A DIRTY WORD

It's a four letter word and it's dirty.

Unlike some other four letter words you won't hear it used much these days. And when you do hear it most likely the context centers on its demise.  Right about now, however, it's probably a good time to consider a: "Not do fast!"

And here are some links about why.


1. http://www.spiegel.de/international/germany/germany-faces-tough-decisions-as-it-dismantles-nuclear-plants-a-899063-2.html

2.http://www.spiegel.de/international/germany/german-renewable-energy-policy-takes-toll-on-nature-conservation-a-888094.html

3. http://oilprice.com/Energy/Coal/Global-Markets-Hot-for-U.S.-Coal.html

4. http://oilprice.com/Energy/Coal/Coal-Is-the-Fuel-of-the-Past-and-the-Future.html
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rle

MONDAY READS

Make You Want To Trust MSM?
http://www.newsmax.com/Newsfront/Network-News-Ties-Obama/2013/05/12/id/504036

Make You Want To Trust Government More?
http://online.wsj.com/article/SB10001424127887324715704578478851998004528.html?mod=ITP_pageone_0

The Wall Street Octopus
http://libertyblitzkrieg.com/2013/05/12/denver-public-schools-pay-216-million-to-wall-street-banks-to-unwind-swaps/#more-5652

Japanese Stocks Up
http://www.reuters.com/article/2013/05/13/us-markets-japan-stocks-idUSBRE94C02020130513

Aussie Dollar
http://www.cnbc.com/id/100683015

Bears Versus Bulls
http://www.bloomberg.com/news/2013-05-12/gold-bears-pull-20-8-billion-as-blackrock-says-buy-commodities.html

Change From Libor
http://www.reuters.com/article/2013/05/12/libor-replacement-idUSL3N0DT09J20130512

New Study About Testicular Cancer in Young
http://www.sciencedaily.com/releases/2013/05/130512141208.htm

Confidence Booster
http://online.wsj.com/article/SB10001424127887324744104578471512931848632.html?KEYWORDS=foreclosure+erro

BRIEFS

Usually we post a few short items here, but this time we think you'll find the following linked-article worth the time.

We've argued for years the MSM leaves much to be desired. In LA at this moment there is an apparent struggle between unions and other populist forces and two free-market-oriented, conservative billionaire brothers over who should get ownership of the powerful newspaper, the LA Times.

Does it matter?  Somebody thinks so. Though this post isn't about that struggle, indirectly it is. Too big to fail isn't just limited to big banks.

The tracks of too big are everywhere: too big to be owned by people with opposing opinions; too big to accurately report the real news; too big to tell the little guy the actual truth.

http://www.testosteronepit.com/home/2013/5/10/every-president-his-bubble-and-its-aftermath.html

WHAT'S YOUR VIEW?

To say that stocks have been on a tear so far is to put it mildly. 

Up 15% for the year so far, should the trend continue on annualized basis the market would end 2013 whoppingly higher. Now this isn't intended to be one of those it-is-it-isn't-going-to-happen articles. Not at all. It's more reflection time.

You've got heavy-hitting hedge fund managers touting everything from further weakness in the Aussie dollar to recommending housing stocks that have already rallied based on further improving fundamentals to suggesting though stocks are not cheap they have a ways to go in this dramtic upswing.

In other words, there is no shortage of opinions here.  Last week there were two prominent meetings, one in New York, the other in what-happens-here-stays-here LasVegas. 

One writer even referred to the Las Vegas gathering as Davos in the desert. Given our view of the annual Davos confab, we're not sure whether that's a compliment or an insult.

What is certain is this information won't stay there. So here's another view from another heavy-hitter.

http://finance.fortune.cnn.com/2013/05/10/sam-zell-says-sell/

WEEKEND READ

WANT MORE $:  SHORTEN NAME
http://www.moneytalksnews.com/2013/05/10/study-people-with-shorter-names-earn-more/?utm_source=newsletter&utm_campaign=email-2013-05-11&utm_medium=email

MARITAL MONEY BLISS
http://news.investors.com/investing-personal-finance/051013-655670-how-to-avoid-marital-money-stress.htm?ref=HPLNews

MONEY BLISS
http://news.investors.com/investing-personal-finance/051013-655670-how-to-avoid-marital-money-stress.htm?ref=HPLNews

US AND UK HOUSING: A LOOK http://www.bondvigilantes.com/blog/2013/05/10/a-look-at-housing-affordability-in-the-us-and-uk/

WHAT SAY YOU?
http://www.insidermonkey.com/blog/jpmorgan-chase-co-jpm-be-careful-what-you-wish-for-139836/

STRONG DOLLAR
http://www.marctomarket.com/2013/05/currency-positioning-and-technical_11.htm

WHERE WERE THEY?
http://www.zerohedge.com/news/2013-05-10/did-they-ever-tell-you-buy-gold-or-sell-stocks

FED MAP
http://online.wsj.com/article/SB10001424127887324744104578475273101471896.html?mod=ITP_pageone_0

A BANK WORTH A LOOK

We've written about HBAN, Huntington Bank, before. It's a midwest regional bank, like many other banks, has had its troubles.

The stock changes hands around $7.50. An insider recently bought 100,000 shares at a cost of just over $700,000. One insider buying is not significant. In this case, however, it's at least a sign.

Most of its branches are in middle America, an area hard hit by the manufacturing decline. And that's part of the story we like, the dull, prosaic Midwest where oil and gas discoveries are helping to fuel the economy. You can do your own research on the region and decide accordingly.

One well-known market strategist when asked recently for her favorite emerging market replied, the Midwest.  Full disclosure: We own the stock and continue to accumulate it. Without putting a number on it, if economic recovery becomes what many MSM cheerleaders hope, the shares have good upside potential.

It pays a small dividend, trades at about 10x earnings and short interest, now about 10 million shares, is down 11% since mid-April, some of it no doubt due to the market rally
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rle                  
    

BRIEFS

There's been much talk so far this year about bonds, starting with all the babble abuot a so-called "great rotation."

Now Pimco's Bill Gross, the noted bond guru, some are saying made it offical recently when he pronounced bonds DOA.

Gross specifically mentioned the 30-year bond bull market that started in the early 1980s, actually the same time the stock market took off. 

But as we wrote about recently the real tipping point came in junk bonds now offering below 5% yields on average for the first time in  the history of these securities.

There are two thing to consider here, risk premium and yield. Yields may be at historic lows for junk, but risk premiums are not. And that tells an important tale.

What all the central bank easing going on around the globe should tell you is the old for-every-action-there-is-a-reaction.  Similar to what the administration is trying to do with its chain CPI index--screw the COLA folks--cutting interest rates to revive economies is putting the screws to all and any looking for yield.

And that goes way beyond just the COLA crowd.

But its a two-way fare. One fine day these yields will prove less attractive than a three-day old hotdog sitting in the fridge.
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FRIDAY READS

Fewer Own Stocks
http://money.cnn.com/2013/05/09/investing/american-stock-ownership/index.html

You Read You Decide
http://libertystreeteconomics.newyorkfed.org/2013/05/are-stocks-cheap-a-review-of-the-evidence.html

UK Rates Unchanged
http://www.futuresmag.com/2013/05/09/british-pound-consolidates-after-rate-decision?ref=hp

Couple Of Interesting Charts
http://www.dailyspeculations.com/wordpress/?p=8365

Dollar Strength Or Yen Weakness?
http://www.marketwatch.com/story/dollar-holds-high-ground-after-topping-100-2013-05-09?dist=lbeforebell

More On The Yen-Dollar
http://www.marctomarket.com/


Another Point Of View
http://news.investors.com/ibd-editorials-perspective/050913-655537-free-market-texas-outperforms-big-government-obama.htm#comments

WHAT HAPPENS NEXT?

When is stubborn stubborn?

How about when your a commodity-based or emerging market currency shows some glimmer of strength. Central banks in Asia and New Zealand are trying to cool off their currencies as capital continues to flow to those areas.

Despite concerns about a global slowdown, Asia in the minds of many investors is where whatever growth exists is. Horace Mann may have said to go west, but it's by all indications now east, China, Thailand, Australia and the Philippines.

The Thai baht is approaching levels not seen since 1997 when it moved around 25 baht to the U.S. dollar. Though it's early this is another form of what some might call reverse currency debasing. 

As these currencies strengthen those of some of their trading partners weaken. That could end up making products from these strong currency nations less marketable putting a damper on exports. 

When a similar situation among the so-called Asian Tigers developed in the 1990s, central banks tried to stem the tide by intervening in the markets. And we all know how that came out. Fooling around with currencies is like fooling around with Mother Nature. You might get away with it for a while.

According to reports Asian emerging markets have attracted nearly $7 billion to bond funds so far this year. Last time that happened was 2010. This is at least in part a higher return thing. Yield hungry investors searching for more income. 

The message is also clear. Money looking for higher returns will travel. It reads like a good telegram: Have money. Need higher returns. Will travel.

What happens after it gets there determines whether the trip was worth it.

BRIEFS

Canadian housing prices jumped over 90% in the last 10 years.

At the same time the country rode a natural resources boom that with all the deflationary concerns around the world that's beginning to go snap, crackle and possibly slump. The Loonie, Canada's dollar, so far this year dropped 1.2% against its American counterpart, according to the WSJ.

Home sales have slowed with home prices yet to follow, but many investors believe they will. Canadian household debt figures are estimated at 165% of of disposable income, not far from what U.S. consumers were carrying before the subprime balloon burst. That's a trend that tracks the country's rise in housing prices.

Demand for homes pushes up not only home prices but demand for things that go in them. Consumption and debt result.

Lower oil prices knocked nearly 0.5% off economic growth during the last half of last year in an economy that  managed to grow only 1.8% in 2012. And don 't forget what's happen so fart this year to the yellow stuff--gold.

With commodities tanking, many expect Canada will do the same.
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We've written about PIK bonds before. Payment in kind paper that was popular back in the early 1980s when interest rates were 14-15% and higher. Now with interest rates 30 years or so later at the other end of the spectrum, PIKs are making an apparent comeback.

So what does that tell you, if anything?

http://online.wsj.com/article/SB10001424127887324744104578470812182691622.html
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