More Opinion by The Springboard
Wednesday, November 19, 2008
It is obvious, that for various reasons, America's auto industry is faced with catastrophic losses in volume and has seen revenue all but disappear. Hundreds of thousands of jobs have already been shed, product lines slashed, plants shuttered, and I suspect that even if a loan is extended to the Big Three auto companies, yet more will likely be coming.
This is, without a doubt, due in large part to a terrible failure on the part of these companies top level managements to foresee major shifts in consumer demand, and to have a plan in place to deal with it, such as looking at innovative ways to make plants more capable of producing more than just one type of vehicle. They literally ran their companies into the ground in this case by being too heavily focused on the big trucks and SUVs that have now severely fallen out of favor. The money they are seeking is primarily for the purpose of retooling existing plants to manufacture smaller, more fuel efficient vehicles, as well as increase focus and attention on the research and development of electric and other hybrid technology in cars.
There's a vast majority of people who keep saying to just let the auto companies fail. They've gotten themselves into this mess and they should therefore suffer the consequences.
The truth is, I think, that under normal economic conditions that might be something certainly to consider. It is largely their problem. The logic certainly sits well with my thoughts about free markets. But we are not experiencing normal economic conditions right now. And there's more going on than just simply bad decision making. There's tension and unease and there's still a massive amount of that uncertainty I keep talking about which is holding back any near term hope for even the slightest hint of a recovery. The markets continue to fall, and the credit markets are all but frozen solid. Under these circumstances, allowing the auto companies to outright fail would, in my opinion, have a devastating—and lasting— ripple effect on this economy. And I think, looking at it now, and looking at the sheer millions of jobs that could potentially be lost from not only the automakers, but their suppliers and dealers as well, that the possibility of a deep depression could be more real than I've ever believed it could be before.
We really do need to tread very carefully here. We're coming very close to testing that bottom we had on October 10th with yet another disgusting day in the stock market today. There's a piece of advice someone once gave me that I still find very profound today, and I think applies to this situation rather well. Don't fuck yourself, trying to fuck somebody else.
I think there are a number of people actually enjoying the pain and suffering of the big companies and the top dogs without realizing the real effect it ultimately has on us in the end.
Friday, November 14, 2008
Okay, perhaps that's a bit harsh. Even unfair. But trust me when I say it's also the reality.
The fact is that if you have taken a recent look at your 401k balance, and if you have evaluated any portion of even your personal portfolio of late, you will have found there to be a stark and dismal contrast between what you had a year ago, compared to what you have now. It's a fantastically scary realization indeed.
It seems only logical to most people that when the money runs away, so should you. But not so fast.
Yes, I know. I've talked about this before. I'm beating a dead horse. Allow me to beat it deader.
Even Warren Buffet, the wizard of stock land, more commonly known as The Oracle of Omaha, is losing his behind grandly. If anyone ought to be sweating bullets it most certainly ought to be the richest man in the world.
But instead Warren's buying right now. In fact, he's been mainly cash in his personal holdings for years. The mere fact that he's exchanging his cash for securities in this of all markets, says quite a lot. Buffet is no dummy when it comes to making money. He knows that stocks are terribly cheap right now. He also knows that this dark and dreary market will not last forever. According to history, the best time to buy the market is directly after it reaches its bottom. We may have seen that bottom October 10th.
The consensus seems to be sell, sell, sell. Certainly the massive dips in the Dow attest to that. I strongly feel that if you take a contrarian approach and buy this market you stand to make a killing. In an earlier blog I wrote, "this, the great economic crisis of 2008, will have historically proven to have made the riches of those who dared to proceed contrary to the current sentiment." I stand by that logic.
Some stocks I like right now include Waterstone Financial (WSBF), JPMorgan Chase & Co. (JPM), McDonald's Corp. (MCD), Marcus Corporation (MCS), World Wrestling Entertainment (WWE), Marathon Oil Corp. (MRO), and Fomento Economico Mexicano SAB DE CV (FMX). Twelve months from now I think all of them will be up considerably. And in the interest of full disclosure, I own all of these stocks except for WWE, which I will be buying Monday or Tuesday depending on trading.
Wednesday, November 12, 2008
And I keep thinking back to that statement that my co-worker said to me, who I'll let on now also happens to be the union president at my plant, on the morning of the 5th after it was clear who our new president would be.
With only one up day on the Dow to speak of since the election, that being last week Friday when we jumped 248 points, the Dow is down over 1300 points. I suppose the good news is that we're still higher than October 10th when the Dow was at 7,882. But it does suggest that perhaps what we thought was the bottom of this market may not have been. We have two more trading days left in the week, and while I think we may have perhaps a small rally, it won't be enough to give back what was lost for the week. And it doesn't seem that farfetched to me that we could very likely start off next week back in the 7,000s.
And then there's this auto industry bailout floating around.
I wrote disdainly, at my other blogsite (which often mirrors this one) http://blog.myspace.com/jimbauer601, that I thought it would be against our better interests to bail out the auto industry, despite my thinking also that I do feel it is an important jobs issue. But it's not the entire financial system that's at stake, so in my opinion it defies that free market capitalism idea I feel did not apply in the other case.
That said, I think if the auto industry bailout does happen, and I think it will because there seems to be much support for the idea amongst the democrats in Congress, it may bode well for the markets. But let's face it, the results of the $25 billion "bailout" to retool American automaker plants to be able to make smaller, more fuel efficient cars and thereby save American jobs that may otherwise be lost, won't really have an effect in the real economy for years.
Oh, for the love of God!
It's a guessing game right now, and while no one can tell the direction of the market, one can usually get a gut feeling. But I have to admit I don't know what in the hell the direction is. Maybe a little rally tomorrow? But another pullback on Friday to end the week dismally? Those would be my "guesses."
But I'm still buying the market right now however. And I'm also watching that 7,882 number. I'm looking to see if we are still past the worst of our troubles.
Wednesday, November 5, 2008
Back to the economy.
A guy at work today who is a staunch Obama supporter swore up and down we'd see the Dow Jones Industrial Average hit 10,000 points today as a result of the Obama victory.
I laughed. I entertained the idea. But I laughed. I then softly explained to him that the stock market is about business. It's about capitalism. It's not about socialism. It's not about higher corporate taxes. It's not about redistribution of wealth. It's not about big government and lots and lots of regulation. It's never historically been about democrats.
Today the Dow shed a whopping 486 points to settle at around 9,139. That's right in line with what the market should have done in the event democrats would be in power. The truth is that in order for us to have seen the Dow reach the 10,000 plus point number, we'd have had to have seen John McCain headed for the White House. That obviously did not happen, and neither did the huge rally we would have seen today on Wall Street if it had. If we would have seen a small rally today, it would have been more about certainty in the markets than about any strides the democrats might make with regard to resurrecting the economy.
This is not to say that the economy will, however, not see a rebound. In fact, it's very highly likely that we'll see this happen during president Barack Obama's historic first term in office. The fact is that if all predictions come true, we'll see the end of this bear market in 2010 or 2011. That's not Barack Obama policy working the markets and the economy. That's just the order of business. That's how the cycle works.
Of course Barack will get the credit for the whole thing. He'll be hailed and honored. He'll probably even see himself enter into a second term in office. It's almost inevitable. He doesn't really need to do a whole lot. The cycles will work in his favor. Plus, with control of both the House and the Senate, he won't have much difficulty getting things passed, though his nationalized health care idea is still a huge pipe-dream. We won't see it happen in our lifetimes.
The Dow will be at 10,000 or better soon enough. It didn't happen today. It won't happen tomorrow. In fact, I'd venture to say we won't see 10,000 until mid 2009 at the very earliest. Again, I'm no expert, but I can make observations. Here's why I think so.
We know who the president is going to be. That takes out that important question. That's that certainty I was talking about. But there's much we don't really know yet. The market now has to be concerned about what President Obama is actually going to do now that he is the president. That piece of uncertainty, in my opinion, will hold back any major surge in the Dow for the short term.
In January when he actually takes office we'll get our first real glimpse. We'll see the future through his first 90 days in office. Once we have that better picture, then its off to better times. Then we can start pricing in Obama policy in our stock valuations. And then we can begin the healing process.
Yes, we can.
Let's just not get ahead of ourselves.
Whoever is in office, I of course, will support. After all, this is still indeed the United States of America, and clearly the American people have spoken. Whether or not I agree with the result, that's our system at work and one cannot be angry at that. Now we have only the task of moving forward and getting down to business. There's a big job ahead for this new president.
Thursday, October 30, 2008
You work hard in class and you study even harder. You do everything you can to learn the materials, and as a result you receive an 'A.' But Tommy, who sits right beside you isn't such a good student as you, and he doesn't spend the time nor does he have the inclination to work hard. As a result of his lackluster performance Tommy receives a 'D.' Seeing this, the teacher thinks this is unfair, and so she says to you that you must give some of your grade to Tommy to level the playing field. It's only fair, right? Why should Tommy be disadvantaged? And why wouldn't you be willing to give up some of your higher score? After all, a 'B' or a 'C' is still a passing grade, and you've got all those extra points. You can afford to give them up so that Tommy can have his fair share.
It sounds farfetched, I'll give you that. It's not exactly apples to apples either. But the underlying message is the same. Socialism rewards those who do not deserve to be rewarded, and punishes those who do. For all of its good intention toward fairness or to the so-called leveling of the playing field, it also leaves behind no real incentive to try hard at anything. Theoretically speaking, it stands to reason that if America would have begun its economic course based on socialist ideals rather than on capitalist ones, America would be a very different place indeed. It's why we must think very long and hard about what our priorities are before we decide to elect Barack Obama to the White House. It simply can't be that the majority of Americans feel that Tommy should get a higher score at the expense of the honor student's efforts. But that's exactly what Americans will be saying if Obama gets elected.
Look, I agree that everyone indeed deserves a fair opportunity to achieve their every wish and dream. Under a capitalist system that opportunity does exist. It is a fair playing field. But opportunity is not a handout. You have to work for it. You have to be willing to take on risk. You have to act instead of talk. You have to commit as opposed to simply wanting. You have to have the guts to do whatever it takes rather than complain about what you don't have. Capitalism is a system that holds one accountable to themselves for the success or failure they ultimately attain. At the end of the day the ball is in your court. You do with it what you will.
Okay, time for a quick joke:
This guy goes to the altar one day and says to God, "I've read every page of the Bible and read a verse a day. I go to Church every single Sunday, and sometimes I even go on Wednesday. Lord, I do your bidding always, being kind and helpful and nurturing and spreading your good word. All I ask Lord is that you let me win the lottery."
Suddenly the man is awash in a most powerful, warm light, and he hears a commanding voice speak to him. "You will win the lottery, my son," the voice says. The man knew it was God.
And so he went home and waited. The first drawing went by, then the second. There was a third and then a fourth. But the man did not win the lottery as God had promised him.
So the man returned to the altar, clearly angered and confused. "Lord, I just don't get it. I've done your bidding. And I asked to win the lottery. You told me I would indeed win. Yet, Lord, I have won nothing at all."
Again the man was awash in a most powerful, warm light. The voice said to the man standing at the altar, "Buy a lottery ticket!"
That said, it is clear that even God Himself would not be a socialist. He cannot give you anything you cannot, or will not give to yourself. I'm not going to speak for the Big Guy in the Sky, but I think it's evident that He would be voting for John McCain this November 4th.
We all should consider to do the same or the word achievement will sadly become synonymous with the word charity.
Sunday, October 19, 2008
Of course, no one has the ability to gaze into a crystal ball and foresee the near term, and neither does Warren Buffet. He said in a recent New York Times opinion page article, "I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month—or a year—from now."
That said, he does believe that in the long haul the markets will be substantially higher long before sentiment or the economy improves. Therefore, he says "if you wait for the robins, spring will be over."
Of course he's talking about those investors who are sitting on the sidelines with their cash, waiting for signs that the market is going to get better. He's talking about those guys who are looking for that ever important bottom. But those guys are also only looking at things with the short-term aspect of the economy and stock market in mind. That's bad news, says Buffet, and strongly suggests that the value of cash will depreciate while equities will appreciate, leaving those cash-full investors holding on to less value to throw at the market once that sentiment and economy does improve, essentially doubling their woes by having missed that very important upturn in the market in the first place.
Granted, it's still important to pick fundamentally sound and strong companies. You can't just buy anything here. You have to look for those companies who can weather the storm, and who have simply been beaten down because everyone is taking a beating.
The simple truth is that in five, ten, even twenty years from now, anyone investing in this market today is going to be very happy with the value of their portfolio tomorrow. Warren Buffet sure seems to think this is true, and I think he's absolutely right. Who could possibly argue with the Oracle of Omaha on a point like that?
Historically the best time to invest in the stock market has been when everyone else is running for the door. I wrote about this to some extent in an earlier blog entitled, "Jittery investors give me the cheaps." Stocks are on a blowout clearance the likes of which we have not seen for at least a couple of decades. It's also not going to come around again any time soon. So if you miss it, it's gone.
I firmly believe that history will again repeat itself. And this, the great economic crisis of 2008, will have historically proven to have made the riches of those who dared to proceed contrary to the current sentiment.
Look, the established loyals weren't the people that John McCain had to speak to during the debates. It was that group of undecided voters he needed to latch onto. And on that task I think he simply failed. He was speaking to dedicated republicans and McCain loyalists during the debates and we already know the answers to the question why a John McCain presidency would be better for America! We weren't the ones that needed to be convinced.
This sad truth puts the prospects of a McCain administration in serious jeopardy, and I predict that Obama will win the White House despite it all.
What happens to the economy then is anyone's guess.
Wednesday, October 8, 2008
People are looking for charisma. They want a strong voice and they want a clear message. They see that in Barack Obama, and to a large extent it was exactly those same qualities that sparked the initial interest in Gov. Sarah Palin. She had passion and fire, and most of all you could tell. But she's not running for president.
The sad truth is that McCain has been less than clear in the debates about just exactly what his policies are, and that's the one place where most Americans will decide who they are going to vote for come November 4th. If McCain can't get his message across clearly to the American people during the debates, and if he can't muster up the fire and passion to excite the audience, it could very well be at the risk of the election. Based on what I've seen so far, I think it may actually be too late.
It's not that McCain doesn't have a plan. If you've been following McCain through his campaign websites, or listening to his prepared speeches, the plan is clear. You know what his vision for America is, and I'd argue that McCain's vision is leagues ahead of his opponent's.
But Barack has better delivery, and McCain, at times, seems to have difficulty articulating his ideas. One CNN poll has suggested that viewers of the debate felt that Barack Obama was the more intelligent candidate. Yet another said that John McCain acted more like a typical politician than his opponent, despite his message that "change is coming." These are all things that McCain has to work hard to dispel. Bush has been criticized—I think to a large extent, unfairly—for not being too smart, and certainly his policies have been highly unpopular with the majority of Americans. Many people, although I disagree, have made comparisons between McCain's and Bush's policies. Senator McCain needs very badly to quell Americans fears that he will be just another war mongering, fumbling buffoon in the White House. Not that I'm making any assertions here as to President Bush's time in office, but if you ask most people, that's what they think about the current administration true or not.
What we need to see from John McCain is something more akin to the last five minutes of his speech before the RNC at the convention. We need to see that fire and that passion, and we need to hear that message that will reinvigorate the ideals of the American dream, of patriotism and love for country.
"Stand up!" he said. "Stand up and fight!" That's exactly what McCain needs to say, and it's also what he needs to do to win this election. We know he's got it in him, but frankly the man just seems a little tired.
Friday, October 3, 2008
But it wasn't going to be over until it was over. Just getting there was only half the battle. Now we had to watch it.
Turning on the TV, I was a literal bag of nerves. Now, don't get me wrong here. Of course I think that McCain made the right choice when he picked the Governor of Alaska to be his running mate. Of course I think that while not fully qualified on day one, that she certainly does have the stuff to be the president if suddenly McCain kicks the bucket. Yet still...
It's a nervousness akin to watching President Bush just before taking up the presidential podium. Or like watching Gerald Ford debark an airplane. You know that for the most part your guy is in command. But somewhere in the back drop, an ominous and looming dark shadow prevails. We've been here all too often before.
The trip. That one fatal step that would send the sitting president falling straight onto his ass.
Now, you can bet your good, hard-earned money that Lorne Michaels and Tina Fey were watching this debate with eager anticipation as well. But their nerves were steel. For them there were no doubts at all. The trip was coming. Palin was going to deliver the one-two to the punchline, and there you'd have it.
There goes our meal ticket, baby.
If the world of the debate were more like the world of the Looney Tunes, Michaels and Fey would not see Sarah Palin at all, but rather a talking, buttered slice of bread.
But it never happened. That fatal err. There were no gaffes to speak of. No requests for that lifeline as Fey would joke. No bereft stare. There was nothing at all but concise, direct, and pointed arguments in favor of the McCain-Palin ticket, and a clear sense that Palin really does have something to stifle the echoes between those two ears of hers.
For me there was a sigh of relief. A sense of victory, and of affirmation.
Now I'm just going to have to watch SNL this weekend to see what they've replaced their Sarah Palin jokes with.
Monday, September 29, 2008
That leads me to the current situation we have with the banks and the proposed $700 billion bailout which failed in Congress today. I am fit to be tied with House republicans who cast a "no" vote for this very important bill. Where are their heads at? Their sitting president is calling for it. So is their presidential nominee. I think most Americans, though admittedly there is a hefty opposition, are also calling for it.
But, republicans say. We have to consider free market capitalism here.
Fine. Dandy. Swell, all. But honestly I don't think the idea of free market capitalism really applies here when it's the entire financial system in crisis, which if we don't fix it, could topple the entire US economy and throw us into the worst recession we've ever seen. This is not like Enron or Arthur Anderson at all.
And what about this ridiculous argument that was made by Minority Leader John Boehner (I think that's pronounced boner) that "we could have gotten (the bill) passed today had it not been for...partisan speech that the Speaker gave on the floor of the House?"
So, because Nancy Pelosi happened to have said some things that republicans didn't like about the president's economic policy which, in the democrats opinion, has been a large contributor to the current economic crisis, we just instead prefer to let the economy go into yet more freefall? We all know that socialist democratic urgings in the Congress to sell the American dream to those who, it now appears obvious, could not afford to pay for, was at least one large contributor.
But this is moot. It's an obvious case of he said, she said, and it really doesn't matter right now. Who gives a flying copulation who did what, when, or how? Right now the issue is the shoring up of an economy that is about to implode.
Hey folks. Wise up. We can argue the details later, thank you, and decide after we've gotten this bull by the horns whose heads we may want delivered on plates.
What we need to do now is get a bill passed.
Saturday, September 27, 2008
Instead he talked about earmarks, which are indeed an important issue. No one needs to be told that there is a ton of wasteful use of taxpayers money on Capitol Hill that needs to be stopped.
But what I, and I think the majority of American people, were waiting to hear about were job creation, stabilizing the credit markets, and specific plans to stimulate the beleaguered economy, including how we will deal with foreign oil going forward. We also wanted to hear specific plans McCain or Obama would put to use on their first day in office in January 2009 to bring to a head the worst financial crisis our country has faced in nearly 25 years. Jim Lehrer even asked the candidates to lay out their thoughts and ideas regarding the proposed $700 billion bailout plan. Neither candidate really told us much at all, except to say that we would need bipartisan cooperation to get something done.
Don't get me wrong. Not that I think that Barack Obama has the better plan for the economy. In fact, I'm not so sure I agree entirely with either candidate on that issue.
Personally, I think that there is much chaos and shenanigans going on on Wall Street that needs to be looked at, and while I support giving tax breaks to corporations, I feel that they must be conditional. We need to make sure that those tax breaks we offer are conducted in a manner that ensures job creation and encourages higher wages for the average American, and better access to benefits. Not higher CEO salaries. We need to make language like this clear when we offer the tax incentives. You pay your workers more and we'll give you more. You pay more of a worker's health care benefits, we'll give you more. And on and on.
Where McCain did well, and not surprisingly, was on matters of national security and foreign policy. Both areas I feel McCain is best equipped to lead. In this area he blew the socks off Barack Obama, and very clearly so.
As to who won? I'd have to go with John McCain here. But I do think it was close.
And so, we move on to the next presidential debate which will be on October 7th. Until then we have the vice presidential debate to look forward to, which will take place October 2nd. We can only hope that debate will stand as yet another defining moment for Gov. Palin of Alaska.
Wednesday, September 24, 2008
John McCain announced today that he is suspending his campaign to return to Washington to deal with what he calls an "historic" crisis right now in the US economy. He has requested to postpone the upcoming debate as well, and has called on his democratic opponent, Barack Obama, to also suspend his campaign, and of course Obama will. To not do so would clearly be a mistake.
But even if this, the first of the three scheduled debates is postponed, it will eventually take place. As critical as I think the debates are to each other's campaigns, I doubt either candidate would want to cancel any of them. But McCain is exactly right when he says that the country's now faltering economy should be front and center in Washington.
Of course, there are going to be those naysayers who will call upon McCain's decision as "one to sway the voters." It's certainly a bold decision to make. Of that there is no doubt. Especially at a time when just recently Obama was again showing a bit of a lead over McCain in the polls. This could indeed give McCain's campaign a bit of a boost. I'd be naive to believe that there couldn't be the possibility of some truth to that way of thinking. After all, there are still clearly a number of voters out there who are undecided right now. That means that the closer we get to the November election, the more important it becomes for the two candidates to reign them in. Bold moves by candidates like this one are certainly one way to do that, and I can certainly appreciate this dynamic.
Whatever the case, I see this action to be more simply another shining example of John McCain's amazing character. It also speaks to his real love of country. He speaks the truth when he says to the American people that the country comes first. To him it's not just a fancy campaign slogan. It's something to lead the nation by.
Early on in his campaign he stated that he would vote his heart and his conscience before he would vote his party. And I believe him. In his eyes, the needs of the country far outweigh the needs of any partisan politic, and the fact that he understands this speaks volumes for the kind of president John McCain stands to be. It should also help us to see more clearly exactly why he should be our next president.
The debates will come, and I can wait. In the meantime there's work to be done. At least in the short term it's encouraging to know that there is even the faintest smidgen of hope, that there is someone on Capitol Hill who can sideline his own needs, and actually do the work that was promised to be done for the American people.
That said, I still think this market ultimately will provide an amazing and, for many of us unseen before, opportunity to make wild profits once things quiet down a little bit. Historically the best times to buy stocks were after the infamous crash of 1929, the crash in 1987, and after the September 11, 2001 terrorist attacks on the Twin Towers and the Pentagon. Markets inevitably must go through cycles. Reality has to, at times, hit the fan. Once that's over, though, there's definite money to be made.
Of course, it's anyone's guess exactly when we'll see the bottom, or when things may begin to turn around. I think you can still buy some good stocks in this market if you have a long term investment goal. But considering the market is going to go lower, it may also be a good idea to wait it out a little bit. When the market starts to stabalize and we get a couple of good solid weeks with positive gains in the Dow 30, then we might be able to shop around and take advantage of some good deals.
In the short term it will be interesting to see what impact Paulson's and the Fed's plan with regard to the nearly $1 trillion bank bailout, and its temporary ban on short selling certain stocks, will have on getting the freefalling market supplied with a parachute.
Thursday, September 18, 2008
It doesn't take a rocket scientist to conclude that there was clearly far too much access to credit, and the only criteria for getting it was to have a pulse. We'll not even go into the shenanigans that went on behind the scenes at the world's biggest banks with regard to mortgage backed securities and layers and layers of margining.
The simple truth about credit is that at some point someone has to pay it back. It's a loan. It's not really the borrower's money. It therefore shouldn't be what drives consumerism. That should come from good wages provided from gainful employment. If our economy was as strong as we'd have ourselves believe (I thought it was stronger too as earlier blogs would indicate, but I've now been forced to reconsider), then consumerism would have been more a product of people having real money in their pockets to spend, from real jobs. Not from credit. In addition, they'd have had real savings that could be used to bail themselves out of a problem if something went bad. Unfortunately that is not the case at all, and the proverbial shit has literally hit the fan.
The fact is that wages have been stagnant in this country for a very long time. Companies have been allowed to ship work overseas and good, high paying industrial jobs which were the backbone of the middle class have all but gone. The ones that are still here teeter on the brink of extinction.
I think that's thanks to credit. The whole idea of credit seems to have effectively replaced the greater need for income. And when everyone can get credit, and get things with it, it creates the perception, rather than the reality, that people have money to spend, and therefore everything is going well. Right?
We've been misled to believe that money is available no matter what, and that we can therefore borrow to our heart's content, heedless of whether or not our incomes would ultimately support that. That kind of thinking has led us down a very precarious path, and we're now feeling the harsh reality of that. I don't get why the Fed doesn't get that as well.
Who needed to have a good job? So long as we could have a credit card in our wallets we could rule the world. Even the 40-something working the french fry vat at the local McDonald's restaurant carried a Platinum Visa in his wallet.
And let's not forget the other side of the coin. The CEOs, who continue to rape the average American worker of their wages and benefits while cashing in their own paychecks worth millions of dollars in salaries and bonuses - even while their own companies and finances go down the tubes. To them, job losses were okay and paying people less was okay as well. The money flow was still in a nice groove despite it all.
What the government powers-that-be need to do to in order for this economy to get rolling again, is to take a serious look at jobs. Jobs are, in my opinion, at the heart of it all. In order for people to obtain things to drive consumerism that has any real economic value, people need money. Good paying jobs provide that. Not banks and plastic cards. We need to restore in American's a real sense of security that their families, their lifestyles, and that their futures are safe. We need to foster a sense in American companies and the CEOs who head them, that capitalism only works if everyone, not just a select few, have a real chance to compete and achieve a gain. Jobs are what are important to the economy. We have to create them, and we must protect them.
As it stands right now, I don't think Ben Bernanke gets that. He therefore should resign. As for the rest of the Fed, it should rightly yank it's head from its ass-crack as well, or we are in jeopardy of a severe, and historic economic disaster.
Saturday, September 13, 2008
General Motors Corp. stock is down a staggering 47% this year so far. Ford's stock is down 27%.
Part of what these funds would allow the two companies to do would be to retool existing plants, which have primarily been used to build larger SUVs and sport-utility trucks which have fallen out of favor, in order to better compete with new demand for more fuel efficient cars. Right now, Japanese automakers Toyota Motor Corp. and Honda Motor Co. dominate this market.
Of course, all kinds of arguments can be made that US automakers made some poor decisions which led, ultimately, to myriad financial problems, and governments should not be involved in helping to buoy companies that get it wrong. For the most part that's true, and certainly the airline industry, notorious for receiving federal help, is a glaring example of abuse of the system. But the US auto industry, perhaps one of the last of the strong wage jobs in America, is important to the economy. And in a time when many thousands of American workers continue to lose jobs as the economy yet wheezes more, someone has to step up and do something to curb the damage.
Right now, both presidential candidates support this. They see the very real potential for major bankruptcies if the top two US automakers cannot fix their problems, and soon. Americans should be on board with this plan as well. It's good for jobs. It's good for the economy. It's good for the markets.
Sunday, August 24, 2008
The car had been speeding along W. Morgan Avenue around 67th St. when the driver hit a curb, lost control and crashed into a tree. They rolled at least three times according to police before finally coming to rest inches before the flagpole my grandfather has had in his front yard for years. On impact all of the occupants were ejected from the vehicle. One of them, an 18-year old, was killed instantly. Clearly none of them had seat belts on, and there's a strong indication as well that alcohol may have been a contributing factor, as beer cans were scattered all around the scene of the crash.
What concerns me is the reckless abandon with which teens continue to pursue their lives. Tragedies like this are a dime a dozen, and this is a story that has been told time and time again. Things like this do not have to happen.
I'm quite aware that kids are going to be kids, and I think we can all certainly relate to the feeling of invincibility that goes along with being young. Yet that still doesn't make it okay. It doesn't take away from the pain the mother of that 18-year old that died will feel for the rest of her life, knowing that her son will not be there anymore.
Hopefully this tragic moment serves as a reminder and saves a couple extra lives. Kids are going to at least think about it. Talk about it. Some will give a second thought before drinking and driving, or perhaps even speeding recklessly. And maybe they'll also see the importance of wearing a seat belt. Perhaps the 18-year old would have survived had he been wearing one at the time of the crash.
This story serves as a wake up call. Unfortunately though, the effect will only be temporary, and therein lies the real tragedy. This story will undoubtedly be told again.
Wednesday, August 13, 2008
Still, I think this stock has plenty of upside, and today's drop is simply a short-term setback which also happens to provide an interesting opportunity to add more shares for the patient investor. As far as I can tell, the fundamentals are still strong and today's drop is clearly a severe overreaction on the part of nervous investors in a market that still incites a jitter or two here and there.
In response to an email I sent off to HQ Sustainable's CEO Norbert Sporns, he told me that the company is experiencing a "temporary speed-bump," and that the company is in great shape going forward. "We have improved our buyer base and expanded our fish by-product sales network," said Sporn. According to Sporns this will result in additional sales and profitability. "This quarters results were affected by rapidly rising costs which rose faster than we could pass them along."
It's not an unfamiliar story lately. And the fact that HQS does its farming in Hainan, China to export to the US, the weaker dollar may have had an impact on profits. Going forward, a strengthening dollar will also help to give them a little boost. That, and the fact that farm-raised fish continues to be of interest to consumers will help HQS to improve its margins and return to profitability.
I'd wait until HQS reaches around $10 a share again before buying any more, though.
Thursday, August 7, 2008
But before we get too excited, I'm not so sure we're quite out of the woods yet. As I see it, oil could simply be taking a little breather before it rockets back up for a little while to then finally take it's fatal plunge back into the $100 a barrel territory. Will it see the $150 or $160 range we all thought it might? Maybe not. In fact, probably not. The recent price hike in oil has been surprisingly effective in actually changing peoples habits. We've reduced driving miles by the billions of miles, and we've seen record declines in interest for gas-guzzling trucks and SUVs. It's by no means an overstatement to say that many of these large vehicles are rottting where they lay on the lots, and in fact just the other day I drove past a sign along the highway offering Dodge Ram's for 40% off. Even at these giveaway prices SUVs and large trucks are far from flying off the lots. So, oil could probably jettison up to around $135-$140 a barrel before we head back down if we see another run up in the price. Of course I'm no expert and I've clearly stated this before. But I do consider myself to be obervant.
What stocks am I buying right now? I'm still a buyer of HQ Sustainable Maritime Industries (HQS) which operates in Hainan, China. They mainly deal in farm-raised fish and distribute both under their own brands and co-pack for other companies as well. With people having a growing interest in the benefits of Omega-3, and with many wild caught fish being riddled with contaminants, such as mercury, HQS has lots of wiggle-room to grow its business. I also like Marcus Corporation (MCS). I'm banking on the premise that in bad economic times people will escape to the movies. Marcus also manages a number of resorts which I think stand to benefit when the economy eventually rebounds.
Western Union (WU) is one to watch as well, and while I haven't bought yet I'm thinking about it. It's currently up 13% since I started watching it back in July and I think it's a $32 stock. I'm waiting for a slight pullback and then I'll start buying.
Target Corporation (TGT) also continues to interest me (though I do not currently own this stock). I think they will have a strong position going forward when the economy does finally break free from its current circumstance as people who have been strapped for cash, and who have been patronizing the discount stores like Dollar Tree (DLTR), Big Lots (BIG), and of course the behemoth, Wal-Mart Stores (WMT), in order to stretch their wheezing dollars, are going to want to treat themselves. Target Corporation enjoys a sort of middle ground between the low-end discount stores and the higer-end like Kohl's (KSS) and Boston Store (BONT). I'll wait to start buying into this one when oil gets closer to $100.
It's my opinion that we have seen the market bottom, right about the time we teetered around the 10,000 territory on the Dow Jones, and so I am a buyer right now, even if we may still have some pullbacks such as today's 200 point drop. The Dow will likely still see shakiness, especially if oil does start to work its way back up, but I don't think we'll see the numbers drop below 11,000 points before the end of the year. A couple of key points here is whether the Fed can keep inflation at bay and whether the credit markets can see a clear path to recovery. Housing prices need to stabalize as well, and in fact I think we may have seen a bottom there also.
Again I stress patience. The best is yet to come.
Saturday, July 26, 2008
Now this is by no means to suggest that I've never taken to considering similar tactics be employed on a flawed piece of equipment in my time. I can remember trying to start my little Toro snow blower in the middle of a blizzard, priming and pulling the cord, priming and pulling the cord, all to no avail, until finally I threw it across the garage screaming "Well, what the hell good is it?" All I got out of it was a blister and a terse look from my wife.
"Well," she said, shaking her head in disbelief. "Now that accomplished a lot."
Yeah, but it did feel good nonetheless, even if the wife was right. Indeed, it accomplished nothing at all.
Welendowski was trying to start his mower, and when it would not start, went into the house, brought out a shotgun, and fired a round into it. Someone from inside the Welendowski's home called police and reported the incident.
According to the complaint, Welendowski told police that "I can do that, it's my lawn mower and my yard so I can shoot it if I want." The report also says he had been drinking at the time.
Now the man faces up to an $11,000 fine and six years and three months in prison if convicted of the charges of felony possession of a short-barrelled shotgun or rifle and misdemeanor disorderly conduct while armed.
Saturday, July 12, 2008
"You haven't seen Barack Obama campaign with (Jesse) Jackson or with Al Sharpton because he knows that the victimization thing is over...white Americans are saying, and rightly so. I mean, let's be honest here. We're white. We don't know what the black experience is. But I'm tired of hearing about 'I left my kids because my grandfather got worked over in Mississippi.' It ain't going to cut it anymore. You leave your kids you're scum.
"I don't care what happened down the road. Any human being. Any adult. Any man knows when you abandon children you're wrong. There's no excuse. And to try to peddle 'it's the government's fault, it's society's fault,' that would be death if Barack Obama ever got involved with any of that."
According to the statistics, which O'Reilly often cites, 7 out of 10 of all black children who are born in this country are abandoned by their fathers. For whites that figure is more like 3 out of every 10. Of course, any child who is abandoned by their father is not a good thing, white or black. But the numbers speak for themselves, here, that this is an occurrence which is very much more prevalent within the black community.
After the recent slip by Jesse Jackson in commenting, unaware that his mic was on and cameras were rolling preparing for a television interview, that he wanted to cut off Barack Obama's nuts for what he calls "talking down to black people," this issue is front and center once again. Jackson was referring to a speech that Barack Obama made recently, where he called for black fathers to take responsibility for their children and be active, positive role models in their lives. What's so wrong about that?
But Jackson blames the government and society for the woes of the black community and has been making this argument for years. So has Al Sharpton. Barack's comments effectively take the burden of responsibility off the shoulder's of the government and society and puts it right back into the laps of black America. In the eyes of the Jesse Jackson's and Al Sharpton's of the world, blacks are but helpless victims because of wrongs of the past, and are therefore predisposed to fail on a number of levels. Government policy should force society to right this.
Of course, I think this is a load of crap and I've said so before. Failure is a choice we make for ourselves. It takes effort to overcome the obstacles presented to us in our lives. While I don't support Barack's run for president, I find it refreshing that his platform doesn't rely on this I'm a victim mentality, and he's not (at least it would seem) afraid to point out that a large part of the black community's woes has been, to some extent, self-afflicted. I think he understands that the government cannot solve all of the problems facing black America, nor that it should try.
In my view, the government cannot enforce the virtues of personal responsibility. But strong leadership can certainly encourage it. I think that if Barack does, in fact, become our next president, that at least on this issue he does present that kind of leadership. Encouraging blacks to step up to the plate and take responsibility for their own lives and their own destiny would be an historical legacy for Barack Obama and the books, and would place his presidency right in step with one of our past greats, Abraham Lincoln.
One can only hope that an Obama administration makes this the primary focus as opposed to say, socialized health care, higher taxes, bigger government...ahem. 'Nuff said.
Tuesday, July 8, 2008
I still stand by my thought that oil will go yet higher before we see any real relief. There's just too much speculation going on, and the entire economy is still contracting. Unemployment continues to rise and though the dollar recently went higher, it's still not done with it's wheezing either. Last week I bought more shares of a stock I like, HQ Sustainable Maritime Industries (HQS), which I've been buying for a couple of months now and whose shares I think will be worth around $19 a share in the next 12-14 months. I've been buying in around an average of $13 a share. Essentially they deal in fish farms, primarily in Hainan, China, and they have extensive operations to include co-packing for companies that have distribution in places like Sam's Club and other large outlets. With mercury and other contaminants becoming a growing problem for non-farm-raised fish, demand for their products are good, and I see an opportunity in this current market to make some money there.
As far as my rebound picks I'm still looking at Target Corp. (TGT) and Visa Inc. (V). Right now Wal-Mart is doing very well as they still offer the best value for the money, and in this economy with budgets being squeezed to the hilt that's a very important thing. Wal-Mart wouldn't be a bad play for the next few months, but growth is an issue there. But I see Target as being the middle-guy. They are redesigning stores, upgrading product lines, and I think that when the economy rebounds people will see Target as a bit of a "step-up" from Wal-Mart. They should see some nice gains in traffic when the smoke clears. And of course, Visa stands to benefit from the increase in transactions people will make from the fees it charges it's terminal users. I'd hold off on buying either one until we see a real shift in oil prices which will be one main catalyst, in my opinion, for a rebound in the economy.
Thursday, June 26, 2008
I think we will have a short rally midweek next week to gain back around 150-225 points, probably hold on to most of that to next Friday, but the week following we're going to see more losses. That said, I'm going to make the call right here that next week is still a sit it out and wait period. I wouldn't be buying this market at all for the moment. The market is going lower.
Friday, June 20, 2008
A sickening feeling grows in my stomach as I sift through my portfolio and assess the damage. Even for me, after touting loudly about the rebound I think is to come, and making my case for buying into this market because of it, I found myself today second-guessing. Should I be in this market? Should I be buying? Is it going to come back? What in the hell do I do now?
For all intents and purposes it is indeed a tricky question. Of course it is going to come back. It's just a question of when. Right now the markets are caught up in some very uncertain times and speculation is wild. Even the word capitulation came up today, a scary word indeed for the investment markets because it's sort of like saying the markets have given up hope. It says the markets are surrendering to the trend, and that's an ugly prospect. It means the downturn in the market could last longer than originally thought and signals more problems weighing on stocks and the economy as a whole.
Maybe sitting idle for a week or so is in order. It's clearer now that the market has not yet bottomed, and I think sitting idle just a bit to see what the market is going to do is a good idea. Don't get me wrong. If you think like I do that the rebound is coming and you have the time to wait, then stocks are still relatively cheap for the Main Streeter who has the longer term in mind. That said, I don't think anyone is going to really miss out any deals by waiting a bit.
For the moment I'm holding.
Tuesday, June 17, 2008
It's no surprise that these guys who work on Wall Street are probably the most nervous bunch of people you may ever meet. But this is actually a good thing. At least in my mind.
For a large percentage of people such as you and I, commonly referred to as Main Streeters, jittery nervous Wall Streeters often times play right into our hands. I'm bearing in mind that most Wall Streeters are after the knockout stock play. They're looking for that one-two punch that will lead them to a quick profit-or they are looking for the door hoping to preserve as much capital as possible after the old you-know-what hits the fan. They trade in large volume and the slightest tick up or down can be Heaven or sheer disaster. There can be massive swings in the price of a stock because of this.
This is more true in the current market when few stocks are being valued based on their fundamentals. You know, those things you and I are interested in. Things like, what is the long term strength of the company? What do its future earnings look like? Is it a company that can do well in an up or down market? Moreover, what is the company's intrinsic value?
Looking at stocks and the market in this way reveals that there are a great many, solid companies that are getting hammered for no good reason other than the fact that everyone is getting hammered. Don't get me wrong. Some stocks are being fairly dragged through the muck, and it is more important than ever before to identify who they are and avoid them. But for the one's that aren't, bargains abound for the patient investor. Quite literally, the stock market is on clearance and I think you should be buying the market right now rather than just sitting on the sidelines or selling the entire lot. If it's a good stock, it's a good stock in any market, and downturns simply make it cheaper to create a new position or add shares to an existing one.
What's more, I think you should be betting on the rebound that will come, even if the real benefits may not appear for another 24 months or so. That means I want to keep it in mind to buy the stocks of companies whose products and services people will buy when they have money to blow again. Rebound companies of particular interest to me right now are Target Corporation (TGT), Marcus Corporation (MCS), and Visa Inc. (V). Apple Inc. (AAPL) tends to be a favorite of mine still as well. Even at nearly $200 a share I think this stock is a bargain. Other rebound plays include automobiles, electronics, restaurants, casinos and resorts.
As for oil, you know I'm steering clear of that. Perhaps a short play may be in order in this sector. But even then I'd still wait to make that play until after the price per barrell goes above $160-$170. Who'd be my first pick for a short candidate? Exxon Mobil (XOM), of course. Yeah, the bigger they are the harder they'll fall. Plus, XOM in particular was the one getting all the bad press.
Friday, June 6, 2008
Now is where the fun begins. Now is where we finally will get to see what the two left standing are made of. Now is where real issues among viable candidates can be hashed out, analyzed, and ultimately put into the basket when considering who will best lead our country forward. I'm really looking forward to this. This is going to be the politics fans Super Bowl of Super Bowls.
Next up, the candidates will pick their running mates. Hmm, let's see. Do I dare make a prediction? Seems the dems want Barack to bring Hillary aboard, but its any one's guess if he'll go for that. As for me, on the republican side I'd be in love with a McCain and Huckabee ticket.
Thursday, May 29, 2008
But here's my problem with that kind of thinking. It implies that people who do underhanded and bad things are free to continue on with their underhanded dealings so long as no one, like say a mortgage loan inspector, will be at the closing table to catch them in the act. It implies that bad contracts are going to be wholly binding heedless of how ridiculous or clearly fuzzy the terms, and that if someone comes before a lender that they determine to be gullible or otherwise uneducated or unprotected, then they (the lenders) have every right to take the buyer for the ride of their life.
We need not be protected by paying someone a fee. That's what we have lawmakers for. That is what we elect our officials to do. We put them in office to secure our interests as Americans. We want them to set forth laws that help to make our lives better. And yes, to provide us some form of protection from things like obvious predatory lending practices. After all this recent turmoil in the credit markets that's exactly what our legislators in the House and Senate should be doing right this very moment; focusing on the problems that got us in this mess and closing the loopholes which made it possible for predatory lending practices to occur at all.
Mortgage documents should be clear, concise and understandable. They must be fair and correct. To be anything less should put the lender, as opposed to the borrower, at risk. At some point people have got to become less agreeable to adding costs to their homeownership experience and stand up and say, if you intentionally try and screw me over and I can ultimately prove it, you are going to be held accountable for it. Enough said. This ridiculous extra inspection will only stick around if we, the consumer, is willing to bear it. I see no reasonable need for it. The law should be clear as well. It should be the only protection we need.
If the contract plays foul it should be moot. If that were the law and the lender was held to that, so would the need for an additional inspection, and additional cost, be moot.
Thursday, May 22, 2008
The guy, whose name will remain anonymous, ordered a conversion kit through some website he found that lets him convert his gas powered Chevy S-10 pickup truck into an electric vehicle. Don't ask me how it all works, I swear the man was speaking Greek to me through most of the conversation. But he's got it all put together, after some weeks (he's a pretty handy guy and working on cars is his hobby), and now he's just waiting on the charger so he can plug it in and rejuice, and then he wants to run some tests to determine his range and whittle down what he thinks may be some inflated claims by the manufacturer. More power to him, pardon the pun. The kit cost him $10,000.
Of course, I too believe that oil still has some upside left in it. In fact, I think it has a lot of upside left in it, and I strongly believe we will indeed see oil reach the $150 barrel mark and beyond. Let's not forget that summer isn't officially here yet, and while gasoline sales have been flat for the first time in say, the last thirty years or so, people are still going to have to at least get their behinds to work to pay for all the gas-related-inflation that has affected the most basic of everyday items. We're not out of the woods yet.
In an earlier blog, "Oil's well, but be weary," May 14, I made the prediction that I thought oil would come down. I still believe that. To me oil has all the ominous signs that it is an an inflated, overpriced market. You've literally got people breaking their necks, scrambling, trying to scoop up as many futures contracts on the stuff as they can. Wink an eye or fart in the wind the wrong way and the oil speculators all but lose their minds. It's all this hype that I believe will eventually, inevitably, kill the cash cow oil has been. We're a long way from gas under $3 a gallon, but I don't think it's impossible either. It just depends on how big the crash is when it happens. Again, it will happen.
My bet is that oil will go to under $100 a barrel in as little as 18 months. But, it has got to get ugly crazy before reality has a chance to really hit the fan. I don't think it has yet. I think we're still reeling in shock.
There is no doubt, though, that in the meantime it's going to be one hell of a ride. I hope it all works out for my buddy at work. If I'm wrong, I may need to carpool with him.
Monday, May 19, 2008
Those words come from a series of chuckle-rendering television commercials selling insurance, but I'm sure that the marketing gurus behind the catchy phrase weren't the ones who first coined it. Perhaps it is merely a more conservative, modern version of the old "shit happens" idiom. Either way, the very statement those five words make is wholly profound.
Life really does come at you fast. In a flash, everything changes. And more times than not, they are changes that you weren't necessarily looking for. They are changes initiated by things that seemingly come out of nowhere and just sort of take you by surprise. They are sometimes the best things to happen to us in our lives. Grounding things.
As I write this my wife, Dawn, and I are just now entering our first year of marriage together, and while we are far from strangers to one another (we've been together for going on three years now), there is still much we are learning about who we are. As anyone familiar with this path can surely attest, being married to someone is vastly different than simply being with someone at varying times throughout the weeks and days. To be sure, no one is nearly as refined in real life as in the impression-setting moments during the dating process. Marriage and being together all the time has a way of revealing some things. My wife has determined that in real life I'm a pig, for example, and that by the evidence of the food crumbs that regularly surround my plate at the dinner table, a fork appears to have been a tool I only recently learned how to use.
Hey, I am her knight in shining armor. She even told me so once or twice. And she did marry me. She is my princess, and of course I did marry her. But eventually the armor must come off to reveal the man inside. And for the record, a princess must eventually, too, hang up her tiara. At the end of the day we are, of course, people. We all have our irks and quirks. Some of them will excite and intrigue us. Some of them will make us melt to mush. And others...well, let's just say this is a tale that has been told more than once.
The long and short of it is that it's an adventure. A journey. And for better or for worse I'm having the time of my life. Change is good. Profound change is good. We've moved from the duplex I own with my mother and bought a new house just down the street. We've had the misfortune to endure the deep emotional pain of a miscarriage, though on the bright side we had a glimmer of the special excitement and joy the prospect of a child will one day add to our lives. We've made important discoveries about each other, and we've grown ever closer, and ever more in love each day.
A year is a short time, relatively speaking. Yet, even though it's only been a short time, in an odd sort of way there is this surreal sense that it has always been this way. That we have always been this way. Whenever I hold my wife in my arms and feel her warm caress, whenever I kiss her tender lips, I feel like this is a place that I've known forever. I feel like this is a place that I never want to leave. It feels good and it feels right.
It's been one year ago, today that my wife and I were married. Life comes at you fast, and I'm ready for whatever comes our way in the next year. If it's anything like the past year, I can't wait.
Wednesday, May 14, 2008
In my opinion, a lot.
As I see it, right now there's just too much excitement in the oil markets, and that makes me a bit nervous. There's also a ton of hype. It's a market rife with scare tactics galore. The price of oil rockets upward at even the slightest hint of bad news. Quite literally oil is on fire, and it's starting to get a bit carried away.
Don't get me wrong, the run up is not quite over yet. There's still an interesting amount of upside in the oil sector, and therefore an opportunity to continue to profit from all the hoopla. In no way am I advocating throwing in the towel altogether on this black gold. That would just be plain silly. But I am saying I don't think you should bet too heavily on it either.
It's sort of reminiscent of that great era of the Internet stocks, and the technology boom that rode on its wings with companies like CISCO, AOL and Digital Island (just to name a few) raking it in. These companies were all the gab, and they were making their investors very rich, very quick. The most recent housing boom had similar effects, and now the whole industry surrounding real estate is left to scratch their heads in the aftermath and wonder starry-eyed about what went wrong.
Like all things that go up, they eventually must come down. It's just the nature of things, and oil is no exception. It will fall. And why shouldn't we think it will?
Of course, at this point it's anyone's guess exactly when this certain bust in the oil markets will occur. No one can predict the future. But one can see the signs of a correction looming the more outrageous the market gets. It's getting pretty outrageous now.
So, in the meantime I'm still buying into oil. But I'm keeping a watchful eye on those flames. I think you'd be right to as well.
Wednesday, May 7, 2008
The simple truth is that people do not have the disposable cash they had, and so they're holding back on non-essential spending. In a consumer driven economy such as ours that's not a good thing. Even as the stimulus checks begin to make their way into the hands of consumers, many experts agree that much of this money will go to help pay for gas and food, and therefore will not have as profound an impact on the economy as our faithful politicians intended. The wait for the recovery is on.
As well, when the official report comes out in a couple of months, I think the data will clearly show that the economy is in recession-a decline in GDP for two or more consecutive quarters. So, how are you going to make money out of this market?
I'm not going to tell you my best stock pick for the week, or provide any financial advice-I'm not a qualified financial advisor and I'm certainly no fancy Wall Street analyst (or even Donald Trump as someone suggested to me recently). I live in America's heartland and I work for a living in a production facility. But I can make an observation, and I'll give my best effort to convey why I think it's one worth paying attention to.
Look, the bad news is that the economy has taken a fall. But the good news is that the economy is resilient, and it is going to come back. It always does. So, if you want to make money in these current market conditions you want to position yourself well to take advantage of this certain rebound by buying the stocks of companies whose products people will buy when they've got money to blow again. And yes, people will have money to blow again.
Before you call me a nutcase, consider the sentiment of Wall Street investors, and frankly the nation as a whole, during the worst economic time our country has ever known. The Great Depression. While many people chose to jump off the tallest building they could find, others chose stocks wisely and put their money to work, and for many of them the payoff was extraordinary. They bet on the idea that things would get better. The economy would rebound. And it did.
Throughout history the stock market, with all of its turmoil, has outperformed every other single market hands down.
We're not at depression levels, but we are presented with an extraordinary opportunity to buy depressed stocks and take advantage of giveaway prices. If you're not buying stocks now, you're missing the boat.
So where do you put those investment dollars? What companies have been unfairly knocked around? There's a ton of them. Good, solid companies who have seen their stocks tumble for no other good reason but that the whole market has tumbled.
Again I'm not going to give you specifics here. But take a moment to think about where you'd spend your disposable dollars once the economy rebounds and money is flowing freely again. What will you splurge on? A new car? A new TV? A vacation? Dinners out? That new boat you've been wanting?
Those are the companies you buy today and cash in 12-18 months from now, and those are the companies you can be assured I'm placing my bets on.
Tuesday, April 29, 2008
The fact that Barack did not do this much sooner still causes some concern for me. To me, it almost seems as though Barack has only now finally come to the conclusion that his association with Wright could potentially damage his nomination by the democratic party for the presidency. I'm still not exactly convinced that this "new" Rev. Wright is a surprise to Barack.
Nonetheless, Barack wants to be president, and he has to make a political move here. He has to secure his democratic nomination. To do that, he must send a clear message to his fellow democrats that he has the ability to maintain focus and challenge McCain on the issues. To be sure, without an absolute, irrefutable disassociation of Rev. Wright by Barack Obama, the entire affair with the insolent reverend would likely have taken center stage in his fight against McCain, and ultimately would have proved to be his undoing.
Democrats know that however popular Barack may be, or even however more popular he may be than Hillary, Barack could not ultimately defeat McCain and win the White House if there was even the slight indication or suggestion that he may secretly share some of the views of his former pastor. He knows that as well.
So for that, Barack may have sealed the deal for his historic nomination. Now only time will tell where we go from here. At least we can put the whole Rev. Wright debacle to bed...for a little while.
Tuesday, April 22, 2008
Okay, so I did say that Mr. Kane is a black guy here in Milwaukee. Allow me to explain the significance of that one minor detail.
Because even though his column this week, "Black or white, we're watching
Pennsylvania," (which I enjoyed reading, I might add) really had more to do with the two democratic candidates and the importance of Pennsylvania in determining who will ultimately win the still undetermined democratic nomination, than to do with color or Barack Obama and the much talked about Reverend Jeremiah Wright debacle, he no less mentioned it. Disturbingly, he gave it a pass.
At least in so many words. Or so, that's how I interpreted it.
Kane recalled a conversation he had very recently with his barber in which the barber told Kane that he thought Obama had no chance at all to win the election.
"You really think white folks will vote for a black guy?" his barber put to him.
Kane says this conversation happened to be weeks after the whole Jeremiah Wright fiasco hit the fan, which, as Kane puts it, "appeared to derail any chances the Illinois senator had of persuading white America to embrace a black guy who went to the kind of church many black people attend to hear black preachers talk the way black folks talk when white folks aren't around."
That's where my trouble starts. Right when he gets to the part to hear black preachers talk the way black folks talk when white folks aren't around.
I won't suggest for a minute that I'm naive enough to believe that many people, when behind closed doors, and in the company of people of their own race, religion, sex or otherwise, will not be more apt to say things in said company that they may also not so eagerly say elsewhere. Like in public forums with cameras on and reporters in the wait. But in no way does that make it right.
Mr. Kane is essentially giving Jeremiah Wright a pass to incite hate and anger in a people. In a culture. He seems to say, hey, we're all racists when we go home at night, so what's the big deal? Get over it already.
Can this guy really be serious? How would the black folks have felt if John McCain had been a member of the Ku Klux Klan? What if white folks would have said it's not that bad and actually most white people do feel this way about blacks? After all, many white Americans are anti-black, right? John McCain supporters could easily have said McCain's just listening to white people talk the way white people talk when black people aren't around. Or stepping away from race a bit, what if McCain were to make a distasteful comment in reference to Mrs. Clinton's breasts in a debate? He's just saying what many men say when there aren't any women around, right? No harm, no foul.
The Ku Klux Klan and Rev. Wright's church are a bit different, I'll concede. The Ku Klux Klan has a terrible history and there are very few white folks I know who subscribe to the violent and misguided-and frankly insane-beliefs of these cuckoos. I certainly count myself in this group of white people who does not support any supremacist group, especially the infamous KKK. And I am in no way suggesting that Rev. Wright would advocate violence toward white people to get his point across. So there are notable differences with my argument. It's not exactly apples to apples.
But hate speech is hate speech, and regardless of whether people talk about things like this behind closed doors or not makes no difference. It in no way makes it right. It doesn't make it okay. Nor does the fact that it is coming from a black guy make it okay just because this is the way, as Kane puts it, most black people talk, and as his comment suggests, feel.
Black or white, America is watching too. I'd like to believe that few of us want to live in a world where racism is acceptable under any circumstance, irregardless of the perspective it is coming from.
Saturday, April 19, 2008
Trade will undoubtedly be a hot topic in the upcoming presidential debates between McCain and the democratic nominee, and each side will have to present their case well in order to capture the vote of a growing segment of displaced and unemployed American workers who firmly believe that their jobs were compromised as a result of trade agreements and cheap overseas labor. McCain may have to do more to convince America that his ideas regarding trade will have a positive impact on the economy, and infact provide jobs and improve opportunities for work, as he is a strong proponent of free trade.
The event was hosted by Bucyrus International, a South Milwaukee based mining equipment manufacturing company, during which Bucyrus CEO Tim Sullivan and McCain discussed economic development and Sullivan's belief that renegotiating trade agreements like NAFTA would be "absolutely crazy" for the United States to consider. Both democratic candidates have talked about having another look at NAFTA in particular. Sullivan went on to say that without the trade agreements Bucyrus would have little reason to consider continuing expansions in the Milwaukee area, partly because much of its business comes from abroad, and the agreements help it to be profitable.
Bucyrus has already spent tens of millions of dollars and doubled its workforce after announcing a $150 million expansion plan more than three years ago. "If we don't have free trade," Sullivan told McCain, "the decision that we made to stay here in South Milwaukee and triple the capacity of this plant is lost."
Trade is, by all accounts, a complicated issue, and not all aspects of trade agreements are bad. Bucyrus is one of its success stories. As well, Canada supplies nearly 50% of Wisconsin oil, and through NAFTA we have priority access to it. Through this action we get our oil at a lower price than if we didn't have the agreement in place. Without NAFTA, Canada could effectively sell its oil to the highest bidder and leave us to get our oil elsewhere, probably at a much higher cost. Still, NAFTA and our dealings with China, has clearly disadvantaged the United States. At least under the current terms. For all the good intentions of free trade agreements, it has really provided companies a convenient "out" when it comes to labor. Rather than pay American workers, companies simply shift operations to places like Mexico under the guise of globalization. When a company makes the statement that it can no longer afford to to pay people to work here, in the US, that's an example of what's wrong with the idea that free trade is good for America.
John McCain believes we need to retrain a displaced American workforce and make improvements to the accessibility of higher education. Still, more and more workers feel that they've had their livelihoods literally ripped out from under them. As for those who kept their jobs, many have had to accept lower wages and reduced benefits. Those who are otherwise ill-equipped to adapt to a service-oriented economy wonder how this can be the path to economic prosperity free traders alluded to from the start. And let us not forget that many of these so-called service-oriented jobs typically do not pay near the wages one could earn working in a large factory.
At the end of the day the issue is really more about fair trade than free trade. The playing field is far from level, and it is, in part, this imbalance, as opposed to NAFTA as a whole or trade agreements alone, that have been eating away at good paying American manufacturing jobs. On top of that, our government hasn't gotten nearly tough enough on China, who continues to devalue and manipulate its currency, giving it enourmous cost advantage over US manufacturing firms, and who also enforces stricter import guidelines for Made in the USA goods entering their country.
I agree we shouldn't necessarily scrap the agreements altogether. But it would be absolutely crazy, to borrow a phrase, to not atleast consider bringing the nations back to the negotiating table to try and come up with a better deal for America.
Naturally everyone wants to gain something out of it; Bucyrus wants to avoid steep tariffs on goods it ships to China, the big three automakers want to take advantage of cheaper Mexican labor, factory workers want to earn a liveable wage and produce goods to be sold abroad in their own factories, and the countries we do business with of course want to sell their goods and prosper as well.
But ultimately all sides need to come together and arrive at an agreement that comes somewhere down the middle, and in the process doesn't leave the American worker behind. For this to be successful, the next president has his, or her work cut out for them.