED SPEAK

Question: What's the difference between voodoo and Fed speak?
Answer: Nothing.

That's what the newly released 'passing grade' the Fed stamped 29 of the 30 largest banks with in their so-called stress test is, Fed Speak. Quite often government makes its net bigger under the guise of the so-called fees. The term tax is too harsh, so we'll call it fees. Big pharmaceutical does it a bit differently; they just pay researchers to produce the results they want to spread a bigger net so more patients will require their drugs. It's a great gig if one can get it.

The idea that these bankers are not savvy enough to keep certain assets in certain dark places is hardly a new one apparently to all but the Fed. And that's just the tip of the full disclosure financial treadmill test.  Once again the public remains mesmerized by the media coverage.

CONTRARIAN INDICATORS

Sentiment should come to mind. As market jitters about a looming correction crank ever higher along with the Dow, here are some to consider, according to a recent Barron's piece.

But buy recommendations from analysts for U.S. Stocks compared to those for the remaining global markets are pushing 10-year highs. And roughly 85% of economists look for U.S. growth to weigh in around 2.5% to 3.2% this year. 

And again, per Barron's, 21 of 21 strategists ( Yes, that's 100 %!  Will someone please definitively define that term?) look for the S&P 500 to close 2014 at 1850. Low hurdles and even lower hanging fruit are Wall Street products--picked, packaged and pushed.

DIAL UP YOUR COUNTER-INTUITIVE BAROMETER

Things get tweaked. That's pretty straight forward. But how about your counter-intuitive intuition.

We'll, one Wall Street maven seems to agree with us: the market not the Fed runs things.

http://blogs.marketwatch.com/capitolreport/2014/03/21/goldmans-hatzius-yellen-made-a-mistake-and-the-fed-is-on-hold-until-2016/

BE CAREFUL WHAT YOU TELL

Mark Twain noted that there are lies, damn lies and statistics. And there are ordinary folks like you and me. A harsh but important truism is everybody lies. So here is an interesting read. It's about lying.

Read it and see what you think or, if you're not into introspection, don't bother and just tell everyone you did.

http://boss.blogs.nytimes.com/2014/03/11/the-surprisingly-large-cost-of-telling-small-lies/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1

WEEKEND READS

Going into the weekend we're written before about behavior; it a simple matter about choice. And everybody makes one. With the Federal Reserve and its incestuous cronies with their ties to Wall Street the choice is always the same: bail out the banking system.

Period. Pure fact. Doesn't matter who gets trampled in the process. This last time around it was those living on fixed incomes, retirees and the working stiffs. Job creation is an oxymoron. Job destruction is a more accurate term.

http://www.testosteronepit.com/home/2014/3/22/this-chart-is-a-true-picture-of-the-unemployment-crisis-in-a.html

THE PIMCO BREAKUP STORY MARCHES ON

Break-ups are a lot like true loves: They never go smooth.

And apparently that's the path things took at Pimco, the fund group run by it legendary leader Bill Gross, who has tried to put this baby to bed more than once.


http://blogs.marketwatch.com/thetell/2014/03/20/more-troubles-for-pimco-in-wake-of-el-erian-exit/

DON'T DOUBT THE DROUGHT

The Ukraine is the sixth largest grain exporter in the world. At least that is what the market expected for this year. But given the current turmoil there now that remains to be seen.
But that's not the only possible headwind grains may face; dry weather in the Midwest, lower crop yields forecast for soybeans in Brazil might be just the tip of what could be much higher prices. Corn, beans and wheat prices are already up.

So don't doubt the drought

BUYING OPPORTUNITY

California needs Occidental much more than Oxy needs California; they just don't know it yet. These are the kinds of environmental lunacies that drive good businesses elsewhere. We view this bad news as good news; first off, it's temporary and, second, it's a buying opportunity in our view.    

Finally, in the interest of full disclosure: we own Oxy and continue to add to it on
weakness.
.http://www.bloomberg.com/news/2014-03-19/california-city-s-drilling-ban-slows-occidental-s-plan.html