THEME: IPOs/GOOGLE
CNN:

Not everyone will be invited to the party, however. "A flight to quality remains the front mission of the Street's investment banking community," says IPO Monitor senior analyst Jeffrey Hirschkorn, noting that 11 of the 20 companies that went public in the third quarter were profitable, and only seven were in the red.

People are hotly anticipating the return to IPO mania. The Street figures as long as it can restrict supply to quality names, the IPOs will continue to do well in the after market. This will be important for keeping the bubble going.
Everyone is anxiously waiting to see the Google IPO happen and whether the result is good.

THEME: CAPITULATION

Fred Nazem, venture capitalist and hedge fund manager, also has lost religion. As a backer of Tenet forerunner Republic Health, Nazem Group did well, he said. But as a value play, he says, there are better opportunities elsewhere.

Deep value is capitulating because the momentum bull market is creating performance panic.

THEME: CHINA
WSJ:

Netcom's case depicts how the Chinese government is trying to reinvigorate the flow of overseas listings, which it sees as an essential ingredient to making state enterprises self-sufficient. The pace of deals has lagged since 2000, in large part because of the weaker conditions in overseas stock markets. With the global economy now showing signs of improvement, China wants to clear the backlog of long-anticipated IPOs like Netcom's so it can fill the pipeline with state-owned Chinese banks and other companies in urgent need of overhauls.

China is benefitting from dollarizing its economy. The key is that it has synchronized its economy with the US so that the interest rate ebbs/flows are not in conflict with fiscal policy.
The China Boom is based on the fact that China is growing way too fast for the low US interest rates. This creates a bubble because labor rates do not go up, yet commodities & goods go up in value. Wealth is created. Speculation is the final outcome.

Investors applied for 89.2 billion shares in Yangtze Electric Power Co. Ltd. on the secondary market, which offered 2.326 billion shares or 29.61 percent of its expanded share capital, its underwriter said in a statement in the Shanghai Securities News.

The Chinese stockmarket riots are returning!!! Destroy the natural beauty of China? Who cares we're rich! Remember how there was such controversy about the damning of the 3 Gorges?


THEME: CHINA VS MEXICO

"Mexico has been hurt because it has lost production and jobs to China, because of U.S. economic slowdown and disappointing domestic reforms," said Meg Browne, currency strategist at HSBC.

Mexico was the giant sucking sound for GHB, and now China is the sucking sound for GWB.
The Republicans do not really want protectionism. They want prosperity for their corporate rich patrons.

THEME: BULL MARKET

"Traders found some weakness in the factory orders in the ISM report after digging around," said Jack Ablin, chief investment officer at Harris Trust.

Why is it so important to dig for weakness? Because people are still biased negatively. This is the required mindset for a bull market.

BULL: stocks down=people happy, stocks up=people anxious/nervous
BEAR: stocks down=people suicidal, stocks up=people hopeful, sanguine relieved

THEME: BUBBLE REDUX

Well Fred Kobrick joins us now. He is president of Kobrick Capital. He has market outlooks and strategy for us as well. Good to see you again Fred, welcome back. Well we have already had somewhat of the reverse. That is we have really had a tremendous run in Cisco and Intel and many of these stocks. And the opposite of the bubble of 2000 doesn't mean that we'll have everything cave in. I think we'll have more of what I would call normalcy. Expectations get higher and higher. Prices and valuations get higher and higher. And usually then expectations reach too far.

People like the bull market, they'd just like it to slow down a bit so that they can catch a ride on it.

Majority of fund managers are negative on tech.



MEME: BEATING THE MARKET
CNBC:

Leave it to "Barron's" Magazine to identify recently seven -- not one, not two, not ten -- seven portfolio managers. They're calling them "market wizards" for their ability to beat the market through thick and thin years. And in fact, that is what the real pros have to do -- it's not difficult make money when the market's doing well. The key is to make money when the market's doing poorly. One of those is going to join Consuelo Mack in a moment for today's "Strategy Session." Consuelo, this is not an easy feat -- to be a winner, good times and lean.

THEME: THE TAPE
The tape on SP is more agitated and active when it goes up than when it goes down. Again, the sign of a bull market.
When the tape slows down and gets quiet, that is the time to BUY!!!!!!!!

THEME: CHINA VS MSFT

The Chinese government plans to throw its financial weight behind Linux-based computer systems that could rival Microsoft's Windows, in one of the world's fastest-growing technology markets, a government official said Wednesday.

China would build a domestic software industry around Linux--a cheaper software standard that can be copied and modified freely--said Gou Zhongwen, a vice minister at the Ministry of Information Industry.

"Linux is an opportunity for us to make a breakthrough in developing software," he was quoted as saying on the ministry's Web site. "But the market cannot be developed on a large scale without government support," he said.

SPEC: CHINESE COMPUTERS
Is it possible that one day Legend computers will be bigger than DELL????

THEME: SCANDAL

"If you are a clerk and you steal some money, you get banned for life," says Ken Morris, a former Morgan Stanley trader and an outspoken critic of the exchange who helped point us to some of the juicier cases. "If you are a specialist and you break the rules and fail at your job of protecting the public interest, you pay a small percentage of your profits for the year. This is a failure of self-regulation."

People feel disgusted because there is every indication that the market is crooked yet it is rallying like mad.
People want the market reach some calm, pristine state of purity where they can just pick up stocks like picking cherries.

SPEC: EURO WEAKENS

The ECB holds its first rate-setting meeting on Thursday since the appointment of Jean-Claude Trichet as governor, and is expected to keep key interest rates steady at 2 per cent.

There is a small chance that Trichet will come out pro-growth, i.e. a true Frenchman, and spoil the fun for the Euro.


THEME: COMMODITIES/GOLD
Newmont Mining (NEM ) plans to offer 20 million shares.

Strength of gold market can be gauged by whether NEM can set a new high after the offering.
KGC managed to do so. Are we still early in a bull market for gold? Or is the market saturated?