TSG – Stocks Mired in No-Man’s Land…

Dear Trader,

TSG Stock Market Letter
Week Ending February 15, 2008
TradeSystemGuru.com

Topics Discussed This Week:

* Mired in no-man’s land
* Leaders resume surge
* Earnings continue to falter
* Credit market challenges continue
* Stocks walk the line
* Requiem on the carry trade?

That stocks registered mediocre … Dear Trader,

TSG Stock Market Letter
Week Ending February 15, 2008
TradeSystemGuru.com

Topics Discussed This Week:

* Mired in no-man’s land
* Leaders resume surge
* Earnings continue to falter
* Credit market challenges continue
* Stocks walk the line
* Requiem on the carry trade?

That stocks registered mediocre performances this week
is not the issue. What is amazing is that with all the
cracks spreading through credit markets, stocks didn’t
fall out of bed. This was clearly evident Tuesday as the
Dow rallied more than 130 points on Warren Buffett’s $800
billion municipal bond reinsurance (bailout) plan – a plan
that would allow the Sage to re-insure monoline insurers’
safest bonds for a hefty $4.5 billion fee. But municipal
bonds aren’t the problem; it’s the more than $1 trillion
of asset-backed securities (including mortgage-back securities
and collateralized debt obligations) bond insurance issued
since 2001 that pose the real risk to credit markets. In
other words, stocks rallied on a plan that even on the
minuscule chance it is consummated, would do little to reduce
the risk of a systemic failure.

In the face of deteriorating housing and credit markets in
a weakening economy, what the heck is keeping stocks up?

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To read this week’s STOCK market letter, please go to
http://tradesystemguru.com/content/blogcategory/34/68/
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To read this week’s INTERMARKET letter Monday, go to
http://tradesystemguru.com/content/blogcategory/35/69/
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