Today was an uninteresting day, as stock markets rose and fell depending on the location and the time of the day with little overall movement. U.S. markets were mostly unchanged, the Euro held to the 1.30 level, while gold was sold off to the 200-day MA.

Some of the interesting news of the day include the consumer confidence report which showed that confidence is at its lowest level of the oast five months even as stocks rally to erase the year's losses. Be that as it may, the shift in consumer attitude is unlikely to be causing the problems that we are facing. The consumer is very willing to spend without looking back provided that there is somebody to give him the money. Now that there apparently is not as much money to get into the hands of the habitual spender, the economy is suffering. But consumer's behavior is a symptom not a cause.

In another piece, Bloomberg is running an interesting article about rising demand for rentals as foreclosures remain on the rise. One of the common arguments justifying a perpetual rise in home prices back in the heyday of the bubble era was that, since new households were being formed, new house would have to be bought, which would keep prices elevated in a long-term uptrend, since Americans do like to have children - unlike some others in the modern age. That argument never sounded sensible. Having had a taste of what was until recently termed the Thirld World, one finds it hard to believe that marriage and household formation must always lead to house purchases, and not, perchance, rentals. There is nothing surprising about this situation. As U.S. consumers find it hjrder to raise money, and also perceive the necessity of savings more acutely in their lives, they rethink investing such large sums in real estate where prices have been shown to be very volatile. So what do they do? They just rent a home while. In short, optimism on the basis of a strong proportional relationship between marriages, children, and homebuilding is not a credible approach.

In sum, at the moment, technical signals are as indecisive as the news flow. So everyone seems to be picking and analyzing a piece that fits his own scenario, which makes reaching solid conclusions a difficult task. That is not to say that the long-term view is that clouded, quite the contrary, in our opinion. Conflicting pieces of analysis, some respectable names predicting collapse, others being exuberant about a bull market all show that we are at an inflection point as far as risk pricing is concerned. We believe that the turn will be to the downside, since strongest pieces of data have so far pointed to continued weakness in growth.

More interesting pieces of data will be released this week, including the volatile but always relevant durable-goods orders. Not that we expect to be surprised, but it will perhaps easier to make sense of market movements once we get a better look at the picture.