Girl: I can't decide if I should wear my hair up or down. (friend nods) I mean, you know when you have to make, like...decisions?

--Bathroom, Columbia University

Very white middle-school boy, yelling to friends: He say yo' momma got a cheap-ass weave!

--87th & Lexington

Girl with huge curly hair: You see I, ugh...randomly wake up reaching up to feel, and see if my hair is still there. Then my subconscious is like "wait! Am I breathing?" Oh yes. I'm breathing!

--Chat N Chew Restaurant

Young teen guy to girlfriend: You see, I got hairline issues. You know, 'cuz when you get older, your hair follicles increase and your hair is less. I'm not used to my hair. It used to be here (points to his forehead), but now it's here. (points to the same place on his forehead) I got hairline issues.

--4 Ttrain

Overheard by: Megz

Nanny, adjusting ward's ponytail: If I fall, I'm taking your hair with me.

--5 Train

Hobo to long-haired hipster playing around with remote-control car: Get a job, asshole!

--Norfolk & Rrivington, Lower East Side

Overheard by: globalvillageidiot

Hobo to passerby: Hey, wanna cum on my ass?

--72nd St & Amsterdam

Overheard by: Rei

Hobo to girl giving him money: Not too much, gorgeous!

--13th St & University

Hobo: What time is bedtime at the Neverland ranch? When the big hand touches the little hand! (pause) Why does Michael Jackson like twenty-seven year olds? Because there's twenty of them!

--1 Train

Bag lady, screaming and chasing a suit: You muthafucka, you stole my 401k! I'ma getchya and take it back!

--52nd & 6th

Overheard by: Get me out of Finance

President: Are they de-seminating the office?...I mean decimating?

--40th & Madison Ave

Overheard by: EScrillz

Girl reading poster: The fastest... (pause) "fastest." Is that a word?

--42nd St AMC Theatre

Overheard by: Steph

Man on cell: Yeah, well that's what the beasting is for!

--Penn Station

Woman to friends: You know me, I say what I speak.

--Fordham Road

Frenchman trying to learn English: I was a beef with those potatoes!

--TGI Fridays, Times Square

Overheard by: CS

Hipster art student to friend: As much as...like...whatever, like.

--School of Visual Arts

Overheard by: I guess that's English

Tourist: I feel so elated! Wait...no, I mean, "violated."

--Uptown 3 Train

Overheard by: Sally Tempo

Nerdy tourist boy looking at display: My depth perception is yelling at me...

--Museum of Natural History

Overheard by: jules

Pizza guy on cell: Have a good 4th... What? No, I said to have a good 4th, not "may the force be with you." (pause) Have a good 4th. (pause) Yeah, have a good 4th, and may the force be with you. Uh- huh. Good night.

--Dekalb & Hall St, Brooklyn

Indian nerd to friends, in the midst of heated debate: Dude, vitamins are fucking weak!

--Grand Central Subway Platform

Overheard by: djprojexion

Geek on cell, in line at Comic Con: Dude, I'm at the con... It's like, ten times more awesome...than anything awesome!

--NYC Comic Con

Overheard by: RedmanInc

Nerdy guy: Some super powers come with implied powers. Like the power of flight. You assume the power of wind resistance, because you'd get pretty freaking cold flying 200 mph. But no one ever thinks of that.

--Fordham Law School

Guy to girl: I have a proprietary interest in your nipples.

--Park Slope

Overheard by: Hunter (aka

Hobo coming out of cardboard box to group of blonde chicks: Run yo nipples!

--Blake St

Teenage girl: It's so fucking cold my nipples could pick up radio stations.

--Central Park

20-something Asian guy: But I know babies' nipples are so sensitive...

--Grand & Eldridge

Hobo, yelling at couple on the street: What the hell I look like to you? Huh?! I'm a gangsta! If I had three nipples and no legs, I'd still get laid! (shakes cane at them)

--41st & 8th

Overheard by: S&B at STJ

Black guy, cutting in front of line at movie theater: Excuse me, Barack Obama is President now. Thank you.

--AMC Movie Theater

Overheard by: Emmy

Man with hand stuck in bus door to bus driver: We got a black President and you actin' like this? You civil service!

--14D Bus

Sketching Jamaican hobo: Obama is some kinda skateboard.

--Shuttle to Times Square

Subway hobo: How come Obama don't have sex with his wife no more? Because every time she opens her legs, he sees bush!

--1 Train

Man to toddler in his arms: That's Obama. He's gonna save us all from doom! From doom!

--University & 12th St

Bar hopper: Look at him! He's 20, but he sucks dick like he's 47!

--2nd Ave & 5th St

Overheard by: Christian

Girl on cell: I'm really mad that he's telling everyone I gave him head, and calling my mom a milf.

--West 72nd Urban Outfitters

Overheard by: Will

Student on cell: I can't wait to put that in my mouth.

--Columbia University

Overheard by: Wait, What?

30-something to teen: I'm telling you: ignore a bitch and she'll be giving you head in a day.

--Central Park

Slutty girl: So after about five minutes, I took a break and my jaw was shaking.

--87th & 3rd

Crazy hobo: Look, I don't mean this in a sexual manner, but could you suck my dick?

--Times Square

Eight-year-old Russian boy, in Martin Luther King voice: I had a dream, that one day...I pooped. (giggles)

--Q Ttrain

Overheard by: Robert G.

Drunk bro on phone: I know I'm not the guy you fuck in the shower, but can I shit on your chest?

--Fordham University

Woman on cell: There's no law against defecation.

--3rd Ave & 10th St

Overheard by: SophieMed

Man whispering into cell: I'm going to have to take a number two while we're talking.

--Sunshine Suites

Young man on cell: We're in the ticket line. Are you still pooping?

--Castle Clinton

Overheard by: B Fraz

20-something guy to friends: When I poop on something, I want someone to notice!

--Bushwick, Brooklyn

Overheard by: I prefer to flush

Earth chick on cell: I had meditation and yoga class today. So, if you're coming over tonight we have to have spiritual sex.

--Barnes & Noble

Guy on cell: You're never going to believe this, but I need to tell you anyways. I just did some witchcraft.

--9th St & 3rd Ave

Overheard by: Smoking Student

Yoga teacher: Not being able to do something can teach you a lot about yourself. Like how you're a fucking loser.

--Midtown

Rich white girl with dog in purse: Yeah, so when I went to go buy a dog, I picked Pookie out because he's a Pisces and I'm a Virgo, and that way our personalities will match.

--C Train

Overheard by: evan

White dude to another: I'd like to see what his chi looks like.

--Chinatown

Overheard by: Aileen

Yankees fan to Mets friends: When we go to the Yankees stadium I'll be like a retard at a Chuck E. Cheese.

--Shea Stadium

Overheard by: Danial

Police officer in van, on loudspeaker: Move to the right! (people in cars ignore the order) Retards! You heard me! Move to the right!

--27th St & 10th Ave

Crazy guy, ranting: You can't have sex with people who aren't retarded because they charge too damn much!

--V Train

Overheard by: Ryan P.

Guy to girl: I never said that I wasn't retarded. Technically, I'm not a hypocrite.

--L Train

Overheard by: Julia

Heavily made-up girl: Do you think retarded people are, like, conceptually aware that they're retarded?

--6 Train

Overheard by: You tell me

Girl: The idea of a retarded Jack Russell Terrier is completely foreign to me, because as I recall, Wishbone was exceptionally well-read.

--Columbia University

Female shopper to Bloomingdale's cologne sprayer: Don't you dare spray your $30 over my $150.

--Perfume Aisle, Bloomingdale's

Old lady on cell: I mean, it's just five million...

--Madison & 77th St

Very rich mom to new nanny, about baby in stroller: Okay, well, she loves sushi, and...

--Upper East Side

Rich teen: I asked my mom to go to Louis Vuitton with me this weekend and she was like, "we're in a recession, let's go to Dolce."

--42nd St

Overheard by: I want a m6

Label-whore eating grapes and cheese, to friend: Oh my god, I feel so rich when I eat this stuff... Oh, wait, I am.

--Paul's Cafe

Female black security guard to male black security guard: So you got two kids that you know of...

--MoMa

Security agent: You are now entering the metal detector area, so those of you with wooden cell phones should feel free to keep those in your pockets.

--JFK

Overheard by: Jason

Security guard to teens blocking entrance: Hmm, just what I need at 9 am, a motherfucking school group.

--Paley's Museum of Radio and Television

Overheard by: scarface

Security guard on cell: Why isn't your hand on your butt?

--Duane Reade

Overheard by: Lord Almighty

Library security guard: Welcome to the library, where your wildest dreams come true.

--St. John's University

Little boy in bathroom stall: Knock knock.
Mom in bathroom stall: Who's there?
Little boy in bathroom stall: I pooped in my pants!

--Ellen's Stardust Diner, Times Square

Will natural gas make a comeback? The odds are pretty good that bargain hunters buying natural gas at today's bombed-out levels could probably double their money in under a year.

All thanks to the fact that we could soon be facing rising industrial demand and the possibility of supply outages caused by the looming Hurricane season. Not to mention that demand typically rises during the summer as individuals turn up the air conditioning.

There's no doubt about it; the best risk-adjusted speculation now for commodities investors is natural gas. There's no other commodity that's this cheap, this battered and this oversold (see chart below.)

From its high in July of last year, spot natural gas prices have now collapsed a cumulative 74%. In 2009 prices have declined 37%. Crude oil – on the other hand – has been driven higher by big supply cuts by OPEC and Russia earlier this year, seeing prices rise 19% to $53 a barrel.

Over the last several months, natural gas has been hammered as the global economy suffers its worst recession since 1981-82 coupled with soaring gas inventories. Though an extremely volatile commodity, natural gas at these levels has historically been a strong speculation following big bear market crashes.

Canada is home to some of the best natural gas companies, including Encana (NYSE:ECA). The stock is more than 50% below its all-time high and pays a 3.6% annual dividend at current prices.

It's time to ride natural gas.

At just $3.55 BTUs (British Therman Units) it's hard to believe prices can head much lower. All the bad news is already baked into gas prices. It's my favorite energy play right now in Commodity Trend Alert (CTA) – celebrating its 7th year this summer.

Source: Natural Gas: The Cheapest Commodity Speculation

Currencies back off… More problems for BOA? More on China…Aussie Retail Sales rebound… And Now… Today’s Pfennig!

Good day… And a Wonderful Wednesday to you! I had someone last week in Bermuda ask me why I have my little sayings like Wonderful Wednesdays, and Fantastico Fridays… I told him that it had to do with my life scare of almost 2 years ago, and that I now celebrate each and every day! (well, maybe when I had pneumonia two weeks back I wasn’t celebrating….)

OK… I hope your Cinco De Mayo fun was… Well… Fun! We went out with some good friends, but was back home before bed time for yours truly… Still fun though!

The currencies, led by the euro have run into a dollar road block… It’s all about the Stress Tests this morning folks… It now appears that Bank of America (BOA) will need approx. $35 Billion, and not the measly $10 Billion rumored yesterday. That’s quite a boat load of money, folks… So… All eyes are on the Stress Tests results which are expected to be released tomorrow. But this kind of rumor regarding BOA (NYSE:BAC), is weighing heavily on the risk assets this morning, with a bias toward risk aversion.

The euro didn’t get any help from the latest print of Retail Sales this morning either… Eurozone Retail Sales in March fell by the largest amount on record… The Eurozone recession is really deepened, doubt about it! But remember this… In 2002-03 the euro ignored the recession that had a tight grip on Germany, the Eurozone’s largest economy, and rallied strongly VS the dollar… It was simply a case of “your car is uglier than mine” regarding the problems that were cropping up for the dollar at that time. And since the euro is the offset currency to the dollar… Voila! The dollar’s car was uglier than the euro’s car…

One thing I also want to mention is that we saw the euro climb back above 1.34 again yesterday morning briefly… It sure seems to me that the euro is performing according to many currencies moves I’ve seen since 1992. What I’m talking about here is the fact that the euro keeps probing higher into the 1.34 handle, only to be knocked back down… This can be good or bad, depending on patient the traders are… Usually, a currency goes above a level that sees a ton of resistance (sells / profit taking), and it falls back. The currency will do this a few times, at which time traders can see this as a challenge, and push the currency higher… Or can grow tired and impatient and give up the rally, thus allowing the currency to drift lower. We’ll have to keep an eye on this in the next week…

One currency that has pushed past a road block, and not given it up is the Aussie dollar (A$), which passed 74-cents the other day… Yes, the A$ has given back some ground following the Big Dog euro… But not below 74-cents, not yet any way! The A$ got a boost overnight as Retail Sales for March reversed the 2% fall in Feb, with a 2.2% rise! Of course, the Gov’t has sent out a round of checks about this time… So, one would expect this to happen… It will be important to see if this is a one-and-done, or if it has legs…

OK… Yesterday, I opened Pandora’s Box of inquiry regarding the Chinese / Argentina currency swap line story I brought to you… Inquiring minds want to know more! Well… I researched this more yesterday, and this is beginning to scare the bejeebers out of me folks… First of all the currency swap line that China and Argentina agreed to, was actually the 6th currency swap line that China has done in the past 6 months… They have in the books, South Korea, Hong Kong, Malaysia, Indonesia, Belarus, and now Argentina… Now, when these other swap lines were announced I didn’t think too much about them… But now… stop for a minute and think back to last month, when we told you that China was calling for an end of the dollar’s reserve currency status…

Now… Don’t these all take on a different meaning now that China has made their intentions known? To me… All these swap lines are like pieces of a puzzle, and are fitting together very nicely for China… 1. I think China is trying to gain wider use of the renminbi in Southeast Asia… And 2. I think China will continue to add pieces of the puzzle, and when all the pieces are in place… China goes back to the G-20 ministers and says… “I want the dollar removed as the world’s reserve currency”

What does this do to the dollar? Well… If we look back at the last reserve currency of the world, the pound sterling, we can see that it was a long slow decline that took years to see any recovery, and then only briefly. And to each and every consumer in the U.S. a weaker dollar will mean a loss of purchasing power, as witnessed last year before the financial meltdown… Remember back around this time last year, I came up with some data that really illustrated the loss of purchasing power of the dollar? Well… It went something like this… In the past 6 years, the price of Oil has rising in dollar terms by 319%, while the rise in euro terms was only 94%, and against Gold it was only 50%… So, that’s what the U.S. consumer can expect… A loss of purchasing power…

That is… Unless they have a “hedge” against this scenario… I can hear you asking right away, “What’s this “hedge” Chuck? Ahhh grasshopper, the “hedge” is to diversify a portion of your dollar denominated investment portfolio out of the dollar!

Whew! That was a lot of typing all at once, and I’m worn out! Be right back…

OK, I’m back, bet you didn’t even miss me. HA! I’m still waiting for the news from Norway’s Norges Bank regarding the size of the rate cut that has been forecast… Most observers believe it will be 50 BPS… I think they will opt for a smaller cut of 25 BPS… But given the strange things that are valuing currencies these days, a 50 BPS cut would probably help the krone more than a lesser cut of 25 BPS. Not exactly the “fundamental” way of valuing a currency, but in these strange days, it seems to be the norm.

News from Switzerland this morning has the Swiss National Bank (SNB) watching the advances by the franc very closely… Hmmm… Recall that I explained to you that the SNB was NOT going to allow the franc to get too strong VS the dollar, as the SNB wanted a weaker currency to bring inflation into their economy… The SNB is scared to death about the prospects of deflation getting a grip on their economy… But debasing the currency to achieve this? I don’t think this should be their route… I’m not a fan of the SNB right now…

And tomorrow is meeting day for the European Central Bank (ECB)… ECB President, Trichet, is between a rock and hard place… He wants to continue to provide price stability, but his economy is diving deep into a recession… What’s a prudent Central Banker to do? The markets believe he will cut rates at this meeting, which is also a weight on the euro this morning… I’m on the fence with this one folks… I know in Trichet’s heart of hearts, he wants to keeps rates unchanged… But I don’t think he’ll be able to follow his heart…

My friend, Ashish Advani, made a call to buy Indian rupee last month, in my “paid subscriber” newsletter, The Currency Capitalist (shameless plug!) … And this morning, Standard Chartered Plc said that, “India will be a growth outperformer this year because it is relatively insulated to the global recession and the trade deficit has been narrowing quite rapidly. The Indian rupee will rally as India’s Trade Deficit narrows and the economy expands faster than most Asian nations.”

The data cupboard will produce the ADP Challenger employment report this morning… Recall, that this is the report that tried to emulate the Bureau of Labor Statistics’ (BLS) methodology, but has failed in past months to be a solid indicator of what the Jobs Jamboree will hold in store for us. Nevertheless, the ADP report will give us an “idea” of what to expect, so, it is worth the couple of minutes it takes to review it when it prints this morning.

OK… Before I go to the Big Finish, I wanted to share something with you… In these times when Banks all over are having a rough go of it, EverBank continues to steer the ship in the right direction… I’ve been highlighting the 2008 annual results at the top of the Pfennig for some time now, to drive home the point… But now, I have even more ammo… Our 1st QTR 2009 results saw a press release yesterday, and I believe I can now share them with you…

Net income of $14.4 million, a 65% increase from the first quarter of 2008
> Asset growth of 28% over the same period last year, to over $7.6 billion
> Deposit growth of 42%, or $558 million, to over $5.6 billion

In addition to producing solid earnings and growth in our core businesses, we further strengthened our capital and liquidity positions and significantly increased our loan reserves. EverBank’s total equity rose to over $541 million, a 49% increase over the first quarter of 2008 and more than $170 million above the amount required by the FDIC to be deemed “well capitalized.”

YAHOO!

Currencies today 5/6/09: A$ .7422, kiwi .5822, C$ .8480, euro 1.3320, sterling 1.5090, Swiss .8830, rand 8.5240, krone 6.5740, SEK 7.98, forint 214.20, zloty 3.30, koruna 20.08, yen 98.30, sing 1.4750, HKD 7.75, INR 49.49, China 6.8215, pesos 13.27, BRL 2.1350, dollar index 84.05, Oil $54.17, Silver $13.47, and Gold… $905

Source: Opening Pandora’s Box…

I promise. Alexander Green and I are not in cahoots about the coming boom in corporate takeovers… We both researched the possibility separately. Unprompted, I might add. And yet, armed with different evidence, we arrived at the same conclusion. If you ask me, such a convergence of analysis in a narrow space of time shouldn't be ignored. So today, let's move on from why a takeover boom is imminent and focus exclusively on three takeover targets you can profit from…

Identifying The Market's Next Takeover Targets

The task of identifying the market's next takeover targets can be daunting. Literally thousands of potential targets exist, which is probably why most investors liken it to a crapshoot and in turn, shun such a strategy altogether.

But that's a monumental mistake!

They're passing up easy double-digit profits. Historical takeover premiums (the amount paid over the current share price for a target company) average 22%, according to a study in The Journal of Finance.

And that's just the averages.

It's common for many deal premiums to reach into the high double digits and even triple digits.

Investing in Takeover Targets - 3 Steps to Improving Your Odds

By following three simple steps when investing in takeover targets, we can dramatically improve our odds of success…

• Go where there is consolidation. Consolidation trends are a powerful predictive tool because they tend to persist. Think about it. When your biggest competitor goes out and doubles in size overnight, there's only one way to respond - find a suitable acquisition of your own to remain competitive. Thus, by focusing on those industries and sectors undergoing the most rapid consolidation, we can isolate high probability targets.
• Focus on companies with valuable (and undervalued) assets. Whether it's a new drug, a mammoth oil discovery, key market share, distribution channels, or a few promising patents, the real reason a company is acquired is because it owns a particular asset of value to the acquirer. Only invest in companies with such "must have" assets. And to reduce risk even further, I suggest buying clearly undervalued companies - ones trading at or near cash levels on the balance sheet. (Yes, they do exist.)
• Insist on improving fundamentals. Understand that takeovers take time. In fact, acquiring companies might spend as much as nine months conducting due diligence. Yet, even then, there's nothing stopping them from walking away from a deal (Microsoft -NASDAQ:MSFT- and Yahoo! -NASDAQ:YHOO- ring a bell?). I recommend buying an "insurance policy" to protect against such unprofitable break-ups. By that I mean, only buy companies with improving fundamentals - whether it's strong earnings growth, new product launches, increasing market share, etc. That way, you stand to profit even if a takeover never materializes.

You'll recall in my previous article about the imminent takeover boom, I singled out three sectors that fit the first criteria above - health care (specifically drug makers), energy and technology.

3 Takeover Targets to Add to Your Portfolio Today

For those unwilling to expend the effort to carry out the next two steps… or just eager to get going immediately, here are three takeover targets to consider adding to your portfolio today:

• Crucell NV (Nasdaq: CRXL): Merck (NYSE:MRK) and Schering Plough (NYSE:SGP). Pfizer (NYSE:PFE) and Wyeth( NYSE:WYE). Roche and Genentech (NYSE:DNA). Now Gilead Sciences (NASDAQ:GILD) and CV Therapeutics. Crucell is likely next. It's the largest independent vaccine maker, with products for treating influenza, childhood diseases and hepatitis B. Crucell's PER.C6 cell line is its most valuable asset. The company already licenses out the technology to over 60 companies. And there's no doubt management is accepting offers. In January, it was in friendly talks with Wyeth, before Pfizer swooped in and bought Wyeth and ended the discussions. Best of all, multiple suitors exist (Novartis -NYSE:NVS-, Sanofi-Aventis (NYSE:SNY), Merck and eventually Pfizer) so a bidding war could unfold, which translates into greater profit potential for us.

• Anadarko Petroleum, Corp. (NYSE: APC): As oil tycoon T. Boone Pickens famously observed, it's often cheaper to drill for oil on the floor of the New York Stock Exchange than in the ground. Andarko proves it, as its reserves currently trade for less than $10 per barrel. Throw in a recent deep-sea discovery off Brazil, minimal political risk (80% of assets are located in North America) and high-quality, relatively untapped and undervalued natural gas assets and the takeover case here is an cinch. A multi-billion dollar stock repurchase program provides downside protection, too.

• Lawson Software (Nasdaq: LWSN): The company is a quickly growing niche vendor of enterprise resource planning (ERP) software for medium-sized businesses. Tech heavyweights like Oracle (NASDAQ:ORCL), Cisco (NASDAQ:CSCO)and Microsoft are in desperate need of new growth initiatives. They have little exposure to the middle-market. And they have the cash to afford to buy it. The $308 million in cash sitting on Lawson's balance sheet reduces our risk and also represents a 32% instant rebate to any potential suitors.

Full disclosure: I have recommended all three of these companies to subscribers in recent months. And we're sitting on gains of 8%, 25% and 59%, respectively, proving it pays to follow step 3 above.

So to echo Alex's sentiments from Monday, if you haven't added a handful of potential corporate takeover targets to your portfolio, what are you waiting for? The opportunities and potential profits will be historic.

Good investing,

Lou Basenese

Source:  Takeover Targets: 3 Steps to Finding Them & 3 Stocks for Any Portfolio

After posting stellar gains on Monday, the Canadian Markets took a well deserved breather during Tuesday's session. For the tale of the tape, the TSX Exchange added 0.19%, while the TSX Gold Index fell 0.3% and the TSX Venture Exchange, Canada's largest junior exploration bourse, tacked on 0.31% with the decliners beating out the advancers by a 437 to 397 margin on good volumes of 207 million shares traded.

Mindoro Resources inked a deal allowing Gold Fields (NYSE:GFI) the right to earn up to a 75 per cent stake in Mindoro’s El Paso, Lobo and Talahib porphyry copper-gold projects in the Philippines. Gold Fields must fund all the exploration and produce a feasibility study for each project to earn the interest. Mindoro ended the day up C$0.01 at C$0.15.

Tenajon Resources tabled an updated resource for its Moly Brook zone in Newfoundland. At a cut-off of 0.04% molybdenum, the indicated resource tallies 86.8 million tonnes grading 0.065% molybdenum and the inferred resource came in at 31.3 million tonnes grading 0.056% molybdenum. Tenajon ended the day down C$0.02 at C$0.10.

HudBay Minerals lost $3.95 million in the first quarter, compared with a profit of $21.52 million in the same period of 2008. The lower earnings reflect significantly lower realized prices for copper and zinc in 2009. On the exploration front, HudBay cut 23.11 grams gold per tonne over 8.75 metres at its Lalor deposit in Manitoba. HudBay ended the day down C$0.18 at C$8.65.

The Canadian markets are showing exceptional resilience in the face of still-weak economic data. We shall see what Wednesday trading has in store.

Source: Resource Stock Roundup: Wednesday, May 06th, 2009

When recessions bite, people turn to cheap comfort foods like macaroni and cheese. And as it turns out, those deliciously cheesy elbows have been a pretty good indicator of difficult times.

This from the Financial Times: Sales of Mac & Cheese – which can feed two or more people for as little as $1 – have become an indicator of the health of the US consumer.

Kraft first reported a surge of "almost 20 per cent" in Mac & Cheese sales during spring and early summer last year as economic pressures increased.

Mac & Cheese sales also jumped in 1990, when the US economy was also in a downturn.

It's not just Mac & Cheese that are surging, either. Other budget menu items are also making gains. Kraft, the largest US food group, reported "solid gains" in powdered drinks and desserts. "Businesses like Jell-O, Mac & Cheese, and Kool-Aid are doing exceptionally well," says Irene Rosenfeld, CEO of Kraft. "There is no question that we are benefiting from the value orientation of consumers," she said.

Kraft also reported strong sales of its ready-to-eat frozen DiGiorno and Jack's pizzas, which it markets as a cheaper and higher quality alternative to ordering pizza to be delivered. Overall, its food business has been benefiting as families eat at home more rather than in restaurants.

That makes Kraft (NYSE:KFT) one of the strongest recessionary plays we've seen in a long time.

Let's take a look at the positive action driving the markets…Just as I predicted, the broader U.S. stock market continues to surge higher.

Take a look at this daily chart of the S&P 500:

The S&P 500 is a good proxy for the broader U.S. stock market. And as you can see, stocks continue to march higher. In fact, from a low of 667 on March 9 to last Thursday's high of 889, U.S. stocks have shot up a mind-boggling 33%.

But that's not all. Take a gander at the large arrow on the left of the chart. It marks the summit of the market's last upside run. Because the market reversed course to the downside that day (Feb. 9) and at that level (875), that peak is called - in technical parlance - a "resistance" level.

The market also failed to penetrate this resistance level just a few trading days earlier, on Jan. 28. All told, that means 875 is a pretty tough point for the market to get above.

That's why the market's most recent action is more significant than most investors and traders are thinking: It smashed above key resistance at 875 like a walk in the park. No doubt about it, that shows uncommon technical upside strength.

Here's the best part: When the market breaks through resistance - especially after failing to do so in previous attempts - that resistance level has an excellent chance of becoming a stopping point when the market decides to turn down again.

In other words, strong resistance - once defeated - becomes solid support for future price action. So when the market pulls back - and it surely will - it's very likely to not fall too much below 875. And I don't have to tell you that can be very reassuring.

There's more good news. Just as I thought, the most recent run continues to be backed by higher average volume. And on the chart, that's marked by the upward sloping average volume line near the bottom of the pane.

Significant? Certainly. When strong upside runs - especially when they include breaks above strong resistance levels - are powered by increasing average volume, it's a clear sign that higher prices are attracting more investors and traders. And they're buying more and more shares to prove it. That means lots of upside pricing pressure in the days and weeks ahead.

But before we start the big celebration, take another look at the chart. Notice that while the market has surged higher, it's done so with very few significant pullbacks.

In other words, the market's most recent run since the beginning of March - including a staggering 33% pop in prices - has been practically straight up.

I don't have to tell you that's a ton of upside action in a short amount of time. And for someone who's been around the block a time or two like me, that's a red flag.

Why? Because like many things in life, markets don't go straight up for very long. And if they do for a while, it only makes sense that they're going to pull back and take a breather.

Plus, big run-ups mean some traders are likely sitting on some juicy profits. So when they take some of that money off the table, that selling pressure will cause prices to drop.

Here's what I'm looking for: Over the course of the next few months, we'll likely see a significant pullback in the 10-15% range. On the S&P 500, that means a drop of 90 to 134 points.

Now, it probably won't happen violently and quickly. I think there's just too much investor optimism for that. But it could easily happen over a few weeks, with downdrafts in the 1-3% range.

Best wishes,
Wayne Burritt

Source: Why You Should Remain Cautiously Optimistic as the Markets Surge Higher

Even if Ben Bernanke is right about the stress tests truly reflecting the "financial conditions" of the banks, it doesn't matter much. Banks themselves are still worried that they won't get paid back on old loans.

The latest Federal Reserve survey of senior loan officers finds very few shoots of green in that garden. According to the survey, "A significant majority of banks reported that credit quality for all types of loans is likely to deteriorate over the year." And this assumes the economy won't get any worse than it already is now! Here are some specifics (hat tip, Real Time Economics)

Commercial and industrial loans: Of 52 banks responding, none said they expect improving quality, but seven said they expect delinquencies and charge offs to stabilize at current levels.

Commercial real-estate loans: Only 1 of 51 banks (the other doesn't make such loans) sees improving quality, and three see quality stabilizing at current levels. Of the 47 who see a worsening picture, 13 expected a substantial deterioration in 2009.

Prime residential mortgages: Only 1 of 50 banks sees improving quality, and seven see quality stabilizing at current levels.

Subprime mortgages: No bank sees improving quality, and only two see quality stabilizing at current levels.

Home equity lines: No bank sees improving quality, though nine expect quality to stabilize around current levels.

Credit card loans: None of the 31 banks who make such loans expects improvement, and three expect stabilization.

Other consumer loans: Only one of 50 banks expects improvement, though 12 see loan quality stabilizing around current levels.

The broad sweep in housing-gold ratios is just as broad and as sweeping as both gold bulls and bears might hope…

Even the UK's small, tightly packed mainland, floating off the edge of Europe, includes disparate and distinct real-estate markets. Glasgow is as different from London as Cornwall from Cheshire. But in the main (and the mania), and with a peak of 185,000 new dwellings under construction in 2006, the broad sweep of house-price inflation…followed by an inevitable slump lasting six years or so…tends to apply across the nation.

In the United States, in contrast, new housing starts at the peak of what pundits, economists and investment bankers clearly felt was a coast-to-coast boom in 2006 approached 1.63 million amid a total housing market of 128 million units spread across 3.5 million square miles.

By necessity, that makes the idea of an "average" home price more slippery. But let's not let such quibbles clog up our spreadsheet! Not after math PhDs, applied to mortgage-backed zeroes, clicked and dragged the answer "AAA" whenever asked. And not before we contend with the data itself.

This first chart's solid enough, thanks to the certainty with which the Census Bureau dispenses its data.

It shows the median price of new US housing, at sale, divided by the ounce-price of gold, monthly average. And as you can see, new housing has swung wildly – measured in ounces – over the last 45 years. Quite clearly, one made a better home for investment than the other over distinct periods, as the mid-way price of new homes (half the market paid less, the other half more) was rocked and rolled by booms, bubbles and busts in both bricks and bars.

Second up, existing homes bought on the secondary market – and the same picture, but only on an annualized basis (and with the National Association of Realtors thrown in as a source) for the Census Bureau's less lengthy, less detailed data.

You can see, between the two charts, how new housing during this last real-estate boom (2000-2006 in nominal prices) began and topped out much sooner when priced in terms of gold. New units also reached further above existing-home prices too, peaking at $243,000 in 2006 – then 550 ounces of metal – or some 10% higher than the secondary market.

Perhaps that extra cash paid for new homes' expanding foot-print. But it's also worth noting, turning aside from Gold Investment for a moment, that new US home prices this decade also saw the mean outstripping the median as never before. The gap between average and mid-point prices, in fact, gaped from one-fifth or less (1975-1999) to as wide as 30% during the summer of 2006. Which might show, we guess, a growing number of super-priced units way up at the top-end of the market…bought and paid for, perhaps, with bonuses skimmed off mortgage-backed bonds sold against the sub-median half.

Finally, the money shot…

True long-run figures for housing, like the concept of "average" itself, are more sketchy than Mel Gibson after a night on the sauce.

We've used Robert Shiller's invaluable numbers, of course, but they only come as an index, itself built from five sources stretching back to 1890. Rolling those numbers back from today's current average ($175,000 according to the NAR) only throws up big gaps with the Census Bureau prices collated and published every 10 years starting with 1940. It also puts the price of US housing above $4,000 in 1900 – and in 1900 dollars, too – when average wages were just $2 per day.

Okay, so home-buying was yet to meet democracy through that great 20th century liberator, the securitized mortgage loan. And yes, two-thirds of US homes had yet to gain running water, let alone electricity. But as in the UK data, Gold Bullion regained its Great Depression value in housing as the Great Inflation of the 1970s peaked out, suggesting (to us, at least) that its utility as a store of value was little diminished by new bath fittings and copper wiring.

The broad sweep – smoothed out to fix those anomalies which our quick desk-bound research, a mere 5,000 miles from the Library of Congress throws up – remains as broad and as sweeping as either gold bulls or bears might hope to spy.

From here, the bottom in housing may still be to come, at least priced in gold. Broad-sweeping investors are invited to draw their own conclusions.

Regards,
Adrian Ash

Source: U.S. House Prices in Gold

"The data we have are accurate reflections of the financial conditions of those banks," says Fed head Ben Bernanke regarding the stress test results… Hmmm…

Didn't Bernanke also recently lean on BoA CEO Ken Lewis to commit securities fraud by not declaring losses at Merrill Lynch prior to its takeover by BoA? We appreciate that Gentle Ben is just doing his job and all. But does he really think we’re going to trust him following the Merrill-BoA episode?

We don't believe a word Bernanke says about the economy… or about banks. As NYU economics professor Nouriel Roubini put it recently, the stress tests (or "fudge tests" as he calls them) aren't worth the paper they're written on. They're meaningless, because they have been reverse engineered to create positive results. Here's Roubini on the subject:

If you look at the actual data today macro data for Q1 on the three variables used in the stress tests – growth rate, unemployment rate, and home price depreciation – are already worse than those in U.S. government baseline scenario for 2009 AND even worse than those for the more adverse stressed scenario for 2009. Thus, the stress test results are meaningless as actual data are already running worse than the worst case scenario.

Nassim Nicholas Taleb, a scholar of risk and chance at Polytechnic Institute of New York University, author of The Black Swan:

The Impact of the Highly Improbable: “This stress test is the equivalent of testing the Brooklyn Bridge by running a single heavy truck on it.”

After an off day on Monday, with the LME closed for holiday, the base metals were mixed on Tuesday. Copper pushed as high as $2.15 early in the pre-dawn hours, but that was it as it sank pretty much straight through the day from there, just coming off its intraday lows to finish at $2.0468/lb., down nearly 4 cents from Friday.

Nickel peaked above $5.50 before it too declined, but it managed to eke out a gain late, closing at $5.3206/lb., up just over a penny. Zinc traded mostly sideways, ending at $0.6744/lb., up less than a half-cent. Aluminum also wound up at $0.6744/lb., down less than a quarter-cent, while lead posted a modest gain to $0.6362/lb., up just under a penny.

Copper backed off its gains, falling from a 2-week high as declining equities and a strengthening dollar were the main drivers of the day, along with perhaps a bit of profit taking after several days of higher prices. The metal had moved up12% in the previous four sessions on speculation that manufacturing will rebound.

As one trader commented, "We’ve moved up for the last couple of days and I’d say it’s probably profit taking. But I don’t think the selling was based on anything too noteworthy."

Volume was light, and with London closed on Monday, some traders see a market mood where holiday mode persists for a few more days.

In any event, the supply situation continues to be supportive. Copper inventories monitored by the LME dropped again yesterday, falling by 3,775 metric tons, to 394,925 tons.

But, "Prices have reached a top," wrote Eliane Tanner, an analyst at Credit Suisse Group (NYSE:CS) in Zurich. She predicted a drop "in the weeks ahead."

Citigroup analysts agreed, writing that, "Copper has run way ahead of its fundamentals."

In company news, Xstrata (LON:XTA) reported that copper output in the first quarter of 2009 fell 1.3% percent from the same period a year earlier, to 217,092 metric tons, while production of coal, nickel, platinum and zinc in concentrate all rose.

Source: Traders Await Inventory Figures