Smart Money with Keith Springer Saturdays at 1PM and Sundays at 6AM on NewsRadio KFBK 93.1 FM and 1530 AM

Critical Economic and Market Commentary 08/27/10

Nice GDP #…Yikes!

Well the GDP revision #’s came in this morning and wow! 1.6%, how pathetic. (“Anemic” if you want to be pc). 2 years of recovery and a $gazillion in stimulus and this is the best we can do?


I pounded the table just weeks ago forecasting this in this newsletter, on CNBC, Bloomberg, etc. and people thought I was nuts. Now look at all the company I have.
It is amazing how the government lowered our expectations so much that the markets were pleasantly surprised and have rallied. Same story, different day: “bad news is good news and worse news is better”…for now!

For the Markets:

Short term: Regardless of the plethora of bad news, stocks are poised to go higher. At the moment, a “Bull” on Wall Street is scarcer than a Yankee fan at Fenway. Sentiment is so incredibly negative and the public is so turned off from the market, that it seems impossible for stocks to drop. Not until we see more complacency among investors, will the market let go.

Longer term: On paper, things couldn’t look much worse for the economy. Unemployment holding steady and likely rising, housing taking another turn for the worse, deflation seemingly inevitable and the country taking on enough debt to rival a banana republic.
So why isn’t the market getting hammered? Because corporate earnings are good. Companies continue to strengthen their balance sheets and are becoming more efficient. unfortunately this comes at the expense of workers. Eventually earnings will need to rise due to top-line growth (increased sales) and not just cost cutting, but currently investors seem content. Who could blame them with bond, CD and savings rates so low.

*I actually discussed this issue on what is being considered a “controversial” interview I gave just yesterday on CNBC. Take a look at the clip if you like – Video

Springer Financial Advisors ("Advisor") is a federally registered investment adviser located in Sacramento, California. Advisor and its representatives are in compliance with the current filing requirements imposed upon registered investment advisers by the Securities and Exchange Commission and the State of California. Advisor's web site and its emails of general distribution are limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of Advisor's web site on the Internet or dissemination of informational emails should not be construed by any consumer and/or prospective client as Advisor's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. A copy of Advisor's current written disclosure statement discussing Advisor's business operations, services, and fees is available from Advisor upon written request. You may also obtain publicly available information about Advisor through the SEC website as follows: http://www.adviserinfo.sec.gov/IAPD/Content/Search/iapd_OrgSearch.aspx. Advisor does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Advisor's web site or incorporated in an email, and takes no responsibility therefore. All such information is believed to be reliable and authoritative but does not constitute sufficient information to be the sole basis for sound investment decisions and all users thereof should be guided accordingly. Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended or undertaken by Advisor) made reference to directly or indirectly by Advisor in its web site, email, or indirectly via a link to an unaffiliated third party web site, will be profitable or equal the corresponding indicated performance level(s). Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client's investment portfolio. Certain portions of Advisor's web site (i.e. articles, commentaries, etc.) may contain a discussion of, and/or provide access to, Advisor's (and those of other investment and non-investment professionals) positions and/or recommendations as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from Advisor, or from any other investment professional. The information is of a general nature and should not be applied indiscriminately to particular situations wherein it may not be completely applicable. Advisor is neither an attorney nor an accountant, and no portion of the content should be interpreted as legal, accounting or tax advice.