College Football

Also, college football starts tonight and in earnest on Saturday. I recommend watching the Illinois v. Missouri game, with Missouri winning. Either way, college football is here and all is well.

What a horrible economy...

Well, despite the best efforts of the mainstream media and pessimists everywhere, the economy blistered ahead at a 3.3% growth rate in GDP. Thank goodness the best of worst intentions aren't directly impacting the economy. For those of you unconvinced things are really that good, consider that in the 2nd quarter, the United States added the equivalent of Sweden, the 18th largest economy, and on an annual pace is adding an Italy to the economy every year. Italy is the seventh largest economy in the world. It's amazing. But don't expect to hear anything about this in the media. Instead the focus will be on rising unemployment (which is still below the historical low point for economic cycles) and how hard it is to make ends meet with record gas prices. While the latter may be very true, it remains as important to stop and note how very impressive a 3.3% growth rate is.

The number on the FDIC's bank watch list has risen to 117. Historically, 13% of banks on the watch list fail. For those of you with bank stocks, I would continue to keep a keen eye on the news for any information about your holdings. Bank stocks are certainly attractive right now, trading at very low multiples. Even banks with relatively low exposure have been pummeled along with the rest of the industry. That being the case, I still wouldn't advise the faint of heart to consider investing in individual bank equities. Unless you're willing to take a big gamble, a safer option would be an ETF or mutual fund that invests in the financial industry. Right now, the industry is in a rut and trading cheap, but it will eventually rebound.

The democrat convention rolled along this week. Up to today, it had been more about the Clinton's than Obama, but that changes tonight when he speaks from the Parthenon, er Invesco Field. There has been relatively little talk about fiscal policy thus far; maybe tonight's speech will provide some insight on how an Obama administration would affect your portfolio. Of note, the Annenberg papers at the University of Illinois at Chicago were released for public viewing. In them, it showed Obama was President of the organization and pushed to reform Chicago's public school into socialist activism "re-education" camps. All the while, Bill Ayer's remained intimately involved as a senior advisor to the organization. The same Bill Ayer's who's an unrepentent terrorist. Just thought I'd drop that in...

I'm headed to the coast for the holiday weekend. There I'll be enjoying margaritas and sitting on a beach all the while attached to the internet thanks to my handy satellite internet card. Ahh, the wonders of technology. The following weekend I'm headed to the Dallas Trader's Convention. Should be a good time.

Hope everyone has a FANTASTIC Labor Day weekend. Watch out for Gustav; he arrives next week! Until then...

Gustav!

Well, the democract party convention is in full swing and last night saw the typical typicals come out and speak. I was actually surprised. There were no "victims", no real people with "stories of hardship". Maybe they're saving it for later in the convention, but I expect to see at least: one person, probably a single parent with nine kids, talk about how hard it is to get by in today's economy and how the economic policies of the last eight years have left he/she unable to afford to leave any tooth fairy money on her kids pillow; another will talk about how high oil prices have forced them to sell their home and how they don't understand how "ordinary Americans" are supposed to get by on $3 pesos an hour while Exxon takes home $11B in profits. Stay tuned, they'll show up.

I was about to sit down and type up how McCain and Obama would affect your investments, then I found someone already has, so we'll start there: http://www.marketwatch.com/news/story/how-obama-mccain-affect-your/story.aspx?guid={93C57CD0-8A08-4632-AAD1-EFEAFEF80563}

Hurrican Gustav is bearing down on Haiti and meteorologists are giddy with glee at the possibility that a Category 5 hurricane will follow its most likely path and arrive full steam in New Orleans sometime early next week. Of note, if you day-trade and play the market you might want to consider shorting airline stocks and going long with some non-Gulf refining companies. If the refiners in the Gulf have to shut down, other refiners will stand to reap the rewards.

I should get back to work. More on the conventions and why drinking wine and cheese doesn't always taste good awaits the next post. Until then!

The sage speaks.

Wouldn't you know it, I ended up having so much fun this weekend I never got around to posting on the blog. What a tragedy. I went to an interesting place on Saturday night, the Ghost bar: http://www.n9negroup.com/#/ghostbardallas/main/ Probably the most pretentious place I've ever been in, but if that's what helps certain people get through the week, I wish them the very best...

So, Warren Buffett had all sorts of things to say over the weekend. It's funny, he used to pride himself on being a real recluse, but over the last couple of years he hasn't shunned public attention like he used to. He turns 78 on Saturday (I'm sure you all already knew that and have sent cards) and I'm wondering if he doesn't see the candle beginning to flicker; maybe he'll spend his last years with a larger role publicly. To summarize his comments, he still believes the mortgage meltdown and subsequent financial crisis will wreak havoc on the stock market, but also thinks the US stock market is very attractive right now as some stocks that have trended with the overall market have become undervalued. For any Budweiser fans, or shareholders, it's interesting to note Buffett sold nearly two-thirds of Berkshire's 35.6 million shares of Anheuser-Busch Cos. stock because he hadn't been sure Belgian brewer InBev SA's takeover bid of $65 a share would succeed. Anheuser agreed to the $52 billion bid in July. He closed by noting that he is the greatest investor there ever was and everyone should love him like a teddy bear...

A new Ipod nano will be coming out in the next two months. I know everyone is super excited. I'm going to go out on a limb and say that it will be: white, thin, of simplistic design and have no more than one main button.

Look for the drive-by media to basically be in a constant state of exuberance that will border on psychosis this week as the democrat convention rolls forward.

Criminals have begun to use Euros instead of Dollars in some black market transactions. What a horrible side effect of a weak Dollar. I was so proud of the Dollars place as the #1 currency of choice for black market operations.

I'll post about the how each candidate's tax policies would affect retirement savings next. Until then!

Let's get this rolling...

I am finally at a point where I believe I will be able to update this daily or at the very least every other day. I certainly hope so.

There was a flurry of activity this morning in the investing world. First, Ben Bernanke had a meeting of the nerd-minds in Jackson Hole, Wyoming to discuss the state of the financial markets. Bernanke still appears to be more of an inflation dove as he said the following (presumably using a chart with two lines):
"If not reversed, these developments, together with a pace of growth that is likely to fall short of potential for a time, should lead inflation to moderate later this year and next year."
Bernanke's expectations that the economy will continue to moderate and thus bring down commodity prices continue to worry me. His apparent unconcern for inflation and a weak dollar are troubling at best. A stronger dollar would fight inflation, bring down commodity prices and nominally decrease the value of the government's deficit. A few individuals on the Federal Reserve Board have dissented with him on the past couple of rate decisions. I wonder how long he'll be able to hold them off...

GM, Ford and Chrysler have asked the government for a $25B bailout. Not surprising given the bailouts extended to Fannie and Freddie as well as Bear Sterns and IndyMac, but logically these are completely different situations. In the Bear Sterns fiasco, the government underwrote loans so that the company was able to be acquired; the shareholders and management walked away with nothing respectively. In Fannie and Freddie, they were government insured entities whose sole purpose was to extend mortgages to those unable to ascertain them through conventional means and in IndyMac, the bank was allowed to go solvent, with the FDIC insuring deposits, but once again shareholders and management left with nothing. Here, the "Big Three" are asking for money without any change to structure or management. What a joke. It's of course one of the smartest moves they've probably ever had, given that they announce this during an election, each candidate will have to walk with glass slippers as they explain why they support/don't support and why you should vote for them. If the "Big Three" spent as much time on product development as they have on the hatching of this plan maybe they wouldn't be bleeding money like a dying drunken sailor. Also, when will the moniker "Big Three" be dropped? Unless of course we're allowed to follow-up "Big Three" with whatever we'd like. "Big Three" disaster; "Big Three" failure; etc. etc.

I just read that Warren Buffett thinks now is the most attractive the US stock market has been in a long time. I'll post a full review of his comments over the weekend along with anything else of relevance that comes out of the economic symposium in Wyoming.