1) OK, so they didn't mention the mosquitoes, the poison oak, or the guy snoring in the next tent on the website. But I'd rather put up with all of that than the absolute dearth of trading opportunities I faced on my return. The S&P 500, the Dow, NASDAQ, the euro, the Australian, New Zealand, and Canadian dollars, gold, copper, lumber, and anything else I like are overbought, bumping up against Fibonacci's, moving averages, RSI's, oscillators, and any other technical warning light you want to mention. Only wheat looks cheap, the greatest growing conditions in history knocking a bushel down to the low five dollar handle (click here for the argument at http://madhedgefundradio.com/June_16__2009.html). Natural gas prices are low, not to be confused with cheap, with every uptick getting smashed with a new field discovery. Only a hurricane can save NG. It's amazing how many people have turned bullish now that everything has gone up for two plus weeks. The only thing that makes sense here is to go short, but not on my first day back. Give me some time to gird my loins and build a risk appetite. And pass the calamine lotion, please.

2) Chicago magnate Sam Zell thinks the big foreclosures won't hit commercial real estate until the institutional holders run out of money in 2-3 years. From 2000 to 2007, half of the commercial properties in the US were sold and releveraged, and even the weaker holders have enough cash flow and reserves to last until then. Having peaked at a higher top, single family homes are now crawling off a much lower bottom, giving a crucial boost to an economy based on consumer spending. I'd call this a future green shoot, if I didn't know that the grizzled property pro was talking his own book. After completing?? a brilliant sale of a huge portfolio of properties to the Black Rock Group at the absolute peak of the market, Sam is now suffering from buyer's remorse with a turbocharger, having rolled the money into the bed ridden and nearly comatose Chicago Tribune/Cubs combo. Sam's favorite overseas foray is Brazil, where a large, growing, educated population backed by rich natural resources, falling interest rates, and a strong currency provide a great backdrop for property investment. China looks good too, but you have to speak Mandarin.

3) A handful of positive data on residential real estate, and all of a sudden everyone is jubilant that the crisis is over. June new home sales popped by 11%, while the S&P Case Shiller Price Index flaunted two back to back monthly gains. Never mind that these are the same people that have been calling a bottom almost every day for the past two years, and who themselves have gone broke in the process. It's a basic law of economics that when you drop the price, the volume goes up. We have not paid enough penance yet. We have not atoned for a generation of under saving?? and overconsumption. The harsh reality is that the torrent of selling is being briefly staunched by a dwindling group of first time buyers once priced out of the market, who saved their cash, and stayed away from the stock market, and are now buying two thirds off the top. Take away the fantastically generous government subsidies that expire in a few months, throw in the next wave of Option ARM reset induced foreclosures, and this market folds like a wet taco shell. I'm waiting to buy at 20th century prices, and make that a home with an indoor swimming pool and basketball court.

4) With the British economy mired in recession, many are wondering if hosting the 2012 London Olympics was such a great idea. The original plan was to convert the one square mile Lower Lea Valley site into a new suburb, and sell the condos to hungry buyers at high prices. Market conditions today couldn't be more hostile. Runaway cost overruns have pushed the budget from $2.8 billion to a back breaking $9.3 billion. The East London neighborhood is so bad that 'when you take the tube out there, life expectancy declines with every stop,' said one staffer. A profusion of undiscovered WWII bombs, a stone aged cemetery, and a toxic waste dump have also caused delays. When I lived in England I flew over this area weekly to skirt the London control zone, and I will be charitable in calling this place an industrial wasteland. The last time the British attempted a major project like this, the 2000 Millennium Park, multibillion dollar losses resulted. But who can forget the film Chariots of Fire? Maybe it's worth it after all.

QUOTE OF THE DAY

'You've got to be the best company in the subspace you are looking at. The number three or the number four market share is worth effectively nothing these days. You see it in cellular, retail, packaged consumer goods, or anything else you are looking at.,' said Larry Haverty at Gabelli global Multimedia trust.

1) One of my favorite stocks, and one of the great ?tells? on the state of the global economy is Freeport McMoRan (FCX), the world?s largest copper and gold producer. CEO, Richard Adkerson, says it?s all about ?China, China, China?, which has been frenetically stimulating its economy with a $586 billion reflationary package, and rebuilding stockpiles of the red metal at a furious pace. The ongoing lifestyle upgrade in other emerging markets is adding to demand, as is the switch to hybrid cars in industrialized countries, which use two to three times more copper than conventional cars. Last year FCX mined 102 billion pounds of copper, 40 million ounces of gold, and 266 million ounces of silver. A doubling of copper prices since January enabled FCX to announce blowout earnings yesterday. The stock has tripled since my New Year recommendation . Did I mention that this is the number two performing stock in the S&P 500 this year? If you want a core holding that is in many right places at the right time, use dips to back up the truck for FCX.

2) Another great ?tell? stock for me is Caterpillar (CAT). I have never owned CAT in my life, but have always followed the company closely because it speaks volumes about the state of the world economy, and because they used to hand out those neat yellow hats at the analyst meetings.?? CEO, Jim Owens, says that only painful job cuts held the decline in earnings to 66% on a 41% fall in revenues, with the emphasis on the word ?earnings? in the most severe conditions since the thirties. The news was good enough to take the stock up a whopping 40% in a week. CAT gets 61% of its revenues from abroad. Business in Western Europe and Japan is worse than in the US, and what strength they are seeing is in Asia, with China up 8%. Large customers are seeing a resumption of credit lines, while smaller and medium sized ones are not. Owens sees a turnaround beginning in Q4, and a full scale recovery beginning next year, as the cyclicality of its major customers in construction, mining, and energy kicks in to the upside. Longer term, Owens sees CAT?s future in the ongoing infrastructure build out in the emerging markets. Hey, didn?t FCX just tell us that? Is there a trend going on here?

3) It looks like Goldman Sachs (GS) is going to leg over the Treasury once again. It is buying back the warrants it issued the Feds as part of its TARP dole out for a mere $1.1 billion, giving a 23% annualized return on the investment. Why is the government selling? Do you think GS knows something about its future earnings the government doesn?t? Could this be the greatest example of insider trading of all time? Has anyone at the Treasury considered keeping free calls on GS to maturity, as Warren Buffet is with his paper? Then they might be worth $10 billion, or even $100 billion. I know that if hedge funds could get these warrants at the same terms as the Treasury, they?d be loading the boat. Safe to say that when GS shakes your hand, you want to count all of your fingers afterward.

4) I have quit listening to the health care debate because there is so much false information being pumped out there. Over the past month I have been told that if you get a heart attack in England in the middle of the night, you have to wait until 9:00 am the next morning to see a doctor. I have been told that vast numbers of Canadians are flocking to the US for treatment because the lines at home are so long. I have also been told that even vaster numbers of Americans are flocking to Canada to buy cheaper drugs. Having spent 25 years living overseas and been a frequent user of the medical services there, I know from firsthand experience that all of the above are untrue. I never invest in health care anyway because the business models are so unpredictable. Better to be amused from afar. So I?ll just turn off the TV and wait to see what makes it through Congress, and then decide what to do.?? My time is better spent elsewhere.

QUOTE OF THE DAY

?He who lives upon hope will die fasting,? said Benjamin Franklin.

1)The upside breakout to a new 10 month high of 19,500 in Hong Kong?s Hang Seng Index last night, up 70% from its March low,? could be a signal for better emerging market performance everywhere. I have always viewed the former British crown colony as the older, better dressed, more respectable brother of its rougher, often irresponsible, riskier sibling in China. Hong Kong companies offer experienced management, believable accounting, and liquid, unrestricted securities to trade. The Hong Kong dollar is pegged to the US currency, eliminating currency risk for dollar based investors. Foreign capital flows into Hong Kong have been huge this year, as investors cash in their US blue chips for Chinese ones. Once considered a place where you only played with your ?mad? money, Hong Kong is rapidly becoming a core holding. Look at Marty Whitman?s 3rd Avenue Fund, which has and eyebrow raising 39% of its holdings in Hong Kong stocks. Now there?s a bet and a half! Hong Kong is the China play that lets you sleep at night. Look at the iShares Hong Kong Index ETF (EWF).

2) I stumbled across a free webinar on investing in emerging market ETF?s, which is a great introduction for those new to the field. Presented by Matt Hougan at IndexUniverse.com, and sponsored by major ETF issuer Wisdom Tree, it goes through the ABC?s of this new and rapidly growing investment vehicle. Some 25% of world GDP is now accounted for by emerging markets, which are making the transition to core holdings in many portfolios. Would you rather pay a 12.5 multiple for zero economic growth in the US, or 32.5 times earnings for 8% growth in China? The risk/reward for many countries has flip flopped so that it is the industrialized countries that have become huge borrowers, while many emerging countries are virtually debt free. Investing here also gives you a natural bias in favor of energy and commodity plays, another sector I prefer, which proliferate in these countries. But you must know your ETF, as asset allocations within regional, and even specific country ETF?s can vary hugely. Please note that the EEM, which I have been hammering away on all year, hit a new high for the year at $34.80. Check out the webinar link.

3) With North Korea testing low grade nukes and short range missiles (think WWII German V2?s), and a former prime minister jumping off a cliff to commit suicide, you wouldn?t think this is the best time to contemplate an investment in South Korea. You may recall that I recommended that the Hermit Kingdom be added to spell ?BRICK? with a ?K? last January. Korea is in fact somewhere in between a true emerging market and a developed country, with lower risk and lower returns, than say a Taiwan or an India. Let?s see how that call fared. After hitting a low of 998 in March, it broke out to a new high for the year last night to 1,480, up 48%. For long term investors, this is opening a rare window to scale into some exposure here. Short term traders should wait for a bigger pull back. They used to say you bought Asia only when there was blood in the streets. This isn?t really blood, but is close enough.

4) If you have had any doubt that commercial real estate is not the place to be putting your capital right now, take a look at the latest Q2 industry data. The vacancy rate jumped from 19.9% to 21.4%. Net negative absorption nearly doubled from 600,000 sq. ft. to 1 million sq. ft., while 723,896 in new space was completed. Closed?? sales plummeted from $87.2 million, to $45.9 million. Paying tenants looking to add space are staying away from the market in droves, easily renegotiating reductions in lease rates instead of committing to risky new purchases. The inventory glut is dragging prices down, scaring off marginal lenders. Several high profile bankruptcies of trophy properties have only exacerbated the pain. The capital drought looks likes it will get worse before it gets better. I would love to recommend shorts here, but the listed REIT?s have already been so crushed, I?d rather stay away. Look at the chart for Prologis (PLD). Pilots will recognize all of this as an irrecoverable flat spin, a twin pilot?s worst nightmare. Non-pilots should watch Top Gun.

1) The ?head and shoulders? is off the table, and now the S&P 500 is looking at a double top at 950. This is why I hate listening to technical analysts, and why they shop at Men?s Warehouse and drive Hyundai?s instead of Bentley?s (see my earlier piece ). Generally, technical analysts tell you to buy every rally, sell every dip, and in a market that?s going nowhere this is a perfect formula for losing money. Watch them tell you to load up if we hit 950. It is clear from the ferociousness of the 70 point, three day rally, that too many hedge funds were drinking the Kool Aid and the blood is flowing as a result. One meekly explained to me that ?head and shoulders? formations fail only 6% of the time. Well, welcome to the 6%. They are going to have to invent a new name to describe this formation (?head and shoulders with a hump back?). This is why I issued my now famous ?Sell in May and Go Away? piece, because the quality of the trades you usually get in the three months that follow is uncommonly low. Look at the chart that has ensued so far. It looks like a lot of nothing.

2) I will be the first to bemoan the abundance of frivolous law suits in the investment community. But no litigation was more richly deserved than the $1 billion action brought by the California Public Employees System against the three rating agencies, Moody?s, Standard & Poor?s, and Fitch?s. CALPERS is claiming that the triple A rating they gave subprime backed SIV?s were wildly inaccurate, causing it to suffer huge investment losses as a result. An airing out of the dirty laundry in this industry, which sells fig leaves to debt issuers for high prices, is long overdue. When I go to my grave, the one revelation I will always remember about this crisis is that the models rating agencies used could not accept negative numbers for future real estate price assumptions!

3) As a follow up on yesterday?s gold piece I?d like to pass on to you an article by Global Resource Alert?s Peter Krauth outlining the entire long term bull case for the yellow metal. The future for the dollar is dark, indeed. Central banks, led by China, are backing off from US Treasuries and the dollar, and are returning to gold as a reserve currency. China has in fact increased its gold holding by 450 metric tonnes over the past six years. Individuals are doing the same, doubling their purchases to 862 million tonnes last year. US budget deficits are already running at the greatest levels since WWII, and a second stimulus package will pour more fuel on the fire. It?s just a matter of time before gold breaks to a new high. To read Peter?s well thought out article in its entirety, please click here .

4) To celebrate Bastille Day I walked over to my favorite French restaurant, Left Bank, to book what is normally the busiest day of the year. Sadly, on the front door was a sign saying ?au revoir, that the chain was closing half its San Francisco Bay Area restaurants because of the ?severe recession.? So instead, I walked to the Meridian Hotel, normally a safe bet for a steak au poivre on France?s national day. I found the main dining room was only open for breakfast, and was closed for the rest of the day to cut costs. However, I could get a nice cheap rib eye in the bar with great wines at ?happy hour? prices. The deals out there are awesome and legion. I reserved a room at a high end Lake Tahoe resort a few weeks ago that normally goes for $300 a night. I paid $40, and was the only one in the building. It appears that hotels are engaging panic dumping of rooms online, and will take whatever they can get. So 85% off is the new 50% off. How do you say ?green shoots? in French?

QUOTE OF THE DAY

?Democracy must be something more than two wolves and one sheep voting on what to do for dinner,? said commentator James Bovard.