Economics

   This Week’s Data

   Other

    The case for inflation and gold (medium):
    http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/the-case-for-inflation-and-gold.aspx
   
    Good news Germany--Angela Merkel wins on tax cutting (supply side) platform (short):
    http://www.clubforgrowth.org/2009/09/das_supply_siders.php

    A look at the consumer price index and how housing is impacting it (short):
    http://www.calculatedriskblog.com/2009/09/housing-tax-credit-and-consumer-price.html

    An update on credit indicators (short):
    http://www.calculatedriskblog.com/2009/09/credit-indicators.html

Politics

  Domestic

  International War Against Radical Islam

    This is a long piece but it is a worth while read on Obama’s current foreign policy dilemma:
    http://www.stratfor.com/weekly/20090928_obamas_move_iran_and_afghanistan?utm_source=GWeeklyS&utm_medium=email&utm_campaign=090928&utm_content=readmore

The Market
    
    Technical

    The indices (DJIA 9789, S&P 1062) continue to trade within their up trends off the March lows (9327-11154, 1035-1263).  Volume was very low due to the Yom Kippur holiday; and while the VIX was down, it was a surprisingly small decline given the strong Market.

   Fundamental
   
    A hint at what this quarter’s earnings reports could look like (short):
    http://bespokeinvest.typepad.com/bespoke/2009/09/earnings-revisions-at-a-two-year-high.html

     Headlines

    Two forces seemed to drive the pin action yesterday:

(1)    it was a merger Monday.  Abbott Labs is buying the drug unit of Solvay, Xerox is buying Affiliated Computer Services, Johnson & Johnson is buying Crucell and Kraft is reportedly preparing a hostile offer for Cadbury.  This corporate action matters because it speaks to valuations, that is, it says a supposedly sophisticated buyer is willing to take some additional risk and pay cash at an above current Market price for another company and a return to normalcy,

(2)    mutual funds and other public reporting funds are doing the typical end of quarter window dressing.  In present circumstances, the thesis is that these funds are under invested and want to be more fully invested in their quarter-end report.

An interesting chart on ‘funds on the sidelines’:
http://www.ritholtz.com/blog/2009/09/the-myth-of-sideline-cash/