Weekend Munchies

Cisco (CSCO - commentary - Cramer's Take) came out this afternoon and confirmed what CDW (CDWC - commentary - Cramer's Take) told us yesterday. That is, the enterprise spending cycle on tech is steady and healthy. Brocade's (BRCD - commentary - Cramer's Take) is a good one off this, as Jim Cramer noted earlier.

That just might mean the semiconductor inventory glut is really abating. And that means those paired-trade ideas are getting more interesting.

Indeed, those semis would crank out cash like crazy if they're cutting tech spending just as their cycle is about to pick up again. I'll be thinking about this a lot and will probably get excited about its bullish implications by Monday. Hmm.

So tech seems as though it's OK. Then there's the rest of the world...

It just "feels" inflationary out there, doesn't it? That's what's bugging me and I think it's bugging most of us. The familiar argument of the government understating inflation makes sense, but has seemed alarmist for the past few years and just doesn't feel that way any more. Rather, it seems "right" -- at least that's what I'm thinking is making me so bearish about the economy lately.

And it makes sense that inflation is getting serious out there. The central banks around the world are cranking out liquidity, as we know from two of the three money-supply charts that the government still publishes, as it's "not really" understating inflation:

One-Year Chart of M2

Click here for larger image.

Source: Bloomberg

I keep coming back to my theory that I'm today labeling "simultaneous pumping." It basically states that all the developed world's central banks are simultaneously pumping new liquidity into their systems so that all the developed world's fiat currencies are losing value against real assets like gold, oil or even, say, milk:

One-Year Chart of Milk Prices

Click here for larger image.

Source: Bloomberg

On another topic, I really can't fathom why Blackstone or anyone else would want to buy the giant can of worms that Sallie Mae (SLM - commentary - Cramer's Take) looks about to become. The story of apparent student loan fraud, blasted into by The Wall Street Journal lately, will likely have some real legs, what with hundreds of thousands of college loan officers out there and the incentives for steered advice so clear.

And with that, I'm off to yet one last biz meeting this week and then back to my apartment for some cookies and milk before bed. Thanks for reading and I'll see you Monday.

At the time of publication, the firm in which Willard is a partner was net long Cisco and Brocade (and has lots of milk in the fridge as always), although positions can change at any time and without notice.

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Cody Willard is the manager of CL Willard Capital Management, LLC. He is a regular guest on Fox News, CNBC and other networks, and he writes a monthly column for the Financial Times. He is also an adjunct professor at Seton Hall University and the author of TheCodyReport.net, a monthly stock market newsletter. Willard appreciates your feedback -- click here to send him an email.