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.

Don’t expect much of a drop in oil prices over the next few days. Tropical Storm Edouard has formed in the Gulf of Mexico, and looks like it could prompt some shutdowns and evacs in the NW gulf oil and gas complex.

Though it doesn’t appear that it will reach hurricane force, the storm could bring what would be some much needed rain to those of us in the central TX area.

…tails, we lose.

From Economist.com:

The second protection is the creation of a new regulator. But the existing regulator has been hamstrung by Congress, thanks to the immense lobbying clout of Fannie and Freddie. Shamefully, a proposal to eliminate their lobbying budgets was not even put to a vote on the Senate floor. Government departments are not allowed to lobby Congress; why are these two firms, whose debts now have an explicit government guarantee, permitted to do so?

If Fannie and Freddie are too important to be allowed to collapse, and the American government is really responsible for their debts, then they should be nationalised. The current arrangement allows managers and shareholders to take all the profits and leave the losses to the taxpayer.

—

The whole package is an attempt to throw government cash at a market that is already heavily distorted by tax breaks and subsidies. And it comes at a time when house sales, if not prices, look at last to be bottoming. Nationalisation, followed by speedy, full privatisation would have been so much better. Are there are any free-market capitalists left in Congress?

I’m not sure about the house sales bottoming - maybe. As for the Congress question, the answer is “very few” - not enough to make a difference.

Thanks for the pointer to Tim at The Mess That Greenspan Made.

The first August edition of the ChartWatchers newsletter from StockCharts.com is available for your weekend browsing entertainment. Topics this week include Keltner channels, economists late to the party, a rally lacking in conviction, resistance on the Russell and the Qs and the possibility of a few bullish signs.

Notes on the latest moves in the industry groups:

• There isn’t a lot new going on. The health care groups are still holding up ok, with the biotechs leading the way on more buyout bingo.
• The paper stocks look like they made a big move, but that was concentrated in one stock (IP).
• Energies and metals stocks are still chopping around, and I’m not sure the worst is over there yet.
• Are the big bouncers done bouncing?
• For a more detailed breakdown of group movement over various time periods, try Prophet.net’s Industry Rankings page., or the Industry Group Tracker at WSJ Online.