YouTube Wisdom and the American Stock Market

The

D
ropping
ow

Riding the Tube

As I watched the Democrats battle it out in their YouTube debate last night,

Look to your left and say one good thing and one criticism about your fellow running mate.

"The good thing is, he is running so hard to the left that he is jeopardizing his chance in the election.The bad thing is, she will probably try to learn to play the saxophone next."






I estimate that if anyone of them wins the presidency, the loser will be the American economy.

For example, John Edwards, continuing the Democratic populist demagoguery, signaled that they are coming after "big oil, big insurance, and big drug companies." He forgot trial lawyers, I wonder why?

The February "Crash"

Anyway, the last time I spoke to you about the stock market was in February, right after the scare caused by the Chinese bubble. Well, our market, and the Chinese market, continued onward and upward from then.

So, with China again being talked about as a bubble, and the U.S. stock market too, and after today's dramatic drop, I think it's appropriate once again to address the market.

Disclaimer

I inform you that I am a former stockbroker with Merrill Lynch, Dean Witter and Charles Schwab. I also tell you, though, that I am presently not a professional in the financial field, and that nothing I say here shall be construed as investment advice. You must do your own homework, and make up your own minds. I am not liable for your decisions. In fact, I'll add, do not follow any advice I give. Need that be any clearer?

Bragging Rights

Still, I want to gloat. In February, after that dramatic fall, I said the market would rise again, and it did.

Tomorrow's Stock Market Today

What do I say this time, after a 226-point drop in the DJIA today?

First. Tomorrow, Wednesday, July 25, 2007, the market will be up. Some segments may still be hurting, like the financials and the homebuilders, but other stock sectors will rise. Techs will climb tomorrow for sure.

Predicting tomorrow is the easy part. What about the next three months, and the rest of the year?

Subprime and Mortgage Woes

The subprime fiasco and mortgage problems will weigh down some banks and much housing. This will hurt consumers, who will have to pay rising interest rates, and who will lose the cash benefit of refinancing their homes. People selling their homes will find the market soft. On the other side, buyers of homes will find bargains.

Globalization

Contrary to this, though, is our favorite bugaboo, globalization, which will turn out to be the world's savior this time. For you see, the economy is no longer national; it is global. This is why Amazon (a bellwether tech stock) can be up 14% at this very moment in after-hours trading, even on a day when the rest of the market was down, down, down. The reason? Tech will not be hurt by subprime or mortgage woes, and tech is a global enterprise. Everyone buys from Amazon, even the "communist capitalists" in China. So? Tech will survive.

Most sectors that are global in nature, such as energy, tech, infrastructure, and others like those restaurant chains that reach overseas, as McDonald's does, will be fine. The sectors, though, that depend on localized, American-only profits, especially those related to mortgages and homebuilding here, might face a headwind.

Overall? Global liquidity (& see liquidity info) might just be enough to overcome any and all American subprime and mortgage woes, even within continental America. There's a lot of money out there looking for bargains, and the American stock market is still undervalued in several areas.

I'd bet on a continued rise, but with some sectors hurting. Don't quote me on it. I'm just not as panicked as some.

A Bush in Hand is Worth More Than Ten Communist Cuckoo Birds on a YouTube

I believe that Bush has helped us soar to a great economy, and that the Dems might destroy it. In fact, the only thing that can ruin my scenario of a continued rise in the market, will be President Edwards, Obama, or Clinton.

Rock

(*Wikipedia is always my source unless indicated.)


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Guns, Butter, Pollution, and Death

Cinese
apitalism

Aside

This was a difficult article for me to write. I don't know why.

China's Smoking Capitalism

China's economy is exploding to the upside. It's ironic that this communist country is veering towards capitalism, that Germany and France are reducing taxes, but that the U.S. is getting ready to swerve left—which will destroy an economy that is humming along.

The problem in China is, in fact, that it is growing too fast, if you can imagine this. They are paying the price for this unbridled growth with pollution that chokes you with every breath, and a runaway stock market that worries Chinese officials, and the world, for that matter.










The problem is a kind of 1920's scenario, where ordinary folks are making fortunes, and so they sell their homes and valuables to invest. It's a great big Ponzi scheme that eventually will end. The only thing that might keep it from becoming a disaster is that China's real growth is astronomic, about 20% a year or more.

This means that the rise in the Chinese stock market is based on fundamental growth, and not just speculation. Still, if their market rises too much, it will overtake real value, and the last ones to buy in will be left holding the bag—minus their homes and valuables. This is just what happened in the 1920's in America when people could buy stocks on margin, only putting up 10% of the value of a stock to own it. When the market crashed, people couldn't pay their margin calls, and started jumping out of windows.

Again, China is not an exact copy of 1920's America, as China's monstrous growth will cushion the eventual fall of the market. Still.

Discipline, Chinese Style

So, China, aware of the danger, has tried to calm down its market by raising interest rates, increasing margin requirements, and so on. The next thing they are trying is to "eliminate" those who encourage speculation. They've just arrested a blogger who is the most read on the Chinese Internet, because he gave stock tips that work! (See also: Chinese blogger, and Chinese blogger arrested.

You see, there are still differences between how their form of capitalism works and ours. We might want to jail unethical people too, but we have to go through a legitimate trial first. There's always the question of guilt and innocence. Was this Chinese blogger really doing a bad thing by giving good stock tips? I don't know the details—whether he was revealing insider information or something like this. The Chinese, though, don't know enough to charge him with anything specific either. They arrested him simply because they see him as part of the problem of the overly enthusiastic Chinese markets.

Notice too, how they handled an unethical businessman recently. They executed him, within weeks of his being charged!

Now that's a heavy penalty. Our Enron offenders are rotting in jail, but Chinese crooks get shot.

Examples of American "Discipline"

Witness, again, that some of our worst businessmen are rotting in jail, after long drawn-out trials and appeals. Enron, Martha Stewart, et al.

Here is another example of how we handle our business renegades:

See the Pearl Izumi advertisement, (& Pearl Izumi ad) in the window at the top of today's post, which appeared in Runner's World. There has been an outcry against, and for, the ad. People against the ad call it tasteless, and lurid. Those for it call it edgy. No one will arrest the authors, though, nor anyone at Pearl Izumi, nor their parent company Nautilus.

Some people might want to arrest them, but we don't do that sort of thing. The ad was either in bad taste, or was "edgy." You decide.

So, Whose System Is Better?

Dictatorships and totalitarian governments are always more efficient than democracies. They can arrest people without trials and stop stock speculation by banning it, to a certain extent. They can jail people fast, and shoot them too. Who's going to complain?

But then what? They've lost this creative blogger, and they're going to lose a hundred thousand others like him with initiative, who now will be frightened to stand out. If the guy broke a law, the law should be public and known to all, before any arrest; and there should be a fair trial.

While we'd like to execute Martha Stewart some days, it's better that she had a trial and was found guilty, and made muffins for the prisoners. (Yeah!)

Our system is better, believe me.

Unstoppable

Like I said, though, things like China jailing a blogger and executing a businessman after a show trial, won't hurt China's growth all that much. After all, they have unleashed the tiger of capitalism in their country. This beast can be ridden, but it can't be stopped. Who would want to stop it? They will try to slow it down, at the point of a gun, but this behemoth has thick skin. It is mightier than bullets. It is not just a tiger. It is a flaming tiger. Its heat melts bullets, and defies firing squads.

One day, it might even lead to—yes, you guessed it—democracy.

Rock

(*Wikipedia is always my source unless indicated.)


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It's a Wonderful Day in the Neighborhood

I admit it, this is a

R


ant.

Live Earth, Dead Air

Like a lot of people on this globe, I experienced the music on Live Earth. I witnessed Al Gore's hologram and all the brainwashed children brainwashing other children. I found it boring and repulsive, like Mr. Roger's Neighborhood without the intelligence.

Youthful Rebellions Have a Purpose, Sometimes

When I was growing up, we rebelled, like all good teenagers, by absorbing Elvis, Bob Dylan, then the British invasion, headed by the Beatles, and culminating in Woodstock.

Our rebellion with Elvis was the slicked back hair, the swiveling hips, the curled lip, the sex of it all. Our upheaval with Bob Dylan was anti-war and pro-intellectualism.










Our insurgency with the Beatles was against anyone older than we were, the way these oldsters dressed, how they conducted their love lives, and their whole religious and sociological point of view. Woodstock was the ultimate breakdown of society.

All four of these singers, groups and movements led to genuine revolutions. We weren't attempting to emulate Bobbysoxers that loved Frank Sinatra. We were not trying to be anything. We were exuberant youth and actually did believe in the Age of Aquarius.

Heavy Metal and Hip-Hop

The kids of today have heavy metal and hip-hop. Complaining for the sake of complaining. Teenage angst looking for someone to blame, and without a cause.

The Religion of Political Correctness

So, their cause becomes political correctness. They have no religion, so they believe in environmentalism; in the inclusion of all of mankind in their loving embrace, including terrorists; in unbridled hedonism coupled with a hatred of everything military, conservative, and traditional.

Yearning for Woodstock

They've seen Woodstock, and think it was cool, so they emulate it. They lack the revolutionary fervor, though, that we had as kids. They want that fervor, and they think that it consists of chants and slogans and mantras.

True Revolutionaries

I am not totally proud of what we Baby Boomers have wrought on this earth. Yet, we were true revolutionaries. I renounce some of the fanciful ideas of my youth, having seen the value now of business and family and religion. I am happy that we have made advances in environmentalism.

Wannabees

I am not proud, though, of this crop of kids, and this gaggle of celebrities.

Little do they realize that they are the establishment. They are not the revolutionaries.



They agree with all the major news channels and newspapers and PBS and on and on, in their maniacal attack on whatever is good in the world. Their robot-like pronouncements require no moral or political courage. They march in lockstep with everyone else.

The Harm They Do

What's more, they hurt people and damage the world. They slaughter innocents by not supporting the Iraq War. They snatch food away from the poor with their socialism. They bloody the wounded with their socialized medicine. They will wind up mangling the environment too, by not embracing science, and instead praying to their green forest gods in the hysterical religion of irrational environmentalism.

Live Earth is Dangerous to Your Health

The death blow Live Earth strikes is to brainwash our children. There is no room for intelligent discussion on this kind of show. It's all goose stepping and saluting the gods of green and St. Al Gore. The celebrities spout their meaningless banter and proclaim to the world, "See what a good person I am! I am a liberal."

Stop Patting Yourself on Your Backs

Liberals, to me, are not the good people. The saints, the heroes of our society are in Iraq and Afghanistan, and the few back home who speak up for liberty and freedom.

Real Revolution

A genuine revolutionary, with a message worth listening to, will not be serenading ethanol and electric cars. He or she will be belting out pro-American songs that encourage the country in its fight against terror. That person will be the next Bob Dylan. He or she is nowhere in sight.

Let the brain-dead celebrities and vacuous youth show me some courage by speaking the truth, rather than their Marxist slogans, and I'll respect them. I'll worship them, in fact. Isn't that what they want? I'd even bow down to St. Al if he admitted that the sky is not falling.

Common Sense

Yes, let's clean up the environment. No, though, let's not make it a religion. Keep it in the realm of science, open to discussion. There is no room on our planet for Nazi-type propaganda machines, be they Al Gore's, or Michael Moore's, or Madonna's.

Think for yourself people, that's all I ask.

Rock

(*Wikipedia is always my source unless indicated.)


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Bush the Nice Guy: When It's a Good Thing, and When It's Not

Warmth


or

Fire

The Bush Scorecard

I feel like a lot of conservatives these days when I see my beloved right wing of the Republican Party in the descendency. I also continue to get whipsawed when I measure my approval rating of President Bush. Since I am like most Americans, on the side of the underdog, I can't help rooting for George W. Still, this blog is about truth, so here we go. I'll get to the nice guy issue in a minute.

Bush is great so far on:
• The decision to invade Irag and depose Saddam
• His attempt to install democracy in Iraq
• Keeping taxes low and our economy humming
• A cluster of traits including persistence, conviction, loyalty, and integrity
• Personal charm, including but not only when he is one-on-one

Bush, in my opinion, falls short on:
• Winning the war in Iraq
• His immigration policy
• Leadership in showing Americans and the world his vision of peace
• His communication skills in public

Bush the Nice Guy

I've said before that one of Bush's character traits is to want to be a nice guy.He desires to be loved by everybody. As a result, his approval rating is one of the lowest for any president in history.

When is it a good thing for Bush to be a nice guy?

Today was one example. President Putin is visiting the Bush family residence in Kennebunkport, Maine. Putin is a bad guy. He is the one leader in our world that could bring back the Gulags if he chose to do that. He has already nationalized private industries and curbed freedom of the press, and may be responsible for outright murder. We could be hard and say we need to put Putin in his place. Yet, I don't see that we'd get much for this. I think Bush is right to coddle up to Putin and pour on the charm.

Why? There is a time to be Reaganesque and say, "Mr. Gorbachev, tear down this wall!" and there is a time to be Bush-like, and say, "We congratulate President Putin on being the only one today to catch a fish."

Russia is not a democracy like ours. It has returned to a sort of democratic autocracy because they didn't know how to run a democracy. The mob took over and there was chaos. Now the Russians have a strongman again, and 70% of them are happy with him. The people wanted it this way. Bush being harsh to Putin would only alienate a whole nation. Sometimes, diplomacy is the right thing.

When is being a nice guy not right?

When waging a war. If you want to be popular as president when you are waging a war, you must win, period. There is no room to be showing the world and your people, in that war, that you are the fairest guy in the battle. You must win.

Nice Guys Finish Last?

So, is it true that nice guys finish last? No, not all the time. They finish first when diplomacy is needed. They finish last in war. Lincoln was a nice guy much of the time. He was vicious, though, in war. Then, when he won, he was the sweetest guy in the world to the losers. That's how it's done.

Give Putin all the lobster he can eat. Give Al-Queda cocktails, Molotov that is, with a dash of bitters.

Rock

(*Wikipedia is always my source unless indicated.)


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