SMACKDOWN WEEK: Episode II

Its time for another SMACKDOWN week. This time we'll be looking at areas of the market and the economy where there seem to be extreme views and/or those where there has been an extreme run of late. In each piece, I'll contrast an area where I'm more bullish with one where I'm more bearish. I suppose you'd say these will be areas where I'm more bullish/bearish than average, but in truth with so many extreme views out there, its tough to say how meaningful average views are these days. Hell, if we contrasted my view with the average blogger, my expectation that the sun will most likely rise tomorrow would seem like naive optimism.

I'll start with one area I won't be covering. The stock market itself. I suppose if you asked me whether I think stocks will be higher or lower two years from now, I'd say probably higher. But my confidence in that view is pretty low. Lately I've found more success trading on my short-term view, trying to make small gains add up over time, than trading on a long-term macro view.

I would also say that while I expect the market to be higher in two years, we could also see some very scary swings in between. I think the factors that kept volatility low in the past, namely leveraged investors who were willing to take on small arbitrage opportunities, is gone and isn't coming back. The result will be larger swings in all sorts of markets from bonds to stocks to commodities. No one leans against small moves, and therefore the small moves become big moves.

Anyway, here are some of the topics I plan to cover. If you have other ideas, please e-mail me. I won't promise I'll write about it (because I might not have a strong opinion) but the feedback is nice.

• Commercial real estate
• Banks
• Consumers spending
• Inflation
• Housing
• Commodities
• Municipals
• The dollar and foreign participation in U.S. markets

Finally, I know I haven't been posting and or e-mailing people back much. I'm sorry, just been really busy. I've always focused this blog on writing more quality than quantity. If you'd like to subscribe by e-mail, there is a link on the right-hand side of the page. This will save you the trouble of checking the site so often.