Buffett Bear buy is bull. Bull’s buying perseveres besides

As suspected, the rumored cash infusion by Warren Buffett and others in flailing brokerage firm, Bear Stearns (BSC) was discredited by David Faber of CNBC early this afternoon. Faber, incidentally, is about the only journalist associated with CNBC US that likes to actually confirm the validity of his information before reporting it as news. Faber confirmed this afternoon that the rumored buy-in of Bear Stearns (BSC) was indeed, bull. It’s a shame that the established media allows themselves to be played like a drum by those interested parties that may have indeed benefited from yesterday’s rumored 20-percent investment by Warren Buffett among others. I doubt that yesterday’s action in Bear Stearns shares will elicit anything more than a sideways glance by Christopher Cox and the SEC. This oversight agency is about as useful as I am in policing this kind of stuff. In spite of the apparent hoax, only about a-third of yesterday’s gains in Bear Stearns shares were given back today. Also, the broader market has already moved onto other things even as news of the now debunked Bear Stearns rumor ignited an across the board rally in nearly everything yesterday. As news of the hoax gently wafted over the market today, it was summarily dismissed as a reason to give back even an inch of yesterday’s broad gains. It’s almost as if the market is unable to discern the change of events as being a catalyst to offset the prior day’s gains as logic might suggest it should. It was useful as a catalyst that got us here. That’s all that matters. Thank you, but we’ll no longer be in need your Bear Stearns rumor now that we’re already here. We don’t care that what got us here has since been fully debunked. We’re here and that’s all that matters. Of course, the additional rally today on top of yesterday’s now debunked Buffet Bear buying rally sets us up for a mere 88-point gain tomorrow in the Dow Industrials and a 16-point gain in the Nasdaq for a 3Q closing that would put us at their respective all-time and 52-week highs---even with everything thing that transpired between June 30th and tomorrow’s final day of the third quarter. Yea, makes sense, huh? Just imagine how bullish a global nuclear war might have been for stocks during the quarter? Nice ramp-job, Fed. I mean, it’s obvious that the world’s central banks were sent into panic mode this quarter given the deep freeze of credit, subprime mortgage markets, hedge funds and bank and mortgage bailouts. I can only imagine how much fiat money was thrown at the problem if we had an accurate way accounting for all of it. But did they have to make it so obvious? It just simply defies logic that all that is need tomorrow is just a moderately positive day for both of these indexes to peg their 52-week highs on the final day of a quarter that witnessed a plethora of such disturbing market events. I can only imagine that whatever the size of the liquidity injection and all of the ancillary moral hazard that it eventually fosters; a sum that is capable of papering-over such serious issues in such short order is also going to show-up as some pretty serious inflationary pressure in coming months. You might want to top-off your gas tanks at the next fill-up.

Buffett Bear rumor buttresses stocks

Today we received word, via a New York Times report, that Warren Buffett and several interwoven parties probably somewhat dependent on the survival of Bear Stearns (BSC)-- hedge fund in drag, may be about to take a 20-percent stake in the otherwise doomed broker. Markets seemed on the verge of fading into the close until this "rumor" hit the tape which in turn ignited a pretty furious rally, especially among financials. The Times said, “Other investors who have expressed an interest in buying a minority stake include the Bank of America, Wachovia and two Chinese institutions — the Citic Group and China Construction Bank, these people said.” Of course, I remind readers of the Hovnanian (HOV) rumor as it concerned a possible Buffet buyout of that decaying homebuilder last month that never actually materialized. I don't even remember a dismissal of that rumor, it just kind of faded into the background. Buffet was also cited by the bulls on several occasions this summer when his recent investments in railroad stocks this summer seemed to have translated into robust rallies for the entire market as that news had been deemed good for the entire planet, per the bulls. Although, true as it concerned his buying of some railroad stocks, it was certainly not true as far as acting as a proxy for everything else given what later transpired in late July and August. I’ll also note that on or around the news of his railroad buying, it turned out to be a peak for the railroad sector in general. Not to disparage Buffett as being a magnificent investor, he is, but the very act of him spending money on something does not translate into being bullish, necessarily, for anything else. But again, Buffet’s name is used on so many occasions as being the subject in a number of major looming investments or buyouts which is almost always deemed to be good for the entire universe. Yet, so often these rumors turn out to be false or at least misleading. On the other hand, when Buffett throws cold water on the bull’s party as he has done on several occasion in recent years, he is often dismissed as being irrelevant, or out of touch with the "new economy," etc. Its my opinion that Buffett wants to have nothing to do with Bear Stearns as an investment, let alone to be a party to a coordinated bailout of such stupidity. He, of all people, most likely believes that Bear Stearns and its ilk, should reap what they sowed.

Hey China, " Dot-com" called. It wants it's bubble back

Anyone watching the slow train wreck that is Countrywide Financial (CFC), as of today’s close, shares are now lower than its September 17th closing price of $19.27/share. September 17th is the day BEFORE the Fed slashed its Fed funds rate with a full (and somewhat surprising) 50-beeps rate cut; probably partially out of deference to Countrywide and their fellow submerging mortgage lenders. Bear Stearns (BSC), notably, is also lower as of tonight versus its September 17th close. As is Citigroup (C) and Capital One (COF). Also, in addition to yesterday’s parade of lowered earnings guidance, Lennar Corp. (LEN), the largest homebuilder in the U.S., reported that its third-quarter net loss was $513.9 million, or $3.25 a share. This dire news exceeded even the most pessimistic estimates on Wall Street and was reportedly the largest quarterly loss in its 53-year history. I might add that in addition to Lennar's punk report, the S&P/Case-Shiller survey of U.S. home values showed that home prices in 20 U.S. metropolitan areas fell the most ever in July. Additionally, the Conference Board’s consumer confidence figures for September dropped to its lowest level in almost two years. The Fed and the rest of the world’s egregious money printers (read: China, Japan, ECB, U.K.) have certainly gone into printing overdrive, but is the liquidity going where they want it? From my vantage, they are just exasperating the remaining and existing asset bubbles—particularly the massively, mutating and growing asset bubble in China. Incredibly, the China Shenhua Energy IPO in China reportedly attracted a record 2.6 trillion yuan or roughly $350-billion in orders for its shares slated to list on the Shanghai Exchange later this week. In other words, the company could have priced itself at a market-cap 30-percent larger than that of Microsoft (MSFT) and there would have been enough takers for every single last share!! China Shenhua Energy is the nation's largest coal producer which I can only guess makes quite a bit less money than does Microsoft and is not close to being a monopoly. Hey China, dot-com called and it wants its bubble back!! But also, take a look at the performance of arguably some of the most absurdly, over-valued, albeit liquid (that’s key), stock action since their respective August 16th lows, the day the Fed clearly went into panic-mode by slashing its Fed funds rate to nearly 4.5% (unbeknownst to most market participants) thru today’s highs: Research In Motion (RIMM), $61.54/share to $97/share (57% rally), Apple (AAPL), $111.62 to $152 (35% rally), iShares FTSE/Xinhua China 25 Index Fund (FXI), $111.25 to $174 (55% rally), Crox (CROX), $44.10 to $64 (44% rally), China Life (LFC), $50.25 to $82 (60% rally), Baidu.com (BIDU), $161 to $304 (87% rally), Amazon.com (AMZN), $70.50 to $93 (32% rally) and to a lesser degree, Google (GOOG), $480.46 to $571 (19%). Yet, Google is still significant given its market-cap. That 18-percent move accounts for an additional $27-billion in additional market-cap alone. That is freshly minted market-cap nearly 2/3rds the size of an Amazon.com (AMZN) created in just over one-month for a single company!! Clearly, money is being printed at warp speed, but it seems to be finding its way, again, into the most liquid, speculative and overvalued assets as the leverage and momentum crowd grab hold of the loose credit and cram it into whatever is working. ….Watch for a stronger-than-the-data-would-otherwise-suggest tape through Friday as the performance sluts manipulate things into the quarter’s close, ala, tape painting as they try to run the clock out ahead of packaging of quarterly statements. If there hasn’t been an all-fronts effort to prop, plug and pull markets during the third quarter, ask yourself the logic behind an S&P 500 and a Dow Jones Industrial Average that will both likely close above their respective 2Q closing values? As of now, the S&P is just marginally higher while the Dow Industrials seems almost assured of closing out the third quarter with gains even as the world of finance has become quantifiably much more scary versus just three month hence. Markets are essentially where they were in mid-July just before it had dawned on folks that the leveraged buyout binge was nearly over. And so goes bubble-nomics.

Slowing economy? Buy beta

The UAW invoked its first nationwide strike in 31-years. Somewhat intriguing, shares of General Motors (GM) actually traded higher briefly following the news; I guess applying the logic that they might actually be more profitable not making cars. Shares did close lower by 20-cents by day's end…. Late last week, air freight and package carrier, FedEx (FDX) said it expects second-quarter net income of $1.60 to $1.75 a share, below the previous Wall Street target of $1.97 a share. I might call FedEx a decent proxy for economic activity, right? Major homebuilder Standard Pacific (SPF) warned shareholders that it would eliminate its quarterly dividend and float a $100 million convertible senior subordinated notes; a sure sign of liquidity problems. Shares dropped another 15 percent inching ever closer to “zero.”…..AMR Corp (AMR), parent of American Airlines, warned of lower revenue amid concerns of slowing demand and rising costs. Its shares saw their biggest single-day drop in more than four years ….Harman International (HAR), a leading maker of stereo-speakers, whose $8 billion LBO fell apart last week, warned that its quarterly profit would be less than half of prior Wall Street expectations….. After the close, home improvement retailer, Lowes (LOW) warned that profits for its fiscal year ending in February will be at the low end of forecasts which had been updated as recently as last month.… Also after the close, the second largest retailer behind Wal-Mart (WMT)---Target (TGT), warned that same-store-sales in September at stores open at least a year would be well below its prior forecast. Two regions that experienced a major brunt of the housing price bubble, Florida and the Northeast were singled-out as experiencing particularly weak sales traffic. Lowes and Target, two of U.S.'s largest retailers, might also act as a decent proxy for the economy.….Also, major flash memory maker; Sandisk (SNDK) began bleeding rather suspiciously late in the morning even as the high-beta names were being chased aggressively higher. The crowded semiconductor trade is setting itself up for some serious disappointment. Indeed, today, if you were already a ridiculously overpriced stock, you probably traded higher helped by a Citigroup (C) analyst upping of its target on shares of Apple (AAPL) to something like $29,000 per share. Also, PetroChina (PTR) apparently has been given the go ahead by those central planners to float $5-billion of ‘A’ shares on the Shanghai Exchange; a clear sign that Chinese authorities are trying to sop-up excess liquidity as the Shanghai Index is in the process of blowing a massive bubble reminiscent of the tech and dot-com bubble in the U.S., circa 2000. Nevertheless, this China-related event was deemed to be a fabulous turn of events for what seems like an “un-turnable” China market. Everything with the word, “China” and “Sino” was up a lot. Mind you, the hyperbolic move in Chinese shares is occurring at a time when, almost daily, we hear of a Chinese-related recall for tainted food or lead-ladened toys. Given their penchant for taking short-cuts in their manufacturing industries (not unlike most developed economies today), how much faith can we really have in their accounting and legal controls, let alone ownership rights? I personally have apprehensions about buying into a market with such questionable traits while also priced for perfection pretty much into infinity. We’re almost certainly witnessing a blow-off run in Chinese-related assets that is not unlike tech and dot-com in the late 90’s and real estate in the U.S. and much of Europe two years ago. It will end very badly and create enormous instability nearly everywhere. As Chinese issues and the sundry of ridiculous beta names such as Research In Motion (RIMM), Crox (CROX) and Apple (AAPL) acted as ports in the storm today, a good number of financials and brokers bled throughout the day and have now surrendered a good portion of their post-Fed-rate-cut gains. This coupled with the aforementioned sales and earnings warnings; I came away today with an image of those shrinking glaciers as huge slivers of ice slice-off and crash into the sea. The area of safe-footing for the bulls continues to close-in around their feet.

Wall Street: Brother, can you spare 50-beeps?

I might start with the fact that stocks were pawed at pretty much from the git-go this morning. The fact that Lehman Brother (LEH) beat previously lowered earnings and the fourth consecutive drop in the PPI, even though oil and wheat both closed at record highs yesterday seemed to have trumped last night's disconcerting news from both Bank of America (BAC) (a large mortgage related write-down) and E*Trade's (ETFC) mortgage related warning. Perhaps some of those housebuilding CEOs that got a private meeting with Ben Bernanke a couple of weeks ago were given the old nod and wink. Of course, if you read yesterday's entry, I saw nearly no chance at all of a 50 bps cut in both the Fed funds AND the discount rate. A full 50 bps cut, ironically, may be the worse thing the bulls could have wished for. Now, the chances of future cuts are diminished not to mention what has already happened to the dollar. By day's end, the dollar closed at a new all-time low against the euro, oil had traded above $82/barrel and gold was trading at 26-year high. If that's not enough, I couldn't help but frame this panic move by Ben Bernanke and the Fed amidst a backdrop of a U.S. stock market that had just reached a new all-time high no less than 2-months ago. And by days end both the Dow Industrials and the S&P 500 had closed within 2-percent of those all-time highs. I mean, what does the Fed know, and when did they know it? But again, the Fed funds rate hadn’t actually trade as high as the stated target rate of 5.25% until last Friday, September 14th after being at or around 5% since August 29th. I guess Ben Bernanke thought he had better get the Fed funds rate back to its stated rate before its meeting today so they could officially cut it. But now, the bull's are again forced to confront the daily drumbeat of deteriorating news concerning housing, mortgage and earnings news. The Fed just used a lot of ammunition and we may have already seen the majority of the fireworks. What now?

25 bps nearly a certainty

It's irony on parade tomorrow as free market proponent, Ben "Helicopter" Bernanke and the other miscreants at the U.S. Federal Reserve make it known to other free market proponents on Wall Street what short-term interest rates shall be. Many folks are debating between the three possible options--50bps, 25 bps or no move. I see a nearly 100-percent chance of a 25 bps cut. A no move is virtually impossible given that unbeknownst to many folks, the Fed has actually already moved the Fed funds rate down to 5-percent after being as low as 4.5% in mid-August. I wonder when they were going to tell us? So that is nearly impossible. Besides, an announced "no change" would be greeted with a tantrum by the speculating community. The other option, which also seems pretty unlikely is a 50 bps cut. If this were to occur, that would be an irony within an irony. Think about this possibility amidst the current backdrop the day after crude oil closed at its highest ever price for a NYMEX forward contract EVER!!?!?! And, as of today's close, gold is less than 1-percent from its 26-year high. A move as aggressive as 50 bps could literally tank the dollar. Under the circumstances, 25 bps is almost assured. However, Ben Bernanke never asked my advice on the matter. But I would be more worried about the purchasing power of the currency by which folks other than hedge fund billionaires need for the purchase of food and shelter. I would be more apt to raise rates 25-to-50 bps. But that's just me. Pretty silly, huh Ben.

Gold knows

It wasn't more than five minutes into Ben Bernake's speech in Germany today, as he again tried to explain away the Chernobyl-like global financial imbalances as a mere "savings glut," that gold began to levitate. Within minutes, gold had traded nearly $10/ounce higher. Savings glut? That sounds like a good thing. Gold knows what Gentle Ben doesn't.

Tech, where the elephant is headed

This morning, Intel (INTC) raised guidance by a range that still overlaps previous estimates. Nonetheless, this coupled with news that Apple (APPL) had sold its millionth iPhone sent Nasdaq futures screaming higher pre-opening in the U.S. The news from Apple came just a few days after slashing its price on the gadget by a mere 50-percent. Just imagine how robust sales might have been had they simply given them away? Higher guidance from Intel, ironically, did nothing for its shares closing lower on the day. Yet, ignoring the curious non-starter in shares of Intel (lets see the balance sheet), folks seemed to extrapolate the Intel guidance across the rest of the sector in spite of hearing from both National Semi (NSM) and Xilinx (XLNX) late last week of quite the opposite…Countrywide Financial (CFC) broke below Bank of America’s (BAC) strike price, $18/share, on the $2-billion private placement convert done a few weeks ago. Remember, shares of Countrywide saw an initial spurt above $24/share on that news. I still remember Bob Pisani squeaking like a little girl that night as he sat in for Larry Kudlow….. British billionaire Joseph Lewis whose fortunes were made in catering businesses and currency trading has taken a 7-percent stake in Bear Stearns (BSC), or an investment of roughly $860 million. Its interesting how news such as this is almost always construed as being what the “smart money” is doing. Lewis is ranked among the 500 richest persons in the world. I’m pretty confident that much of these people on this list can credit luck as being a significant factor in amassing a good part of their fortunes. It’s important in this game not to confuse wealth for brains. I've seen time and again sickeningly wealthy folks do sickeningly stupid things with bits of their wealth and after it goes awry, they're still sickeningly wealthy. Anyone that has built a fortune in paper assets might not be as smart as previously thought. But that remains to be seen. Again, the rallying cry is “tech, tech, tech!!!” And just as none of these folks were capable of connecting the dots from egregious lending standards, to housing bubble, to popping of said bubble, to subprime defaults, to an eradication of said lenders; these same folks seem to have decided that there is no need to extend this logic beyond this point. However, from my vantage, buying tech is buying the giant hole where the elephant (recession) is headed.

Goldilocks chokes to death on debt

Goldilocks was found dead on Friday, September 7th, 2007. Cause of death is believed to have been due to asphyxiation. She was found dead at the residence of friends where she had been a tenant since March of 2003. The owners, a family of three bears, found her lying motionless upon their return home after reportedly returning from a long hibernation. Goldilocks was found with partially chewed mortgage, credit card and home equity loan applications lodged in her throat. Results of an autopsy reveal that Goldilocks may have been living off of such high enough levels of debt that had she not choked on it, the levels of toxicity built-up in her bloodstream would have likely resulted in sudden death within days. She is survived by her close dear relatives, Larry Kudlow, Jim Cramer, Hank Paulson, John Chambers, Bob Pisani, Arthur Laffer and actor, Ben Stein.

That can’t be good

Apple’s (AAPL) rock-star CEO, Steve Jobs, apologized to early iPhone buyers, including the ones that camped-out in front of stores on June 28th to be the first ones to own one of the most over-hyped chunks of plastic and silicon since Atari’s ping-pong game a day after announcing a $199 price slash on its 8-gigabyte model. Jobs and Apple said they want to make good by offering a $100 credit to earlier buyers at Apple's retail or online stores. Given what we know now about the iPhone’s preliminary sales and subsequent 33-percent price slash after roughly 65-days on the market can’t be good…Same store sales were better than expected at stores where one would expect the majority of parents to shop in preparation for their children’s return for the fall school semester. Its not unusual to see parents loose it as they watch their children get benched at sporting events is it? One thing to remember before extrapolating today’s “better-than-expected” same-store sales figures across the entire consumer specter is to realize that parents will go to extreme lengths to prove to others that their children are smarter, faster, prettier, more handsome, more hip, dress better and have cooler cell phones than other children. I believe they will even forsake the possibility of financial ruin in pursuit of those endeavors. That, in a nutshell, is why these particular stores reported better-than-expected same-store sales this morning. And this may also explain the scary growth in revolving credit growth (read: credit cards), now that people have tapped-out their home equity lines of credit. Speaking of that, foreclosures recorded a fresh new 55-year record high as a percentage of total mortgages entering foreclosure-- not just in number of foreclosures. That is a very significant point to understand. The Mortgage Bankers Association said that mortgage-holders starting the foreclosure process in the April-June quarter reached 0.65 percent. This was the third consecutive quarterly record set. Also, I have to say that the crap CNBC U.S. commentators regurgitate day after day is such an enormous disservice to its viewers. Late this morning, I happened to catch Bob Pisani explain that with the S&P 500 just 55-points from its all-time high that this is most definitely not “telegraphing any kind of recession.” These guys have far too much faith in the market’s abilities to fully discount foreseeable dangers ahead. I wonder what Bob Pisani thought the Nasdaq was telegraphing on March 10th 2000 when it was trading 5132 and a P/E over 100x----the existence of Santa Claus? Markets are essentially voting machines by the monied masses that also price in an array of human emotions and temperaments. If masses weren’t capable of making mistakes, we would have never had Germany’s Third Reich. Sometimes, markets are pretty efficient at predicting the future, sometimes its relegated to an adolescent reality telly programe—and that’s where we are today….The front-month gold bullion contract broke the important psychologically important $700 barrier today. Hey Bob Pisani, what does that telegraph? It can't be good.

A bell never ‘ringtones’ at the top

You know things have become a bit too cozy when folks can concern themselves with the sound of their phone’s ringtone even as its country’s constitution is being used as a mere door mat. The former was one of today’s “major” announcements from Steve Jobs and Apple (AAPL), to let songs to be made into iPhone ring tones—oh, for 99-cents. And you pretty much know a stock has reached or is near achieving bubble-status when marginal product changes are treated as headline news. I subscribe to MarketWatch’s e-mail news alerts (among many). In addition to news alerts of today’s Pending Home Sales figure, Mattel’s (MAT) latest Chinese-made toy recall and an account of the Fed’s Beige Book release, I also received a headline that read, “Apple adds touch screen and Wi-Fi to iPod line, ups memory; iPod nano gets video capacity.” Pay attention to the signs. A company’s stock is usually not cheap when the financial press deems it necessary to provide play-by-play on its CEO’s bowel movements……Mattel is recalling 700,000 more toys due to safety concerns. It was he third such recall in five weeks. As was the case with their most recent massive recall, the toys were reportedly manufactured in China. Given the spate of China-made related recalls, I suspect there is somewhat of a disconnect between the growing concerns related shoddy manufacturing practices and the blind faith investors around the world have placed in it's stock market and by extension the integrity of China’s accounting as it relates to China-based, publicly traded companies. Judging by the hyperbolic move in Chinese shares this year—up 150% in just 8-months, and 5-year returns that now exceed the returns witnessed by the Nasdaq from 1995 thru early 2000, so far, investors seem to have concluded that it’s a lot more difficult to sell a lead-based toys to American parents than it is to lie about their earnings….. ADP’s “JV” jobs report reportedly grew by an anemic 38,000 in August. This number excludes an expected 27,000 government jobs anticipated to be included in Friday’s “Varsity” Bureau of Labor Statistics report putting the total of 65,000 well below the 100,000 to 123,000 expected on Friday. This was the weakest in four years. ….With over $1-trillion of corporate financing slated over the next few weeks from commercial paper rolling over to funding for previously announced private-equity deals, LIBOR is making this tank a bit more difficult. The rate banks charge each other to borrow in dollars for three months rose for a 10th day in a row. The London interbank offered rate, or Libor, increased to 5.72 percent, the highest since January 2001, from 5.70 percent yesterday and 5.36 percent at the end of July.….Also, for what its worth, one of the canaries in the coal mine, Blackstone Group (BX), saw a fresh new low today and some major retailers, Kohl’s (KSS), Best Buy (BBY) and Wal-Mart (WMT) all hit new 52-week lows today, just a day after the Nasdaq's best 4-day skein since 2003. More clues for the clueless. They’re right there for everyone to see like a naked Playboy bunny---just not as attractive.

August, NOT bull's "memento"

Ala, 2000, Piper Jaffray’s analyst, Gene Munster, raised Apple’s (AAPL) price target to $211/share. At that price, we would be looking at a $178-billion market-cap for the entire company. That would equate to a price-to-sales ratio of 7.9x based on their current trailing 12-month’s revenues. That would only be cheap relative to an even more absurdly priced Research In Motion (RIMM) with a current price-to-sales of 15.6x. The delusional price target helped the momentum crowd bid shares of Apple higher by over 6-points even as Microsoft (MSFT) floated the possibility that it is considering the introduction of a mobile phone combining features of its Zune digital music player to compete with Apple’s iPhone. This is the second such announcement of a possible dent to Apple's iPhone margins and market share in recent weeks. The other being Nokia (NOK). A Google search of “Gene Munster” and “AAPL” will find all kinds of Apple cheerleading sites reminiscent of the Qualcomm (QCOM) and internet bubble daze in late 1999 and early 2000. Also, Yahoo (YHOO) was singled-out as Bear Stearns (BSC) “top pick.” Do folks still care what people at Bear Stearns say about anything? The Apple and Yahoo calls seemed to really get the juices flowing among tech stocks on the first day back from trader’s long Labor Day vacation in the U.S. Even though Yahoo is essentially an advertising company that has seen one of it biggest customers, supbrime mortgage lenders, evaporate in recent months.…..Oh, and Jim Cramer, the guy that said subprime was "totally irrelevant" on July 16th, 3-days before the Dow Jones’ record high and then cried “Armageddon” on August 3rd, as subprime became "relevant" is now wildly bullish again calling this month, the “September to remember.” Today, he declared tech to be “immune from housing,” and ended one shouting session with CNBC’s Erin Burnett with, “tech, tech and more tech.” By today’s close, the Nasdaq is now within 3-percent of its 6 ½-year high set on July 19th. Its four day advance is its steepest since 2003. The S&P 500 is now within 3.9-percent of its all-time high and the Dow Industrials is also within 3.9-percent of its all-time high. If there are still unresolved credit, real estate, commercial real estate, private-equity financing, hedge fund and/or structured credit issues still looming, the equity markets are totally oblivious to it. Or the other possibility--- essentially all of these concerns that essentially took three-to-five years to accrue, have been solved over the past 45-days or so. With the jobs report looming on Friday and the heightened possibility of a fairly active earnings warning season that will begin next week, I’m pretty dubious of the latter scenario. Gold rallied nearly $10/ounce and is among the few assets now trading high than its July 19th price level.