Friday, October 29, 2004

lipstick on a pig..I got a plan...Red Sox win...end of the John Peel show

October 28, 2004

Did you say thirty thousands of bananas’s, or was it 380 tons of explosives or maybe 3.8 tons well what ever the story is today.
Folks incase you haven’t done the math it would take 100 men with 38 trucks working 12 hours a day two weeks to move 380 tons of explosives ,mind you in the middle of a war . Sounds reasonable to be handling explosives for 12 hours while being shot at doesn’t it? Funny that no one is worried about what happened to the WMD’s. If the terrorist in Iraq had all these weapons why haven’t they used them? Doesn’t this claim also support the President claim that Iraq was a serious and gathering threat? I am simple amazed at the total ridiculousness of this story. It gets even sillier with each passing day. You would think members of the mainstream media would have learned something form the Dan Rather fraud documents scandal. Yet, they continue to harp on something that is blatantly false and logically makes no sense what so ever.

The story originated from the UN director of the IAEA, Mohammed el-Baradei, Hans Blix’s boss. He sent a letter to the New York Times making the accusations in an attempt to cover his own arse. The IAEA has missed many major weapons stock piles including some in North Korea, Iran, Libya, and Iraq. The stock piles at al-Qaqaa were the responsibility of the UN and as usual the UN failed in that responsibility. Mohammed el-Baradei is considered inept at best, fostering global criminality and nuclear proliferation at worst.

This brings me to my next point; the oil for food scandal makes it clear that members of the Security Council were paid off thru the oil for food program by Saddam Hussien to oppose the war. France sold their vote on the Security Council for a mere $1.7 billion. Apparently they have joined forces once again with their allies in the mainstream US press and the Kerry campaign to defeat President Bush. Add George Soros a known commodities and currency trader, a man clearly trying to buy the presidency to the mix and it is no wonder that oil prices have suddenly moved so high so fast. My prediction oil prices will begin to plummet on Election Day.

Why so much about politics because as investors we only know what we have and we don’t know what we don’t have. After the fact anybody can say what we should have done. Investment needs a certain level of certainty and because of the environment this certainty has been missing. On November 2 we are going to move one step closer to that certainty and gain a clearer picture of what steps to take the next couple of years.

Alright finally, congratulations the Red Sox made it look easy; they win it all first time since 1918. Perhaps credit the lunar eclipse with breaking the curse or maybe there never was a curse at all, maybe they just always sucked? Don’t think of it as a good omen for Senator Kerry however, as Boston Red Sox star pitcher Kurt Schilling said it best in an interview with Charley Gibson on Good Morning America urged everyone to go out and vote on November 2 and go out and vote for Bush!

Investors have to be careful out there, it is a dangerous world,

Monday, October 25, 2004

No Sleep till Victory!...maybe we all need to get a real job...Godzilla turns 50!

October 21, 2004

Alright, alright I know the Red Sox won, remember they still have to win the World Series to break the curse of the bambino, and destroy the world. If the curse holds and the calendar is correct history tells us we have entered the seasonally favorable time of the year for investors. This period runs from the end of October to beginning of April, of coarse if the Red Sox win the World Series all bets are off.

So now we all know that according to Teresa Heinz Kerry that a real job is marrying a very rich man, and giving away money you never earned to a bunch of people how don’t deserve it….but being a school teacher in Texas is not. Apparently Teresa Heinz Kerry is referring to something similar to the world’s oldest profession as her profession.

Folks the Clintons Nationalized the production of flu Vaccine, with out nationalizing the cost of litigation. Without the proper profit margin and with added risk of lawsuits there is no incentive for Vaccine production. Vaccine production in the US dropped from 33 producers to 1 under the Clinton care arrangements.

On an interesting note Godzilla, the over grown Japanese lizard is 50 years old this month. Many investors already have been squished by Godzilla market the last several years. What is the Godzilla market? The Godzilla market is the dot com turns to dot bomb, corporate scandals, terrorism, higher oil prices, increasing interest rates, deflation, natural disasters and political uncertainty, like I said the only thing worse than this would be the Red Sox winning the World Series.

Why does the dollar continue to decline and what does it really mean? It seems the central diatribe of the mainstream media is that our economy is bad, there is too much debt, and Bush is hated. The mainstream media has pronounced the declining dollar to be symptomatic with failure, sounds rather ominous. The reality is far different. The declining dollar is more a symptom of low interest rates. Yes I know interest rates have been boosted by the FED, but they are still relatively low in historical terms. In fact long term rates have declined somewhat this year even with the FED raising rates. Because of the enormous stock market decline during the final year of the Clinton administration, The FED in 2000 was forced to flood the US economy with cheap money in an effort to stem the deflationary spiral that was beginning to take hold. Not wanting to repeat the mistakes of the past, Chairman Greenspan made the wise move to excessive easy credit. Unlike the 1930’s were raising rates and raising taxes started the(deflationary spiral)Great Depression or as Japan did in the late 1980’s also raising taxes and raising interest rates to defend their currency and their budget surplus. These actions pushed Japan over the edge into a deep deflationary spiral which they are still currently looking to escape. So low interest rates, tax cuts and printing money have contributed to a decline in the over valued dollar in an effort to fight off deflation. The decline in the dollar also makes the US manufacturing more competitive and there by threatens to undermine Europe’s exports, which the EU is highly dependent on. The weakness or strength in a currency is seldom a moral judgment it is simply a pricing mechanism of countries competitiveness, demographics, resources, economic cycle and so on.


Wednesday, October 20, 2004

who's your dady?

October 19,2004

The market continues to push upward with intermittent periods of sharp selling, giving investors opportunities to get on board. Weather it is higher oil prices, earth quakes or government investigations of the insurance industries every couple of days the market seems to take a hit. When it looks bleakest the market then reverses to the up side. Day by day the economic data taken out of context seems to contradict it self. So for this email I am going to try to put some of the data in perspective.

As I have stated before the mainstream media and much of the business media have very much mischaracterized most of what has been going on in the economy. What I think has been very much misunderstood is the continued move in America to an ownership society. Here are some of the economic basics of our time;

According to the Cato Institute 68.6% of all American households own their own home which is an all time record high and some like John Kerry own five. There are many factors that create this environment among them low interest rates, tax cuts, and demographics. Most economists would agree that this is probably one of the best measures of the vitality of the middle class.

Even with the poor stock market environment since March 2000, the investor class now makes up over 50% of US households. That is up from 32% in 1989 and 19% in 1983.

So you ask what about jobs? According to the payroll Data since President Bush has been in office there is a decline of about 900,000, working for someone else(that’s payroll data) ,but household working survey shows an increase of 1.8 million jobs since January 2001(that’s working for yourself or someone else) . Again I think the wide spread use of technology is fundamentally changing the way we work and live, challenging our ability to measure changes in the economy. After all people like me are not showing up on the payroll survey yet the fact is I am working. The four week moving average for new unemployment claims is 348,500, less that the 25 year moving average of 380,520. Even the decline in labor force participation from 67.2 to 66 % which is almost exclusively do to the sudden lack of 16-19 years olds willing to work. The US will outsource about 3.5 million jobs from 2000 -2015; meanwhile there are currently 5.4 million jobs that have been in sourced.

What about manufacturing jobs? There has been and 11% decrease in manufacturing jobs in the US and world wide from 1995 -2002. China has had a 15% decrease in manufacturing jobs during the same period. This is primarily due too increases in productivity. Of late the US has seen a serious rebound in manufacturing activity and a slight rebound in manufacturing jobs.

Real earnings have continued to increase at 2% per year even during the 2000-2001 recession. Real earnings are higher now than at the height of the “” craze. This is entirely different than past recessions were real earning declined such as 1980-82, or 1990-91.

Real GDP growth is running about 3.3%, slightly above the 1990’s of 3.26%. The Poverty rate has reached 12.5%, up but below the 1998 rate of 12.7%.the recent raise in Child Poverty (1.6%) has been significantly below the raise in the past recessions of 1980 (5.5%) or 1990(2.7%).1/2 of all Poverty lasts less than 4 months and 80% of people in Poverty are out of Poverty in less than one year. 80.4% of all Americans had health insurance, up from 78.2 in 1996.


Monday, October 11, 2004

sex orgies...rocket man and no respect


Year to Date 2004

12/31/03 09/30/04 YTD 2004
Close Close Performance

DJIA 10,453.90 10,080.27 Down 3.57%

S&P 500 1,111.92 1,114.58 Up .24%

NASDAQ 2,003.37 1,896.84 Down 5.32%

Russell 2000 556.91 572.94 Up 2.88%

October 10th 2004

Recently one of Wall Streets biggest technical analysts called for a prolonged bear market, kind of like jumping out of plane that already hit the ground. My view is still that short term impediments of global insecurity will eventually be over whelmed by good fundamentals and a growing economy. Years of technology investment are paying off with bigger and bigger increases productivity growth, enabling even the most technologically inept, to easily access quality of life enhancing technologies.

Does anyone think the coverage of the Mt St Helens volcano is a bit silly, are those camera men really going to sit there until it erupts? Unless it erupts soon I don’t think that is going to be a good career move. This market is like watching Mt St Helens .We all know something is going to happen it is simply a matter of when. Another words what will be the catalytic event that will get the market going in a positive direction in a big way?

We are entering the seasonally favorable time of the year, the middle of October till the ides of April. Usually the market makes some kind of a low by the 3rd week of October then on que uncertainty begins to lift and we are off to the races. The last several years the October to April sweet spot has been noticeable absent. The recent strength in the market coupled with an explosion to the upside of the transportation sector implies that the seasonally favorable time of the year may have resumed. The markets have continued to rally recently in the face of higher oil prices, terrorism, nuclear proliferation, beheadings, prison atrocities, debates, hurricanes, volcanoes and earthquakes. What has become noticeable is that counter cyclical stocks such as energy issues have often rallied along side of traditional growth stocks.

The “NET” is back. In the last couple of months many on the larger high quality internet stocks have not only show good profit growth but also some nice moves in their stocks prices. It seems the advertisers are back and much of the sticky pay for content is sticking and getting paid for. Personnel ads, traditional classified, travel, special news services, online shopping and job ads have begun to go mainstream. Advertisers are beginning to dig the “pay for click “format.