Kirk Kerkorian must see something that we have been missing

May 6,2005

Hello,

So did he get a “bloody Nose” or is the Anti-Bush Mainstream Media just a bunch of sore losers. Tony Blair’s victory signals nothing more than a resounding support for his policies. Without sounding like I am stating the obvious, the Party that picked up the most seats from Labor was the “Torries ,the party of Margaret Thatcher ”, in the US we would call them the “Conservatives” who were strongly in support of the War on Terror, are free market oriented and very suspicious of continental Europe. What should be gleaned form Prime Minister Blair’s victory is perhaps he wasn’t strong enough. The number one issue In Brittan was immigration, immigration, immigration! Listen up everyone, immigration! I said immigration……

The market continues its final shake down. I am just waiting for everyone to call and say no more stocks; I am going into real-estate because “I can’t lose any money.” That’s the buy signal I am waiting for. The real-estate investor is sounding like Tech investors in the late 1990’s to me.

The interesting thing is that there are so many takeovers, and stock buys backs going on. One can only conclude is that the people with the big money think the market is cheap no matter what they say. We are seeing the return of the LBO, merger mania and perhaps the dreaded “green mail”. Again I say what does Kirk Kerkorian know that we don’t .Those of you who do not know who he is simply google his name and think Chrysler 1980’s.

Will GM survive? GM has been over do for structural changes for some time, like 30 years, well hope springs eternal. Ah those pension plans GM, American Airlines and so on be wary they are based on the same “ponzi” principle that social security is based on. Be fore warned the same will happen to all “pensions” eventually. There is an inherent flaw in there design. The flaw of paying current retirees with current workers contributions will fail because of increases in productivity, changes in demographics and shifts in industrial development. Market based 401k’s type plans are the way of the future and of the present. The obsolete pension obligations of the past are creating a huge burden for tax payers and consumers. Is anybody listening?

Oil may not be as big of a deal as we all have been led to believe. Seems that in 1980 we spent 7% of our income on fuel and currently we spend 3%. Each dollar of GDP takes 50% less oil to create than in 1980. Perhaps high oil prices are more a measure of geopolitical uncertainty than a harbinger of economic slow down.

Lots of talk this week about the “Nuclear Option”, who will use is first, the Senate, the UN, North Korea, Iran , Al Qaida or George Bush either way it looks like we are in for some fireworks the next couple of months, which should add some volatility to the mix while the market finds its bottom.

I will be traveling next week on business ,to Berlin (Germany not Vermont or Conneticut)from the 13th to the 19th .On Friday May 20th I will be conducting a seminar in the early evening at “Westfield Avenue Cigars” 17 West Westfield Ave ,Roselle Park NJ 07204, (908) 241-1140 on how terrorism effects your investments. Stop in for a smoke and some wide open conversation .

James