Let It Snow

Nonfarm Payrolls came in at a relatively (for these days) -36K jobs. Most economists blamed the snow for the negative print. They say that if not for the large snow storms in the eastern half of the country last month, we may have seen a positive nonfarm payrolls print. This is good news. Now we must hope that the government does not introduce anti-business legislation.

Other than concerns that consumer activity will be lower than in the past two hedonistic decades, businesses fear legislation which will make them less profitable and less competitive with foreign companies.

The Wall Street Journal printed an excerpt from Sears Holdings CEO, Eddie Lampert to share holders:

"Sears Holdings shares the stated goal of many public officials of creating jobs. But, we don't believe that we need large government programs to generate these jobs. Public officials often fail to recognize the obstacles they place in the way of job creation. For example, over the past year proposal after proposal has been put forward to reform health care, reform the financial system, increase taxes, and add regulations, all with the intention of making the United States a better and stronger country.


"Yet, as a business, trying to understand which of these proposals might become law, what their impact might be on business prospects and competition, and what additional costs they might impose creates a great deal of uncertainty. It has led our management team and board (and I am sure those managements and boards of other companies) to spend inordinate time trying to determine which investments we should make, defer, or cancel and which jobs to create, maintain, or eliminate. The removal of this uncertainty and the constant drumbeat of new threats against various businesses would go a long way to allowing American entrepreneurial energy to be unleashed."

Bad legislation has me concerned about the financial sector. This is a mid-term Congressional election year. Politicians running for re-election want to portray themselves as champions of the people. If there was ever a time in which we could see anti-business and anti-bank legislation this is it.

When investing in corporate bonds and preferreds, stay away from most regional banks and large banks with large government ownership positions. Also, invest in banks with the most traditional business model.

People continue to ask what bonds can I buy to make money over a shirt period of time. In my opinion the bond market is rich. There may be recovery stories, such as Ford (although the jury is still out on Ford's long-term viability). Investors looking for capital gains should buy large cap, blue chip equities, collect the dividends and wait for gradual and fundamental appreciation. Patience is a virtue and good things come to those who wait.