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The Best of Kass

Written by: Doug Kass 03/18/12 - 4:41 PM EDT
Tickers in this article: GLD XLF
NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.

Among his posts this week, Kass discussed the implications of the latest inflation data, revealed a change in his strategy on bank stocks and wrote that the bull market in gold is over, at least for a while.

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If You Don't Eat or Drive, Inflation Is Low
Originally published on Friday, March 16 at 9:30 a.m. EDT.

  • With the core CPI rising at a slower rate than core PPI, a headwind to corporate profit margins lies ahead this year.

    • The core CPI came in slightly below expectations this morning at +0.1% (month over month) vs. expectations of +0.2%.

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    By contrast, the headline CPI was +0.4%, matching consensus. With the core CPI rising at a slower rate than core PPI, a headwind to corporate profit margins lies ahead this year.

    And, with unit labor costs rising by +3.0% in the fourth quarter 2011, up from +2.0% in third quarter 2011 and only +0.1% in second quarter 2011, the consensus view that margins could be flat to slightly better (incorporated in most strategists' 2012 S&P profit forecast) is in jeopardy.

    Position: None

    Ludicrous Forecast
    Originally published on Friday, March 16 at 12:43 p.m. EDT.

  • I sold my XLF long and shorted JPMorgan Chase, thinking that the banks need a rest.

    • Gun to my head, the banks need to rest now -- too much too fast.

    I am now out of my long Financial Select Sector SPDR(XLF) position, and I took at small short rental in JPMorgan Chase(JPM) at $44.75 early today.

    At the time of publication, Kass was short JPMorgan.