Tonight while watching my favorite show,  Jim Cramer’s I Will Lose Your Money,  he was suggesting this year is nothing like the last.  His analysis as always is nothing less than comical.  Before I bring up the strong supporting evidence for my argument, merely refer to Another Greeceful Weekend to understand my disdain for Jim Cramer.

Now to the meat of the presentation.  Below are two images and you are tasked to decipher which is 2011 and which is 2012.

Yes real GDP is better; In comparison to what?  To make the argument that things are better when the comparisons are based on the great recession is ridiculous.  Things are better, yes.  Are things perfect?  No they are not, in fact they are not even decent.  The durable good number speaks for itself, this cold hard number suggests thinks aren’t perfect.  For the market to keep headed higher at these rates in spite of gas, in spite of horrible home prices, and  in spite of the European recession is just comical at this point.  The markets have come up hard and fast.  When the market stops brushing off the bad news because it’s so bad it has to sink in, we will go back the other way as quick as we did last year.  For those reading this suggesting that I haven’t brought up jobless claims, housing, or so on.  You are correct, the average readers time span has elapsed and my point has been clearly made and does not need any further support.

“Don’t be afraid to see what you see.” – Ronald Reagan

With all the chatter of Microsoft breaking above $30 and investors comparing the stock to Apple, they have forgotten a key element.  Windows has the Xbox platform and as of late it has been a big portion of the company.  Last quarter in the over $20 billion of Microsoft revenue, more then $4 billion was from Xbox.  Apple may be winning when it comes to desktops, but they haven’t even entered the console arena.  In the future years the console area may be what propels Microsoft stock.

For those that don’t believe in the power and future success of Windows 8,  those skeptics can be squashed by merely mentioning Xbox.  The future of Microsoft may lay in the next generation of the video console.  With Xbox growing as a portion of revenue and continually creating revenue through the Xbox live platform, its profit potential is huge.  The recent 15% y/y growth was merely from updating the product.  What will happen when they revolutionize it?  The days of consumers fighting over the gaming products at the store are far from being may in the past.  As the next round of consoles looks to enter the market in the next few years, Microsoft may once again be propelled to the forefront.  Consumers will once again do anything to get an Xbox.

Many fail to realize the potential of Microsoft.  With the intelligence and money on hand Microsoft can do just about anything.  Who’s to say that the next version of the Xbox will not have Skype integrated in it?  Microsoft has revolutionized products in the past and brought one of the most successful gaming consoles to market.  In the future they may revolutionize the Xbox and make it a household phenomenon, even more so then it is.  Microsoft has the ability to revolutionize our home entertainment system through the means of a little black box.

The Windows platform is merely one leg Microsoft stands on.  In the coming years the Xbox portion of Microsoft will grow and may be the main leg Microsoft stands on.

“Whether it’s Google or Apple or free software, we’ve got some fantastic competitors and it keeps us on our toes.” – Bill Gates

As February draws to a close, take a look at the last three months shown below.

Things have seemed substantially better since December.  Everything from jobs to housing…. Wait was that about housing?

Supply has been declining, but prices have not been improving.  This suggests either a decrease in demand or a real underlying issue (housing has not bottomed).

Remember last year when we were all tricked into everything being better?  Well it seems the trickster has just changed its name from housing to jobs. Below is the S&P from last year.  Investors seem to have forgotten the market can go down.  Below shows that the market can decline and do so very rapidly.

Both Lowe’s and Home Depot report a good quarter supporting the story of housing recovery. The true reason that the winter quarter was good for these companies was renovations. Americans have quit moving out of their homes and instead have been upgrading aggressively. The previous statement does not suggest a housing recovery, but instead a fear of Americans getting back into the housing market. Gary Balter a Credit Suisse analyst states: “We encourage investors to look past the near term and think about double-digit margins for all when housing recovers.” Not only is he wrong, he is dead wrong.  My Anything But Housingarticle brought attention to the massive revisions downward of existing home sales, which don’t bode well for the housing recovery. If homes aren’t moving, then the good numbers of Lowe’s and Home Depot are merely suggesting mom and pop upgrading their kitchen or bath.

During the end of last week housing once again came into focus.  The housing data were not as glorious as the bulls had expected.  The price of homes was a key data point, and was not positive for the housing story.  With home prices at the lowest they have been in 10 years the housing recovery lacks a key component.  With the endless depreciation of the real estate market, investors and consumers alike must ask; Why would I buy a house if it will continually to loose value?