You Want The Truth?

Well the government clearly thinks you can't handle it. Take a look a the chart below that shows the relative federal funding committed to uncovering "the truth."

"Challenger" on the chart is the investigation of the Challenger Space Shuttle Disaster. Total spent = $175 million (adjusted for inflation = $300 million). Columbia on the chart is the investigation of the Columbia Space Shuttle Disaster. Total spent = $152 million. The government spent $30 million investigating the Monica Lewinsky scandal. Only $15 million was spent in funding the 9/11 Commission and a mere $8 million on the Financial Crisis Inquiry Commission.

You think the Feds really want to find out what happened on 9/11 or what really caused the financial crisis? Think again.

via Washington's Blog (h/t Zero Hedge)

Posted via email from jessefelder's posterous

Here's One Leading Economic Indicator That Looks Like Hell

From Wikipedia:

The Baltic Dry Index (BDI) is a number issued daily by the London-based Baltic Exchange. Not restricted to Baltic Sea countries, the index tracks worldwide international shipping prices of various dry bulk cargoes...  

Because dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods, such as concrete, electricity, steel, and food, the index is also seen as an efficient economic indicator of future economic growth and production. The BDI is termed a leading economic indicator because it predicts future economic activity.

As the chart above clearly shows, this index is currently testing its worst levels of the recession. Have the bulls just conveniently ignored this fact?

Posted via email from jessefelder's posterous

The Most Important Technical Level for Stocks Right Now

XLF 17:

The financials led us into the depths of the epic bear market of 2008/2009 (punctuated by the Lehman bankruptcy listed on the chart). They NEED to breakout here to validate the current upward trend.

Posted via email from jessefelder's posterous

Curiouser and Curiouser

Stocks continue to rally seemingly every day without a hint of a correction on the horizon. Back in December I curiously noted that the volatility index was reaching an important mark on the downside signaling a high degree of investor complacency.

Volatility continues to wallow around these lows (even going sub-15 today).

Curiously, as the S&P 500 keeps making new relative highs...

...the Russell 2000 Index (small cap companies) has dramatically lagged behind for over a month.

The last time the ratio between the two indexes turned down like it did in December it signaled the onset of a correction. The S&P 500 lost about 20% from May to August last year. This time, however, despite the lowly VIX and lagging small caps the "Newtonian rally" continues.

Is this just a bull market scaling the "wall of worry" or are stocks running on empty?

Posted via email from jessefelder's posterous

Michael Lewis on the Perils of Wall Street and Why He Switched To Schwab

Michael Lewis is one of the few famous Wall Street insiders (or former insiders) who is willing to call the industry out like this:

via businessinsider.com

For more of Michael Lewis' Wall Street insights I highly recommend Liar's Poker, his first book, and The Big Short, his most recent.

Disclosure: I and my clients have a relationship with Schwab Institutional

Posted via email from jessefelder's posterous