The stock market is roaring back after a lackluster 2011. It's happening without any fanfare and limited volatility. In fact, we are now at 11 days and counting without a 1% move in the market, which suggests the calm and storm are occurring at the same time. Ironically, I've had a lot of professional investors, master of the universe types; say the lack of volatility is some sort of red flag. I hear them but don't agree. Sure, it's easy to argue there is no conviction to this rally, but there hasn't been conviction (as measured by volume) since the rebound off Dow 6600 back in March 2009. For me, it only means the masses don't believe, and that's a shame.

That being said, the light volume is a negative when it comes time for pullbacks as there aren't any strong hands around when panic sparks. Just like that coward captain who abandoned his ship, leaving passengers to fend for themselves, when the market begins to slip, sellers leap off board first and maybe ask questions later. This is the conundrum of the market and the self-fulfilling aspect of folks not participating. Machines dominate trading, while humans fret about how rigged the game has become. Of course, the greater number of humans that get in the "game," the less gyrations and emotional reactions there will be. I think we would have to see an amazing 2012 before Main Street felt confident enough to plow into Wall Street.

Modern society has come a long way, but is it heading in the right direction? I ask because I had a chance to see an authentic "The Birds of America" by John James Audubon, which is expected to set a record when auctioned at Christies tonight. There are only 120 complete sets of the book in existence, which helps to explain the $7.0 to $10.0 million anticipated. I actually think it's going to break records and fetch a bid above the high end of expectations. One thing in addition to the majesty of the work is the story of Audubon himself. His colorful life reflects the hustle and wonder of living in America during his time.

Yesterday on Varney & Co, Francis Wahlgren, head of books and manuscripts at Christies, repeatedly pointed out that Audubon repressed rugged individualism. That's the same rugged individualism that President Obama called a myth earlier this year, and it's being discouraged in a bid to get Americans in line with centrally planned agendas. Maybe one day we will read about pioneers as reckless risk-takers, but for now their stories are pure inspirations including that of Audubon. A true outdoorsman that ate what he killed, including many of the birds he so beautifully illustrated. He was known to pal around and respect Native Americans, mostly the Shawnee and Osage.

Drawing from their expertise in hunting, he honed his skills as did regulators, Kentucky rifleman that carried out the laws. By the time Audubon got to England at age 41 with his first collection of art, he was being called "the American Woodsman." He wowed them and came back armed with the mission to sell more books. The project was expensive, coming in at more than $2.0 million in current dollars, paid for through getting subscriptions, making exhibitions, earning commissions, and selling animal skins.

These days Americans are so intimidated they won't even invest in McDonalds, Nike, or Starbucks. In fact, USA Today underscored a pet peeve of mine for the past decade, pointing out in an article yesterday how Americans snatched $400 billion out of stock market funds over the past four years. Also, Americans have pulled out of the notion of home ownership (glad to see multifamily starts down and single family starts up last month) and even participating in the jobs market. In others words, they've thrown in the towel on so many things that have built this nation and made it the world's envy.

We are miles away from that rugged individualism that shaped Audubon, and we're slipping further each day.

Rugged Road to Recovery

The United States Conference of Mayors released a scathing report on the slow recovery of Americans cities. Just 26 of 363 metropolitan areas have seen a full rebound to pre-recession peaks. Moreover, just about 80 of those areas will need five years to bounce back to previous levels. In addition, medium real income for US households was $49,455 in 2010, down from an inflation-adjusted $53,252 in 1999. In metro areas median income slipped 2.2%. The good news is 2012 is shaping up to be better, but still in the grand scheme of things, not as robust as the past. People leave the farms to make money in the big city.

Sectors that look to get better

Construction and mining look to lose 135,000 and government (local) 196,000.

A lot of job growth this year will come from that rugged arena of energy. According to the report, jobs associated with the Marcellus Shale to the Barnett Shale will grow strongly. It is not just direct jobs from these great opportunities, but the report says professional business services will add 12,800 jobs in the Dallas-Fort Worth metro area, 10,500 in Houston and 1,900 in Oklahoma City. Add in another 23,400 new jobs in education and health service workers in these three metro areas and you have to think the war against fossil fuels is foolhardy and suicidal.
Even more suicidal is the amount of people relying on the government these days. The latest data says 48.6% of the population lives in households receiving government benefits. In addition, as we approach 50 million on food stamps, the tally came in last year at $71.8 billion. It's really tough trying to be rugged when the most strenuous thing you do to survive is walk to the mailbox. I realize crunching numbers on corporate reorganization isn't the same as joining a Shawnee hunting party, but most high paying jobs tax the cerebellum muscles more than calf muscles these days. But you still have to get out of bed early in the morning and work late into the night.

During the last earning season, I wrote about a "Dirty Fingernails Rally" and that is still the core of this nation. We have to drill for energy, mine minerals and metals, and move earth to create the foundation for that future. That continues to be the case, but those future names are now adding to the rally as witnessed by the strong move in the NASDAQ this year. Even with Google posting a very disappointing number and ready to open down almost $60.0, the NASDAQ hints at starting the day holding on pretty well. Stocks have had a nice run and already surpassed full year targets by some bullish analysts.

Comments

Tired is what we are - as if it's not hard enough to be in business and be responsible for other people's livelihoods, now they are just adding more and more regulation and fees and watchdogs - and even for us long time business owners it just makes you really tired of fighting with them. diane on 1/20/2012 8:31:19 AM

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