In 1936, Germany re-took the Rhineland, the first move in an attempt to satisfy Hitler’s quest for world domination. The reaction of the free world was mute. In 1938, Hitler started pressing Austrian officials to allow a union between Germany and Austria. Again, a mute reaction from England, the leader of the free world. Austria became a part of Germany in March 1938. The next target for Hitler was obvious, the Sudetenland region of Czechoslovakia, which was heavily populated by ethnic Germans. England gave a response which commenced a series of high-level negotiations. A few border incidents and heavy sabre rattling resulted in the Munich Agreement, a promise by Hitler to stop rolling through Europe, if handed the Sudetenland. England and France agreed. However, Czechoslovakia, not involved in the negotiations, had a different opinion. Too bad, country lost to Hitler to appease the world.
Neville Chamberlain returned to England and disembarked from his plane holding the agreement that was “symbolic of the desires our two peoples never to go to war again.” In other words, the classic statement, PEACE IN OUR TIME. He was wildly applauded by fellow politicians. The press called him brilliant. And everyone went about their business, and their next cup of tea. Everyone that is, except for Winston Churchill. The rest of the story is history.
It has been said that history does not repeat, it rhymes. This morning, we heard praises from politicians, financial analysts, and television pundits that the recession is over. GDP exceeds expectations, the turnaround is at hand, and happy days are here again. The hand is raised, the paper is shown, and relief is felt. But is it?
Cash for clunkers, housing credits, back-to-school-payouts, and on, and on, and on, lend me to ask: With record infusions of cash by the government, and printing presses running 24/7, 3.5% GDP is the best you can do? What happens when that ends?
The reality can be summed up in two stories this morning. First, 530,000 first-time unemployment checks. That’s another 500,000-plus people (per week) that have lost their jobs. Second, a very well known tire company announced yesterday that a gain of $2 million in the third quarter will ultimately lead to a fourth quarter loss of $123 million. A hidden bombshell finally released to the public. How many more of these little “bombs” will be released in the weeks and months ahead?
People want to see and believe the illusion, because sometimes the reality is too difficult to face. Whether it was Neville Chamberlain and the appeasers of the 1930’s, or the green-shootists of 2009, the ability to understand what is happening allows us to not only prepare, but also to protect, and potentially even thrive when the inevitable occurs.
Yes, the recession could be over. Welcome to a possible depression.
Till next time,
Bill
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A disclaimer: None of the content published on BillTatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Thursday, October 29, 2009
Tuesday, October 27, 2009
Ignoring the Obvious at Your Own Peril
Insiders are selling faster than at any time in history. Since August, mutual funds have seen large net redemptions. Money markets are at the same level as before the bear market rally. Market indicators exhibit greater risks than at the top of 2000 and 2007. Accounting gimmicks have reached an all time high (low). What does it all mean?
It means that sometimes the expression “you can’t see the forest for the trees” is as accurate today as when it was coined years ago. The next leg down should be a doozy!
Till next time,
Bill
P.S. - On Thursday, Chamberlin returns with his report. Stay tuned.
Sources: Bloomberg
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A disclaimer: None of the content published on BillTatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
It means that sometimes the expression “you can’t see the forest for the trees” is as accurate today as when it was coined years ago. The next leg down should be a doozy!
Till next time,
Bill
P.S. - On Thursday, Chamberlin returns with his report. Stay tuned.
Sources: Bloomberg
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on BillTatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Monday, October 19, 2009
Main Street USA
The flag (Dow 10,000) has been captured. The march to the top has been strong, consistent, and straight up. Or has it? Since September 16th (one month ago Friday), the Dow Jones Industrial Average has appreciated 204 points (as of close 10-16-09.) However, consider that during that same time frame, The Dow Jones Composite Average is up only 3.47 points, and the Dow Transportation Average is plus a mere 0.87. Therefore, the rise over the past month could be considered, at best, labored. Also during this past month, I’ve spent much time driving across the country, and speaking with citizens of our great nation. The disconnect between Wall Street, Congress, T.V. commentators, and the average citizen of Main Street, is miles wide. While the former contend that prosperity is right around the corner, the latter know that the corner is several blocks away. Unemployment, foreclosures, deficits, wars, and most important, lies, all add up to immeasurable difficulties, not only in the short term, but for several years ahead. From the blue collar worker to the corporate retiree, from the unemployed mom to the furloughed line worker, all are worried, and all feel threatened.
The stock market is always a reflection of the economy. If Wall Street, Congress, and the T.V. commentators are correct, and prosperity is just around the corner, then Dow 10,000 will be a springboard to much higher levels, and the past month will only have been a resting spot. However, if Main Street is correct, and prosperity is a wishful thought, then the past month may be the beginning of the end for the stock market. Only time will tell.
After travelling 2,000 miles across the country, my money is on Main St. They know what the truth is.
Till next time,
Bill
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A disclaimer: None of the content published on BillTatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
The stock market is always a reflection of the economy. If Wall Street, Congress, and the T.V. commentators are correct, and prosperity is just around the corner, then Dow 10,000 will be a springboard to much higher levels, and the past month will only have been a resting spot. However, if Main Street is correct, and prosperity is a wishful thought, then the past month may be the beginning of the end for the stock market. Only time will tell.
After travelling 2,000 miles across the country, my money is on Main St. They know what the truth is.
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on BillTatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
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