As the old phrase about voter sentiment goes, “it’s the economy, stupid.” And like it or lump it, one of the reasons President Obama rode to victory in 2008 was a foot-in-mouth moment from opponent Sen. John McCain during the height of the market meltdown.

That famous gaffe was a quote from McCain that “the fundamentals of our economy are strong” while the Dow Jones tanked 500-plus points or over 4% in a single day on Sept. 15, 2008.

Whether McCain’s words were taken out of context – the senator claimed he was waxing philosophical about the fundamental strength of the American economy and its workers – is irrelevant. In politics, it’s less about reality and more about what the America people believe and what the media chooses to focus on. Read 

The wave of money coming back into risk-adjusted equity funds is real. In mid-April, it was reported that hedge funds amassed over $2 trillion in capital for the first time ever in the first quarter of 2011.

The global hedge fund industry now controls $2.02 trillion worth of total assets, according to Hedge Fund Research, up $102 billion from the first quarter of 2010. This is more than the industry had in the second quarter of 2008, when assets peaked at $1.93 trillion.

As a reference to the recession, hedge-fund assets dropped to $1.41 trillion in 2008. As of 2010, hedge funds represented 1.3% of the total funds and assets held by financial institutions. Read 

The clock is ticking on “Bubbles” Bernanke. Come June 30, his latest “quantitative easing” program (QE2) is scheduled to end. The big question on everyone’s mind is: what happens after June 30? Will government bond yields explode?

A number of respected commentators, including bond king Bill Gross of PIMCO, are bracing for the worst—and it’s not hard to see why. Certainly, the Federal Reserve’s behavior in the wake of the 2008 financial crisis has exceeded, in sheer recklessness, anything attempted by any senior central bank in history.

First, the Fed stuffed its balance sheet with more than $1 trillion of dodgy mortgages (purchased with money created out of thin air). Then last November, well over a year after the economy supposedly pulled out of recession, Bernanke’s crew voted to buy another $600 billion of Treasury paper. Read 

Last week’s market action was simply stunning, as wave after wave of better-than-anticipated corporate earnings lifted the Dow by over 300 points in the three days after Monday’s scary 140-point drop. At 12,506, the Dow is now at its highest level since June 2008, while the tech-heavy Nasdaq did even better last week, rising 2% versus 1.3% for the Dow and S&P 500. The Nasdaq was led by earnings reports from Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), F-5 Networks (NASDAQ: FFIV) and Qualcomm (NASDAQ: QCOM), among others. Are cyclical stocks next to rise? 2 Best Investments in a Weak-Dollar Scenario

The two best investments in a weak U.S. dollar environment are commodities — since they are universally priced in U.S. dollars — and multinational stocks, which reap windfall profits from being paid or priced in appreciating foreign currencies.

Let’s take stocks first. Last quarter’s stellar corporate earnings were fueled by stronger-than-expected sales, upbeat company guidance and a weak U.S. dollar, which boosts the earnings of many multinational companies. Since the average technology company is multinational in scope, they benefit from a weak dollar. Last week, we saw better-than-expected earnings from semiconductors like Intel, cloud computing like VMware (NYSE: VWM) and networking firms like F5 Networks. Read 

The U.S. markets ended last week strong following the announcement that the U.S. debt rating could be cut. However, the forces that are pushing investors into international stocks persist. U.S. debt is still out of control, growth rates are still higher abroad and the U.S. dollar continues to make investing in stocks priced in non-dollar currencies the better choice. Uncertainty Sends Investors Into Global Stocks

The U.S. dollar is now approaching its lowest level in 30 months thanks in part to S&P’s decision last week to lower its outlook on U.S. debt. S&P effectively gave the United States two years to get its fiscal house in order and enact meaningful change or be downgraded.

Naturally, President Obama was not too happy about this decision and quickly dispatched Treasury Secretary Tim Geithner to CNBC in an attempt to do damage control. Interestingly, Geithner said that there was “no risk” that the United States’ AAA credit rating would be downgraded. Read 

The silent investment story of the year is the collapse of the U.S. dollar against the Swiss franc, Canadian dollar and Swedish krona. The dollar’s decline has been breathtaking, and the fault, as always, lies with the Fed.

Chairman Ben Bernanke assures gullible citizens that he is not “printing the money.” But take a gander at my chart — Adjusted Monetary Base (high-powered money) and Excess Reserves. Parabolic curve comes quickly to mind.

For the Fed chairman to B.S. the citizenry with his “we’re not printing the money” is cause for Mr. Bernanke to look for another line of work. Let me be clear: The Fed’s monetary malfeasance has caused yet another catastrophic bubble. Read