"To be upset over what you don't have is to waste what you do have."
Ken S. Keyes, Jr.,

Poor Patriots...I hope that can bounce back from this upset and pull of a perfect season next year, but I guess as far a SuperBowl prediction goes we are up to continuation of the last week's rally in the next week or two... But here are a few interesting links to consider before pulling all stops out though and an interesting investing idea at the end of the message:

On recession from ECRI:

"The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 131.1 in the week to January 25 from 135.7 in the prior week, revised down from 135.8. The WLI fell due to higher jobless claims, weaker housing activity and lower stock prices, said Lakshman Achuthan, managing director at ECRI. The index's annualized growth rate plunged to minus 7.1 percent from minus 6.0 percent. "WLI growth has dropped back to the six-year low seen in early January," Achuthan said. "While the economy and employment did continue to grow through the end of 2007, the window of opportunity to avert a U.S. recession is about to slam shut."

On why the mortgage refinancing revival could be just another short term blip on the way into a recession, as you might have guessed again- inflation matters:

"Then there's the concern that low short-term rates could eventually bring higher prices." Inflation is very bad for mortgage rates," Green says. While mortgage rates might follow the Fed's lead and fall over the next few months, there's a possibility later of rampant inflation and rising mortgage rates. "By the time the changes make their way through the economy, we might find that the Fed did too much," Green says."

Now the last million dollar question- who thinks that non residential construction could possibly hold up as well as it has in the last year? I personally thought that correction in CRE is long overdue- GS seem to agree:

"Commercial real estate prices may fall 21 percent to 26 percent from current levels, resulting in writedowns for banks of about $20 billion, Goldman Sachs said today in a report. Home price declines will probably drive defaults in non- traditional loans such as Alt-As, which often include limited or no income documentation, resulting in $40 billion in markdowns, the analysts added."

And now two graphs to complete the "optimistic" picture; first one on payrolls- dipping negative does not bode well for the economy in the next 6 months:

source: DallasFed and BLS

And to finish it off here is a promised investment concept- I wish we could buy the US Gross National Debt futures as I think with another $400B red ink likely to be budgeted for the next year, this could be the only sure-thing investment out there right now :)

Stay safe out there,
skepticalcapitalist@gmail.com

P.S. I am looking into the Solar sector for some "real" potential opportunities, here are some of the names that look interesting SPWR, JASO and STP.