http://www.fxstreet.com/fundamental/analysis-reports/market-comment/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-02-10.htmlThere's a reason the EU settlement with Greece is taking two years to work out-----the necessary fiscal, monetary and economic measures are just too painful for both sides to bear. And the alternative is a disorderly default that would be even worse. Today's outline of an agreement among the various Greek political parties to accept some harsh austerity measures has been presented to the EU, which is meeting in Brussels tonight. EU officials have already indicated that there will be no finalFri, 10 Feb 2012 06:07:53 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-02-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-02-03.html"A 30-50 year virtuous cycle of credit expansion which has produced outsize paranormal returns for financial assets----bonds, stocks, real estate and commodities alike----is now deleveraging because of excessive risk and the price of money at the zero-bound. We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time." This quote from Bill Gross's February comment for Pimco neatly summarizes in one sentence the main theme we have been emphasizing inFri, 03 Feb 2012 05:25:57 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-02-03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-01-27.htmlThe Fed is worried, and you should be too. That is the major take-away from yesterday's FOMC statement, combined with its release of updated projections and Bernanke's press conference. Despite the market's cheering of the promise of a near-zero fed funds rate until late 2014 and the prospect of QE3, the Fed is fighting a lonely battle against severe economic headwinds----and they know it. In answering a reporter's question, Bernanke made it crystal-clear that he does not believe that theFri, 27 Jan 2012 07:29:11 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-01-27.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-01-20.htmlAlthough a number of economic indicators have recently improved, the economy is now entering a period of high risk. In their now well-known book, "This Time It's Different", Rogoff and Reinhart showed that once a nation's government debt-to-GDP ratio reached and exceeded 90%, the period ahead was marked by credit crises, exceedingly slow growth and frequent recessions. The latest example, among many, is the experience of Japan in the years following 1989 and continuing until today. AsFri, 20 Jan 2012 05:43:59 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-01-20.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-01-13.htmlHow This Effects the Consumer and Housing Market The U.S. used unusual methods in handling the bursting of the "Financial Mania" of the late 1990s, the one called the "Dot-Com" bubble. Instead of letting the free markets dictate just how low the prices of stocks and other assets would wind up after the bursting of the bubble, the "powers that be" intervened. The Greenspan-led Federal Reserve reduced Fed Funds from 6 ½ % to 1% and started a second bubble, an unbelievable housing bubble. TheyFri, 13 Jan 2012 05:32:32 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-01-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-01-06.htmlThe European debt crisis has not gone away. Concern about Euro debt has ebbed and flowed in the markets for the last two years, but is still far from a solution. Periodically, various high-level meetings and resulting announcements of vague outlines of plans have led to quiet periods, only to re-emerge again when something happens that indicates that not much has really been accomplished, and that there are still serious problems ahead. The latest eruption of worry burst forth as Unicredit,Fri, 06 Jan 2012 11:21:48 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2012-01-06.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-12-16.htmlMost U.S. portfolio managers seem to view the EU sovereign debt crisis as they would a pesky mosquito that refuses to fly away. If only the mosquito would leave, the asset managers could concentrate on the U.S. where the economy is said to be showing so much improvement and stocks are incorrectly perceived to be cheap. Unfortunately, that is not the case. The EU crisis is part of a developed world credit crisis brought on by too much debt that must be deleveraged, a process that will take manyFri, 16 Dec 2011 06:45:03 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-12-16.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-12-09.html"More than any other time in history mankind faces a crossroads. One path leads to despair and utter hopelessness, the other, to total extinction. Let us pray we have the wisdom to choose correctly." -------Woody Allen We begin this comment by warning that anything we say can be overtaken by swift-moving events, and may be moot by the time you read it. As everyone knows the EU is meeting today and tomorrow in what is being billed as a last-ditch effort to save the Euro Zone. It is, of course,Fri, 09 Dec 2011 05:42:53 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-12-09.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-12-02.htmlThe emergency action of the central banks led by the U.S. to ease the credit crunch on European banks came as the world was only days away from a crisis that would have brought the European----and perhaps global ----economic and financial systems to a near collapse. Just as in the days leading up to the outbreak of World War I, European leaders were about to stumble into a dire situation that they didn't want, but were unlikely to prevent. Fortunately, however, Fed Chairman Bernanke saw whatFri, 02 Dec 2011 05:37:50 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-12-02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-11-18.htmlThe European sovereign debt crisis is rapidly approaching what could be a significant tipping point as it threatens to spread to the heart of Europe. In recent days Italian 10-year bond yields have soared to 7.22% and today Spain was forced to pay 6.975% at its auction. Even French 10-year yields have climbed to 3.71%, its widest spread over German bond yields since the Euro Zone was started. All of this has happened despite large ECB purchases of periphery country bonds over the last fewFri, 18 Nov 2011 05:49:47 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-11-18.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-11-11.htmlWhen the Greek crisis started to emerge in early 2010 we recognized the possibility of contagion and the potential threat to the global economic and financial system, although it was generally dismissed as a manageable problem by the investment community. Following is an excerpt from our comment of February 11, 2010. . "The Greek fiscal crisis is just a symptom of world-wide credit problems that was signaled by the emergence of subprime loan disclosures as early as August 2006. The importanceFri, 11 Nov 2011 06:48:28 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-11-11.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-11-04.htmlIn our view the FOMC statement and Chairman Bernanke's follow-up press conference presented a bleak take on the economy. The market cheered the virtual assurance that the funds rate would remain near zero until at least mid-2013 and the strong hints that further stimulus including QE3 was on the table. To us, however, this was far more of a forecast of economic weakness rather than strength. Importantly, they slashed growth estimates significantly for 2011, 2012 and 2013 while making steepFri, 04 Nov 2011 06:17:24 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-11-04.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-10-28.htmlThe sharp rally off the October 4th intraday low of the S&P 500 is a result of the assumed prospect of a real plan to save the Euro and slightly improved U.S. economic numbers indicating that we may not be in a recession right now. In addition the market was probably oversold after its rapid plunge below the 1260-1370 trading zone. We think the market will soon be disappointed on both counts. Our initial reading of the reports coming out of Europe does not exactly inspire a great deal ofFri, 28 Oct 2011 12:07:25 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-10-28.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-10-21.htmlAlthough market strategists are rightly concerned about Europe, the U.S. economy and a slowdown in China, the one thing all seem to agree on is that the market is cheap. One guest after another on financial TV states that stocks are undervalued and no one ever challenges them. In our view such assertions are unsupported by the historical data and are a result of flawed reasoning. The analysts state that the S&P 500 at about 1200 is selling at about 11 times estimated 2012 operatingFri, 21 Oct 2011 04:57:48 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-10-21.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-10-14.htmlWe have seen some statistically significant results from very wise stock market pundits where anyone would be foolish not to be cognizant of the results. These results are important, but not nearly as important as what is taking place in the macro picture with the accumulation and/or liquidation of U.S. debt both public and private. It is our opinion that the accumulation of debt (usually accompanied by inflation) and the liquidation of debt (usually accompanied by deflation) are the mostFri, 14 Oct 2011 07:46:28 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-10-14.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-10-07.htmlThe latest releases by the Business Roundtable's (BRT) CEO survey results, and the layoff announcements by Challenger, Gray, and Christmas do not paint a very positive picture for the economy. We recently discussed the lackluster employment changes announced by the National Federation of Independent Businesses (NFIB) in a recent comment. Historically, during recoveries the small businesses represented by NFIB account for about 75% of new jobs. The Business Roundtable is an association of 140Fri, 07 Oct 2011 07:36:42 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-10-07.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-30.htmlDr. Austan Goolsbee, formerly the Chairman of the Council of Economic Advisers of President Barack Obama, is now a professor at the University of Chicago at the Booth School of Business. He appeared on "This Week" on ABC this past Sunday and made some interesting observations. Dr. Goolsbee stated that there is only one way to get out of the current economic morass. Most of the country thinks we need to cut expenses or entitlements since it is so clear that we dug ourselves into this mess withFri, 30 Sep 2011 06:26:28 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-30.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-23.htmlAs the nation experienced the Great Depression beginning in 1929, Total Credit Market Debt as a percentage of GDP rose substantially before eventually collapsing. The years following the '29 crash were characterized by the most dramatic rise in public debt (and decline in private debt) the nation has ever seen. Beginning in the 1980's total debt began to expand dramatically until the Total Credit Market Debt hit 380% of GDP in early 2009. Subsequently (just like in the Great Depression), theFri, 23 Sep 2011 05:46:46 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-23.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-16.htmlWe find little reason to change our opinion that the US faces a high risk of slipping back into recession. We cite continuing intractable unemployment, a long term poor housing market, low business confidence, unsustainable growth in sovereign debt, uncertain political and global leadership, and in the current headlines, debt problems in Europe as some of the key systemic problems impeding a recovery. We note the political landscape is currently dominated by debate about "Jobs". Politicians ofFri, 16 Sep 2011 05:45:01 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-16.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-09.htmlThe attached chart shows the volatility of the U.S. stock market from 1994 to present (see attachment -credit to MarketSmith). In this "Special Report" we will describe the extreme moves along with a narrative to explain what drove the volatility. The chart shows the up move from 1994 to 2000 (440 to 1550), then the downswing from 2000 to the end of 2002 (1550 to 770). Next, the chart shows the up move from 2002 to October 2007 (770 to 1570). The S&P 500 declined to the March 2009 low atFri, 09 Sep 2011 08:01:45 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-09.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-02.htmlWe usually don't do comments over holiday weekends and this Labor Day is no exception. We don't like to depress our viewers over holidays. We maintain our prediction that the S&P500 will have a very difficult time penetrating the significant resistance at the 1250-1260 area, and we will comment more about that next week. Have a great weekend!Fri, 02 Sep 2011 06:08:28 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-09-02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-08-26.htmlAs many of you know our fund is currently positioned to benefit from a declining stock market. This bearishness is mostly due to the enormous debt built up over the last few decades (total debt-including private debt-- was $11 trillion in 1984 and grew by over $40 trillion to over $52 trillion today). Of that $40 trillion increase over 27 years, $26 trillion came in the last decade (see attached chart). In fact, the eight years between 2000 and 2008 the debt grew from $26.5 trillion (265% ofFri, 26 Aug 2011 06:03:01 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-08-26.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-08-19.htmlWhat is currently happening in the market and the economy was predictable and is following the sequence we have long expected. Households accumulated enormous debts in the past decade, leading to the credit crisis and recession of 2007-2009. The government stepped in with massive monetary ease and fiscal expansion that produced only a weak recovery and a vast increase in government debt. The market erroneously assumed that the recovery would follow the pattern of typical post-war expansionsFri, 19 Aug 2011 05:00:12 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-08-19.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-08-12.html1. Eleven years ago we experienced the strongest secular bull market in U.S. history covering the period from 1982 to 2000 (interrupted only by the 1987 crash). This secular bull market ended with the most outrageous valuations in history. In fact, the P/E and px to cash flow and every other metric you wish to use were more than double the prior peaks over the past 100 years. The NASDAQ valuations metrics were off the charts and NASDAQ hasn't come close to this high since. All this wasFri, 12 Aug 2011 05:29:26 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-08-12.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-08-05.htmlA few weeks ago (July 7th) we wrote a comment entitled "Nothing Matters Until It Does" . Now it suddenly does all matter, although all of the problems every one is talking about today have been pretty obvious for some time. These include the economic slowdown, the coming fiscal tightening, the lack of any more powerful Fed tools and the turmoil in Europe. What apparently triggered the current selloff is Washington's action on the debt ceiling and the recurrence of turmoil in Europe only twoFri, 05 Aug 2011 05:24:35 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-08-05.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-29.htmlThe stock market looks highly vulnerable to a major downturn no matter how the debt ceiling issue is resolved. Although anything we write about the controversy could be moot by the time you read this, here's how it looks now. Once the symbolic Boehner and Reid proposals are rejected congressional leaders will attempt to come up with a compromise between the Boehner and Reid plans over the next few days. The talk from Washington is that the two sides have already been working on this even priorFri, 29 Jul 2011 11:21:07 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-29.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-22.htmlSince both the Chamber of Commerce and most of Wall Street are strongly urging political leaders to raise the debt limit and avoid a U.S. default, it is likely---but not absolutely certain----that this will happen. Political leaders of both parties realize that defaulting would be a global disaster, and Speaker Boehner today indicated that he can bring enough House Republicans to vote for some sort of compromise even though some members may vote against it. The way events are shaping up,Fri, 22 Jul 2011 05:49:06 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-22.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-15.htmlThe media, both TV and print, spend an inordinate amount of time explaining why the economy feels so bad. They interview hundreds of economists, strategists and government officials and trot out dozens of convoluted graphs and charts in a seemingly endless effort to come up an answer. We'll save you the time. It's actually quite simple and we can explain it with just one measurement----GDP. The current economic recovery, following a severe credit crisis, is by far the worst recovery since theFri, 15 Jul 2011 07:33:13 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-15.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-08.htmlOnce again, as in early 2000 and late 2007, the market is misreading the negative significance of domestic and global economic conditions. While the debt ceiling issue most likely will be settled under the pressure of a potential U.S. default, the optimistic interpretation of such an agreement is not warranted. The key is that whatever the details of the final agreement, it will result in a much more restrictive fiscal policy, and therefore will be negative for economic growth. Since this isFri, 08 Jul 2011 10:57:55 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-08.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-01.htmlInvestors have used the European action on the Greek crisis as a convenient excuse to rally from an extremely oversold short-term market. However, Europe's serious problems with its Southern tier nations are far from over at the same time that both the U.S. and global economies are slowing significantly with no sustained recovery in sight other than a possible temporary uptick from an alleviation of the Japanese supply-train problems. All that the "bailout" of Greece accomplishes is the addingFri, 01 Jul 2011 07:10:20 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-07-01.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-06-24.htmlHere's all you need to know about the current paralysis of Fed monetary policy. The FOMC is officially forecasting an unemployment rate of 7.8%-to-8.2% by the end of 2012----3 ½ years into the "recovery"---and has decided it cannot do anything about it. The Fed has used all of the conventional tools in its toolbox as well as some that aren't so conventional. It has kept interest rates near zero for an extended period and bought over $2 trillion in mortgages, ballooning its balance sheet toFri, 24 Jun 2011 06:12:46 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-06-24.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-06-17.htmlLooking back at the long history of the U.S. stock market it is clear that there are long periods when the trend is distinctly up or down. We call these long trend "secular" markets as opposed to the commonly-known cyclical market trends that last about four years on average. In our view we are currently in a secular bear market that began when the market peaked over 11 years ago in early 2000. The most powerful secular bull market took place in the 18-year period from 1982 to 2000. In thisFri, 17 Jun 2011 07:28:41 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-06-17.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-06-10.htmlThe major problem with the economy is that consumers are not spending as a result of the record household debt built up over the last few decades. Until this huge amount of debt is pared down to more normal levels, fiscal and monetary policy can do little to return the economy to previous growth rates. It is therefore misguided to blame the lack of growth on uncertainty about excessive regulation, tax policy and health care. It's all about the debt. No matter what we do about regulation, taxesFri, 10 Jun 2011 05:59:34 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-06-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-06-03.htmlAlthough the economic slowdown we've been discussing in recent comments has now hit the headlines the stock market has resisted a major downturn. Fundamentally, strategists have offered two reasons for this reluctance. First, they maintain that the pause in economic growth is only temporary and second, they say that if the economy continues to falter the Fed will simply initiate yet another round of quantitative easing----QE3. We think this seemingly consensus view will prove to be wrong onFri, 03 Jun 2011 06:58:13 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-06-03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-05-27.htmlOur comment of two weeks ago outlined the major headwinds likely to impact both the economy and stock market over the period ahead, while last week's comment discussed the actual economic slowdown that was already happening. Events of the past week have confirmed these views. The Chicago Fed's National Activity Index of 85 coincident indicators for April dropped to minus 0.45, its lowest level since last August. The index has now been below zero for five of the last eight months, as is theFri, 27 May 2011 06:07:39 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-05-27.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-05-20.htmlToday's somewhat weak economic releases add to a pattern of recent tepid results from a number of economic indicators, and suggest that an economic slowdown is gathering steam even before the end of QE2. We cite the following as evidence. 1) Existing home sales for April were down 0.5% to 5.05 million as compared to 7.2 million at the peak. Inventories of homes for sale increased to a 9.2 months, the highest since December while prices were down 5% from a year earlier. 2) April housing startsFri, 20 May 2011 06:02:39 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-05-20.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-05-13.htmlThe market is giving distinct signs that the previously strong rally is fading and that investors and speculators alike are paying greater attention to the headwinds that we have been discussing in these comments for the last few months. Last week we pointed out how suddenly everything that was going up turned sharply down and that everything that was going down moved up. On a more gradual basis we note that stocks have made no progress now for almost three months. The S&P 500 reached 1344Fri, 13 May 2011 09:26:56 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-05-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-05-06.htmlAs we pointed out from the get-go Bernanke's QE2 policy was a gamble from its inception, and its consequences are now coming to the fore with the collapse of the commodities bubble. Throughout financial history parabolic market moves have inevitably collapsed, and there is no reason to think that this one will be an exception. Although there will undoubtedly be some attempts to buy the dips, once bubbles burst they don't come back for a very long time. The chances are therefore high that thisFri, 06 May 2011 05:53:11 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-05-06.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-04-22.v02.htmlAlthough at first glance Chairman Bernanke's press conference consisted of the usual "boiler plate" Fedspeak, a more attentive examination leads to a number of disturbing conclusions that support our negative stance on the economy and stock market. Our observations are as follows. 1) The Chairman confirmed, as expected, that QE2 would continue until its conclusion at the end of June and would not be extended. He then stated that there would be no tightening of monetary policy until it wasFri, 22 Apr 2011 05:54:59 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-04-22.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-04-22.htmlWe cannot overemphasize the potential negative effects associated with the probable ending of QE2 at the end of June. QE2 is the Fed's unprecedented attempt to get the faltering economic recovery growing again in the absence of any further expansion of fiscal policy in the face of record federal budget deficits. In this regard the key fact to remember is that we are in a hesitant recovery that will remain restrained by the after-effects of a major credit crisis and the need to deleverage theFri, 22 Apr 2011 05:27:51 GMThttp://www.fxstreet.com/fundamental/analysis-reports/info@comstockfunds.com (Comstock Partners Inc.)http://www.fxstreet.com/fundamental/analysis-reports/market-comment/2011-04-22.html