The Best of Kass

Here are some highlights from Doug Kass' trading diary this week.
By Doug Kass ,

NEW YORK (

TheStreet

) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with

RealMoney Silver

readers in "The Edge," his daily trading diary.

This week, he wrote about why the government's employment report was so negative, why holders of retail stocks should be worried and why he was shorting gold on Thursday.

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Don't Kid Yourself -- The Report Is Terrible

Originally published on Dec. 3 at 9:50 a.m. EST.

No use trying to sugarcoat the jobs report. It's bad.

I am reading the post-mortem from the jobs report, and, quite frankly, I find it filled with a bunch of excuses from the bullish cabal as to why it was way off mark.

Words like "aberrant" and "inconsistent with other data points" are some of the most common. And "continued fear and uncertainty of policy" is another rationale for the big disappointment.

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That said, average weekly hours and average hourly earnings were flat.

That is downright horrible.

Ever the optimists, the bullish folks are spinning the report to say that it will ensure the likelihood of an extension of the Bush tax cuts, reduce the debate over quantitative easing and stop the recent interest rate rise -- all market-valuation constructive developments.

In reality, as Tony Crescenzi relates in his commentary, "The jobs data loudly remind investors that very strong structural headwinds such as deleveraging and global competitiveness stand in front of today's gusty cyclical tailwinds and that this will limit economic vigor."

Structural changes are aplenty in the "new normal," not the least of which is the "

Decade of the Temporary Worker

," which was manifested in strong temporary employment gains in November. (Though, again, the wrong-way bulls spin it as positive, as it has historically been a precursor to payroll growth).

Amen, Tony -- it's different this time.

Retail? Bah, Humbug!

Originally published on Dec. 3 at 1:02 p.m. EST.

I'd have a number of concerns about owning retail stocks.

Despite the unbridled enthusiasm for retail stocks on

RealMoolah

and elsewhere, I would be concerned about owning retail stocks in light of the massive move in the sector, today's weak jobs report and today's ISI report.

The ISI report revealed that (a) the average of its two retailer surveys dropped (from 51.1 to 46.9), (b) its specialty retailer survey moved lower (from 51.7 to 46.7), (c) the pricing power within the surveys fell (31.8 to 30.2) and (d) its broadline retailers sales survey weakened (from 50.5 to 47.0).

Getting Shorter on Gold

Originally published on Dec. 2 at 8:06 a.m. EST.

I see plenty of reasons for downside in the yellow metal.

With less ambiguity regarding domestic economic growth, the likelihood that QE2 will not be expanded beyond $600 billion in 2Q2011, and with the possibility that the ECB will not expand its sovereign debt purchases -- though the market is anticipating a more ambitious program to be announced shortly -- I am shorting more

SPDR Gold Shares

(GLD) - Get Report

now.

At the time of publication, Kass was short SPDR Gold Shares.

Doug Kass is the general partner Seabreeze Partners Long/Short LP and Seabreeze Partners Long/Short Offshore LP. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

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