http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aDSp1GtwaRpE

Yowch!  We've talked of tracking error before.  Tracking error seems to the worst in inverse and leveraged funds.  Couple that with futures and you have a recipe for serious tracking error.  20% is the new record.  So I ask, why would anyone want to trade these things?  They seem entirely unpredictable.  So now you have the unpredictable underlying asset coupled with the unpredictable nature of the way the asset is exposed through an ETF. I just don't understand who would trade something like this even for the short term.

There seems to be a direct correlation in the minds of the masses between the economy, the price of the broad based indexes and the jobs numbers.  True, all are related in some sort of way, but all do not move in lockstep.  In fact, the market is considered a 'leading' indicator, jobs, a lagging indicator and the economic numbers themselves somewhere in the middle. Whether or not this is all a self fulfilling prophecy is a topic for another entry. I bring this up because the masses are confused again (read, marketwatch comments, morning radio, friends, etc) and I don't know how else to communicate this fact. It happened in the last bull/bear cycle and it will happen again in the next. The market will likely fall, people will wonder why because everything is 'rosy', then the economy and jobs follow.  The order is maintained when the cycle goes the other way.

So being a 'bear' because the jobs numbers are bad, is a recipe for missing out on the incredible run up that usually happens when the cycle swings up. With the S&P 500 up 50% off the lows, it's probable that the people watching the jobs numbers as their clue or cue to get back in the market have now introduced risk into their holdings.

A great headline this afternoon pushes one of my points through succinctly.

Exactly!  Now what, or more importantly, who cares?  This doesn't change a thing and has no meaning whatsoever.  Why is it a headline? I suppose they have to write about something. Imagine you're on a road trip, the road trip takes 500 miles. You just hit the 100 mile mark, what does that change about the trip? It's still a 500 mile total trip, you've likely planned an arrival and departure time, those haven't changed. Getting out of the car and dancing around at the 100 mile mark could get a lot of funny looks, but doesn't change the details of the journey. Is mile 100 somehow more significant than mile 99 or 101? I understand milestones and goals, but it shouldn't be based on a random value of an index.

I suppose it's a way to quantify gains and losses and a point in time for people to reflect. Where were you when the Dow hit 10,000 (the first time, second time, and hopefully third time)?

So to answer 'now what', nothing.  End of article. This is why I'm not on TV, I've nothing interesting to say, couple that with a face for radio ... a fatal combination.

Not sure when this aired, but it's the first time I've seen it.