Bear Mountain Bull

It’s time again for a little BMB R&R, especially with the market behaving as bizarrely as it’s been. Maybe if we stop watching it start to behave a little better…

Posting will be very light and variable over the course of this week, but we’ll put up an open thread each market day for our readers to comment on the day’s market activity or to post any interesting links they might run across.

Check the space below for whatever the latest might be during this ‘off’ time, and please visit the various sites in the ‘Links’ and ‘Regular Stops’ for up-to-date market news and analysis.

BMB will be back in full swing by next weekend.

Between a rock and a hard place.

BMB has said for some time now that the Fed would find itself backed into a corner, with very little that it can do to change the situation. On one side, you’ve got rising inflation, and on the other, a slowing economy. Not a real good combo. Check out the tables in the latest commentary from Paul Van Eeden. As he says:

There isn’t all that much Ben Bernanke can do. To prevent prices from rising he’ll have to sacrifice economic growth and to save the economy from collapsing he’ll have to risk a dramatic increase in price inflation. When faced with such a choice it is easy to see why the Fed left interest rates unchanged during the past two Federal Open Market Committee meetings. Essentially the Fed is doing nothing, and probably hoping that something will happen to make things better. That, however, is unlikely.

So, the Fed will keep the helicopters in the air, dropping money to whomever will take it. Ever wonder why they stopped reporting M3? I think it’s pretty obvious.

From Ron Sen today:

Investing isn’t love. Stocks don’t love you back. They don’t even know you own them. Falling in love with a stock may not hurt you; it may kill you. That’s why you have stops or other forms of risk control - such as diversification, asset allocation, options, and hedging.

It’s not about love? Someone needs to tell the whackos on the message boards.

Items of note on the latest industry moves:

• End of third quarter - time to take another look at the YTD numbers.
• Even though the semis and networking stocks have helped lead the techs off the July lows, they’re among the worst YTD.
• Housing stocks haven’t been allowed to go down for quite a while now - but they’re still down nearly 20% YTD.
• Steel stocks have taken a pounding lately, but have hung on to a 33% gain on the year.
• Some of the health care stocks showing a little weakness, namely the hospitals ($RXH chart) and HMOs ($HMO chart).
• For a more detailed breakdown of group movement over various time periods, try Prophet.net’s Industry Rankings page.