Great Expectations

Every new disappointment in the economic data sends markets higher along with expectations for more free money to be handed out by the Fed and the ECB. Today it was the Dallas Fed report, which basically collapsed. Not to worry, Big Bad Ben to the rescue!

All I can say is, he had better not disappoint. Read this week’s Hussman, “When Rich Valuations Meet Poor Economic Data.”

Meanwhile the most hated asset class is hanging in there nicely, thank you. Actually I’m starting to get with this hate thing, because the mortgage REIT in which I have a bunch of money, Annaly (NLY), seems to be getting a lot of hate – mostly from the professional bloggers, such as Motley Fool and Minyanville. Hate on, boyz. I guess it sells.

Speaking of NLY, here’s a hint. If you are holding it in a taxable account and you have accumulated capital losses, sell at the close the day before the ex-dividend date and then the next day (the ex-dividend day) put in a limit order to buy back your shares at the previous closing price less the dividend. That should convert the dividend into a capital gain (over time). Do your own due diligence, past doesn’t mean future, etc., of course, but if you look back over the price history this has worked pretty well.

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