Lots of News

Merrill Lynch has an analyst who says that oil is going down to $25.

Really? What about gas falling to $2/gallon? The truth is, it doesn't seem to be helping, as the latest figures on fuel consumption in the U.S. shows a 6.2% yoy drop for the four weeks ended Nov. 28th (Bloomberg).

David Rosenberg says that gold does well during a global trade war, the seeds of which are being sown as China starts devaluing the Renminbi.

Will gold be the next bubble? Could happen, but I'm really on shaky ground here. I feel much more confident on my call of a new asian/emerging market currency crisis. There are just a lot of little reasons I like gold. Here's another one: low interest rates make the opportunity cost of owning gold really low.

Smartest and stupidest trade of the year all in one: Treasuries. I caught the first one third of the greatest rally in history perfectly, but got out with only one third of the profits. This week, I've seen three versions of "Are Treasuries a bubble?" in the news already, which means that the best part is probably over.

Now with half a million job losses, there is no doubt in my mind that the market will plunge again. There are a couple things I'm thinking about. The first is the Fed's Grand Poobah Two-Day PowWow. Expectations are very high, but who knows what Bernanke will pull out of his hat. I'd rather wait and see what happens before I lever up any more. Actually, since learning about Mexico's oil hedging program, EWW will be the first emerging market short I will cover. But I want to pay $25 or less.

Another thing I'm looking at is the homebuilder's index (ITB) again. As a short, of course! They've bounced from $6.50 to almost $11 yesterday. That looks like a great short, however, it's only 0.85X book value. I will short this if I see it go to $12, which would be 1.00X book value. Otherwise, I need to wait and see what Bernanke pulls out of his hat on 12/17.

Asian stocks are reported to be rallying on the hope that the drop in oil will reduce costs, according to Bloomberg. I remember when this happened in the U.S. earlier this year.

And I haven't said anything about retail lately, but here's a telling quote from Vanity Fair, "I was at Michael’s yesterday and was thinking, Oh, Manolo’s … But then I thought, Why? Why do that? It just doesn’t feel good." This shopper is right. Even if you have the money, it doesn't feel good to throw money away when you're friends are suffering.

“I ran into a couple I always see at the antiques show,” one Upper East Side woman recounts of her visit to the Armory show on Park Avenue. “They always buy something fairly grand. ‘What have you bought this time?’ I asked. ‘Oh, nothing!’ they said. ‘We’d feel … ashamed.’”

It used to be cool to buy stuff. Now it's not. Look out below!

And another really cool statistic. According to the Bureau of Labor Statistics, unemployment for 1930 was only 8.9%. This was after the crash. Maybe the Great Depression was not so bad after all.

Oh, wait, unemployment did reach 24.9% in 1933. I don't know if things are that bad, but I've also been bullish (compared to the market) for most of the past two years.