Market Approaches Year High In Thin Trading

Equity stock market continues to recover towards the level before Japan earthquake. Although hedge fund selling is finished, individual investors lose interest in buying stock again. Those individual investors who entered market early last October either have realized profit before the earthquake or are starting to take profit recently on the bounce back. Institutional investors take the turn to propel the rally. They have a relatively high cash proportion. Since the overall performance is lagging behind broad market with too much cash, they seek to increase the portfolio return with riskier assets such as equity stocks. Some individual investors with too much cash holding turn to real estate investment which is hardly accessible to small investors under current tight credit requirement by banks. Although market participants have ample supply of capital, investors are cautiously waiting for a dip to re-enter market or holding the portfolio until the end of the bond buying program ending in June to plan for next movement. Many market participants missed the opportunity in the recent crisis because market did not drop hard as expected (much less than the flash crash last May) and the bounce back climbed the wall of worry.

As the bounce back continues, market is likely to reach year high. The scenario is similar to last year when market climbs the wall of worry by institutional investors buying. Individual investors react to the recent market drop similarly as before, switching the portfolio to money market and waiting on the side line.



Large Caps, Tech Stocks Are the Play Now: Fund Manager Jordan
"You've got to stick with companies that are selling something that people can't do without," he says. He loves technology right now, particularly anything to do with the smartphone or tablet PC. He says the tablet computer is going to put the notebook out of business -- and not just the iPad but almost everything involved in the space, from smartphones to broadband plays and chipmakers to content providers.

Peter Schiff: U.S. Should Abolish Corporate and Personal Income Taxes
Facing a $1.6 trillion budget deficit, even Congress knows the size of the government debt is unsustainable. However, both parties lack the political to will to act. Republicans talk about cutting government spending, though the record shows they are no more fiscally prudent than Democrats. Democrats say "tax the rich," but President Obama agreed to extend the Bush-era tax cuts for all.

The real fix probably lies in a combination of higher taxes and smaller government, says Peter Schiff CEO of Euro Pacific Capital. "We need to reduce the size of government. In fact, if we can cut government enough, then we can reduce taxes," he tells Henry Blodget in the accompanying clip.

GE Paid Less Taxes Than You Last Year, Says The New York Times
Because GE employs an army of tax experts whose job is to figure out how to make sure the company pays not a single penny in taxes more than it has to. And because our byzantine tax laws allow multi-national companies not to pay U.S. taxes on overseas profits, carry forward losses, depreciate equipment, and do dozens of other things, smart companies like GE figure out how to structure themselves to pay the absolute minimum in taxes each year.

Ponzi Scheme Hits Mystery Hedge Funds
The SEC says that from 2006 through last year, Clark raised $47 million from investors for his firm, Impact Cash, an online payday lender making loans to the poor at Chili Palmer rates.

Clark ran his operation out of a small office in Logan, Utah. Population: About 50,000. How impressive is this guy? "He's what we would call 'shiny,'" said the SEC's Melton. "He looks like a salesman. You might buy a snowmobile from him."

For most of the four years, Clark raised money for Impact Cash from the predictable places. He tapped friends and family. He tapped friends of friends. He paid salesmen fees and commissions to find new investors, paying one between $500,000 and $600,000 over four to five years. He travelled to trade shows and payday loan conferences.

But his biggest windfall came right at the end — last September. Through word of mouth, his allegedly amazing returns reached the ears of a few hedge fund managers.

New York. San Francisco. Sophisticated money capitals on the coasts.

This "shiny" guy, with the manner of a snowmobile salesman, promises them pie-in-the-sky returns of about 55% a year. And they plunge in $15 million, says the SEC.

Right at the end. Months before Impact Cash collapses.

Harry Dent: “Major Crash” Coming for Stocks, Commodities Already Topping Out
The first quarter comes to a close today with major averages at or near multi-year highs. Expect "substantial" further gains for stocks before a "major top" occurs in late summer, says noted forecaster Harry Dent, founder of HS Dent and The Dent Method.

As for the Fed, they are "checkmated," Dent says, suggesting the Ben Bernanke & Co. are damned if they do QE3 -- because the bond market will freak out -- and damned if they don't -- because the economy and financial markets are so dependent on easy money.

Which Is the Real Warren Buffett?
Lobbying of Mass Destruction: The Wall Street Journal reported that Buffett actively lobbied last spring to change a proposed overhaul of derivatives regulation. The change was championed by Nebraska Sen. Ben Nelson.

Buffett famously dubbed derivatives "financial weapons of mass destruction" in 2008, but that hasn't stopped Berkshire from amassing a huge derivatives portfolio, which Buffett understandably wanted to protect from new regulation.