By Charles Payne, CEO & Principal Analyst
The bull bandwagon is bursting at the seams as everyone is bullish for just about the same reasons.
* Retail sales are higher
* Stocks are higher
* Homebuilding is increasing
* Corporate earnings are soaring
* America is not Greece or any European country, for that matter
I’m with you on the last one but the others aren’t slam dunk reasons to be so giddy. In fact, I’m a little nervous about all of the people that are all of a sudden getting buy signals and green lights on the stock market and economy. That said, this doesn’t mean that we are going to take a bearish stance. On the contrary, there is so much money on the sidelines that if that dam breaks we could have one heck of a party. Always remember that the market continued to rally damn near five years after Greenspan’s “irrational exuberance” speech. I’m glad that the nation has hit terra firma, and think we could have bounced sooner and stronger without the government interfering. Be that as it may there are different signs; the kind of stuff regular people would call “real world” signs, that we have a ways to go.
Through February, vehicle miles driven in the United States declined to its lowest level since 2003. Maybe it was the weather or maybe people didn’t have the coin.
If guilty what the heck is wrong with Goldman Sachs (GS)?
I suspect that any case against a giant moneymaker like Goldman that focuses on one individual, a 31 year old guy not even a manager of any division, has to be flimsy. That said, when money is involved greed is always on display and underhanded principles can dominate. Last night at my charter school board meeting I saw an interesting diagram on the wall. While a post graduate student at the University of Chicago, Lawrence Kohlberg expanded on the theory of moral reasoning as the basis for ethical behavior. Kohlberg’s stages of Moral Development were grouped into six stages through three levels. Each stage has to be met before moving to the next stage. I think that when it comes to Wall Street the ability to simply go out of business is the best punishment and deterrent.
I know that this is highbrow stuff but it’s interesting considering the general debate in this country which is really a debate over limiting individual and corporate wealth. Still, if the goal is to teach this stuff to kids in K-5 then it stands to reason we should all be aware, including the folks at Goldman. I do get nervous when words like “universal” are used beyond the concept of good and bad toward your fellow man. I still like the notion of individual achievement (alone or part of a team or even large corporation) as opposed to commune-think which seems to be the ultimate aim of many in power or with influence over power centers. Anyway, it is interesting that obedience is at the top of the list. There is no doubt that the moral compass in this nation was broken.
The shame is that it’s not being fixed right now by pitting one group of people against another. In the meantime, the debate about too big to fail will continue with different interpretations on the best course of action. It also boils down to the question of whether we want Wall Street to play nice or face an eternity of detention. Moreover, moral reasoning and ethical behavior is most important when practiced by those in power first and foremost.
If the economy was Apple (AAPL) then the DJIA could justify being north of 15,000, the company is really in a world of its own. Of course the story of this quarter is about the world. 58% of the company’s revenue came internationally. China iPhone sales were up more than 900% and overall sales to the region up more than 300% to $1.3 billion. Apple is the ultimate company in the world right now and as a result, its market cap makes it the third largest in the country behind Exxon Mobil (XOM) and Microsoft (MSFT).
* iPhones: 8.75 million from 3.79 million year over year
* Macs: 2.94 million from 2.2 million year over year
* iPods: 10.89 million
* iTunes: $1.1 billion revenue
* Gross margin: increased to 41.7% from 39.9%
Charles Payne is the CEO and Principal Analyst of Wall Street Strategies . This post was republished, with permission, from his company’s column, WStreet Market Commentary.
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