Monday, January 26, 2009

With big new layoffs announced yesterday by Texas Instruments, Caterpillar, IBM and Sprint, investors chose to see the bright side, focusing on a dead-cat bounce in the housing sector to pump up stocks for a few hours. An uptick in both home sales and the index of leading indicators was treated as statistical surprises, allowing floor trader Anthony Conroy his 15 minutes of fame with this sunny quote, reported in the Wall Street Journal: “People are beginning to realize that the stuff we're seeing from the fourth quarter is in the past, perhaps from the worst quarter we're going to see for the entire recession." You’d think a floor trader would have better sense than to join the chorus of PhDs who profess to see a recovery later in the year. Spouting such poppycock may be the ticket to mainstream respectability and recognition, but remind us to pillory these guys if, come June, things haven’t started to improve. We’re not sure which “people” it is who have begun to “realize” that the worst of the recession is over. But it surely is not the ones who have been weighing in at the Rick’s Picks forum. There, the discussion has taken a survivalist tack, mostly in response to an Inflation vs. Deflation thread that has produced some illuminating discussion. An excerpt that I printed out for my wife listed 100 items most likely to disappear from store shelves when the panic begins. This is not something you’ll want to ponder after the panic has begun. Indeed, if you wait until the story finds its way onto CNBC, fried pork rinds may be all that is left at suburban Safeways. Click the link above and check it out! (If you’d like to have Rick’s Picks commentary delivered free each day to your e-mail