Take a break

US is in the middle of a real estate crisis. Prices of homes are decreasing. New starting homes are improving. But the picture is a little bit far from the end.

S&P - 500 is moving higher. It will be better to take a break. Otherwise, we will have a hardlanding!

S&P 500

200 points in the major index, in one single year, it is too much. Meaning roughly +15% return on investment. Too good to be true!

We think stock market will always be the best way to make money, nevertheless it is impossible to grow so quickly in one year, especially in a economy giving some clues of a slower pace.

Let's go to a sector analysis, because the ETF type of investment, based on S&P, or even in the Nasdaq, will be more volatile.

Bear

"Financial stocks are not performing well and this is usually a bad indicator for the market". Marc Faber has said that. And when we have this kind of figures: A measure of financial shares has retreated 5.9 percent since Feb. 20. We are in a bear market.

Rising oil prices, real estate burst and "war on terror" never ending story, we will se S&P in a bad shape.

Ford: a nightmare?

We are people that admire the icon Ford and the entrepreneur Henry Ford.

Nevertheless, we think Ford is in crossroads: the turnaround or the end.

Read this:

• Ford is losing market share in the U.S. for the 11th consecutive year.
• Its U.S. sales tumbled 9.6 percent last month as the automaker lost business to rivals.
• The automaker reported a loss of $6.99 billion for the first nine months of 2006.
• its shares have fallen 7.25 percent this year to $7.16.
• The automaker's U.S. decline this year has been led by some of its best-selling vehicles, such as the F-Series pickup, down 10 percent through November, and the Explorer sport-utility vehicle, whose sales fell 26 percent.

But the markets have given them, enough money to support the turnaround:

• a new $18.5 billion loan agreement, will provide the Dearborn, Michigan-based automaker with enough money to eliminate 40,000 jobs and close nine factories.
• The $4.5 billion of 4.25 percent bonds (convertible bonds) due in 2036 .

....but the market is making a warning:

• Fitch Ratings on Dec. 6 cut Ford's unsecured debt one level to B- from B.
• Moody's rates the notes Caa1 and S&P gave them an equivalent ranking CCC+.
• Bonds rated below BBB- by S&P and Fitch and Baa3 by Moody's are considered below-investment grade

This will be a fine management lesson, for the future: the excellence or the complete failure.