Ripe for Disappointment By Chris Cimorelli, Managing Editor, Economy & Markets  Over the past week, U.S. stocks edged higher, and on Friday U.S. GDP growth for the fourth quarter was revised upward. Meanwhile, the IMF warned the global economy is vulnerable and that G20 nations should be willing to take drastic actions to spark economic activity. Oh, and France, Spain and Germany slipped back into deflation.
As to the bounce in stock prices, Adam explained in Monday's 5 Day Forecast that it's not a matter of sentiment suddenly turning bullish:
"Investors aren't currently buying stock as long-term investments. They're buying stocks to 'cover' their short positions. You see, in the aftermath of last year's late-August sell-off, investors have increasingly joined our camp… finally adopting the viewpoint that stocks are in for a rocky road ahead. And they loaded up on short positions (bets against stocks) accordingly. Short-interest has risen in seven of the last nine months, in fact." So with short-sellers increasingly running the show, don't get your hopes up about stocks.
With the market up, John recommended his Forensic Investor readers load up with a new short trade so they could ride the next wave down for a profit. He's targeted a company in what he calls one of the most "hyped-up sectors of the market," meaning they're ripe for disappointment. And with the stock trading below its 10 and 40-week moving averages, the bears appear to be in control.
Earlier in the week, Rodney wrote a piece in Economy & Markets that I really enjoyed.
There's an economic theory that when demand for a service declines, workers can simply re-train and switch to one that's on the rise.
But as Rodney said, "maybe that was true in Adam Smith's day," when the free market capitalist wrote The Wealth of Nations. Today, it's not so simple.
Sure, we have a very high standard of living. But much of that is thanks to cheap labor overseas. And a lot of that has come at the expense of jobs here. The example Rodney gave was that "44% of the manufacturing decline in the U.S. between 1990 and 2007 can be attributed to the rise of China."
But finding new work is easier said than done. Today, industries tend to be concentrated geographically. When the industry moves, its displaced workers either have to move, or wait for another industry to move to them, which may never happen.
And as he concluded: "This doesn't mean that we should not have free trade… but we should keep in mind that just because a TV costs less doesn't mean everyone wins. Before you can buy a cheap TV, you need to have income. That's tough without a job."
Speaking of income, on Thursday Charles wrote about an interesting (and odd) opportunity in the markets today that will allow you to invest in a dollar's worth of assets… for 90 cents.
Think about that. You can get a dollar for 90 cents. That sounds too good to be true. But it isn't. There's an odd pricing relationship inside an investment vehicle called closed-end funds, and you can also find it in some mortgage REITs. Today, many of these are priced below their book value, because they've been oversold. That gives us the opportunity to buy these assets cheaply.
Rodney, in fact, recommended a closed-end fund in a new service we just launched called Peak Income. Co-authored by Charles, the idea behind this service is what its name says – to generate income. And in today's market, the yield is to die for: 6.25%.
Right now we're only offering Peak Income to current Boom & Bust Elite subscribers. This subscription includes lifetime access to Boom & Bust, as well as a newsletter exclusive to these readers that Harry publishes called The Leading Edge. Click here to see this offer.
Enjoy your weekend, 
Chris Cimorelli
Managing Editor, Economy & Markets
economyandmarkets@dentresearch.com
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