Seward’s Folly,cyber monday and bond swaps for the tax man

November 28th 2005

Hello,
So were we in the black on “black Friday” or not? Any one near a shopping mall or a down town shopping district would have to say black or red we were certainly stuck in traffic. Yes some retailers did better than others, and given that many retailers had wool coats in, in the middle of July when it was a mere 100 degrees out side, they are going to need more than one black Friday. Forget black Friday anyway I use a far more accurate judge of commerce, than mere retail sales; I use the “Christmas light indicator”. The Christmas light indicator you ask, what’s that? The more Christmas lights you see on roof tops and chimneys the more prosperous the consumer feels and the better the economy is. As for me it has been one of those “almost years”, a lot of good things almost happened and I don’t work for Goldman Sacks so Santa is not bringing a big check but I scarped together my parking change and purchased a string of icicle Christmas lights (450 lights) and ran them across my front porch. They are guaranteed to blink 45,000 times a minute, kinda gives the place a Las Vegas strip feel and the neighbors love it.

So what is all this talk of “cyber Monday” anyway you ask, seems that internet shopping has come of age. It is nice to know that high speed internet access can be used for something other than down loading porn and music from I Tunes. So the talking heads are trying to tell us that employees will be arriving to work with their Santa’s list to do some shopping. Nice to see the worker bees get to work on time for a change and I thought it was the free doughnuts and coffee. As for me I only keep one “S” list and that doesn’t stand for Santa.

The end of the year is coming and it is time to take a look and clean up some positions. Remember you pay taxes only on realized gains .So if you are looking to increase the quality of your bond portfolio, increase total return, and take advantage of higher rates or save some money on taxes. Now maybe a good time to consider bond swaps. By converting your paper loses in to real losses you can offset taxable gains and improve portfolio.

I continue to feel that getting the NASDQ going in a big way is the key to reigniting public interest and trust in the equity markets. Like I said last week NASDQ needs to double just to be even with the highs of March 2000. Yes I know all the talking of “4 year highs”, which basically get us back to where we were 2 years ago. This is a crucial juncture and a big push upward would be an extremely bullish sign. In recent days great economic data has given way to fears of that the FED will tighter further and faster due to the quickening pace of economic acceleration. Higher interest rates put a cap on the market’s upside but so do higher oil prices. The flip side being the economy is awash with cash, and with a slow down in the real-estate market there is no place for it to go, but into the market.

James

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