Markets and Economy9800 AND THE MARKET TIMING "SCANDAL"

The Market Timing "Scandal" explained. There is nothing wrong with market timing. It is a time honored method of trading. Many funds allow their customers to trade in and out of various funds they own. You can "switch" from high growth to a money market fund. You can see a market going higher in Europe and switch to a stock fund here. All legal as hell. Many of you do it all the time and you ain't going to jail. Many funds prohibit this kind of trading because it can distort their funds big time. $100 billion moving in and out will really disrupt markets. So most now ban the practice for the good of fund owners.

What this "scandal" is about is that fund managers traded "in and out" for their own personal fund accounts with fund money for themselves only and not for the fund members. In other words the "timing" profits should have been shared with fund holders. Period. They also gave preferential "trading rights" to a few favored friends in the funds. That's it. Read the Alan Reynolds piece below. Should you sell your mutual fund? NO NONO.

The notion that mutual fund investors are routinely losing huge sums to prescient day traders is a dubious theory backed by questionable estimates. If there really are such losses, they pale in comparison to the losses investors will suffer in the future if the result of all this poking and probing is that many people become scared away from the largest, most successful mutual funds. The fact is that our nation's most popular mutual funds have performed remarkably well over the past five years despite unusually challenging times. Whenever forced to choose between economists' estimates and stock market facts, stick with the facts.

Like the numbers as I keep preaching. And don't think guys ain't wrong a lot when they do this stuff. It is risky business.
The Market at 9800: Technically, meaning charts, it looks like it is consolidating around here. But information moves markets and the information everyone is waiting for is JOBS. The actual GDP number excluding inventories is a monster 9.2% and this won't continue. The numbers next December will be huge, and the weekly numbers will become significant. A big shift can give the market a boost or a wound. Remember that the White House has all the weekly numbers a full 24 hours before release and lots of private forecasters deliver good numbers to their clients. Watch your own numbers carefully. Don't listen to the Left who manage to find disaster in every nugget of gold or the Right who see diamonds in every lump of coal. Watch the numbers and save your politics til after the close each day. JOBS is everything. Iraq is BAD. GDP is GOOD. Period.