REAL ESTATE VERSUS GOLD

Real estate versus gold, the rich against the poor. Here's an interesting read about the subject. The bottom line it's about making money and where and why people choose the investments they do. It's a bit more complicated or befuddling than one would suspect.
http://t.ritholtz.com/bigpicture/#!/entry/the-rich-buy-real-estate-the-poor-want-gold,535661b6025312186cfaacba

MARKET OVERVIEW

Our bulletin board take on the market.

--next entry point if S&P 500 pulls back to its 200-day moving average around 1,700 level.

--earnings aren't great, but not horrible either. Coke (KO) and GE, two laggards in this market, rallied after reporting. Look for more of the same.

--big caps (value) still rule and have a ways to go

--starting the year energy was supposed to be a no-show. but check out the gas prices over the past 5 weeks at your local pump or the futures contracts, up 1.1% earlier this week and up 11% so far this year. Gasoline futures are a leading not lagging indicator 

--we continue to be long energy as US refineries export more overseas. Media obsessed with fantasy of lower energy prices...delay of Canadian pipeline no accident.

--bond yields still no threat to equities and won't be until 10-year bond yields 3.5%

--joe public still scared and out of the market, thinking real estate safer investment. JP won't be back in until froth on the beer much greater.

--higher interest rates when they hit will help financials

--cyclicals, materials look good here as Fed gets further behind the curve.

--while back warned about number of IPOs hitting market, many with no earnings. Much of water cooler-cocktail palaver at time about these IPOs printing money for investors.

--this bull market now 61 months young, longest in recent years 64 months, only '82-'87 and '96-2000 longer...difference is rates going up then and Feds pulled the punch bowl from the party.

--that will happen here too, but the market will see it first.

--10% from here puts S&P near 2,000 mark, quite doable before pullback.

JUST DON'T TELL GEORGE

Hey! What did they expect? It was New York money. Bacteria have been around since the beginning of time, way before the Father of Microscopy, Van Leeuwenhoek (1632-1723), developed the microscope.

Around our house growing up mother always warned never put money in your mouth or your fingers without washing them after you've handled it. This is just another example of boring and bored media mesmerizing. The fact is bacteria preceded the media, most likely a good thing. 

http://online.wsj.com/news/articles/SB10001424052702303456104579489510784385696

MORE ON THE UKRAINE

International politics are hardly known for their clarity. Clear as mud might be a better description given all the high jinks these players resort to. Here's an informative article on some of today's goings-on in an attempt to perhaps let peace ring out.

http://www.minyanville.com/sectors/global-markets/articles/Maybe-Putin-Did-Blink-on-Ukraine/4/21/2014/id/54655?refresh=1

IF YOU DON'T LOOK

Walk into any Major League Baseball park in the old days and you'd probably hear something like this: "Programs, programs! You can't tell the players without a program."

Well, if you haven't been looking you can't read the road signs either. They're at it again.

http://www.businessinsider.com/us-mortgage-lending-is-starting-to-ease-2014-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29

ABSOLUTE CERTAINTY

Somewhere along our path we recall seeing a sign in a chest surgeon's office that said something to the effect that nothing is more uncertain than the state of absolute certainty. From Bloomberg here's some more economic fodder for the premise that the Fed is already behind the curve.

Too many people are looking for more deflation. One side of the Good Vessel Deflation is getting crowded.

“After a slow December and January and some weather-related impact in February, we are beginning to see retail conditions improve,” Paul Toms, chief executive officer of Hooker Furniture Corp. in Martinsville, Virginia, said in an April 16 earnings call. “The overall economy seems to be more resilient and able to shake off bad news, there’s a firmer foundation under key indicators for our industry like housing, employment, the stock market and consumer confidence.”

http://www.bloomberg.com/news/2014-04-21/gain-in-u-s-leading-index-points-to-second-quarter-rebound.html

THE ENTRAIL CROWD

In ancient Rome predictions of future events would sometimes be based on an examination of the entrails of a sacrificial animal.

Most have heard of the in-crowd. But there's another group perhaps not so well known we call the Entrail Crowd.

Simply stated, these are those economic seers who read their econometric babble and come up with forecasts. Not much has changed notwithstanding the electronic evolution. Accuracy, in most cases, turns out to be missing more often than those unfortunate children with their pictures on milk cartons.

Just make sure in this case your investments are not the sacrificial prey.

http://blogs.marketwatch.com/capitolreport/2014/04/21/seventy-two-economists-polled-and-exactly-zero-see-economy-contracting-this-year/

SHORT TRUCE

Easter Sunday didn't keep things from heating up in the eastern Ukraine as gunfire broke out at one check point.
http://www.businessinsider.com/ukraine-rebels-call-for-russian-intervention-2014-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29

DEMAND FOR TIPS

In a few weeks one of the most famous sports sayings will once again be in the headlines at the Indianapolis 500: "Gentlemen, start your engines."
 
 A while back we unloaded most of our TIPS at a nice profit when the yields were getting weaker than new born kittens. Is this a wake-up call or just another false start? You be the judge.

Bloomberg: - The U.S. sale of $18 billion in five-year Treasury Inflation Protected Securities drew the strongest demand ever from a class of investors that includes foreign central banks.

Indirect bidders bought 58.4 percent of the securities at the TIPS sale. That compared with an average of 42.3 percent at the past 10 auctions. The bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 2.7, matching the highest level since December 2012. The notes sold at a yield of negative 0.213 percent, below the negative 0.162 percent average forecast of five of the Fed’s 22 primary dealers in a Bloomberg News poll.

“The stats were off the charts,” said Stanley Sun, a New York-based strategist at Nomura Holdings Inc., a primary dealer, said in a telephone interview.

The five-year breakeven rate (a rough measure of implied inflation expectations) jumped as a result.

BUBBLE LAND UK STYLE ?

Interesting read about the UK real estate market.

In the US banks are now softening their requirements for mortgages because most of the low, easy picked fruit has been picked in another case of bankers rewarding bankers. Fees and penalties have been hiked. Next?

So get thee prepared; this is just another step in the ever-on-going cycle. Know that there's plenty inflation around, deflation is a non-entity, costs are rising, labor shortages cropping up and wages are about to follow.

Years ago a famous cartoon character was famous for always repeating: "What me worry?" Well, rising wages will bring forth the worry worms in droves.

So what as an investor are you going to do about it? How and where and why are you going to hedge your positions?
http://soberlook.com/2014/04/a-uk-housing-bubble-or-something-else.html