The Farrell Chronicles: Going Down??

First order of business: Happy Birthday Mom (when I’m writing this)

I don’t know about the rest of you, but Mother’s birthdays supersede all others, including spouses (sorry honey), children and Spot the dog.  Don’t ask me why, it’s just the order of the universe.

So, I have tons to report upon and several observations to be made this week.  First, how about that Super Bowl?  It turned out to be a great game which was wonderful for viewership.  Apparently it was the second largest television audience every – M*A*S*H final show is still the all-time first.  The two million dollar, 30 second investment, made by many firms probably seemed like a good idea.  So, let’s talk commercials.  First off – the Snicker’s Betty White and Abe Vigoda spot – sweet.   Already there have been protestors against cruelty to seniors… I’m serious.  I’m betting the 88 year old Betty and 88 year old Abe aren’t protesting as they wheel their cash to the bank.  If it was so offensive, then I’m sure they would have turned down the role.  Hence, give me a break.

Plus, the Doritos’ owner/dog collar commercial.  How good was that?  It actually was produced by a viewer in entirety.   Originally it was going to be $100K to the winner.  I’ve heard they raised it to $600K.  They should pay him a million as it was so good. 

All my Super Bowl fun came this past Sunday in the City of Brotherly Love.  I arrived in Philly mid-morning on Super Bowl, just hours after their 2^nd biggest snow storm ever.  I left mid-day on Tuesday as they were bracing for another 18 inches.  My departure was planned at that time, but I was going to Metro NYC for appointments the next few days.    Well, those folks were calling and emailing me suggesting they would probably be working from home on Wednesday as the city area was calling for 10-20 inches.  Two observations:   First, working from home. This economy (or lack thereof presently) is so virtual that a vast majority of the jobs today can be done from home…or anywhere.  That is great news.   On the other hand, this virtual economy is bad news as where is the manufacturing?  Do we need to concern ourselves?  I’m thinking Yes…

So you say “finally he’s talking about the economy”.  Well, does anyone recall where they heard a few weeks ago that our financial markets were headed for a correction and our market could dip down to 9200?  If you don’t recall, it was HERE.  Ironically I bring this up on a day in which the market is up triple digits.  However, the trend has been down, closing down the past few weeks on a weekly cumulative.  It is also amusing that the market surge today is tied to leading news that the country of Greece is virtually bankrupt and needs a bailout.  Sure, take profit from other’s misfortunes.  Effectively it is positive news to the market as it shows there is global support available (European Union and specifically Germany) to ‘bailout’ Greece.  But mark my works, this is a short-lived, as other Baltic countries are in similar pain and Germany can’t commit to bail them.  Sound like AIG and Merrill and Bears and Lehman’s all over again?

I made my predication several weeks ago, before the recent downward trend, strictly based upon my interpretation of two year charts.  We were due, and in fact, the markets are charting exactly as I predicted.  While I’m beating my chest here like a Super Bowl hero, the biggest test will be is 9200 the current floor as I suggested weeks ago?  If I was able to call the current downturn from chart movement, I don’t see why I can’t call the bottom.   I will cover my “call” by saying I personally find it easier to pick out peaks to retreat from versus bottoms to buy.  However, I still believe this is an interim downturn as a primary market signal is up – temporary hiring.  In all rebounds, temporary staffing increases are one of the first indicators of future economic activity. Also, shipping news– the Baltic Dry Index is climbing (barely, but nonetheless climbing) – I heard iron ore and copper are being shipped to China and hence are bidding up freight rates.  If you’re a follower of the Weekly Economic Report you will know I am partial to the BDI and cooper as very good signals.  Good news and stay tuned (the international issues above are a slight concern, but they don’t come close to the amount of debt the U.S. had/has in September 2008, so they will be ripples).

Ending today’s report, in a peer to peer conference I just attended (which included much discussion on estate planned giving), I’m hearing out of the Congressional Record that Washington finally has had substantiate discussion regarding gift and estate taxes.  Apparently late last week the Senate reviewed and passed onto Congress a continuation of the 2009 estate tax at $3.5 million with the 45% maximum tax.  I also heard there was positive news regarding some of the 2001 tax incentives which expired last year.  Both of these are good news, but it is a trade off, from what I’m reading, for votes on a jobs bill.  Politics as usual. 

Have a great week.  Enjoy your friends, kiss your Valentine next Sunday, and of course comment freely.  Advancing Tomorrow Today.  Greg

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