Fear Sells... To the Victors go the Spoils... A Modest Proposal...Speaking of Congress...Stock Watch... Try try again...

FEAR
–noun
1. a distressing emotion aroused by impending danger, evil, pain, etc., whether the threat is real or imagined; the feeling or condition of being afraid. (1)

Fear is even a convenient advertising tool. From Head and Shoulders advertisements tauting dandruff as the root cause of a love life gone askew to a Odor Eaters advertisement where the father scares off the family with the smell of bad feet one thing is for certain, fear sells!!!

Before Harry Truman announced the Truman Doctrine (financial aid to Greece and Turkey) he understood that he had to "sell" it to Congress and the American people. His chief of staff suggested that since Soviet aggression was a real threat to the region, that he uses fear to push the measure through Congress... (2)

So it was no surprise when fear was used again last night as the main point of pushing through what will amount to the largest spending measure in U.S. history. Fear worked when Bush was tauting the need to go to war in Iraq... Fear reared its ugly head again with the first Tarp Plan... and now fear has moved this 800 pound gorilla through the House and the Senate in lock step fashion. This is not to say that the spending is not needed, nor that the plan will not be effective. However, Congress should know what they are voting on... No one knows exactly what was in that bill that passes last night except the lobyists.

To the Victors go the Spoils...
Whether it be genuine concern for the American people... grandstanding... or being a pig, one thing is for certain the pork in that bill, like many of its predecessors underscores the business climate in D.C.. Republicans don't quite get it, as they pushed for tax cuts for the rich, business, and limits on state aid. Democrats don't quite get it either. As the agents of change, they have included a few "pet" projects such as the (magnetic train from L.A. to Las Vegas courtesy of Senator Reid from Nevada) that give D.C. the real black eye. We ar ealso reminded that Pork Barrell spending (at least in American hsitory) can be traced back to Henry Clay and John C. Calhoon who created legislation that built Northern Infrastructure at the expense of tariffs on imports. Ironically, we may well look for a replay of this scenario as Congress will eventually need ways to pay for this excessive amount of spending.

A Modest Proposal...
As a taxpayer, and concerned American I would like to make a modest proposal. When bills are put forth in Congress, I would like every member in both the House and Senate to know what they are voting on... Maybe we can start a program called NO CONGRESSMAN LEFT BEHIND... Let's test them on what they are voting for, if they fail the test, then they are not allowed to vote on it. Afterall, if these are the same measures placed on the nation's youth and teachers, then it should also be placed on Congress. No this is what I refer to as high stakes testing. If the Congressman fails the test, then they are not permitted to vote on the legislation(3)!!! Heck, this idea sounds so obnoxious that I may even submit this to my Congress... or even get a petition started... Can you imagine the outcry? Our leaders are voting on bills and don't even know the content of what they are voting on!!! Now that's CRAZY!!!

Speaking of Congress
I always enjoy a bit of grandstanding, and could not help but get a chuckle when CEO Pandit from Citi Bank faced the music on Capitol Hill this week... First it was the aut executives, and now it is the banks CEOs. Mark my word, as this financial catastrophe continues to unravel, we can rest assured that some of the fat cats on Wall Street who received bonuses while their companies were heading for failure will be the next group called up. And pulic outcry toward the fat cats will make last week's hearing look like Sunday School!!! To think the U.S. government got $7 billion dollars in preferred stock, and is on the hook for over $234 billion... IT IS BEAUTIFUL!!! CLICK THIS LINK...

Stock Watch
The market took some interesting turns this week. While most people expected an automatic jump on Treasury Secretary Geithner's proposal, instead the market punished it. Oil started to turn back after a seven day losing streak. Gold continued its run. Stocks in general... and the financials in particular took another beating. That being said, I have one month to exit several positions.

CNK is my only winner, and that one is only haning on to modest gains... My only hope is a sell off on a dividend cut before this option expires... Earnings due 2/26...

MDC is a loser. I was over-zealous on a financial downturn and got caught on this one. While I believe my reasoning to be fundamentally sound, this one coudl still surprise me with a hard drive to the bottom before x-date. The company is holding steady at a -8.24 earning per share... If the debt markets remian tangled, these guys could be goners... Unfortunately, they will no report until April. However, the stock reacted violently last week as analysts did not like the bailout's impact on these characters...

GE call is a loser as well. Thsi was originally intended to be a hedge play against TARP I and the assumption that GE would be able to "lay off" bad debt in a bad bank scenario, and gain more tax payers monies. Right idea... wrong price. I have whip marks on my back from this one...

Try Try Again...
I like shorts on trasportation... BNI may be a play here... PH is a consideration as it is deeply connected to industrial output... ROK could have lost my opportunity here. QID is a consideration now that technology seems to have had a bit of a rally (except for RIMM).

On the long side of things, I believe there is potential for companies that deal with things of real value... raw materials... oil... and natural gas.

We are reminded that this massive stimulus package at best has a 50/50 chance of avoiding a major recession... and could well be nothing more than the beginnings of a safety net to insulate some Americans from dire poverty. We are reminded that bread lines did not form until 1932 during the Great Depression.

In Buffet's book Snowball, Warren pointed out the fact that 100's of companies rise when new technologies arise... i.e. There were hundreds of car companies in the United States... now their are 2.5. There were 100s if not thousands of technology companies in the United States...now there are only a few key players. (Remember the .com bubble). There will be 100s of green energy companies, and one day, there will only be a few main players...and a lot of short candidates once the euphoria dies... Green energies are always an easy sell when oil is high... a much tougher sell if and when the Arabs start giving it away...

1. http://dictionary.reference.com/browse/fear
2. http://en.wikipedia.org/wiki/Truman_Doctrine
3. http://en.wikipedia.org/wiki/No_Child_Left_Behind_Act