Another Argument for Optimism
Manny Weintraub of Integre Advisors put out a note last week with the optimistic thesis that “it really isn’t as terrible as it could be.”
He mostly focused on the “silver linings” of the increase in energy prices. Shipping costs, for example, are rising and imports are more expensive, which is “good for American jobs and American workers.” The U.S. steel industry, is “really having quite a turnaround,” he says. Also, Americans are adapting to the high price of gas:
When the price goes up we deal with it. Sales of SUVs have plunged. But people are buying scooters. They are dealing with it by consolidating trips, and just making one trip to Wal-Mart… People are adjusting and doing a good job.
Finally, Weintraub says, “There’s a lot of money out there.” Lehman Brothers (LEH) quickly raised $6 billion, while during the savings and loan crisis 20 years ago, it was much harder to raise money. “We have a manageable economic situation with attractive valuations,” he says.
Stock moved higher Monday afternoon despite a host of negative headlines including volatility in the price of oil, a huge loss at Lehman and turmoil in the top ranks at AIG (AIG). Weintraub’s brand of optimism helps explain why there are still plenty of buyers in the stock market.
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