Stocks took a rollercoaster ride yesterday – not because traders were racked with uncertainty, but because the mysterious cyclical forces that drive the markets evidently are not quite ready to capitulate in favor of bears.  That will happen soon enough, we think, but in the meantime there was bound to be some squabbling between shorts positioned to benefit from a downturn and portfolio managers keen on distributing as much stock as possible before They pull the plug.  That’s how it works, and if you think it is “hopeful” investors that drive shares higher, you should avoid anyone who approaches you with a solid-gold brick or a “good-faith” envelope filled with money.

Concerning the rollercoaster ride, we doubt that anyone could be even mildly uncertain at this point about what the foreseeable future holds for the U.S. economy. All the indicators that matter are pointing down, aren’t they? Oh, right. There’s that price blip in the housing sector.  Chalk it up to marginally qualified buyers driving the low end of the market with FHA (i.e., subprime) loans and an $8000 tax credit. That might continue for a while, incidentally, since our elected representatives are talking about extending the credit till who-knows-when. There have been reports of widespread fraud in connection with this giveaway, but that wouldn’t trouble any of the Keynesians in Congress, since the good Lord’s supposedly great idea was to put as much money into circulation as possible -- and who cares whether it has been honestly earned or wisely spent.

Blast Survivors

Meanwhile, we give The Real Estate Roundtable credit for not trying to put too much lipstick on their pig. In fact, Roundtable evidently sees no end to the depression-like conditions developing in the U.S. commercial real estate market. Even though sentiment indicators have waxed since the market’s collapse last year, the statistical improvement suggests not optimism, but relief at having survived the initial blast. “The problems now are more clearly defined and there's a grim sense of reality setting in, but that's a long way from saying markets are stabilizing or that conditions are on the mend," Roundtable President and Chief Executive Jeffrey DeBoer said in a statement.

Can you imagine President Obama saying something like that?  Although it accurately describes the condition of the U.S. economy as a whole, the news media would just shake their heads in disbelief. The chattering classes would be so completely dumbfounded and despairing -- “What on earth did he mean by that!?” -- that they might forgo their Christmas shopping.

Let’s hope it doesn’t come to that. We’ll likely be okay as long as no one breaks faith with The Guvvamint and looks to see what’s in his good-faith envelope.

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not b construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Tuesday, 3 November 2009 | Digg This Article