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Short Term Problems

March 25, 2011 – 5:50 pm

The final revision of the 2010 fourth quarter GDP was reported this morning. It was revised up to 3.1% growth from 2.8%. That news is good but is so old that no one on Wall Street cares.

Of more importance this morning were the very good earnings numbers out on Oracle and Research in Motion, though RIM was not so positive about the growth in the next quarter or two mostly because of competition
and the cost and unknown ramp up of their I-Pad device.

Japan’s stock market has recovered all of its loss and is again up this morning. That tells me that investors believe they will recover, that the disasters while dire at the present, are a short term problem. I would not argue with the market as one of the strongest predictors of economic direction is the stock market. Japan will recover and after a sharp fall in GDP growth this quarter and the next, later there will be a sharp spike up and the market is anticipating that.

The stock markets are ignoring a lot of political distress around the world believing it is all short term and not going to impact the fundamental world economy. I think there will be an impact, just one that can be easily absorbed.

There is always something to worry about and right now we have a number of somethings to worry about but none of them big enough to really hurt.

Good Trading
Steve Peasley

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