February 13, 2008

1) Masco, a major building materials supplier, announced terrible earnings, citing a fall off in new housing starts among its customers of 25-33%. The stock got slammed. Still no light at the end of the tunnel in housing.

2) Sub prime related law suits against directors and officers are skyrocketing.?? In 2007 there were 191 law suits with $3.9 billion in claims initiated, four times the previous year's figure.

3) Fund manager cash levels are at the highest levels since 2001, all fuel for the next bull market.

4) Private business jet sales in 2007 totaled 1,138, up 28%, an all time high. Fractional ownership has been the big driver as businesses try to avoid the post 9/11 hassles of airport travel. The rich are definitely getting richer.

5) Global wheat stocks are at a 30 year low and US stocks are at a 60 year low. The inflation adjusted all time high is $20 a bushel, the target that traders are gunning for this year, compared to last week's high of $12.

6) We are ?? of the way through the fourth quarter earnings reports. Excluding financials US corporate profits are up 13%, a great year for anyone with international business. The problem with the economy is not with corporate earnings but expectations. We may be talking ourselves into a slowdown which is not warranted by fundamentals.

7) US retail sales came in at +0.3% compared to an expected -0.3% spurring a 173 point rally in the Dow.

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