Saturday, January 10, 2009
The Truth Police... The Spin won't Stop... Economic Calendar... A Special Message from Boom and Doom
The Truth Police
I had talked about it... and now have finally done it. We now have a new blog feature that actually tracks the river of lies flowing from Wall Street analysts and TV personalities. This could be entertaining... informative... and most of all build in a component of accountability that is sadly lacking!!! Please take a minute or two to check out a blog dedicated to truth...justice... and the way fallacies, dishonesty and outright lies should be recorded. www.wallstreetlies.blogspot.com This feature allows you the reader to comment on your favorite commentator who just can't get it right!!!
The Spin won't Stop...
The unemployment rate was underestimated again… 524,000 jobs were bled from the economy in December… and still that number was not right!!! The government knows it… the unemployed know it… and you know it!!!! But let’s play the game a little longer… buy them a bit of time… maybe even manufacture another rally. In the end, the credibility of Wall Street is on the line.
According to CBS News, phone and computer systems at New York, North Carolina, and Ohio outright crashed… while many other states are reporting higher than usual phone calls. Pennsylvania could become the norm where “Temporary workers and expanded the hours of its unemployment benefits hot line to accommodate a surge in the number of calls, going from 600 employees to more than 800. Officials hope to eventually have 1,100 workers answering calls.” (1) While I am hopeful that Obama’s stimulus plan will get the economy back on track… and Americans working… I am doubtful that there is a quick fix to the situation. The $1000.00 per family stimulus, in my humble opinion, would be better applied to the deficit as opposed to additional bread for the masses. In essence, the Federal government could well be creating a giant Ponzi Scheme they makes Bernie Madoff (with billions) look like a vegetable stand salesman.
Speaking of stimulus... there is on-going wrangling in Congress as we speak to Obama's stimulus package. The Republicans... not to be confused with the charlatans that really backed George W. Bush, are becoming increasingly conscientious about the long-term effects of massive government spending. (2) These are people like Jim DeMint from South Carolina, Richard Shelby from Alabama, and the ultra fiscal conservative George Voinovich from the Great State of Ohio. (see George Voinovich on I.O.U.S.A.). In the House, you can count on additional grand-standing from Ron Paul and a much lower-key Steve LaTourette from Northeastern, Ohio. Ironically, Obama's plan is drawing criticism from both side of the aisle... conservatives/liberals, Democrats/Republicans.
As far as the market goes, we saw a slide from Wednesday to Friday. I cannot see a reason to rally next week. Beige Book reports Wednesday. To remind readers the Beige Book reports current anecdotal economic conditions via each of the Federal Reserve Banks throughout the United States. Thursday's PPI should show a weakening price margin as domestic producers are going to great lengths in clearing old inventory. Should this be the case, another warning bell for deflation will be sounded. Last, and maybe the most important will be released on Friday. Michigan's Consumer Confidence Report should clearly demonstrate a weakened consumer... and one who has become more judicious in his needs. Couple these statistics with a revised unemployment report, and we will be on slippery footing for the week.
Continue to follow put options on FXI, XLI, XLY, XNG may well be a long buy opportunity as well.
A Special Message from Boom and Doom
I have seen it, read the book, and
attended a forum with David Walker, Bill Bixby and Sen. George Voinovich
discussing this subject. Please watch this movie even if you have to
record/DVR it. I applaud CNN for broadcasting this. The current
financial crisis we are in does not even compare to what is coming if we do
not address these issues. I would be willing to further discuss with
you any questions or comments you may have either before or after the
movie. I'm not trying to scare people, but people need to be aware of
what is happening. The problems will not go away by ignoring them.
Also, take some time to visit the Peter G. Peterson Foundation website
which has links below. I.O.U.S.A.