Jan

5

How Buck from The Call of The Wild would show his affection for his master JohnNo one asked me but the relative movement of the S&P and bonds this year of -40 percentage points, +22% for stocks and -18% for bonds, appears to be the second greatest divergence in favor of stocks in history by a long shot, rivaled only by 1999 when stocks were up 17% and bonds down 30%. 2000 was not a good year for stocks. And the Fed Model has worsened considerably to say the least.

The Call of the Wild by Jack London is full of market insight. London starts out by pointing out that Buck was kidnapped because the workman relied too much on a system and all systems end up going broke and leading to such things as kidnapping. He also says that a miner's trial was held for Buck when he defended his master and ripped the throat of a drunk bum who threatened the master. One would like to hold a miner's trial for those who profited from the forgotten man's contributions to their wherewithals in recent times, and others seem to share the sentiment.

The problems of musical notation on computers are similar to the problems of using computers to predict market movements. It is twice as fast as hand notation apparently. the musicals no longer can show a few persons singing and get the audience to suspend disbelief so they have to make fun of the singers these days. When will the market people suspend disbelief in the ability of the earmarks?

The scholarly market starts the year in fine fashion up 1% to 1080, a 15 month high, within 5% of an all time high, thus leading the way. The respect that the chair of the Central Bank there receives should be captured in a story by Sholem Aleichem and be followed by all who wish to see the likely course of interest rate policy around the world.

The energy stocks have performed the best over the last 10 years. Insights concerning their likely future performance will be gained by watching the subsequent scoring figures of Nate Robinson of the Knicks after his 45 points last Tuesday. A reading of Statistics on the Table by Steve Stigler is always helpful in this regard also.

Kim Zussman adds:

I ran yearly change of TNX (10y rate) and SPX, 1962-present, and when ranked by chg TNX found 2009 and 2008 were at the extremes of the series:

The top 5 are biggest yearly increase TNX (and same-year chg SPX), and the bottom 5 are biggest yearly drops in TNX:

             chg    chg
year        TNX     SPX

2009    0.71     0.23
1999    0.39     0.20
1994    0.35    -0.02
1969    0.28    -0.11
1967    0.23     0.20

1985    -0.22     0.26
2002    -0.24    -0.23
1982    -0.26     0.15
1995    -0.29     0.34
2008    -0.44    -0.38

Stands to reason that an outliar (sic) year is followed by another.


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