The stock market’s rebound has been so fast and furious that it might make folks forget that we just experienced a nasty credit crisis and market downturn. Have sinking home values not registered with the national psyche? Surf around on Zillow.com and witness the vast amounts of wealth disappearing over the last few months as homeowners see their most significant asset crumbling on a shaky credit foundation. Of course, institutional money managers are the ones buying furiously and fueling this market rebound. It is entirely plausible that, unlike the average American, their homes are not their most significant asset. Maybe most of their wealth is stored in Swiss bank accounts, gold bullion, Impressionist paintings, or first edition copies of Superman and Batman. Thus, unlike Barack Obama, Hillary Clinton, and John McCain (average Americans all), hedge fund managers don’t feel your pain.

But we are all shareholders now. Even as our home values continue to sink, our brokerage accounts are softening the pain as equities turned in a strong performance over the last week. Technology stocks, much to my chagrin, turned in a 3.4% pop. In investing, paradoxically, there is nothing as potentially humbling as having a strong opinion. The S&P 500 and Dow Jones Industrial Average followed the leader and also rallied impressively. Curiously, REIT stocks topped them all, suggesting that the market is discounting further weakness in real estate.

“Go East Young Man!” That ought to be the rallying cry for ambitious college graduates. Learn an Asian language and stake your future in emerging markets. While almost all equity markets have performed negatively over the last twelve months, emerging markets continue to appreciate at a blistering pace with Asia being a driving force. I count myself lucky that my parents taught me to speak Cantonese-Chinese. They displayed amazing persistence as I was not a receptive student to one of the most difficult languages in the world to master. I am still amazingly inept at it, but I could survive in Hong Kong and Guangzhou.

The Black Bubble inflated just a tiny bit. Nonetheless, crude oil set a new record high – topping $127 per barrel before settling at $126.02 per barrel. As the summer driving season approaches, will the high cost of oil discourage road warrior Americans from taking that trip to the Grand Canyon and other national monuments?

Macro

American corporations are flush with cash. Big blue chips are flush with cash. Mid-sized companies are flush with cash. Small capitalization technology companies are flush with cash; actually, a wide swath of technology companies is flush with cash. So while the major market indexes have rebounded strongly, many individual company stocks are still way off their price highs. We need more dudes like Carl Icahn.

Mr. Icahn last week announced that he had accumulated a significant stake in Yahoo! (YHOO) and plans to nominate an alternative board in order to force a sale of Yahoo! to Microsoft (MSFT). He contends that the current Yahoo! board acted irresponsibly by rejecting Microsoft’s buyout bid.

This is precisely the time for cash-rich companies to go shopping for fallen competitors on the cheap. If the pickings are slim, then they ought to deploy their cash and buy back shares. If corporate managers cannot put corporate coffers to good use by engaging in business activities that produce strong returns on investment (ROI), they should return that cash to shareholders.

There are plenty of situations that could use a good activist investor to spur intelligent deployment of cash. Smart acquisitions and stock buyback programs would further bolster the current rally. There are few good reasons, given the prevailing environment, to hoard cash.

Micro

CBS in $1.8B deal for online news, info site CNet – This is exactly what I’m talking about. CBS Corporation (CBS) has a decent balance sheet and plenty of cash to make this acquisition of CNet Networks (CNET). Startup entrepreneurs rejoice! With Rupert Murdoch’s News Corporation (NWS-A) busily gobbling up web companies to bolster its Fox Interactive Media unit and Time Warner buying new properties in an attempt to make its eventual spinoff of AOL more attractive, the rest of the media giants will play lemming to catch up. Suddenly, everyone wants to be Web 2.0! Here’s a very informative piece from Amy Webb showing who owns what in Web 2.0 – a handy thing to keep at the side of your desk if you’re a venture capitalist with some Web 2.0 in your portfolio:

Meet Carl Icahn’s Yahoo Board – Let’s revisit the drama that is Yahoo! Mark Cuban is on the alternative board. Cuban is the smart fellow who sold Broadcast.com for $5.7 billion at the height of the dotcom bubble. He also had the foresight to sell whatever shares he had for cold hard cash. In life, timing is everything. This time though, the payoff for Cuban will not be quite so lucrative. If Icahn is successful with this proxy battle, I liken Cuban’s likely short stint, as a director, to community service. He’ll perform a service to the community of Yahoo! shareholders by forcing a sale to Microsoft.

Comcast to Acquire Plaxo – Here is one that doesn’t make sense, no matter how flush Comcast’s (CMCSA) coffers are. Did I mention that big media companies will begin to behave like lemmings? If the big cable giant is going to move into this space, it should also set its sights on LinkedIn.

Ask.com buys Dictionary.com parent Lexico – Ask.com, owned by IAC/InterActiveCorp (IACI) takes ownership of Lexico for a reported $100 million. IAC/InterActiveCorp is another one of these bigger tech companies with a boatload of cash. The options are simple – invest it, buy competitors, or return to shareholders. IAC/InterActiveCorp will undergo big changes itself as it prepares to spin off non-core properties.

Natus Shareholders Throw A Fit – Let’s look at a different kind of tech. Natus Medical (BABY) develops and sells medical devices that help in the screening, detecting, and monitoring of newborn conditions. It filed to issue a secondary public offering of 3.5 million shares. Shareholders reacted violently to the potential dilution, but the company is simply attempting to raise more cash in order to make more acquisitions. It is essentially the same theme being played out over in the software industry with Microsoft, AOL, and IAC/InterActiveCorp. Full Disclosure: I currently have a long or short position in BABY in one or more of my private investment partnerships.

Life is “solitary, poor, nasty, brutish, and short.” Thomas Hobbes might say the same about life in the stock market for hedge fund managers. The mortality rate found in the hedge fund world is extremely high; it is an ecosystem that is filled with predators and would-be predators. By mid-2007, an estimated 9,700 hedge funds controlled approximately $1.7 trillion in assets. According to Hedge Fund Research, 1,518 launched in 2006 and nearly as many called it quits. The battle for investment survival mirrors Hobbes’ State of Nature found in his Leviathan, where life is a war of all against all (bellum omnium contra omnes).

As an asset manager, I aim to exist in this world with selective company, wealth, civility, and longevity. This Investing Linkfest deals primarily with the State of Nature as we find it. We find the world in a state of war and our homes plummeting in value. We have witnessed the demise of Bear Stearns (BSC) and the thinning of the investment banking species. Fear, not greed, permeates a volatile atmosphere and these are conditions ripe for skilled hedge fund managers to protect wealth. Staying in the game is the name of the game.

Will we continue to call on our defense sector companies to provide services that help us to protect our homes? Even if our houses continue to depreciate in value into negative equity territory, would we not still defend what little value we retain? Defense related stocks take the limelight while we examine the dark recesses of housing related stocks.

IHS Q1 results top Street estimates, ups ’08 rev view – I’ve always found Jane’s Intelligence Solutions to be peculiarly named. Jim’s Intelligence Solutions might be more apropos for its implied masculinity. In parallel, the hedge fund world is filled with macho names like Tiger Global, Cerberus Capital, Pirate Capital, and Fortress Investment Group (FIG). Then again, only an estimated 7.8% of hedgies are women. The military relies on IHS (IHS) to provide technical information, logistics support, safety handbooks, and consulting. Chances are that a Democrat will take the White House, our best prediction markets say so, and this would be a high risk investment.

Moog sees China sales more than doubling in 2-3 yrs – Founder Bill Moog started the company in 1951 and was probably an alpha male as well as a brilliant engineer. Moog (MOG-A) manufactures precision control systems that are primarily used by the aerospace and defense industry for satellites, missiles, and aircraft. The company also has a medical device division building pumps for delivering nutrition to hospital patients. This is obviously not a household name like Lockheed Martin (LMT), Northrop Grumman (NOC), or Boeing (BA), but it pays to look where no one else is looking.

ManTech Q4 earnings rise, sees Q1 above Street view – This is a quintessentially manly name befitting a company in the business of providing information technology products and software that help the military secure its data, manage logistics, and organize intelligence. ManTech International (MANT) has seen strong growth in the recent past but of course the real question is whether it will see strong results in the future. Prediction markets should explore the differences between a potential Clinton presidency versus an Obama presidency as well as the implications for the defense sector. The highly unlikely McCain presidency would probably keep the defense stocks healthy with government orders.

CRH says agrees to buy U.S. Pavestone for $540 mln & Ireland’s CRH to enter India with MHIL buy – Prudently run companies should take advantage of a downturn in the economy and grab market share from flailing rivals. CRH (CRH), an Irish producer of cement and building supplies seems to understand the opportunity at hand to capture market share and position itself for the inevitable recovery. Emerging markets continue to demand copious amounts of the company’s products. Beware of debt, it is relatively manageable compared to the competition but significant nonetheless.

Global Prefabricated Housing Market to Exceed 836 Thousand Units by 2010 – This little note is a rare bright spot in the abyss that is the housing market. Of course, it is easy for analysts to cite “global” demand in “emerging” economies as offsetting the slump in the domestic market. I am skeptical of the arguments for decoupling. In ancient times when isolationism prevailed, decoupling was a natural phenomenon. In this era of global integration, decoupling seems highly unlikely. I would argue that we are more interdependent and correlated than ever before. Tangentially, it is this argument that lends credence to the theory that democracies never go to war with each other. Cavco Industries (CVCO) has a clean balance sheet and may be able to weather the current storms on the housing front. Marty Whitman, the legendary aggressive conservative investor at Third Avenue Management’s Value Fund (TAVFX) seems to agree. I think things get worse before they get better, but that’s probably what Whitman thinks too.

Avatar 2007 earnings fall on weak market – Florida and Arizona remain two of the weakest real estate markets in the country. Avatar Holdings (AVTR) happens to be concentrated primarily in these two states. Foreclosures and negative equity threatens to plunge real estate values further. Have we reached the depths of despair? The recovery will occur as boomers retire to the sunny climes of the desert and the beach. The question is when will the turnaround occur? Remember that the market anticipates the future.

Herman Miller Sees Difficult Fiscal 2008 – Everyone at my previous venture-backed startup, mediaFORGE, loved the Herman Miller (MLHR) Aeron chair. It has become an iconic fixture at wasteful software startups in Silicon Valley and beyond. Its home furniture unit has suffered along with the rest of the residential real estate market. There doesn’t appear to be a slowdown in technology startups and venture capital funding remains strong. The high capital expenditures necessary in the furniture manufacturers space puts many of these companies in precarious positions. Debt payments do not slow down along with slowing revenues in a faltering economy.