Good Morning All,
The markets can't seem to muster a serious bear rally despite their highly oversold condition; and it is still all about the banks. The Obama budget is out and as "Slate" stated, "he put the money where his mouth is"; and much to the disdain of the CNBC commentators and their chosen guests, he has largely kept his campaign promises. It should be remembered at this time that it was not Dems who got us here, it was the GOP and Wall Street greed. The complaints from the right about the Obama budget are many, but essentially the most discussed concerns are related to taxation changes for the top 2% of Americans, and to a limited degree, the top 5%. None of the contentious items have been explained in detail on any of the complaining networks. In fact, when a talking head interviews a like minded guest, they speak of the tax rise from 35 to 39.5% as if this were going to destroy America's entreprenurial spirit. Think about it; some really smart guy or gal is now going to choose "welfare" over working because they have to pay an additional 4500 dollars on every 100,000 they earn over 250k. Not bloody likely. The other bugbears include the mortgage and charitable deduction clauses in the proposal. Again, these are presented on business television as if they have been totally eliminated, when in fact they have been reduced for people in the 33% plus tax bracket from the present deduction, to 28% in both cases. Example; 1000 dollars of mortgage interest or charitable donation is presently deductible at your tax rate. Under the new tax law, it will be 280 dollars per thousand versus the former 330 or 350 dollars. In Canada we have no mortgage interest deduction and a much better housing market, not to mention a much lower deficit. And once more, let's remember that this is the top 5% of American earners at 33% and the top 2% above that level. There are 300 million citizens of the United States....you do the math. America is greatly in need of some tough love and strong leadership, it is also in need of a little sacrifice and a lot less greedy whining from the already wealthy, not to mention the Trumps of the world. This morning's defacto bank nationalization may well signal a short term end to that crisis, the fat lady is warming up.
Friday, February 27, 2009
Tuesday, February 24, 2009
February 24 Edition
Good Morning All,
Markets continue to be ruled by the banking crisis, and in America, the Wall Street analysts, pundits, practitioners and knee jerk ideologues remain concerned, if not incensed with the word nationalization. The administration also appears fearful of using the "N" word, even as it effectively puts it into practice. In a bid for greater clarification I would humbly suggest that the President incorporate the following phrase into this evening's important address to this worried nation. First used by our own MacKenzie King in W.W.ll and later paraphrased by the new leader of Canada's Liberal party, it would sound something like this; "nationalization if necessary, but not necessarily nationalization".
Markets have been extremely noisy of late and I am not sure that they are truly reflecting the future potential of the world economy. They are certainly reflecting the nation's fears, almost to the point of exploitation. At this moment we may be looking at a generational opportunity.....or the beginning of the end of the world as we have known it. Being of the belief that the world is at a far more advanced place than at any time in history, I find myself in the former, more optimistic camp. It is usually during times such as these that I quote W.B.Yeats' first verse of his poem "The Second Coming" but in lieu of space I will ask those of you who care enough, look it up. Times are tough, but they have been much tougher many times before, times when we were not quite as smart, or quite as civilized.
Stop listening, for a moment, to the people who got us into this mess, and start paying heed to the ones who will get us out of it.
Markets continue to be ruled by the banking crisis, and in America, the Wall Street analysts, pundits, practitioners and knee jerk ideologues remain concerned, if not incensed with the word nationalization. The administration also appears fearful of using the "N" word, even as it effectively puts it into practice. In a bid for greater clarification I would humbly suggest that the President incorporate the following phrase into this evening's important address to this worried nation. First used by our own MacKenzie King in W.W.ll and later paraphrased by the new leader of Canada's Liberal party, it would sound something like this; "nationalization if necessary, but not necessarily nationalization".
Markets have been extremely noisy of late and I am not sure that they are truly reflecting the future potential of the world economy. They are certainly reflecting the nation's fears, almost to the point of exploitation. At this moment we may be looking at a generational opportunity.....or the beginning of the end of the world as we have known it. Being of the belief that the world is at a far more advanced place than at any time in history, I find myself in the former, more optimistic camp. It is usually during times such as these that I quote W.B.Yeats' first verse of his poem "The Second Coming" but in lieu of space I will ask those of you who care enough, look it up. Times are tough, but they have been much tougher many times before, times when we were not quite as smart, or quite as civilized.
Stop listening, for a moment, to the people who got us into this mess, and start paying heed to the ones who will get us out of it.
Monday, February 23, 2009
February 23, 2009
Good Morning All,
Well the bad news, at least for me, is that my most recent letter which called for a market rally last week, not only fell on deaf ears but on fully plugged ones. The good news is that although some stocks may go to zero, the market itself will not, and as indexes fall to lower levels it becomes increasingly clear that we cannot continue the descent at present rates for seven more weeks. So as we begin the second month of the "fix it" Presidency we can look for a relief rally of some sort, the sustainability of which will be dependent on the reception given the Obama budget and the quasi nationalization of CitiGroup and Bank of America.
I am still in southern Florida where the class system of America is as visual as it gets. Interestingly though, it appears that the gap between the super wealthy and the much larger group, which is quickly beginning to include almost everyone else and is growing wider by the day, may not include attitude...fear and anger have been mutualized. The sense of hope that was ignited by the Obama victory has been somewhat mitigated by the attack dogs on the right who appear to control the business networks, Fox news and talk radio. It will be a sad day for us all if we lose the print media one day down the road where someone may well rant, but they can not scream.
The President, through all this, has remained calm, adult, personable and patient. His fault lies, in my opinion, in trying too hard in his quest to broaden the tent by appealing to his opponents' better instincts....my advice, stop, because as Gertrude Stein famously said about Oakland; "there is no there, there".
This niceness may of course be part of a grander plan, the one in which our Machiavellian Prince Barack practices the art of bait and switch, by giving them enough rope from which they may collectively swing.
It is necessary at this time, for Obama to show strong and unyielding leadership, leadership that purveys a sense of hope and a promise of renewal. He is more than capable of so doing and this crucial week is likely to bring new impetus to the great plan; or as I prefer to call it...the renaissance.
Meanwhile, even my late November, early December selections took a drubbing and although most remain somewhat higher than their outset prices, they are significantly below their peak prices....opportunity knocks.
Well the bad news, at least for me, is that my most recent letter which called for a market rally last week, not only fell on deaf ears but on fully plugged ones. The good news is that although some stocks may go to zero, the market itself will not, and as indexes fall to lower levels it becomes increasingly clear that we cannot continue the descent at present rates for seven more weeks. So as we begin the second month of the "fix it" Presidency we can look for a relief rally of some sort, the sustainability of which will be dependent on the reception given the Obama budget and the quasi nationalization of CitiGroup and Bank of America.
I am still in southern Florida where the class system of America is as visual as it gets. Interestingly though, it appears that the gap between the super wealthy and the much larger group, which is quickly beginning to include almost everyone else and is growing wider by the day, may not include attitude...fear and anger have been mutualized. The sense of hope that was ignited by the Obama victory has been somewhat mitigated by the attack dogs on the right who appear to control the business networks, Fox news and talk radio. It will be a sad day for us all if we lose the print media one day down the road where someone may well rant, but they can not scream.
The President, through all this, has remained calm, adult, personable and patient. His fault lies, in my opinion, in trying too hard in his quest to broaden the tent by appealing to his opponents' better instincts....my advice, stop, because as Gertrude Stein famously said about Oakland; "there is no there, there".
This niceness may of course be part of a grander plan, the one in which our Machiavellian Prince Barack practices the art of bait and switch, by giving them enough rope from which they may collectively swing.
It is necessary at this time, for Obama to show strong and unyielding leadership, leadership that purveys a sense of hope and a promise of renewal. He is more than capable of so doing and this crucial week is likely to bring new impetus to the great plan; or as I prefer to call it...the renaissance.
Meanwhile, even my late November, early December selections took a drubbing and although most remain somewhat higher than their outset prices, they are significantly below their peak prices....opportunity knocks.
Tuesday, February 3, 2009
January 31st 2009 Editon
Good Morning All,
The following article was brought to my attention by one of you (thanks for the feedback Phil). I thought it described one of the many areas in which the enormous potential of stem cell research can be brought to bear. As many of investors are fast becoming aware, markets are forward looking instruments, and what could be more forward looking than owning some of the companies that are engaged in the scientific investigation of new and better solutions to the world's ills. The Obama Presidency has kicked off an entire new and growing interest in such progress, as recent price appreciation in this sector has proven. It is my belief that many of these companies will be successful while others will fail, so as I wrote last November, "own a basket" and trade within it. I have added two additions to my list and yes I do own all or some of them.
In my opinion, the President's attempts to reach out to the Republicans have failed and it is now time for him to move on. He stated in his inaugural address that it was time to "dust ourselves off"; well if I may be so bold...it is time for the President to dust off the GOP.
The following article was brought to my attention by one of you (thanks for the feedback Phil). I thought it described one of the many areas in which the enormous potential of stem cell research can be brought to bear. As many of investors are fast becoming aware, markets are forward looking instruments, and what could be more forward looking than owning some of the companies that are engaged in the scientific investigation of new and better solutions to the world's ills. The Obama Presidency has kicked off an entire new and growing interest in such progress, as recent price appreciation in this sector has proven. It is my belief that many of these companies will be successful while others will fail, so as I wrote last November, "own a basket" and trade within it. I have added two additions to my list and yes I do own all or some of them.
In my opinion, the President's attempts to reach out to the Republicans have failed and it is now time for him to move on. He stated in his inaugural address that it was time to "dust ourselves off"; well if I may be so bold...it is time for the President to dust off the GOP.
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