If you're bearish like me, you may have found yourself wondering earlier in the week:
How the hell did Intel report results that good?
Intel is not a company that juices quarterly results (cough, GE, cough) - so the odds are they really did sell as many chips as advertised. But how? Is the green shoots crowd correct?
I grilled some of my Intel contacts this week to shed some light on the mystery.
Answer: The Chinese Government!
Not reported in the mainstream media, internal executives quiety admitted internally that the Chinese government made "large purchases" during Q2.
That fits - China seems to be driving everything right now. The commodity recovery. The stock market recovery - you think the US is hot...the Shanghai index has boomed 85% from its lows!
But how sustainable is this? I have to wonder. This is a V-shaped recovery that appeared to be impossible a few months ago.
China's been juicing the money supply for sure...I just read that the Chinese money supply shot up over 28.5% in June alone. Now that's a recipe for a good time.
I'm just skeptical that any of this can end well. Seems like the drunk on a big binge, who gets up the next morning and cracks open a beer. Sure the old "hair of the dog" is an effective short term solution, but eventually, all good things must come to an end.
So I believe caution is still the order of the day (and I wish I was following my own advice, as you'll see below). Markets can, of course, continue to surprise us to the upside - but I can't figure out what's different fundamentally now, as very few excesses seem to have been corrected. Thus, I'm cautious that the March lows will be taken out again before this is all said and done.
Business Idea - Barter, Anyone?
Had a random idea while waiting in line for my morning coffee yesterday. With tax rates on the rise globally, shouldn't we see a dramatic rise in barter?
Cash transactions are easily traced, and thus taxed. Barter is supposed to be taxed, but much easier to doctor up.
I could see businesses increasingly turning to barter as a means of obtaining goods. Plus, you're now insulated from currency risk, as the goods have their own inherent value. I know there are some barter exchanges out there, some publicly traded.
Just a random thought to share, which you may be able to apply profitably in your investing or entrepreneurial ventures. I'll continue to noodle on this topic, and please comment or email any thoughts on over.
Quick Reader Survey - Please Share Your Thoughs!
I tossed together a quick 3-question reader survey, and I'd appreciate it if you could take a minute or two to share your thoughts and suggestions with me using the survey link here.
Positions Update
Should have kept my cash under the mattress...
Went long cotton...my timing was impeccable :)
I bought the break own - then cotton broke right down! Still, there does appear to be a support shelf around the current price level, so I will hold for now. Will sell on the customary 15-day low stop.
Current Account Value: $24,803.91
Cashed out: $20,000.00
Total value: $44,803.91
Weekly return: -9.8% :(
2009 YTD return: -51.2% :(
Prior year's results: --> Don't try this at home...this is what is known as wreckless trading
2007: 175%
2006: 60%
2005: 805%
Initial stake: $2,000.00
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