The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.
GM Could Power Johnson Controls
By Don Dion
9:25 a.m. EDT
Obama's subsidiary GM will roll out a 60-day "try me for free" total refund program for all remaining GM products. Expect heavy promotions during our football games this fall. The huge marketing push which will also draw
into the battle, will help keep car sales in the 10 million to 11 million range. This increase demand should benefit
and the Fidelity mutual fund FSAVX, which focuses on auto suppliers.
Positions: Long JCI, FSAVX
By Ron Insana
11:17 a.m. EDT
Can someone explain to me how short- and long-term rates are breaking down while gold, silver and oil are breaking out?
Inquiring minds want to know!
Greatest Bull Market in History?
By Jim Cramer
11:20 a.m. EDT
I am pondering the very same issue, Ron. It is a total quandary, but it must be answered.
Greatest Bull Market Ever??
By Rev Shark
11:59 a.m. EDT
We have a very long way to go to match the bubble days of 1999-2000, but just contemplating the idea of the "greatest bull market ever" sounds like bad karma to me. That isn't a very factually based opinion, and maybe I'm just superstitious, but once you start tossing around labels like that, the trading gods are sure to take umbrage.
Actually if there isn't some behavioral finance study to back up the idea of "bad karma" we could probably formulate a pretty good one.
Bubble in Everything
By Christopher Grey
12:05 p.m. EDT
For Jim and Ron, Marc Faber actually does an excellent job of explaining how we can have appreciation in government bonds, oil, gold, stocks, corporates, and even possibly real estate soon all at the same time. He calls it something unique in recorded history. That is a bubble in everything, created by unprecedented central-bank money-printing that is not going into the real economy. It is only going into assets, so every asset is going up at the same time. This has never happened before. Faber calls this is a unique accomplishment, but he doesn't mean it as a compliment. His view is that the endgame from this bubble in everything could ultimately be just the reverse, which won't be much fun for anyone.
We're Forever Blowing Bubbles
By Howard Simons
11:27 a.m. EDT
Chris, Faber's an estimable fellow and one whom I take seriously, but his memory's short. We had a similar re-liquefaction trade in 2003. Everything you could pump money into rose and made investing geniuses out of ordinary folks.
It all ended so well.
We are off the top of the chart on the liquidity front by one measure I use, the forward rate ratio between six- and nine-month LIBOR. This is the rate at which you can lock in borrowing for three months starting six months from now, divided by the nine-month rate. Its previous high was 1.2786 in April 2004, just before the Federal Reserve began its series of seventeen consecutive quarter-point rate hikes (and made geniuses out of people who claimed to be students of monetary policy). Its present reading 1.636.
rates to rise, but so long as the central banks are depressing the very shortest rates, that expectation can persist indefinitely. It has in Japan for the entire decade.
This article was written by a staff member of RealMoney.com.