Good Morning All,
I don't believe there is much left to say about the past year that has not already been either mumbled in one's sleep or screamed from a rooftop, so let's move on to the coming battle for safety and sanity in 2009.
On January 20th the world will finally be rid of George W. Bush and the last remaining puppet masters that have surrounded and managed this forlorn Presidency. There could be no better time for a positive beginning and by all appearances, no better emerging leader than Barack Obama, for it is at these watershed moments in history that such dramatic change is not just necessary but demanded. The words and themes of the seemingly endless election campaign were all about change and as the days and weeks became months, the problems in America grew worse and the global economy which had appeared to be coasting... collapsed, bringing not simply urgency to the fore, but desperation. Now Barack will inherit all of the above, including the cobbled together bandaid solutions of what had become the Paulson/Bernanke administration.
The words to look for in 2009 have already been tossed about and they include infrastructure and trade protection, the former being a positive, while the latter looms as a potential menace. It does not however appear that Obama wishes to revisit the Smoot-Hawley tariff bill of the 1930's, nor does it seem that labour is in any position to make unreasonable demands. Regulation will likely be another hot topic and a rescindment of the Gramm-Leach-Bliley Act coupled with the reinactment of the Glass-Stegall legislation that separated banking and investment banking is likely. Look also for an increased emphasis on international cooperation and a move forward on the DOHA trade talks.
Tax loss selling for Canadians ended last week, today it will end for American tax recipients (as opposed to payers) for there will be little in the way of capital gains entering government coffers this year. With this final lifting of much selling pressure comes the opportunity of a major rally over the coming weeks wherein market indexes are set to put in their best performance of the coming year. I fully expect index gains of 20 to 30 per cent before January ends along with individual stock doubles, triples and more among the more junior issues, particularly within the beaten down tech, biotech and commodity sectors. We should see 1100 to 1200 on the S&P 500 (presently 890) and equivalent gains across the board. This will all happen very quickly and will be over before most of you have mustered up the courage to join in the fray. You can if brave enough, make your entire year in these few weeks.
There are several trillion dollars sitting in 0 interest T Bills that will be put to work during this period and this probablity, combined with the 500 billion dollar energy cut at the pump and furnace, and the aforementioned relief from selling pressure make this prediction a logical one....that and a bit of history.
A happier year to all
Wednesday, December 31, 2008
Tuesday, December 23, 2008
December 22nd Edition
Good Morning All,
As there appears to be a veritable dearth of earth shaking news to report or comment upon at the moment, I will only seek to remind you of the obvious and the understated. This is the beginning of the holiday season and the end of the tax loss selling that accompanies year end. In 28 years of writing this letter in one form or another, I do not believe I have ever either quoted or paraphrased the present Queen of England. Now, as so many others have likely noted, may be the time to do so, as this past year has surely topped all others in recent times as being the true annus horribilus. Yet, as many on the Obama team have stated, "we must not waste this opportunity to bring change" and I would humbly suggest that this national goal of the future President become both that of the world and of ourselves.
Permit me to once again iterate the following; market indexes have traded 40 to 50 % off their highs of either early 2008 in the case of Canada or October 2007 most everywhere else. Commodity prices from metals to energy to food have fallen much farther. The financial, and thereby the currency world is in turmoil while the physical world is less safe than it was eight years ago. So by the numbers, all of the above are definitivly cheaper and therefore better buys than they were 40 or 70 per cent higher. There are of course remaining pitfalls and potential failures and yes, just maybe the expectations lent to the incoming administration are wildly inflated. But just maybe they are not.
I have often thought that 1968 was a pivotal year in 20th century history with the deaths of Robert Kennedy and Martin Luther King being crucial to the rebirth of Richard Nixon. The Nixon effect was a powerful one and it did not end with Watergate because his legacy went on to include, not just the tragedy of Vietnam but the advancement of the careers of Rumsfeld, Cheney and George Bush the Elder without whom there would have been no George the younger. The Ford pardon of tricky Dick also had far more important and long lasting effects than first thought for it essentially led to excesses of the outgoing administration whose members have always felt protected from prosecution or even impeachment by this rule of precedent and during the next few weeks we are likely to see much evidence to support this arguement.
Sometime ago I wrote of an interesting way of regarding the passage of time by comparing times past to the present in terms of their relativity. This is sometimes known as the farther now nearer then phenomena and since everyone is talking and thinking depression, let's do the math. Choosing our pivotal year of 1968, first think of where you were, if you were a were at the time, and subtract 38 years.....ta dah the start of the Great Depression. Now flash forward to our present circumstance and note that we are 40 years from the outset of the Nixon era. You can have fun or fear in doing this with a lot of stuff, but for history buffs such as I, it does seem to bring some perspective to life and to its brevity.
Happy Holidays to all.
As there appears to be a veritable dearth of earth shaking news to report or comment upon at the moment, I will only seek to remind you of the obvious and the understated. This is the beginning of the holiday season and the end of the tax loss selling that accompanies year end. In 28 years of writing this letter in one form or another, I do not believe I have ever either quoted or paraphrased the present Queen of England. Now, as so many others have likely noted, may be the time to do so, as this past year has surely topped all others in recent times as being the true annus horribilus. Yet, as many on the Obama team have stated, "we must not waste this opportunity to bring change" and I would humbly suggest that this national goal of the future President become both that of the world and of ourselves.
Permit me to once again iterate the following; market indexes have traded 40 to 50 % off their highs of either early 2008 in the case of Canada or October 2007 most everywhere else. Commodity prices from metals to energy to food have fallen much farther. The financial, and thereby the currency world is in turmoil while the physical world is less safe than it was eight years ago. So by the numbers, all of the above are definitivly cheaper and therefore better buys than they were 40 or 70 per cent higher. There are of course remaining pitfalls and potential failures and yes, just maybe the expectations lent to the incoming administration are wildly inflated. But just maybe they are not.
I have often thought that 1968 was a pivotal year in 20th century history with the deaths of Robert Kennedy and Martin Luther King being crucial to the rebirth of Richard Nixon. The Nixon effect was a powerful one and it did not end with Watergate because his legacy went on to include, not just the tragedy of Vietnam but the advancement of the careers of Rumsfeld, Cheney and George Bush the Elder without whom there would have been no George the younger. The Ford pardon of tricky Dick also had far more important and long lasting effects than first thought for it essentially led to excesses of the outgoing administration whose members have always felt protected from prosecution or even impeachment by this rule of precedent and during the next few weeks we are likely to see much evidence to support this arguement.
Sometime ago I wrote of an interesting way of regarding the passage of time by comparing times past to the present in terms of their relativity. This is sometimes known as the farther now nearer then phenomena and since everyone is talking and thinking depression, let's do the math. Choosing our pivotal year of 1968, first think of where you were, if you were a were at the time, and subtract 38 years.....ta dah the start of the Great Depression. Now flash forward to our present circumstance and note that we are 40 years from the outset of the Nixon era. You can have fun or fear in doing this with a lot of stuff, but for history buffs such as I, it does seem to bring some perspective to life and to its brevity.
Happy Holidays to all.
Tuesday, December 16, 2008
December 16th Edition
Good Morning All,
The Federal Reserve will make yet another attempt to stimulate the U.S. economy this afternoon through cutting rates to their lowest level on record. This is not bad news, but it has been, and is being, positively discounted in markets as we write. The more important good news in our view is the recent decline in the LIBOR and TED Spread numbers, an indicator of loosening credit markets. Meanwhile the reverberations of one man's scam continue to echo around the worlds of both banking and private investing, much to the devastation of some and to the amazement of many.
Futures and European markets are once again rising in the face of other not so good news, and later today GE will give guidance, news that will catch the momentary interest of mavens far and near. In the end, what will really matter in the post tax loss selling period will be the perception of where the economic numbers will be in quarter three of 2009, this, and the need for money managers to earn their keep is what will drive markets higher over the near term. These guys can only get paid for conserving capital if markets are going down, not when they are rising 10% per month. The herd will once again begin to move and at the first whiff of water they will start a stampede.
Paul Krugman, the recent Nobel recipient, wrote yesterday of Angela Merkel's intransigence in the face of a failing German economy. This is something we have also been concerned with for some time as well, due to the lack of cohesiveness of the European Community in this time of crisis. There are a number of things we don't need to see happen at this juncture and political posturing in front of an election is surely one of them. This is yet another situation that bears watching, as the tipping point is still evident.
The Federal Reserve will make yet another attempt to stimulate the U.S. economy this afternoon through cutting rates to their lowest level on record. This is not bad news, but it has been, and is being, positively discounted in markets as we write. The more important good news in our view is the recent decline in the LIBOR and TED Spread numbers, an indicator of loosening credit markets. Meanwhile the reverberations of one man's scam continue to echo around the worlds of both banking and private investing, much to the devastation of some and to the amazement of many.
Futures and European markets are once again rising in the face of other not so good news, and later today GE will give guidance, news that will catch the momentary interest of mavens far and near. In the end, what will really matter in the post tax loss selling period will be the perception of where the economic numbers will be in quarter three of 2009, this, and the need for money managers to earn their keep is what will drive markets higher over the near term. These guys can only get paid for conserving capital if markets are going down, not when they are rising 10% per month. The herd will once again begin to move and at the first whiff of water they will start a stampede.
Paul Krugman, the recent Nobel recipient, wrote yesterday of Angela Merkel's intransigence in the face of a failing German economy. This is something we have also been concerned with for some time as well, due to the lack of cohesiveness of the European Community in this time of crisis. There are a number of things we don't need to see happen at this juncture and political posturing in front of an election is surely one of them. This is yet another situation that bears watching, as the tipping point is still evident.
Monday, December 15, 2008
December 15th Edition
Good Morning All,
World markets are in the process of digesting last week's two major news events as it now appears that the probable auto bailout is outweighing the 'Madoff 50 billion dollar scandal". In the end this latter occurrence may well prove to be of less importance than the former even though the amount at stake here is three times as large. The Madoff affair has once again proven that even the world's largest banks (who appear to have been among the biggest victims) have no business handling huge pools of investment capital; just maybe they ought to stick to what they do best, lending and charging usurious transaction fees.
Challenging the copious number of possible winners in this year of the tragic comedy is the George Bush appearance in Iraq where he was not welcomed with open arms but with freshly unshod feet. This shoe throwing is apparently among the greatest of Islamic insults and strangely front runs the none too soon end to the American occupation of Iraq. After what may be a final cost of one or three trillion dollars (depends on what you include) this inane exercise in out of mind hubris will have been responsible for the displacement of 4.5 million Iraqis and the deaths of several hundred thousand others. It will have taken the lives of over 4000 "coalition" troops and permanently maimed many more. Remember forever that this deed was done in the wake of 9/11 and under the ostensible rationale of a search for "weapons of mass destruction". Remember also how quickly the lessons of Vietnam were sacrificed on the altar of self serving ideology. And while you are once again mulling all this crap, think about how 19 of the 21 September terrorists were Saudis, and that none were Iraqis or Afghanis. Remember as well the next time you hear a CNBC or Fox News tirade that the United Nations inspectors were right and that U.S. intelligence knew it. All this to replace a Sunni dictator with a Shia strongman who may become......?
The Federal Reserve meets today and tomorrow but it doesn't really matter, the real key to ending the deflationary fears are reflationary policies. So far the banks have all the money they need and they are keeping it, the thought most current among those in the investment community is that the neo Keynsians in the incoming administration will force the banks to lend the wads of fiat currency presently in their possession. This will spark an economic recovery but it will also lead to much higher inflation as the year goes on. We have lately seen evidence of this in the dollar weakness/gold strength trade, one that is likely to continue gaining attention. Hedge in precious metal or precious metal stocks for the coming year.
And finally for today the good news is that markets continue to fare reasonably well in the face of really awful news. LIBOR is well below two as is the TED spread. This is telling us that credit markets are finally beginning to loosen up. This, combined with a declining VIX or volatility index, is of major importance.
And finally, finally for all the Barack fans out there....Google Corrigan Brothers Obama and tune in to their Irish ditty;"there's no one as Irish as Barack Obama"
World markets are in the process of digesting last week's two major news events as it now appears that the probable auto bailout is outweighing the 'Madoff 50 billion dollar scandal". In the end this latter occurrence may well prove to be of less importance than the former even though the amount at stake here is three times as large. The Madoff affair has once again proven that even the world's largest banks (who appear to have been among the biggest victims) have no business handling huge pools of investment capital; just maybe they ought to stick to what they do best, lending and charging usurious transaction fees.
Challenging the copious number of possible winners in this year of the tragic comedy is the George Bush appearance in Iraq where he was not welcomed with open arms but with freshly unshod feet. This shoe throwing is apparently among the greatest of Islamic insults and strangely front runs the none too soon end to the American occupation of Iraq. After what may be a final cost of one or three trillion dollars (depends on what you include) this inane exercise in out of mind hubris will have been responsible for the displacement of 4.5 million Iraqis and the deaths of several hundred thousand others. It will have taken the lives of over 4000 "coalition" troops and permanently maimed many more. Remember forever that this deed was done in the wake of 9/11 and under the ostensible rationale of a search for "weapons of mass destruction". Remember also how quickly the lessons of Vietnam were sacrificed on the altar of self serving ideology. And while you are once again mulling all this crap, think about how 19 of the 21 September terrorists were Saudis, and that none were Iraqis or Afghanis. Remember as well the next time you hear a CNBC or Fox News tirade that the United Nations inspectors were right and that U.S. intelligence knew it. All this to replace a Sunni dictator with a Shia strongman who may become......?
The Federal Reserve meets today and tomorrow but it doesn't really matter, the real key to ending the deflationary fears are reflationary policies. So far the banks have all the money they need and they are keeping it, the thought most current among those in the investment community is that the neo Keynsians in the incoming administration will force the banks to lend the wads of fiat currency presently in their possession. This will spark an economic recovery but it will also lead to much higher inflation as the year goes on. We have lately seen evidence of this in the dollar weakness/gold strength trade, one that is likely to continue gaining attention. Hedge in precious metal or precious metal stocks for the coming year.
And finally for today the good news is that markets continue to fare reasonably well in the face of really awful news. LIBOR is well below two as is the TED spread. This is telling us that credit markets are finally beginning to loosen up. This, combined with a declining VIX or volatility index, is of major importance.
And finally, finally for all the Barack fans out there....Google Corrigan Brothers Obama and tune in to their Irish ditty;"there's no one as Irish as Barack Obama"
Friday, December 12, 2008
December 12th Edition
Good Morning All,
The presumptive failure of the Senate's ability to pass auto bailout legislation led U.S. markets lower yesterday and last night's resolution of the fact has negatively impacted world markets during our overnight trading hours. This failure, or victory for those who opposed the funding, has also diminished the U.S. dollar and had a lowering effect on oil prices despite the OPEC production cuts and the technicals that were leading that commodity trade higher.
Whether you are for or against the auto bailout it is interesting to place the dollar amount in perspective and link it to the short and long term job risks. The alternative bankruptcy option appears to be the popular solution for many business and economic observers, none of whom are auto suppliers who would be left holding the debt. Okay so let's see; the U.S. government has been spending between 10 and 15 billion per month on the inane war efforts in Iraq and Afghanistan while AIG and CitiGroup have already been in receipt of amounts 10 times as large as the initial 14 billion at stake here and they are still paying bonuses to senior management. The list of banks and bankers goes on and on and on.
So who is to blame here? Well the most popular whipping boy among opponents appears to be, surprise, the workers themselves and the UAW leadership. And of course they share the blame, along with the American auto and other executives who are (unlike their Japanese counterparts) paid in excess of 10 times the average labourer's wage. So the difference as best I can figure is about 14$ per hour based on salary and benefits. It does not of course take into account the tax and other concessions given to foreign car makers by Tennessee or Alabama or wherever. It should also be noted that the UAW has not said no to negotiating downward, it has simply refused to sign a blank cheque.
The ball is now in George Bush's court as the Whitehouse can, if it wishes, order the money up from the TARP which is still sitting on the much of its unspent treasury funds. The Republicans have now essentially conceded the rust belt states for the foreseeable future but the mostly abandoned outgoing President still has his legacy to worry about. Just think how far a little love will go for this guy no matter what the source. Detroit can count on these funds, maybe before you read this.
Further to Wall Street's problems has been the disclosure of former NASDAQ Chairman and Advisory Broker owner Bernard Madoff's 50 billion dollar Ponzi scheme wherein he appears to have blown a lot of very rich people's money.As has been said about a lot of this year's goings on "You couldn't make this stuff up".
Look for a market recovery later if Bush comes through.
Obama Worked to Distance Self From Blagojevich Early On
By Eli SaslowWashington Post Staff WriterFriday, December 12, 2008; A01
Like every other politician in Illinois, Gov. Rod Blagojevich waited for Barack Obama's call this summer. He told colleagues that he expected a speaking role at the 2008 Democratic National Convention, a nice bit of payback for being the first governor to endorse the senator from Illinois in his campaign for president. By showing off a connection to Obama in Denver, Blagojevich hoped to repair his own diminished reputation.
Obama's campaign made speaking offers to the Illinois treasurer, the comptroller, the attorney general and a Chicago city clerk. Sen. Richard J. Durbin (Ill.) was asked to introduce Obama on the convention's final night; Rep. Jesse L. Jackson Jr. (Ill.) was told he would speak on television during prime time. Finally, fed up and embarrassed that he still had heard nothing, Blagojevich joked to a crowd at the Illinois State Fair that, yes, he also had been asked to speak -- at 4 a.m., in a Denver area men's bathroom.
Long before federal prosecutors charged Blagojevich with bribery this week, Obama had worked to distance himself from his home-state governor. The two men have not talked for more than a year, colleagues said, save for a requisite handshake at a funeral or public event. Blagojevich rarely campaigned for Obama and never stumped with him. The governor arrived late at the Democratic convention and skipped Obama's victory-night celebration at Chicago's Grant Park.
Even though they often occupied the same political space -- two young lawyers in Chicago, two power brokers in Springfield, two ambitious men who coveted the presidency -- Obama and Blagojevich never warmed to each other, Illinois politicians said. They sometimes used each other to propel their own careers but privately acted like rivals. Blagojevich considered Obama naive and pretentious and dismissed his success as "good luck." Obama disparaged Blagojevich for what he viewed as his combativeness, his disorganization and his habit of arriving at official events half an hour late.
Under different circumstances, friends said, Obama might have derived some satisfaction from seeing Blagojevich handcuffed for allegedly trying to sell off Obama's vacated Senate seat to the highest bidder. But, only six weeks after Obama won the presidency by casting himself as a reformer, the Blagojevich scandal is a jarring reminder that Obama's political origins are in a city and state long tainted by corruption.
Blagojevich was elected in 2002 as a reform governor, but he has faced a series of investigations and charges of ethical irregularities ever since.
"Obama saw this coming, and he was very cautious about not having dealings with the governor for quite some time," said Abner Mikva, a former congressman and appeals court judge who was Obama's political mentor in Chicago. "The governor was perhaps the only American public officeholder who didn't speak at the convention, and that wasn't by accident. He's politically poisonous. You don't get through Chicago like Barack Obama did unless you know how to avoid people like that."
But Obama and Blagojevich shared pieces of the Chicago political network, which is why this has been an uncomfortable week for Obama's presidential transition team. Senior adviser David Axelrod once advised Blagojevich. Antoin "Tony" Rezko, a developer who was convicted in June of fraud and money laundering, raised money for both men. Robert Blackwell Jr., a longtime Obama friend, served on Blagojevich's gubernatorial transition team. Blagojevich appointed one of Obama's closest confidants, Eric Whitaker, as director of the Illinois Department of Public Health.
The president-elect's connection to Blagojevich is emblematic of his political rise in Chicago. Obama had contact with corruption, but rarely firsthand. He relied on the establishment when he needed it, but he maintained enough distance to cast himself as an outsider.
"Few people I've ever known have as good a sense about who might end up getting you in trouble," said Denny Jacobs, a retired Illinois politician from East Moline who befriended Obama when they both served in the state Senate. "It's like a sixth sense. Chicago's a mess, and he was surrounded by it. But he knew the people that could drag you down and tarnish your image."
Even though they both began their careers in Chicago, Blagojevich and Obama operated on distinct tracks. Blagojevich, the son of a steelworker who was born in Serbia, grew up on the city's predominantly white North Side and rode a pair of buses with his mother to his first Chicago Cubs game. He married the daughter of a gritty, deal-making alderman and entered politics as an unapologetic product -- and representative -- of the Chicago Democratic machine. He drew support from the city's white middle class and was elected to the state legislature in 1992.
Obama, a transplant from Hawaii and New York City, moved into the progressive, integrated Hyde Park neighborhood and attended White Sox games on the South Side. In his campaign for state Senate, he cast himself as the righteous alternative to what he called "old-school politics" and pitched his case to a coalition of African Americans and Hyde Park's liberal upper class.
Obama and Blagojevich rarely interacted until Blagojevich ran for governor. Obama told his friends in Springfield that he was unimpressed by Blagojevich's résumé, and he tried to lobby his friend Durbin to enter the race before deciding to support Roland Burris in the Democratic primary.
"When Blagojevich beat me, I told Barack to get on board with him," Burris said. "It was kind of like swallowing his pride a little bit, because he didn't really see that they had anything in common."
About all Blagojevich and Obama shared was searing ambition, which is what occasionally brought them together. Obama recognized that a Democratic governor could help him pass legislation and build his résumé in anticipation of a U.S. Senate run, so he helped Blagojevich's campaign as an informal adviser. Once Blagojevich was elected, he and Obama formed an awkward, arranged marriage: Obama passed a steady succession of legislation and built his reputation as a power player in Springfield; Blagojevich signed the bills and took the center seat at celebratory news conferences.
It worked just fine, Springfield politicians said, until Obama started to eclipse Blagojevich as the rising star in Illinois politics. Blagojevich never endorsed Obama in his U.S. Senate bid in 2004, and he expressed a preference for two other Democratic candidates. On the campaign trail, Obama sometimes made a point to highlight his distance from Blagojevich and the rest of the administration. "Nobody sent me," he often told his crowds.
"The governor didn't offer his support, and to be honest, we didn't really ask for it," said Jim Cauley, a Kentucky native whom Obama hired to run his U.S. Senate campaign. "We weren't going to the old hall or chasing the county chairs. We wanted to show we weren't a part of that world."
While Obama prepared to deliver the keynote address at the 2004 Democratic National Convention, a speech that would launch him to stardom, Blagojevich was back in Springfield watching his own reputation dissolve. After a poor first term, he fought over the state budget with Democratic leaders before flying to Boston and arriving an hour late at a party held in his honor. The event was sparsely attended. Obama made only a brief appearance.
"We have one salvation, and that is Barack," Jacobs, the state senator, said at the time. "It probably knocks Blagojevich down a peg from the leadership chart."
Not long thereafter, Obama started cultivating Illinois leadership of his own. He mentored a basketball buddy, Alexi Giannoulias, and supported his run for state treasurer. He befriended Attorney General Lisa Madigan and Comptroller Daniel W. Hynes. On one night in August, Obama boosted the gubernatorial hopes of all three by inviting each to speak during the opening night of the Democratic convention. Blagojevich watched from his seat.
As Obama went on to win the presidency and his rift with the Illinois governor crystallized, Blagojevich grew increasingly desperate. In phone calls reported in the criminal complaint, he pined for a spot in the Obama administration. Maybe, the governor reasoned, he could let Obama pick his own Senate successor in exchange for a job as an ambassador or as secretary of health and human services. Or maybe Obama could set up Blagojevich's wife, Patricia, with a cushy, high-paid position on a corporate board.
But Blagojevich's solicitations went nowhere, and it became clear that Obama had abandoned him for good.
"They're not willing to give me anything but appreciation," the governor told his chief of staff, John Harris. "[Expletive] them."
Staff writer Peter Slevin in Chicago contributed to this report.
The presumptive failure of the Senate's ability to pass auto bailout legislation led U.S. markets lower yesterday and last night's resolution of the fact has negatively impacted world markets during our overnight trading hours. This failure, or victory for those who opposed the funding, has also diminished the U.S. dollar and had a lowering effect on oil prices despite the OPEC production cuts and the technicals that were leading that commodity trade higher.
Whether you are for or against the auto bailout it is interesting to place the dollar amount in perspective and link it to the short and long term job risks. The alternative bankruptcy option appears to be the popular solution for many business and economic observers, none of whom are auto suppliers who would be left holding the debt. Okay so let's see; the U.S. government has been spending between 10 and 15 billion per month on the inane war efforts in Iraq and Afghanistan while AIG and CitiGroup have already been in receipt of amounts 10 times as large as the initial 14 billion at stake here and they are still paying bonuses to senior management. The list of banks and bankers goes on and on and on.
So who is to blame here? Well the most popular whipping boy among opponents appears to be, surprise, the workers themselves and the UAW leadership. And of course they share the blame, along with the American auto and other executives who are (unlike their Japanese counterparts) paid in excess of 10 times the average labourer's wage. So the difference as best I can figure is about 14$ per hour based on salary and benefits. It does not of course take into account the tax and other concessions given to foreign car makers by Tennessee or Alabama or wherever. It should also be noted that the UAW has not said no to negotiating downward, it has simply refused to sign a blank cheque.
The ball is now in George Bush's court as the Whitehouse can, if it wishes, order the money up from the TARP which is still sitting on the much of its unspent treasury funds. The Republicans have now essentially conceded the rust belt states for the foreseeable future but the mostly abandoned outgoing President still has his legacy to worry about. Just think how far a little love will go for this guy no matter what the source. Detroit can count on these funds, maybe before you read this.
Further to Wall Street's problems has been the disclosure of former NASDAQ Chairman and Advisory Broker owner Bernard Madoff's 50 billion dollar Ponzi scheme wherein he appears to have blown a lot of very rich people's money.As has been said about a lot of this year's goings on "You couldn't make this stuff up".
Look for a market recovery later if Bush comes through.
Obama Worked to Distance Self From Blagojevich Early On
By Eli SaslowWashington Post Staff WriterFriday, December 12, 2008; A01
Like every other politician in Illinois, Gov. Rod Blagojevich waited for Barack Obama's call this summer. He told colleagues that he expected a speaking role at the 2008 Democratic National Convention, a nice bit of payback for being the first governor to endorse the senator from Illinois in his campaign for president. By showing off a connection to Obama in Denver, Blagojevich hoped to repair his own diminished reputation.
Obama's campaign made speaking offers to the Illinois treasurer, the comptroller, the attorney general and a Chicago city clerk. Sen. Richard J. Durbin (Ill.) was asked to introduce Obama on the convention's final night; Rep. Jesse L. Jackson Jr. (Ill.) was told he would speak on television during prime time. Finally, fed up and embarrassed that he still had heard nothing, Blagojevich joked to a crowd at the Illinois State Fair that, yes, he also had been asked to speak -- at 4 a.m., in a Denver area men's bathroom.
Long before federal prosecutors charged Blagojevich with bribery this week, Obama had worked to distance himself from his home-state governor. The two men have not talked for more than a year, colleagues said, save for a requisite handshake at a funeral or public event. Blagojevich rarely campaigned for Obama and never stumped with him. The governor arrived late at the Democratic convention and skipped Obama's victory-night celebration at Chicago's Grant Park.
Even though they often occupied the same political space -- two young lawyers in Chicago, two power brokers in Springfield, two ambitious men who coveted the presidency -- Obama and Blagojevich never warmed to each other, Illinois politicians said. They sometimes used each other to propel their own careers but privately acted like rivals. Blagojevich considered Obama naive and pretentious and dismissed his success as "good luck." Obama disparaged Blagojevich for what he viewed as his combativeness, his disorganization and his habit of arriving at official events half an hour late.
Under different circumstances, friends said, Obama might have derived some satisfaction from seeing Blagojevich handcuffed for allegedly trying to sell off Obama's vacated Senate seat to the highest bidder. But, only six weeks after Obama won the presidency by casting himself as a reformer, the Blagojevich scandal is a jarring reminder that Obama's political origins are in a city and state long tainted by corruption.
Blagojevich was elected in 2002 as a reform governor, but he has faced a series of investigations and charges of ethical irregularities ever since.
"Obama saw this coming, and he was very cautious about not having dealings with the governor for quite some time," said Abner Mikva, a former congressman and appeals court judge who was Obama's political mentor in Chicago. "The governor was perhaps the only American public officeholder who didn't speak at the convention, and that wasn't by accident. He's politically poisonous. You don't get through Chicago like Barack Obama did unless you know how to avoid people like that."
But Obama and Blagojevich shared pieces of the Chicago political network, which is why this has been an uncomfortable week for Obama's presidential transition team. Senior adviser David Axelrod once advised Blagojevich. Antoin "Tony" Rezko, a developer who was convicted in June of fraud and money laundering, raised money for both men. Robert Blackwell Jr., a longtime Obama friend, served on Blagojevich's gubernatorial transition team. Blagojevich appointed one of Obama's closest confidants, Eric Whitaker, as director of the Illinois Department of Public Health.
The president-elect's connection to Blagojevich is emblematic of his political rise in Chicago. Obama had contact with corruption, but rarely firsthand. He relied on the establishment when he needed it, but he maintained enough distance to cast himself as an outsider.
"Few people I've ever known have as good a sense about who might end up getting you in trouble," said Denny Jacobs, a retired Illinois politician from East Moline who befriended Obama when they both served in the state Senate. "It's like a sixth sense. Chicago's a mess, and he was surrounded by it. But he knew the people that could drag you down and tarnish your image."
Even though they both began their careers in Chicago, Blagojevich and Obama operated on distinct tracks. Blagojevich, the son of a steelworker who was born in Serbia, grew up on the city's predominantly white North Side and rode a pair of buses with his mother to his first Chicago Cubs game. He married the daughter of a gritty, deal-making alderman and entered politics as an unapologetic product -- and representative -- of the Chicago Democratic machine. He drew support from the city's white middle class and was elected to the state legislature in 1992.
Obama, a transplant from Hawaii and New York City, moved into the progressive, integrated Hyde Park neighborhood and attended White Sox games on the South Side. In his campaign for state Senate, he cast himself as the righteous alternative to what he called "old-school politics" and pitched his case to a coalition of African Americans and Hyde Park's liberal upper class.
Obama and Blagojevich rarely interacted until Blagojevich ran for governor. Obama told his friends in Springfield that he was unimpressed by Blagojevich's résumé, and he tried to lobby his friend Durbin to enter the race before deciding to support Roland Burris in the Democratic primary.
"When Blagojevich beat me, I told Barack to get on board with him," Burris said. "It was kind of like swallowing his pride a little bit, because he didn't really see that they had anything in common."
About all Blagojevich and Obama shared was searing ambition, which is what occasionally brought them together. Obama recognized that a Democratic governor could help him pass legislation and build his résumé in anticipation of a U.S. Senate run, so he helped Blagojevich's campaign as an informal adviser. Once Blagojevich was elected, he and Obama formed an awkward, arranged marriage: Obama passed a steady succession of legislation and built his reputation as a power player in Springfield; Blagojevich signed the bills and took the center seat at celebratory news conferences.
It worked just fine, Springfield politicians said, until Obama started to eclipse Blagojevich as the rising star in Illinois politics. Blagojevich never endorsed Obama in his U.S. Senate bid in 2004, and he expressed a preference for two other Democratic candidates. On the campaign trail, Obama sometimes made a point to highlight his distance from Blagojevich and the rest of the administration. "Nobody sent me," he often told his crowds.
"The governor didn't offer his support, and to be honest, we didn't really ask for it," said Jim Cauley, a Kentucky native whom Obama hired to run his U.S. Senate campaign. "We weren't going to the old hall or chasing the county chairs. We wanted to show we weren't a part of that world."
While Obama prepared to deliver the keynote address at the 2004 Democratic National Convention, a speech that would launch him to stardom, Blagojevich was back in Springfield watching his own reputation dissolve. After a poor first term, he fought over the state budget with Democratic leaders before flying to Boston and arriving an hour late at a party held in his honor. The event was sparsely attended. Obama made only a brief appearance.
"We have one salvation, and that is Barack," Jacobs, the state senator, said at the time. "It probably knocks Blagojevich down a peg from the leadership chart."
Not long thereafter, Obama started cultivating Illinois leadership of his own. He mentored a basketball buddy, Alexi Giannoulias, and supported his run for state treasurer. He befriended Attorney General Lisa Madigan and Comptroller Daniel W. Hynes. On one night in August, Obama boosted the gubernatorial hopes of all three by inviting each to speak during the opening night of the Democratic convention. Blagojevich watched from his seat.
As Obama went on to win the presidency and his rift with the Illinois governor crystallized, Blagojevich grew increasingly desperate. In phone calls reported in the criminal complaint, he pined for a spot in the Obama administration. Maybe, the governor reasoned, he could let Obama pick his own Senate successor in exchange for a job as an ambassador or as secretary of health and human services. Or maybe Obama could set up Blagojevich's wife, Patricia, with a cushy, high-paid position on a corporate board.
But Blagojevich's solicitations went nowhere, and it became clear that Obama had abandoned him for good.
"They're not willing to give me anything but appreciation," the governor told his chief of staff, John Harris. "[Expletive] them."
Staff writer Peter Slevin in Chicago contributed to this report.
Thursday, December 11, 2008
December 11th Edition
Good Morning All,
World markets are mixed going into this morning's opening while oil is recovering and gold is stronger for yet another day. Despite today's spate of economic news having mostly met forecast expectations, futures have trended lower and will likely erase yesterday's modest New York gains in the early going. The indexes however do not always reveal the complete story as it has been interesting to note the recent recovery in some of the underlying sectors, particularly among techs and some commodity based stocks such as fertilizers. This bottoming process appears to be ongoing despite the forever bad news and the seasonal tax loss selling that continues to pervade market sentiment.
One positive sign has begun to emerge in the investment banking area as several successful stock issues have cleared in the past few weeks. The next important step in this area will be the reemergence of mergers and acquisitions, something that will tell us not only how cheap some companies are but it will provide us with a monitor on how healthy the credit markets will have become.
There is in life a large difference between confidence and arrogance, just as there is between wisdom and intelligence. When the former are present the next best attributes of great leadership are experience and good judgement. We are about to find out just how crucial these factors are because for eight long years the world has survived without them. Let us hope that we have now come to the end of the era of hubris and ideological rule before we will have run out of history.
World markets are mixed going into this morning's opening while oil is recovering and gold is stronger for yet another day. Despite today's spate of economic news having mostly met forecast expectations, futures have trended lower and will likely erase yesterday's modest New York gains in the early going. The indexes however do not always reveal the complete story as it has been interesting to note the recent recovery in some of the underlying sectors, particularly among techs and some commodity based stocks such as fertilizers. This bottoming process appears to be ongoing despite the forever bad news and the seasonal tax loss selling that continues to pervade market sentiment.
One positive sign has begun to emerge in the investment banking area as several successful stock issues have cleared in the past few weeks. The next important step in this area will be the reemergence of mergers and acquisitions, something that will tell us not only how cheap some companies are but it will provide us with a monitor on how healthy the credit markets will have become.
There is in life a large difference between confidence and arrogance, just as there is between wisdom and intelligence. When the former are present the next best attributes of great leadership are experience and good judgement. We are about to find out just how crucial these factors are because for eight long years the world has survived without them. Let us hope that we have now come to the end of the era of hubris and ideological rule before we will have run out of history.
Wednesday, December 10, 2008
December 10th Edition
Good Morning All,
Yesterday may have been blogless here but it certainly wasn't snowless, at least not in beautiful Montreal and its environs. Markets too had a stormy day as profit taking and other stories assumed temporary precedent over their recent show of optimism.Things look a little better on both fronts this morning as the upward trend attempts to reestablish itself. We will continue to monitor the TED spread,( now two...ish versus five..ish), the LIBOR rate, the U.S dollar, and the technicals for signs of danger but right now the generally bad news seems to be enjoying a market discounting that is set to run through inauguration day.
The news out of Illinois may have added to the market concerns yesterday although Fox News must have had a field day. No one of a serious or patriotic nature would want anything to interrupt the Obama inspired hopes that have most recently pervaded the American pysche. It would seem that this creep of a Governor has already cleansed the President elect of any possible collusion by having referred to him on tape using the F word.
Yesterday may have been blogless here but it certainly wasn't snowless, at least not in beautiful Montreal and its environs. Markets too had a stormy day as profit taking and other stories assumed temporary precedent over their recent show of optimism.Things look a little better on both fronts this morning as the upward trend attempts to reestablish itself. We will continue to monitor the TED spread,( now two...ish versus five..ish), the LIBOR rate, the U.S dollar, and the technicals for signs of danger but right now the generally bad news seems to be enjoying a market discounting that is set to run through inauguration day.
The news out of Illinois may have added to the market concerns yesterday although Fox News must have had a field day. No one of a serious or patriotic nature would want anything to interrupt the Obama inspired hopes that have most recently pervaded the American pysche. It would seem that this creep of a Governor has already cleansed the President elect of any possible collusion by having referred to him on tape using the F word.
Monday, December 8, 2008
December 8th Edition
Good Morning All,
Markets around the world were soaring as we slept here in North America and they were doing so on the back of a number of things, the most important of which was Friday's strong New York performance in reaction to the worst job numbers report in 34 years. This letter has stated more than once, and most recently on December 5th, that a market that rises in the face of bad news has found a base upon which to build. The worse the news, the more important the contrarian rally will become. We have just witnessed such a successful test at 818 on the S&P 500 slightly above our suggested support level of 815.
Adding to this good reaction to bad news market scenario was some actual good news as Barack announced plans for an Eisenhower-like stimulus package just as Congress appeared to reach a bailout agreement for the auto industry. China too has joined the spending fray as it now seems that stimulus will quickly replace my favourite candidate, the short-lived prorogue, as word of the year.
Infrastructure spending will not be limited to America or China as Governments around the world realize that bridges, roads, schools, hospitals and the sewer and water systems that supply them cannot be imported; better still both the workers employed and the companies employing them will be paying taxes. Beats the hell out of a 500 dollar cheque to individuals who will drive to Wal-Mart and boost the Asian economies and speaking of driving, think of how much of a tax cut the drop in gas prices is, about 400 billion I believe.
There will be no shortage of Canadian political news this week, beginning with a Quebec election and on through to the leadership change in the Federal Liberal party. A good week for both Charest and Ignatieff looms.
Look for a big week with 1025 S&P 500 in sight.
Markets around the world were soaring as we slept here in North America and they were doing so on the back of a number of things, the most important of which was Friday's strong New York performance in reaction to the worst job numbers report in 34 years. This letter has stated more than once, and most recently on December 5th, that a market that rises in the face of bad news has found a base upon which to build. The worse the news, the more important the contrarian rally will become. We have just witnessed such a successful test at 818 on the S&P 500 slightly above our suggested support level of 815.
Adding to this good reaction to bad news market scenario was some actual good news as Barack announced plans for an Eisenhower-like stimulus package just as Congress appeared to reach a bailout agreement for the auto industry. China too has joined the spending fray as it now seems that stimulus will quickly replace my favourite candidate, the short-lived prorogue, as word of the year.
Infrastructure spending will not be limited to America or China as Governments around the world realize that bridges, roads, schools, hospitals and the sewer and water systems that supply them cannot be imported; better still both the workers employed and the companies employing them will be paying taxes. Beats the hell out of a 500 dollar cheque to individuals who will drive to Wal-Mart and boost the Asian economies and speaking of driving, think of how much of a tax cut the drop in gas prices is, about 400 billion I believe.
There will be no shortage of Canadian political news this week, beginning with a Quebec election and on through to the leadership change in the Federal Liberal party. A good week for both Charest and Ignatieff looms.
Look for a big week with 1025 S&P 500 in sight.
Friday, December 5, 2008
December 5th Edition
Good Morning All,
The much anticipated November U.S. employment figures were released this morning, and they were well beyond the consensus call, but not too far removed from the whisper number. Yesterday's late day, low volume sell-off was likely symptomatic of these rumours thereby discounting the actual news in advance. We are now about to see, on this important trading day, whether the markets bend to this news or rally in the face of it. The initial movement will reflect the former while we await a hold around 815 on the S&P 500.
Fed Chairman Bernanke's fearful comments did nothing to reassure markets either as his "deer in the headlights" look has become increasingly unsettling. It is once again interesting to point out that one of the few apparently calm and confident people at this juncture is the President elect; fortunately for all of us, his name is Obama and not McCain.
In Canada, parliament will now be prorogued until the end of January at which time a budget will be presented and voted upon. What I would like to know is why we have to wait so long for something that can be composed in days. Budgets come from behind doors one, two or three as they either raise taxes or cut them, print money or constrain spending, this need not be a long drawn out process. It seems simple to this writer: allot money to the provinces for infrastructure spending; as the dusty engineering plans already exist across the land. Let's get busy and make a deal sooner rather than later....and let's stop the divisive politics that raises the spectre of separatism while ignoring the more important threat of deflation. It is also time to prorogue the government's head in the sand attitude toward a stimulus package. I knew I could sneak that word in somehow.
The much anticipated November U.S. employment figures were released this morning, and they were well beyond the consensus call, but not too far removed from the whisper number. Yesterday's late day, low volume sell-off was likely symptomatic of these rumours thereby discounting the actual news in advance. We are now about to see, on this important trading day, whether the markets bend to this news or rally in the face of it. The initial movement will reflect the former while we await a hold around 815 on the S&P 500.
Fed Chairman Bernanke's fearful comments did nothing to reassure markets either as his "deer in the headlights" look has become increasingly unsettling. It is once again interesting to point out that one of the few apparently calm and confident people at this juncture is the President elect; fortunately for all of us, his name is Obama and not McCain.
In Canada, parliament will now be prorogued until the end of January at which time a budget will be presented and voted upon. What I would like to know is why we have to wait so long for something that can be composed in days. Budgets come from behind doors one, two or three as they either raise taxes or cut them, print money or constrain spending, this need not be a long drawn out process. It seems simple to this writer: allot money to the provinces for infrastructure spending; as the dusty engineering plans already exist across the land. Let's get busy and make a deal sooner rather than later....and let's stop the divisive politics that raises the spectre of separatism while ignoring the more important threat of deflation. It is also time to prorogue the government's head in the sand attitude toward a stimulus package. I knew I could sneak that word in somehow.
Thursday, December 4, 2008
December 4th Edition
Good Morning All,
Markets in Canada continued to drift yesterday in front of the Harper address and a couple of bank earnings reports. New York on the other hand rose on some late day buying as December money was put to work. Heed must be paid to both the former and latter points made here because although the Canadian market might lag its U.S. counterpart by a few days due to our ongoing political crisis, the need to put money to work before year-end is a shared condition. Investment managers are not being paid fees to hold zero interest treasuries in the face of 20% weekly run-ups. Sometime soon they will have to stick more than one toe in the soup.
Rate cuts in Europe have so far done little to ease markets as the immediate reaction to these dramatic moves has been one of fear rather than relief as talk of the recession/deflation cycle getting out of control has held the greater weight this morning. As often stated in this rant, we must watch for a market that goes up in the face of bad news, and particularly for signs of one that fares well in the last hour of trading. Not silly folks, just history.
The Harper speech last night and the general tone adopted by the Conservatives over the past few days has been enlightening. It is almost as if Karl Rove had moved his operations to Canada where a new fear mongering campaign can drive a wedge between Canadians. Once more....agree or disagree with the coalition's actions, there is nothing illegal or immoral or even banana republic like about them. Furthermore, the Bloc Quebecois is a joke and it is not being made powerful by the Liberals and NDP but by the desperate attacks of the Conservatives. Read the agreement.
Markets in Canada continued to drift yesterday in front of the Harper address and a couple of bank earnings reports. New York on the other hand rose on some late day buying as December money was put to work. Heed must be paid to both the former and latter points made here because although the Canadian market might lag its U.S. counterpart by a few days due to our ongoing political crisis, the need to put money to work before year-end is a shared condition. Investment managers are not being paid fees to hold zero interest treasuries in the face of 20% weekly run-ups. Sometime soon they will have to stick more than one toe in the soup.
Rate cuts in Europe have so far done little to ease markets as the immediate reaction to these dramatic moves has been one of fear rather than relief as talk of the recession/deflation cycle getting out of control has held the greater weight this morning. As often stated in this rant, we must watch for a market that goes up in the face of bad news, and particularly for signs of one that fares well in the last hour of trading. Not silly folks, just history.
The Harper speech last night and the general tone adopted by the Conservatives over the past few days has been enlightening. It is almost as if Karl Rove had moved his operations to Canada where a new fear mongering campaign can drive a wedge between Canadians. Once more....agree or disagree with the coalition's actions, there is nothing illegal or immoral or even banana republic like about them. Furthermore, the Bloc Quebecois is a joke and it is not being made powerful by the Liberals and NDP but by the desperate attacks of the Conservatives. Read the agreement.
Wednesday, December 3, 2008
December 3rd Edition
Good Morning All,
Not much special about yesterday's market activity except the S&P 500 did manage to close back up at the important 850 level. This morning's poor job claims numbers, the declines in Europe and the diminished guidance by Mr. BlackBerry have all served to lower today's expectations. However one day does not make a market or a week, up or down, so let us all stay tuned.
It is not surprising that Canadians are extremely divided over the latest political machinations in Ottawa. Harper supporters are rallying around the anti-separatiste banner while the Liberals and NDP are dismissing the Bloc's influence as a necessary evil in their bid to form a new government. The breakdown is as usual, mostly an east-west split, wherein the recently chastened Albertans are ripe for fuming due to the 100$ drop in oil prices. It is always a joy for this writer to bring up the point that neither Ralph Klein nor that province's citizenry ever put a drop of oil in the ground.
Whether you agree or disagree with the opposition's tactics or strategy here is opinion; the question involving the legality of the action or the precedent behind it is not. The British Parliamentary system has proven itself, despite its flaws, to be superior to any other form of democracy for several centuries, and if you don't believe that just take a look at the recent two year primary and election campaign in America even as you try to understand how a country can have a President-in-waiting for two and one half months. I could go on about how George Bush would never have survived one question period let alone eight years of them, but I digress.
The most interesting thing to come out of all this may not be a new government with a much needed stimulus plan, but the word prorogue, a far better candidate than paliniste for word of the year.
Not much special about yesterday's market activity except the S&P 500 did manage to close back up at the important 850 level. This morning's poor job claims numbers, the declines in Europe and the diminished guidance by Mr. BlackBerry have all served to lower today's expectations. However one day does not make a market or a week, up or down, so let us all stay tuned.
It is not surprising that Canadians are extremely divided over the latest political machinations in Ottawa. Harper supporters are rallying around the anti-separatiste banner while the Liberals and NDP are dismissing the Bloc's influence as a necessary evil in their bid to form a new government. The breakdown is as usual, mostly an east-west split, wherein the recently chastened Albertans are ripe for fuming due to the 100$ drop in oil prices. It is always a joy for this writer to bring up the point that neither Ralph Klein nor that province's citizenry ever put a drop of oil in the ground.
Whether you agree or disagree with the opposition's tactics or strategy here is opinion; the question involving the legality of the action or the precedent behind it is not. The British Parliamentary system has proven itself, despite its flaws, to be superior to any other form of democracy for several centuries, and if you don't believe that just take a look at the recent two year primary and election campaign in America even as you try to understand how a country can have a President-in-waiting for two and one half months. I could go on about how George Bush would never have survived one question period let alone eight years of them, but I digress.
The most interesting thing to come out of all this may not be a new government with a much needed stimulus plan, but the word prorogue, a far better candidate than paliniste for word of the year.
Tuesday, December 2, 2008
Good Morning All,
A more contrite group of auto executives will meet with Congress once again today and it is likely that some deal or another will be forthcoming. Futures are up this morning as are European markets despite today's descent in Japan. This is Tuesday and some important numbers need to be surpassed and held by day's end if my call for a bullish two weeks is going to get started . Yesterday's huge decline in Toronto was typified by major losses in golds and oils; but that was really just the surface picture. Aside from the fact that this was a low volume sell-off both here and in New York, it would seem that profit taking played a large part in this activity. Petro Canada par example lost 4$ plus over the trading day, a large number until one considers that it had gained over 13$ during the previous five and it was one of many such trades.
The Canadian political situation would be laughable were the economic problems not so serious. Some may believe these latest opposition manoeuvres to be unnecessary and self serving while others are cheering them on. Allow me to make one point; Canada is in surplus and the present government does not believe that economic stimulus is needed. In the U.S where deficits have reached so far past historical records that they are close to unfathomable, stimulus will be increased under Obama, not diminished, and few, if any, economists oppose these scheduled expenditures. The risk of doing nothing in this deflating economy is far greater than the risk of growing larger deficits, or in our case, creating them.
Look for a close over 850 on the S&P 500 to confirm an advance of meaningful proportion.
A more contrite group of auto executives will meet with Congress once again today and it is likely that some deal or another will be forthcoming. Futures are up this morning as are European markets despite today's descent in Japan. This is Tuesday and some important numbers need to be surpassed and held by day's end if my call for a bullish two weeks is going to get started . Yesterday's huge decline in Toronto was typified by major losses in golds and oils; but that was really just the surface picture. Aside from the fact that this was a low volume sell-off both here and in New York, it would seem that profit taking played a large part in this activity. Petro Canada par example lost 4$ plus over the trading day, a large number until one considers that it had gained over 13$ during the previous five and it was one of many such trades.
The Canadian political situation would be laughable were the economic problems not so serious. Some may believe these latest opposition manoeuvres to be unnecessary and self serving while others are cheering them on. Allow me to make one point; Canada is in surplus and the present government does not believe that economic stimulus is needed. In the U.S where deficits have reached so far past historical records that they are close to unfathomable, stimulus will be increased under Obama, not diminished, and few, if any, economists oppose these scheduled expenditures. The risk of doing nothing in this deflating economy is far greater than the risk of growing larger deficits, or in our case, creating them.
Look for a close over 850 on the S&P 500 to confirm an advance of meaningful proportion.
Monday, December 1, 2008
December 1st Edition
Good Morning All,
Markets will spend a good part of the day giving up some of last week's gains. This activity should evolve into an interesting process that sets up a turnaround Tuesday leading the way to significant early December gains. I would expect that the pre Christmas week will once again be typified by tax loss selling even though it would appear that many capitulators have already accomplished this task. If things go according to Hoyle, (and they rarely do), then a very opportune reentry into markets, particularly among small and mid caps, will take place during the pre year end holiday week. This upward movement will likely exhaust itself by inauguration day but it will be large in percentage gains.
The world as we now know it, appears to be experiencing a leadership gap, beginning with the lame duck Presidency of George Bush and extending through to the inaction of Germany's Angela Merkel and our own out of touch Cabinet in Ottawa. This vacuum of doingness, yes I know it is not a word, has lately been compounded by other world events from India to Thailand and the Gulf of Aden where a motley group of pirates continues to hold powerful nations and their interests at bay. These are each headline events just as the other major ongoing African wars appear not to be, but pay proper heed to the short term nature of their impact and look forward to a more structured and interactive globe just down the road. Meanwhile everything must be done to prevent any further deterioration in Pakistan-India relations. This, not Iraq, not Iran, not Israel is and always has been the world's most important and most dangerous potential battlefield. That's a lot of..... I's......for one sentence, so let's add another while we are on a roll.... Ignatieff....?
I have no idea what Harper has been thinking, so I must believe that he hasn't been.
Markets will spend a good part of the day giving up some of last week's gains. This activity should evolve into an interesting process that sets up a turnaround Tuesday leading the way to significant early December gains. I would expect that the pre Christmas week will once again be typified by tax loss selling even though it would appear that many capitulators have already accomplished this task. If things go according to Hoyle, (and they rarely do), then a very opportune reentry into markets, particularly among small and mid caps, will take place during the pre year end holiday week. This upward movement will likely exhaust itself by inauguration day but it will be large in percentage gains.
The world as we now know it, appears to be experiencing a leadership gap, beginning with the lame duck Presidency of George Bush and extending through to the inaction of Germany's Angela Merkel and our own out of touch Cabinet in Ottawa. This vacuum of doingness, yes I know it is not a word, has lately been compounded by other world events from India to Thailand and the Gulf of Aden where a motley group of pirates continues to hold powerful nations and their interests at bay. These are each headline events just as the other major ongoing African wars appear not to be, but pay proper heed to the short term nature of their impact and look forward to a more structured and interactive globe just down the road. Meanwhile everything must be done to prevent any further deterioration in Pakistan-India relations. This, not Iraq, not Iran, not Israel is and always has been the world's most important and most dangerous potential battlefield. That's a lot of..... I's......for one sentence, so let's add another while we are on a roll.... Ignatieff....?
I have no idea what Harper has been thinking, so I must believe that he hasn't been.
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