Some good stuff in Barrons this weekend - first the guys who run the terrific BESPOKE site are interviewed- their model portfolio now 78% equities and 22% cash - What do they see?

1) Current rally led by fins, tech and industrials as opposed to other recent rallies led by energy, materials and telecom- a bullish sign;

2) emerging markets turning up led by China +30% ytd- Brazil +13% and and Indian and Russia out performing US equities;

3) an improvement in earnings revisions;

Specific stock recommendations- INTC MA MO ADM;

Also bullish stories on AMZN, RIG, DO and NE;

Jim Melcher, with a terrific long term record- not keen on the current markets:

In spite of Balestra's strong start this year, Melcher is very bearish about the U.S. and global economies. He believes the current crisis is the worst since the Great Depression. While he supports President Barack Obama's stimulus package, he thinks the government still doesn't grasp what needs to be done. "Policy makers must let the markets clear by themselves instead of trying to reignite more borrowing and spending. Excess stimulus may just create more problems later on."

Melcher believes the problem ultimately stems from previous Federal Reserve policies that ensured plenty of liquidity instead of permitting periodic economic contractions to burn off weak entities and force companies to restructure.

Gene Epstein detailing some stats that may indicate the bottom is in as the economy is starting to turn while David Rosenberg not so sure as he looks deeper inside the stats:

"As Merrill Lynch's David Rosenberg points out in a recent commentary, the official keepers of the books have been unusually aggressive in constructing seasonal adjustments for February's economic data.

To illustrate, the seasonal adjustment for new-home sales was the strongest since 1982; for durable-goods orders, the strongest since they were first released in 1992; the retail-sales figures for February were flat (or, as David says, flattering) after such adjustment, but unadjusted fell 3%, the biggest drop on record. He also notes dryly that the 40,000 raw non-seasonally adjusted housing-start total for February "all of a sudden becomes a headline-adjusted annual rate figure of 583,000."

Which makes David think that come the inevitably sharp downward revisions of such distorted data, first-quarter real GDP is likely to suffer a 7.2% drop. Which, together with the 6.3% skid in the fourth quarter of 2008, would be the worst back-to-back contraction in the economy in 50 years."


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