For quite a while now, and after careful consideration of many respected gurus' opinions on the matter, I have been coming down on the side of stock market "price" strength. Not because I believe in the market or its "fundamentals", I surely don't. But because I have watched it stagger along since last summer, refusing to just fold up and get it over with. You know what this means. The Frankenmarket metaphor implies something that is dead, but is somehow stitched together, reanimated and set out into the countryside living on and on until its final destruction.
In my business life, I am seeing an urgency in new levels of public corporate greed and desperation. Quarter-end engineering of the books has always been present to one degree or another. But THIS quarter, ended June 30th has seen a marked increase in both the frequency and intensity of the games. Witness:
Company ABC, a large conglomerate well known for its former CEO's extravagance, informs suppliers they will not be paid from May through the 4th of July, according to my customer, a supplier of Company ABC.
Company XYZ demands expedited delivery of components to get as much product out the door as possible, while at the same time, payments sit on a corporate manager's desk, unbeknownst to accounts payable.
Company PU begins layoffs of its engineering department and in the words of a laid off 13 year product manager "they are cutting into the bone to show Wall St. a profit". Company PU also begins delaying payments to suppliers.
All three of these examples pertain to publicly traded companies that I am sure most of you are familiar with. All three of these examples have keyed in on the quarter ended June 30th. Meanwhile, we have our friends on Wall St. conveniently bullhorning a post-terror, pre-earnings rally.
I have tended to taunt the perma-bears in some articles, while always stating that they are of course right. Their analysis, reasoning and logic are right. But I believe corporate chiefs are wink winking and nudge nudging with Wall St. as they prepare to show the public the goods for the June quarter.
But In my opinion, woe be anyone who buys this as anything more than a trade. Ma 'n Pa stand to hold a bag of unimaginable weight. If I am wrong I am wrong, but I sense a huge level of desperation and plan to watch ever more closely from this moment on. It appears that the mark up phase of the endgame is upon us. Timing is always difficult, and ongoing analysis is required unless you just plan to stand clear, which I feel is a very viable option.
In light of the above, biiwii will now shift to a stance of monitoring the proceedings with ever more interest. I am again looking into modifying the site to allow subscription access to premium content, as I feel now is the time to get it right. If you are interested, keep an eye out on the site for details.
Thank you, and keep both eyes open from this point on.