Thoughts

Many economists/strategists who have waxed enthusiastically about forward growth rates have explained that the housing market is now such a low percentage of GDP that it will no longer be an economic drag in 2011-12.

That said, I see plenty of drag, as yesterday BAC announced that is laying off 1,500 underwriters and loan processors in its mortgage business.

And it's happening at other mortgage and lending bank departments around the country, as the housing market's outlook has not improved.

This softness will serve as another headwind to the more optimistic jobs growth expectations from the bullish cabal, and it seems to me to be something of a statement regarding the future outlook for housing markets as well.

Despite all the hubbub surrounding the municipal bond market several months ago after Meredith Whitney's 60 Minutes appearance, muni prices have behaved well.

Cleveland Fed Sees More Inflation

The Federal Reserve Bank of Cleveland's Median Consumer Price Index signals increasing inflation.

Some conspicuous insider selling in Google should give dip-buyers some pause.

Before one buys the Google weakness, I would suggest looking at the company's insider sales recently.

Even though this is likely 10b5-1 selling, it is, well, conspicuous and should give dip-buyers some pause.

Value Traps

BAC is to the banking sector as CSCO is to the technology sector. They may be poor investments over the balance of 2011 with lingering fundamental legacy headwinds. As such, they both may be value traps.

"When the facts change, I change my mind. What do you do, sir?"

-- John Maynard Keynes

Worries:

* March ISM manufacturing showed notable declines in the growth rates for orders, exports and order backlogs. And core capital goods orders were surprisingly weak in both January and February.

* The trade deficit unexpectedly expanded and will be a drag on first-quarter 2011 growth.

* First-quarter IDC personal computer sales were disappointing.

* Consumer confidence continues to be weak.

* Housing remains in the crapper.

* Jobless claims have deteriorated.

* Cost pressures abound (especially of an energy kind).

* Sovereign debt pressures in the eurozone are intensifying.