GOODBYE S&P 500 at 800. HOPE TO SEE YOU AGAIN SOON.

Unfortunately, nobody took me up on my dinner wager offer on March 9. And even after a ~2% decline last Friday, S&P500 sits north of 800. Ok, that was fun.  Hope everybody had the sense to sell before the weekend as there is no way that last Monday's boffo performance will be repeating itself anytime soon.

Cars, Inc. - FAIL.  Unfortunately, March 31 is not only the end of the 1Q, but the deadline for the auto companies to impress the "Task Force" why they should warrant an additional lifeline from the government. Would it be too obvious to suggest that this will just be a stark reminder that there is no coherent economic recovery plan? Are we supposed to take the news that GM CEO Rick Wagoner was finally (albeit politely) kicked to the curb as progress? Chrysler doesn't even have a reason to exist: the Daimler de-merger annihilated its engineering talent (shifted to Deutschland) and overseas sales presence. It's hard to see how the latest auto sales figures to be released this Wednesday will be anything, but ugly; not seeing "at least they beat consensus" potential, either. In other words Xenon headlights can't illuminate the proverbial end of the tunnel.

The day also marks the end of the Japanese fiscal year. I think it's safe to say the passing of this "marking up period" will also mean the appetite for fresh buying will have passed. Speaking of which, I still think Sony (SNE) is one of the worst well-known companies to own on the planet. Even its Playstation franchise has to compete head-on with cash-rich MSFT and highly profitable niche player Nintendo (NTDOY).

Guilty.  Unfortunately, we're coming upon corporate confession season in the United States and this will also not be pretty. In particular the stimulus pacakge is still a non-event and the outlook for the balance of 1H, let alone 1Q, will be brutal. So brutal that everybody should snap awake to the reality that any future positive GDP forecast will be a 2010 event at best; calling for an upturn by December is laughable. When it comes to bad news, I guess there is only so much appetite to heed the warnings of the Nouriel Roubini's of the world.

Telepresence.  Frustration is thy name for this industry. The benefits seem legion, but the results have always been piss poor. First after 9/11, and again today when travel budgets are truly viewed as an extravagence, I'm still waiting for pure plays like Polycom's (PLCM) of the world to perform (CSCO is a major player, too). I have seen some positive analyst comments on Tandberg (trades in Europe), but when will I get to eat the proof in the pudding? Alas, the bar to spend on telepresence increases rapidly as reasonable substitutes emerge and strenghten, and extracting non-critical (let alone essential) capital expenditures is just not happening right now.

The bottom line is its extremely difficult coming up with plausible leaders for the next bull market right now, which is why the market the last few weeks can only be considered a mere bear-market rally. Cash remains king.

MADNESS MEETS THE LOTTERY, PART 2

Part 2; a continuation from yesterday's piece.

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ERIC MAYNOR, VCU

Unlike the other players I watched this weekend, VCU’s Eric 

Maynor had only one opportunity to showcase his talent, since VCU lost to UCLA. On paper, the 6’3" point guard looked good, scoring 21 points, pulling down 6 rebounds, and dishing 7 assists. But a closer inspection of his game gave me some cause for concern.

First, the positives, though. Maynor has a beautiful shot in which he extends his arms over his head while in the air, floats for a bit, and then releases a tight spiral. It’s difficult

 to guard, particularly when he’s falling away from the basket. He also has a knack for drawing fouls after penetrating into the lane. And Maynor can be explosive to the basket when he feels like it. Still, Maynor seemed to lack two essential ingredients necessary to succeed on the NBA level as a point guard – ball control and decision-making. Maynor will often head down the court like a frightened deer, darting in and out of defenses. He can be trigger happy on both his passes and his shots. At times, he seemed out of control. On top of this, he dribbles high off the ground, increasing the likelihood of steals or turnovers. He can get away with some of this at the college level, but Chris Paul, Rajon Rondo, Deron Williams and their peers will not be so forgiving. To compound this issue, his basketball judgment needs improvement. The final play of the UCLA game serves as a great example. With 12 second remaining and VCU down by a point, Maynor came off a screen and dribbled inside the three point line. With one man to beat, he could have dribbled into the lane and drawn a foul (he is, after all, a 79% free throw shooter). Instead, he double clutched and took a floating jumper with a man in his face as time expired. In one of the most 

important game of his life, Maynor’s shot came up short. (Yes, I realize that Maynor beat Duke in the last second in 2007 – I’m not saying he isn’t clutch, just that his decision-making can use a little fine tuning.) From an NBA-readiness perspective, I was actually more impressed with Maynor’s teammate Larry Sanders. The guy plays like a spitting image of Dikembe Mutumbo, sans finger wagging. From what I hear, Sanders isn’t likely to come out this year, but he looked to me like a top-ten pick in the 2010 draft.

Is he worth a top-five pick? Sanders is closer than Maynor, in my opinion. But I wouldn’t rule out a mid-first round selection for Maynor. A team like the 76ers, for example, could use a young point guard.

HASHEEM THABEET, Connecticut

We all know you can’t teach height. At 7’3, Thabeet has this covered anyway. But what was crazy about watching Thabeet last week, first Thursday against Chatanooga, then Saturday against Texas A&M, is that you can teach this reed of a center pretty much anything else, and fast.

It’s jarring to think that two years ago as a freshman, Thabeet couldn’t catch the ball well. He’d get pushed around with his back to the basket. More often than not, his low post game consisted of throwing – using the word shooting doesn’t quite capture it – the ball in the vicinity of the hoop, and using his height advantage to stuff down the rebound. He also passed the ball poorly.

Against Chatanooga and Texas A&M, I watched a different athlete. Thabeet had much better body control. Six minutes into the Chatanooga contest, Thabeet took a bounce pass on a fast break, pumped faked once while a defender blew by, and dunked the basketball. Two minutes later, same thing, although this time with a wonderful catch under the basket. Two years ago, the pass would have sailed out of bounds.

He also handled the double team well, either taking a short hook shot, powering to the basket for a score (on his first attempt), or passing the ball out to teammates A.J. Price or Craig Austrie. He ran the court well for his height. And Thabeet’s well-documented defense is NBA-ready; his ability to block shots and, more significantly, keep the ball in play (ala Alonzo Mourning) will keep NBA executives salivating.

So the tournament thus far showed NBA franchises a few constants – Thabeet is tall, he’s coachable, and he can swat a basketball. But the Texas A&M game in particular demonstrated the risks of taking him as a top-five lottery pick. First, he shoots an ugly, parabolic mid-range jumper. Especially at his weight, Thabeet can’t expect to dominate inside three feet of the basket like in college (Chatanooga had only player on their team taller than 6’8, for example – in the NBA, not happening). This necessitates developing a stronger jump shot, or at least a more consistent hook shot. He also needs to work on his free throw percentage – 63% from the line can win you a contest at a county fair, but it won’t cut in it the NBA (unless you are Shaq or Ben Wallace – Thabeet is neither).

Is he worth a top-five pick? This year, definitely. Last year, meh…. Teams like the Kings, Warriors, or Knicks will be tempted to use their pick on Thabeet to shore up their porous defenses, and rightfully so.

JORDAN HILL, Arizona I’m not going to waste too much time on Jordan Hill. He’s a perfectly nice NBA role player. The 6-10 forward is scrappy. He sets picks well. He’ll scratch for rebounds. He has a pretty solid drop step. He follows-up his shot well, and on the other end of the court, he can block a shot or two. He accomplished all this in his first two rounds against Utah and Cleveland State, and wound up with an admirable 17 points and 13 rebounds, and 16 points and 9 rebounds, respectively. In the NBA, though, this effort will result in about 5-10 points and 4-6 rebounds, and maybe a block here or there. On top of this, Hill has some major flaws. He commits cheap fouls. He’ll sometimes get lazy in the paint and forget to box out. He can’t shoot from outside five feet to save his career.

We’ve all seen Jordan Hill before. Next time you’re bored, try this parlor game. Flip over a boggle hour-glass and see if you can name how many Jordan Hills of the world have floated through the NBA over the past decade before it bottoms out. Just off the top of my head, how’s Chris Wilcox, Joakim Noah, Shane Battier (but without the brains), Josh Boone, or Erick Dampier. I’m sure you can do me one better. These are all nice players with solid careers, but…

…are any of them worth a top-five pick? No. Neither is Hill.

Sadly, with this year’s mostly underwhelming crop, he might just find himself there. Maybe he can match up with Beasley.

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PH blog loved the candid insight. Thanks!

MADNESS MEETS THE LOTTERY, PART 1

Today's post is Part I of a contribution from Unfrozen Caveman Lawyer. Currently an attorney for the federal government, UCL visualizes dunking over Ruben Boumtje-Boumtje as a self-motivational tool. So far, his entire Final Four remains alive.

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Sprinkled throughout the crowd during the first two rounds of the NCAA tournament last week were NBA scouts, executives, and perhaps even a coach. Last year, Pat Riley temporarily left his coaching duties in Miami to observe potential draft picks in the first few rounds of the tournament (and look where it got him – Michael “Semi-Fraud” Beasley!). 

So I figured if Riley could do it, I could too.  Reviewing the first two rounds of the tournament is an imperfect science; the sample size is small, and a streaky player may get overrated. But the tournament also serves to demonstrate a player’s leadership and ability to cope under stress better than any NBA combine.  Below are my reviews of five players – Blake Griffin, James Harden, (part I)  – who most draft experts currently rate as potential top-five picks that are playing in this year’s NCAA tournament.

BLAKE GRIFFIN, Oklahoma

Blake Griffin has his critics, much like democracy, god, and freedom have their critics. After watching his first two rounds against Morgan State and Michigan, this much seems clear – in a weak draft, Griffin is the one player with NBA All-Star potential.

The first thing you notice about him is that on nearly every offensive and defensive series, Griffin contributes. The guy is ubiquitous. He’ll set a high screen on one series, rope in a rebound on the next, post up in the box while double teamed and still score after that, steal a pass at the top of the key on the following drive, hit a mid-range jumper on the next (he has a surprisingly fluid jump shot), and take a charge after that. He’s got the energy of a particle accelerator, but he’s also in control of his game.  For example, while he kept himself out of foul trouble against Michigan, his opponent, Manny Harris, had two fouls within five minutes of tip-off, and never factored into the game after that. 

Two aspects of Griffin’s game, however, really stand out. The first is his feet. They are like granite. I haven’t seen a college player with Griffin’s ability to position himself in the paint, set a screen, or box out since Tim Duncan.  You can’t teach that. 

The second exceptional aspect of his game is his toughness. Against Morgan State, forward Ameer Ali flipped Griffin over his shoulders like a lumberjack disposing wood. He played through it. Against Michigan, with 15:09 to go in the first half, Griffin had his knees undercut, fell back, but still held on to a rebound.  A few minutes later, a dive on the court resulted in a bloody elbow. A few minutes after that, he’s got gauze shoved up his nose to stop it from bleeding.  Griffin still played 39 minutes.

Griffin’s most glaring weakness is his free throw shot, which looks like he’s casting a fishing line.  He could also use another two inches.  His 6’10 frame puts him in NBA no-man’s land – too small for a post-up center, but his outside shot isn’t consistent enough yet to succeed as a prototypical power forward.  Still, Griffin is the one player in this draft with immediate break-out potential.

Is he worth a top-five pick?  He’s worth the top pick.  He can help any team in this draft with a starting power forward not named Bosh, Duncan, or Stoudemire.  

JAMES HARDEN, Arizona State

Griffin’s doppelganger this weekend was Arizona State shooting guard James Harden.  He had all the energy of a burnt out light bulb.  In his first round match-up against Temple, my notes read as follows: 15:00, first half – three is blocked, looks like Pendergraff’s team; 13:44 first half – hangs around the three point line like a ghost; 13:44, second half – cheap foul, still no energy; 11:45, second half – Harden travels; 9:45, second half – Harden drives, passes out, deflected, stolen by Christmas; 9:21, second half – airball, Pendergraff bails him out again; 8:43, second half – they’ve stopped double teaming Harden, still sleep-walking; 6:26, second half – Harden stood outside the three-point line for a good 4-5 seconds without moving (shouldn’t the NCAA amend the rulebook and consider this a turnover?); 2:35, second half – Temple is forcing the ball to Harden and away from Glasser, pathetic. 

So for all you Harden apologists, please don’t give me that Harden was “contained” by Syracuse’s fabled 2-3 zone defense two days later, resulting in his eye-poppingly pathetic 10 points on 2-10 shooting (and no points in the first half).  He was doing the same thing on Friday against Temple’s match-up zone.  Frankly, Harden just played without motivation, in two of the most important games of his life. He also lacks that burst of speed off the dribble that you would want from an NBA shooting guard. Harden runs up and down the court like he is stepping through burnt marshmallows. His shot was consistently off. Even his court awareness, apparently his greatest asset, seemed spotty. 

Meanwhile two other future NBA players shone on the court against Harden.  On Friday, Temple’s Dionte Christmas looked like a raw version of Reggie Miller.  On Sunday, Syracuse’s Johnny Flynn (showing no worse for wear playing all those OT minutes in the Big East tournament) demonstrated a level of explosiveness that should have taught Harden a thing or two about elevating one's play for the NCAA's, but didn’t.)

Is he worth a top-five pick? If he was auditioning for a stint in Moscow or Tel Aviv, maybe.  In the NBA, not even close.  I can’t image his draft status not suffering heavily after this weekend.

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Editor's Note: Come back tomorrow morning for the breakdown of Eric Maynor (VCU), Jordan Hill (Arizona), and Hasheem Thabeet (UConn). 

SO MANY EMPTY SEATS

Today's post is a contribution from my friend, Shogun (Youtube). Follow him and BK drop some soccer science on Twitter (RoadtotheCup) or their biweekly podcasts on the www.roadtothecup.com. Meanwhile, his entire Final Four remains alive.

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Yackin with my man J.J. last nite - he asked me what I thought the biggest thing that had happened at the NCAA tourney so far... without any hesitation I said "it has to be the empty seats."  Not just one or two of them - but hundreds and hundreds of empty seats at every venue in the tournament.  Now don't get me wrong - the enthusiasm of the crowds are just as rabid as always for college basketball but the realization of a gripping recession has finally played itself out at our gut level.  It is hard to be more passionate about earthly things than Americans are to their alma maters in this annual countrywide basketball tournament, but in this place and time even the most devoted have opted to "watch in HD" which means the recession grip has not loosened and will not be over tomorrow or the next day...stay tuned and don't let CNBC fool ya - their is little confusion amongst the common people - hard economic realities will be with us past 2009 - but like so many of the exciting games in the tournament thus far - doesn't mean we still can't enjoy ourselves... strike up the band!!!

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Related link: [7 FEB 2009]  SPORTS LEAGUE PAIR TRADE: Short MLB, Long MLS

MARCH! MADNESS!

In about two hours worker productivity in the U.S. should become muffled by the phenomena of March Madness. We’re in the midst of a minor Depression so good working girls & boys will be minding their p’s & q’s, but make no mistake that those lucky enough to be following over the internet on the sly will be more preoccupied than usual. I theorized to a hedge fund manager friend that the high of the week on the indexes would take place yesterday partly because I knew from experience Wall Street traders are amongst the worst offenders of becoming distracted by the men’s college basketball tournament. The guise of settling positions and staying away from the potential volatility of a quadruple witching this Friday is just the elegant professional cover needed to eye the hi-def TV instead of stock screens; CNBC viewership will temporarily plummet.

Over the course of March Madness I am also happy to announce that the Paper Horticulture blog plans to introduce its first guest contributors.  Although not college basketball experts per se the writers are outstanding sports generalists. Unfortunately, I think this is a function of being acutely aware, as yours truly, that nobody would ever care much what we could do ON the field.

Without further ado, our final four selections:

Paper Horticulture

• East: (1) Pittsburgh
• South: (1) North Carolina
• Midwest:  (4) Wake Forest
• West: (11) Utah State

Champion: North Carolina over Wake Forest

UNC was the unanimous pre-season #1 team for a reason: The core squad, more than capable of winning last year, returned to the Chapel Hill campus intact on a mission to complete unfinished business and build on the already staggering Tar Heel basketball legacy. Of course, a big reason is that the four aspiring pros in the starting lineup don’t project to be anything special in the NBA, but when playing at their collective best has the potential of embarrassing any collegiate opponent. Without the artificial pressure of maintaining a pristine record, or a letdown from winning an emotionally draining ACC tournament, I think the conditions are ripe for the best team in the nation to rip through a final 6-game winning streak. PG Ty Lawson sitting out round 1 should be a non-event, although his play will be critical to bring home some hardware.

Dark Horse: I project Utah State reaching the final four due to my forecast of an unlikely string of favorable matchups, including an encounter with BYU in the 4^th round. 

Unfrozen Caveman Lawyer (nom de guerre of my choosing)

• East: (2) Duke
• South: (1) North Carolina
• Midwest:  (1) Louisville
• West: (1) Connecticut 

Champion: Connecticut over North Carolina.  [Editors note]: I can’t penalize someone who is picking with his heart and not his head when it comes to Coach Jim Calhoun’s Huskies program.

Dark Horse: Midwest (6) West Virginia. “I have them beating both Kansas and Michigan State and reaching the Elite 8 before getting tired and falling to Louisville.  I think Louisville is vulnerable, but they happen to be in a weak bracket. As for West Virginia, as much as I hate having to root for Bob Huggins, the Mountaneers play tight defense despite some size problems, and have some quality wins this year over Pitt and Villanova. They've also been toughened up by their ridiculous schedule, which is much tougher than what Michigan State or Kansas had to go through. I think the bracket shapes up well for them until Louisville. Now watch them go lose in the first round.

The Shogun Ill Emperor (www.roadtothecup.com)

• East: (1) Pittsburgh
• South: (2)Oklahoma
• Midwest:  (1) Louisville
• West: (2) Memphis

Champion: Pittsburgh over Louisville.  [Editors note]: From experience, I can attest that the Shogun is not a chalk player. However, despite the romance of the Cinderella team that has made this tourney so popular, there is no reason not to expect a 1- or 2- seed not to take the championship.

Dark horse: East (11) VCU. Sometimes it’s best to let others speak for you: "VCU, I think, has been playing strong, and I hate to say this, because my brother-in-law [Craig Robinson, Oregon State] is in the Pac-10 right now, but the Pac-10 has been looking pretty weak this year," said President Barack Obama. "I like that as an upset." It also helps that this little known program features potential NBA lottery picks in 2009 (PG Eric Maynor) and 2010 (F/C Larry Sanders).

Good luck! 

DEPRESSION NOT YET GREAT

Last week I was mildly positive about the market and consider the subsequent action, albeit volatile, as pretty decent confirmation as there was ample opportunities to go long. Right now I feel GE is the stock to watch because it best reflects the challenges of an AAA-rated industrial company hounded by overarching concerned of “financial” exposure. To wit, it has backed into regaining its status as an important market bell-weather company.

I always find it very instructive to constantly review my own“trader mentality” since nothing goes straight down/up, which is why, on occasion, I offer a market view diametrically opposed to my intermediate term views (6-24 months). When I’m ready to publish a book is when I’ll start commenting on my longer term visions (for suckers to buy).

Bull in a China Shop: Buying on the Rumor.  The bull case right now lies in the hope that China’s stimulus plan is the Real McCoy. It stands to reason that due to its relative size (vs GDP) and mechanism (Hu Jintao doesn’t have to deal with Congress) it should be more timely and effective. Therefore it must work before we get really excited by Obama’s plan. Until this view is discredited I think we can at least take a market meltdown off the table. For the brave few with market exposure remaining I believe that is substantial enough of a reason to look for a rally. Does anybody believe there is any meaningful selling pressure overhead between 700 and 800 on the S&P 500? I think not. I’m definitely open to dinner wagers that we see 800 before 600.

Nonetheless, I note that under more normalized conditions the collective size of the myriad entitlements offered in the U.S. is generous while China’s is still effectively nil (explains the savings rate). Without 8% GDP growth China is very concerned about social stability, and the consensus estimate is 20+ million have recently lost jobs , and the hope still is to encourage more domestic consumption to offset the global slowdown?! I fear that a higher proportion of the monies set aside for economic stimulus (short-term) will soon be shunted over to China’s nascent entitlement programs, as has already been initiated with basic healthcare. Meanwhile Chinas leadership disappointed markets last week by (tacitly) insisting a supplement to stimulus planned announced last November was unnecessary. Let’s hope so, but I’m not holding my breath.

Brace Yourself for Depression.  Yesterday, the World Bank announced it predicted global economy would be negative for the first time since WWII. To me this is an adequate proxy for declaring that we’re entering a period of Depression (term should always be capitalized). And although a spot check at the Federal Reserve will reveal that M2 money supply continues to grow at a rapid clip  (signaling possible major inflation) we can’t lose sight of the fact that credit (personal or commercial) is what is most precious these days. My strongest recommendation for those still employed remains unchanged: Aggressively pay down high yielding debt (e.g. credit cards) after leaving enough liquidity available to satisfy minimum payments in lower yielding debt and an emergency cash cushion.

Don’t Forget We’re in a Buyer’s Market.  Right now cash is king so those with the ability to pay in cold hard currency (especially before it may devalue!) should try to convert it to assets. Obviously great deals can be had not only in the housing market, but in autos and anything else that was formerly lubricated by easy money. Anybody shopping for a car not checking into LeaseTrader.com is doing themselves a disservice. And if even that’s a luxury, at least try renegotiating your rent. Landlords are always most concerned with “headline price” and utilization rate.  Use this information to your advantage to negotiating a favorable extension (you have to give back a little); that’s some major pre-tax dinero to be saved. Be aggressive. Play up everybody’s worst fears to your benefit (for a change). If successful, you will know exactly what every banker in the world is doing these days. Good luck.

 

BEARD LUCK CHARM

Issues of veracity notwithstanding, the only thing that has remotely "worked" for the market recently took place last Tuesday when FED Chairman Bernanke asserted that our major banks did not need anything remotely resembling nationalization. Today he's speaking again at 10 a.m. and all eyes will be glued on everyone's new favorite lucky charm. Believe me, the markets want to be seduced by anything or anyone to break this negative feedback selloff. Tim Geithner is also due to me making public comments at 12:30. If he, as Treasury Secretary, can give ANY indication that this administration is adequately chipping away at the herculean task at hand of saving the economy it will be off to the races this afternoon; UP! Unfortunately, it's hard to say what he's going to say, but Wall Street loves when expectations are surpassed! I wish I was joking.

I usually don't pay much attention to pre-market futures except when market psychology is very frail; I've been worried about market capitulation, though, especially after yesterday. However, futures are actually up right now so I think it indicates that the market receptive to the possibily of some good news. Since everybody and their mother is looking toward technical analysis to provide some guidance (and gaining little) I believe the conditions are ripe for a little rally. Finally.

I'm afraid that it appears the China, for the most part, has finished restocking on commodities (note how the dry bulk charter rates have moderated again), but I would expect the cyclicals/commodity plays to work best if the market rallies. There also has been increased chatter (of hope) that India is primed to take the mantle of driving commodity demand from the Chinese (gimme a break, they have huge national debt problems). Just getting dipping your foot into the shallow end of the pool with general market exposure would be my recommendation for right now though.

In the meantime, Legg Mason Value Trust (LMVTX) manager Bill Miller is eating some more crow after getting another another major market call wrong. I'm, of course, referring to his declaration that we reached a market bottom last fall. I think the odds that he is ousted (or retire if you want to call it that) by the end of summer has risen to 80%. How much damage will one man be allowed to inflict upon a firm? Why on earth would he make a market-timing call as a purported value investor? Just goes to show that the energy of developing a strong top-down view or and assessing the magnitude of near-term catalysts can't ever be overlooked.

SNOWED IN

The major snowstorm that has converged upon the U.S. eastern seaboard overnight appears to be a sign that U.S. equity markets are far from removed from the carnage experienced YTD; March is unlikely to herald anything new and accordingly, the risk of the S$P 500 hurtling toward 600 (from 735.09 today) only increases. The signs of the apocalyse are legion: the U.S. dollar is the strongest currency in the planet (laymen would be shocked), a major financial institution requires capital injections (today, HSBC), and our Captains of industry (GE reversed it stance on a dividend cut within weeks) and a Legendary investor (Warren Buffett) plea mea culpa like its going out of style.

I even here the term depression being uttered on television to describe the current state of afffairs. I say when the three biggest economic zones (US, EU, Japan) are in a bad recession we have successfully achieved depression. All depressions need not be "Great".

All about the Benjamin. Benjamin Franklin noted long ago the inevitability of citizens confronting death and taxes. And if there is one certainty right now it is that taxes are going to be increasing. For the investor class the $200,000 annual income breakpoint is not a gigantic hurdle, let alone $250,000 for families. With the taste for equities souring and the trillions of wealth destruction that need to be recouped in order to become whole again (don't hold your breath) I strongly believe that the fixed income asset classes will be the first to recover. In particular, the municipal bond market due to its relatively favorable risk/reward profile, tax-adjusted yields, and the strong presumable support of local investment funding by the Obama administration. After all there is no more "shovel-ready" spending initiative than existing ones.

Normally I prefer to recommend specific securities, but right now I think people should be investigating bond funds because of the double discount factor. Funds own discounted to net present value (NPV) issues, which is the opportunity a value-oriented investor seek. This discount is fairly meaningful because bondholders are most interested in cash flow generation; capital appreciation is secondary. However, the demand for liquidity has caused many closed end funds (trade like stocks, not mutual funds) to trade at much steeper than normal discount to net asset value (NAV). Net asset value is a much more tangible metric than sentiment influenced ones such as price/earnings. I'm enough of an optimist to suggest that a) I do believe that normalcy will eventually return, and b) there is no reason to think successful, long-tenured fund managers have collectively become worthless so the double discount factor of NPV and NAV is the "fat pitch" a hitter is looking for. Trolling in this formerly unsexy corner of the investment universe today is appropriate for any investor. Cash is King; especially, the U.S. Dollar.