New Year and a new try

I have tried from time to time to actively write here with limited success (who am I kidding, limited is being generous.) I am not terribly interested in getting great gobs in exposure or notoriety for writing but rather to get in the habit of putting "pen to paper" (as it is) in such a manner and with a degree of discipline that others could read my thoughts and garner some sense of what I am thinking. It seems like a worthy endeavor for my own sake in as much as it helps me understand what I am thinking. So here we begin again...

The new year is upon us and, as is typical, it comes in with a questioning of what we really know. "Final" numbers for 2010 come in with the equity markets up some 11% or so, and the bond markets off their recent lows but still at remarkable low levels (3.4% in the 10 year can hardly seem high although in this market it does almost feel as such.) Oil sits north of $90 and the dollar continues to show some resilience although it is still closer to recent lows than recent highs. So what exactly do we know... I seem to be falling into the proverb that states that "the whole is not always the sum of its parts." With the housing market still a mess (and for the foreseeable future as well,) still high unemployment and rising fuel costs cutting into growth, I have a hard time being overly optimistic. Now the market seems to have some reason for optimism so who am I to argue but I just have difficulty jumping on board. So as for positioning, if pressed, I would be selectively long equities, short interest rate vol and short the dollar. I think the data over the next few months is going to be a mess due to the announcement that the IRS will not be able to process many itemized tax forms until March (due to tech issues with getting the tax changes late.) That has got to mess up the retail numbers which are seasonally adjusted to, in part, smooth those flows. It would seem that the likely result would be a pulling of spending into Q2/Q3 that would have normally occurred in late Q1 early Q2. Should be interesting to watch.

I have come to the conclusion that it is nearly impossible for the gang in Washington to deal with any of the fiscal problems that we face. No-one seems to have the political where-with-all to push through the changes that need to happen to address the defect and national debt. While it may be a statement on the current crop of residents in DC, there just does not seem to be anyone willing to stand up and lead (or frankly the appetite to be led.) This is something that I simply do not have any insight on how it will resolve itself (more thought on this later on.)

Well this is the first foray into this for the year so we'll have to see if I do better this time around. We shall see...