Monday, March 23, 2009

Spring Bull Rising

The grimmest news is behind us in economic woes although we will be slapping patches on for the next few months. The global banking system has been shaken to their core and many of the banking elephants have become zombies. But we know all that and it is all now been priced into the market.

Most important, the Fed printed the coin to replace the depleted capital of the banking system. All those brokers are now working down the street at their smaller and wiser former competitors. And damn few of the brokers other that the five or so idiot corporations on Wall Street have folded.

That means that it is possible to have a rising market returning to health and all the positive things that go with that. Far too many very sound stocks are beaten down are will easily rebound, now that we are not fighting of waves of incredibly bad news.

I expect a major rebound in the energy industry in particular, led by the oils. We have entered the greatest industrial retooling since the Second World War. Everyone now knows that the USA must lead the world in shifting out of the oil paradigm to the alternative energy paradigm. Last year we discovered that oil priced over $100 is unsustainable. It is now recovering to the $50 to $75 range which is sufficient to keep it turning over. It is also sufficient to keep up the capital investment momentum in the total energy business.

All energy related stocks will be humming this summer and strengthening into the fall.

Nanosolar and EEStor may even make believers of us all.

Everything else will settle down and solve their hangover. This includes even Detroit.

I think that this past six months will be seen as one of the greatest directional changes ever seen in even the global economy ever. The financial dream machine has been shattered and must now slowly restore confidence. Retirements have disappeared and everyone is rolling up their sleeves to claw back their fortunes, much chastened by the financial tsunami that came through.

Amazingly, if you are free to act, and that is no small feat, it is the best of times.

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