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Any number of pundits

Posted on Nov. 10, 2009 at 9:46 PM - 0 Comments - Post Comment - Link

Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to cultured pearl jewlery resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.

A false recovery is under way. I am pearl jewelry wholesale reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will pearl jewelry wholesale result in yet another asset bubble.

Anytime the central bank intervenes

Posted on Nov. 10, 2009 at 9:45 PM - 0 Comments - Post Comment - Link

Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan's excessively low interest rates: the housing bubble, the explosion of sterling silver jewelry subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions. Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.

This is nothing less than the creation of inflatable water games another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble's collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to freshwater pearl increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve's balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?

Government intervention

Posted on Nov. 10, 2009 at 9:44 PM - 0 Comments - Post Comment - Link

What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to freshwater pearl collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.

Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury's program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person's pocket and gives it to someone else without creating any new inflatable bouncer wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.

The only remaining option is to have the Fed create new money out of thin air. This is inflation. Higher prices lead to wholesale pearl a devalued dollar and a lower standard of living for Americans. The Fed has already overseen a 95% loss in the dollar's purchasing power since 1913. If we do not stop this profligate spending soon, we risk hyperinflation and seeing a 95% devaluation every year.

Sam Stewart

Posted on Nov. 10, 2009 at 9:41 PM - 0 Comments - Post Comment - Link

Senate Majority Leader Harry Reid, D, Nev., said Monday that health care legislation headed to pearl jewelry wholesale the Senate floor will include a public option. The bill is being vetted by the Congressional Budget Office before lawmakers begin their debate. (See "Cost Estimate May Be Key For Public Option.") Investors have been worried that the money to fund a public option isn't in the future budget, and will have to be subsidized by the health care industry in some fashion. A framework put forth by Sen. Max Baucus, D, Mont., in September proposed a multi-billion dollar taxes on the pharmaceutical, medical device and insurance industries, spurring concerns that lean times in the sector will last beyond the current recession-caused struggles.

Sam Stewart, the founder and chief investment strategist at Wasatch Funds, and Beth Lilly, portfolio manager of the Gabelli Woodland Small Cap freshwater pearl necklace Value Fund, agree that there is a palpable "fear of the unknown" in the health care space, but said it is likely creating opporutnities to scoop up high-quality investments that traders have been hesitant to jump into. Stewart, whose firm manages over $5 billion in assets, points out that worries over ObamaCare have in many ways kept health care stocks from fully participating in the broader equity market's rebound. To wit, the Health Care SPDR ( XLV - news - people ) exchange-traded fund is up about 28% since early March, a nice gain but relatively pedestrian compared with a 60% gain for the S&P 500. Many investors are treating health care stocks with kid gloves and Stewart said valuations are going to start looking pretty compelling compared with other more cyclical sectors that have set the tone for the inflatable tent rally.

Hedge fund manager Zeke Ashton

Posted on Nov. 10, 2009 at 9:39 PM - 0 Comments - Post Comment - Link

Hedge fund manager Zeke Ashton of Centaur Capital Partners sees is great value in Laboratory Corp. of America Holdings ( LH - news - people ), a freshwater pearl jewelry laboratory services company that hasn't fully participated in the equity resurgence. LabCorp. and rival Quest Diagnostics ( DGX - news - people ) are like the Coke and Pepsi of the lab services industry, Ashton said, and were hit hard by worry that a proposed tax in an early draft of health care reform would have created a $750 million annual tax on the industry, allocated by market share. The only problem? LabCorp. and Quest have about 66% of the independent lab business and only had about $1 billion in combined 2008 profits. The tax, which was struck from the reform bill in September, would have eliminated a a huge portion of the pair's profits . LabCorp. is up just 28% since early March even after beating top- and bottom-line estimates for pearl jewelry Chian the third quarter when it issued results Oct. 22; Quest is 27% higher.

In a presentation at the Value Investing Congress Oct. 20 that focused on stocks left behind by the rally, Ashton laid out his case for LabCorp., praising its acquisition of Monogram Biosciences ( MGRM - news - people ) earlier this year and highlighting its presence in genomic and esoteric testing, a growing business. That presence may help the company pick up some ground on Quest, which has about 40% of the laboratory services business conducted outside of akoya pearl earrings hospitals and physicians offices.