Riding Herd on the Financial Range - August 20th
Now is the time to watch real carefully to profit from the market
8.20.2009
By Russ Magarity
Edited by Chris Janelli
Howdy Folks,
Did you see the news on Warren Buffet today? The Oracle himself, a big O supporter, has a message for the Great One. His message is to reduce the debt and the debt to GDP ratio (today 56%) or risk being a banana republic. In other words, STOP SPENDING.” He must have known the impact of his remarks so we have to give him an Atta Boy for the courage to say it. I wonder what took him so long? You can read the whole Op Ed piece in the Obama Times.
Or go here: http://www.nytimes.com/2009/08/19/opinion/19buffett.HTML?_r=1&adxnnl=1&ref=opinion&adxnnlx=1250679809-vkyiY4/BtTu6cDDesIMy4w
Another indication of Buffet must feel about his support is the realignment of his portfolio in Berkshire. He was dumping energy (Conoco, Constellation Energy), Carmax, Home Depot, Moodys, United Healthcare, Wellpoint et cetera. On the other hand, he also appears to have bought Becton Dickinson (BDX), Eaton Corp (ETN), Johnson & Johnson (NJ) and there was a small increase in WellsFargo. For those that are keeping an eye toward holding something for a long term, you might put on your watch list what the Oracle and the Leftist Creep (George Soros) have in common in their respective funds: check out symbols COP, WMT, LOW, HD, NRG. No one said we can't make money off of these guys; just watch for insider selling.
While we are on the “if you can't beat 'um, join 'um streak”, watch Goldman Sachs (GS). This is that greedy - no super greedy - Wall Street firm, that has all of their protégés running the government. If I am not mistaken, they also were the ones to first pay back the TARP money, since they really didn't need it in the first place, but what the hell it was basically free. And they were able to invest it to generate huge profits before paying it back. Well, what would you expect? These guys are not just good, they are very very good and belong among the firms which will undoubtedly survive no matter what happens. Their current stock prices is $159.93 and I certainly like it better at around 80 bucks, so I am just watching for now. I may tiptoe in if it hits $100 again. For those that wonder what the great firm is touting these days, here are a few of their suggestions.
“Goldman sees a large divergence between the commercial real estate price estimates in equity REIT’s and CMBS market.
How to play it?
Short REITs, buy AAA CMBS or sell protection on AAA CMBX.
Goldman sees continuing problems in developed nations that have financed their bailouts (ahem) through increased public debt.
How to play it?
Short debt-laden developed economies, long select emerging economies. You can also buy USD, JPY, or EUR puts versus calls on the currencies of commodity exporting nations (AUD, BRL, CAD, NOK).
Goldman sees continued weakness in the Japanese economy.
How to play it?
Sell the Yen or buy JPY puts. An equity short doubles as a short position for debt-laden countries above.
Goldman continues to believe oil prices are heading higher.
How to play it?
Buy long dated oil futures. Short the crack spread.
Goldman also likes a number of market neutral strategies, but that’s for another post for another day.”
We should also keep an eye on General Electric (GE. As much as we despise their leader and tactics, they could benefit hugely from their Obama administration connections, the huge amount of lobbying they are currently doing on the Hill and their positioning to take advantage of the move to green energy technologies. We don’t need to like them to make money off of them.
I was listening to talk radio this afternoon and was introduced to the independent woman's forum. I did not know about this organization, so I went to their website. I liked their mission statement and they claim to be non partisan. They are passionate about women's causes. In particular, they had a video against the supreme push for national health care, which was excellent. Watch their FEATURED VIDEO here, or go to http://iwf.org and decide for yourself. Think about passing it on to all the women in your life as this is their issue.
I write about this as it caused me to wonder if America’s women folk see the health plan differently than American men. So I pass it on for comment since I feel it is far above my pay grade to comment on what these women had to say. The FEATURED VIDEO was from women’s perspective and I liked it, but be your own judge.
Headlines you should be concerned about:
HEADLINE: Senator Grassley: FCC Diversity Chief May Stifle Talk Radio
He is worried that Obama administration’s new federal communications "diversity" director, Mark Lloyd, may try to regulate talk radio with a "backdoor" method akin to the Fairness Doctrine. Lloyd alleged a “structural imbalance” in political talk radio suggested increasing government involvement to regulate it. So Big Bother keeps looking for ways to regulate FREE SPEECH despite our First Amendment rights. Of course the First Amendment specifically says “Congress shall make no law…..” so I guess if the Great One has a federal communications "diversity" director do it that’s OK. Just another example of the Czarist Amerika our Great Leader is creating; just more of “Change We Can believe In.” Yup.
Lloyd co-authored the paper for the liberal Center for American Progress whereby he wants to tax political talk shows (read conservative) an amount equal to their operating profit to fund liberal stations, including NPR which already receives private donations. I think I read that they also receive stimulus money too, but unconfirmed.
What the hell is a Diversity Czar anyway? To better understand Obama’s Czar troika that is circumventing Constitutional authority – even Congress – watch this vide CZARIST AMERIKA. Since taking office just seven months ago, the president has skirted the Senate confirmation process and given unprecedented power to individuals, allowing them to oversee major offices within the federal government. Many of whom operate only under the supervision of the White House itself and do not report to a cabinet secretary or Congress. Congressman Kingston has introduced H.R. 3226 to ban czar funding. For more information visit kingston.house.gov/czar
Or go here: http://www.youtube.com/watch?v=-ClRQvu9ndg
If you really want to get sick to your stomach about the kind of people who are YOUR Czars, read Chris Janelli’s blog entitled You Can Judge Obama By the Company He Keeps and the Czars He Appoints.
Or go here: http://distressedpatriots.us/patriots38.html
HEADLINE: David Axelrod's ties targeted in health fight
Critics of President Obama’s health-care overhaul are zeroing in on his senior adviser David Axelrod, whose former partners at a Chicago-based firm are the beneficiaries of huge ad buys — now at $24 million and counting — by White House allies in the reform fight.
The unwelcome scrutiny, largely from Republicans, comes at an inopportune time as Obama seeks to shore up support for health care reform. It revolves around two separate $12 million ad campaigns advocating Obama’s health care plan that were produced and placed partly by AKPD Message and Media, a firm founded by Axelrod that employs his son and still owes Axelrod $2 million. You can Read More About This at:
http://www.politico.com/news/stories080926240.HTML#ixzz0OiYo5Ccx
Okay too much fun for one evening; well actually it is morning now
Your humble editor, Russ
About Russ Magarity
Jackson, Wyoming Distressed Patriot Russell Magarity and Chris Janelli, Chief Distressed Patriot, have been business associates and close friends since working together at Chase Manhattan Asia in Hong Kong. Russ grew up in Cuba and Panama and graduated from High School in Peru. He received a BA in International Relations from the University of Oklahoma (Norman), an M.B.A. from the Universidad Autonoma de Guadalajara (Mexico), and a Masters in International Management (with Distinction) from the American Graduate School of International Management (Thunderbird).
Russ spent his career with Chase running countries and managing corporate finance businesses in Brazil, Mexico, Hong Kong and throughout SE Asia. Prior to joining Chase, he served in the US Navy for 9 years first as a Midshipman and Naval Aviator. As a carrier pilot, he served 3 tours in Vietnam and flew over 250 missions.
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