[Money-matters] Money Matters Update Dec 30 2008

Tue Dec 30 04:03:59 UTC 2008

Marc's Notes:
Hope everyone had a wonderful Xmas and you are looking forward to a great
new year.
I got back from vacation and thought I would touch bases on what went on
while I was away.
As indicated before I left (see last update around December 17th)   the
market just slowly bled away a few hundred points to land where it is today
at around 8400. True to our email.
No major items or "ANNOUNCEMENTS' came out as the holidays are usually slow.

Oil continued down until the problems in the Mid East surfaced and now it
has bounced a tad. I am thinking it is possible the Saudis could not get oil
to stabilize even with their announcement of cutbacks so they engineered
attacks with Hamas to destabilize the region and send oil back up. Not a
pleasant conjecture to be sure but one that could have some weight to it. I
have not seen this idea in print so I may be the only one thinking it. After
all, it is "all about oil" right?

Meanwhile Obama continues to assemble his "team". He is stacking the deck
with the same old hacks like Clinton and Tim Geithner. I had hoped he would
have chosen new fresh talent, but alas, he is picking from the same old
barrel. Most of these no goodnicks have been around for decades and are
career politicians who brought us this whole mess.  He is putting in the
very same people responsible for all crisis, so it is not very encouraging.
How about some new blood Obama!  

The old head of the NASDAQ  stock exchange Bernie Madoff was running a 50
billion dollar ponzi scheme. Sounds like the stock market in different
clothes. Same crookery. This guy headed up the Nasdaq stock exchange a few
years back. Guess he learned his trade well from Wall Street.
The FEDS had numerous complaints about his firm in the last 3 years and
still didn't stop him!    Again, we see the guys in charge stand by like
idiots while a 50 billion dollar fraud was being committed. Just like the
subprime fraud. And they say they need more regulation? They have always had
it!   

Remember, SEC  had COMPLAINTS about Madoff and STILL did nothing. Like I
say, same old story.. bums   all of them. Now Obama appoints more of them.

January ought to be somewhat hopeful and positive for the markets unless the
Mideast gets worse forcing oil up. This is a wild card. Obama has big
dollars in his eyes and is planning on printing even MORE money to  'create
jobs' fixing sewers and highways. Oh well, better that then giving it to the
banks I guess.

Housing still is cratering, prices of homes being the thorn in their sides,
so like I keep saying, expect the FINAL solution to be an all out bailout by
the FEDS of ALL mortgages past due. It will be a giant resolution trust
where the government will use tax money to pay off mortgages to the banks so
they forgive Joe Sixpack of his folly. This will be addressing the
underlying problem of plummeting house prices. They will finally realize
what I have been saying for months. They must stop the housing prices spiral
and stop throwing money at the banks. They have to address the underlying
problem. Home prices. This halt in foreclosures will hurt our realtor
friends unfortunately as house sales will slow.

You watch. Eventually MAJOR ANNOUNCEMENTS even LARGER then anything to date
is coming. I do not know what they will call it but the media will name it
something like the resolution trust company (THE RTC) which is like what the
FEDS set up in the 80's for the savings and loan bailout. 

Meanwhile the US dollar is weakening as all this money printing is finally
making it into the heads of world investors that the US dollar is out of
control. Interest rates are still low but that will change eventually.
Meanwhile with Obama and the 8.5 trilllion of bail out money they have
thrown at this thing so far, these money printing madness  is so far out of
the realm of reasonable control that only bad things are in the future, I am
sorry to say. 

Recall they said in August of 2007 that this would only cost us 200 billion.
I said try 5 trillion to 11 trillion. Turns out they were WAY OFF and my
calls for 10 trillion may have now been understated, incredibly.  They
really need 100 trillion or more but who knows. We are truly in uncharted
territory.

GOT GOLD? 

Markets:
Still neutral to slightly negative until after the NEW YEAR,  then you can
expect an OBAMA rally. The wild card is the Middle East or an unforeseen
event that could derail the OBAMA inauguration rally.

Holdings:
The auto gambler blue light special fizzled because the bastards took TOO
LONG to bail them out. Our play FORD motor was up 20 % or so but fell with
the delay. As indicated, you should have sold the day after the announcement
for a small loss. (When you need them to act, they then act smart!  Kind of
like "Where's a cop when you need one!")

Oil- started down. Looked like we were headed for the 50 % Test I mentioned
until HAMAS stirred things up. Still like holding for the eventual rise to
reflect inflation.

Gold and Silver- Includes our SLV trade. Never went into the red and is
climbing nicely. Like I said. got gold?

Interest rate fund  RRPIX   This insurance fund balances our other t bill
funds  SHY VIPSX  TIP      they are rising while RRPIX is falling. Moving
opposite as it should. Hold RRPIX for when interest rates rise as the dollar
falls. Hold SHY  TIP and VIPSX for now. Come a time when we will have to
dump them when the world starts dumping treasuries. The BIGGEST BUBBLE ever
is filling in these treasuries. Oh my. IF this bubble pops, the ability of
the US government to borrow will end and Armageddon in the US dollar markets
will commence.
This is by far my darkest fear. I pray it doesn't happen but the balloon is
filling as I watch with dread.

Inflation hedges- DBC   Energy   Oil   Dividend payers -  down with
deflation right now but energy is starting up again. Meanwhile 6 or more of
our dividend paying stocks paid today and the India fund PAID again 67 cents
per share after a 6 dollar a share payment last month.

OCNF   Oceanfreight,   followed Diana shipping and halted its dividend so
you should SELL both DSX and OCNF immediately if you have not already done
so. More pain is in store for our shippers as the world shipping trade
business is bleeding red ink and virtually frozen due to lack of trust for
payment.  

Uranium- still climbing- HOLD and ADD

Bank Cds - paying 4.25 %     check out GMAC bank. Most of your money should
be in these for now.

Physical gold- ADD    the time will come when you won't be able to get
enough.

BEARX and UNWPX- Both paid a ton last month and are climbing again. HOLD
new buyers do not add BEARX as it is now a load fund.  Use DOG instead for
now as a regular "contrary fund" to counter weight your regular stock
holdings and dividend payers. This DOG funds will go DOWN if the market goes
UP. You can also use QID or SCC but these are 2 X leveraged funds and will
make or lose you money twice as fast.

Financials- Do not short or add.   BAC or USB  was our only consideration if
you must own a financial and both paid a dividend in the last month. I own
USB and BAC myself.

Housing- do not short or add. Obama's resolution trust will boost these
stocks when announced. I actually added a LONG housing stock URE for a few
clients and myself to catch this bounce. After the bounce, I will sell ALL
OF IT, as housing is still spiraling down and will continue to do so for
years. Nothing can stop that.

Retailers- January should start a bloodletting in these, but a market rally
will lift all boats. I added BEST BUY  shorts last week and am slightly up
and holding for more.
Day traders can dabble in retailers just before they post earnings. But
tread lightly. An Obama rally will rally all stocks.  But it will be fun
watching these retailers post earnings soon. Yech.. Look for nasty numbers
from holiday sales..

Foreign currency funds- RISING - HOLD    ADD     they also are paying nice
dividends (except our YEN fund which is way up but doesn't pay a dividend)

Swiss Annuities- Add anytime and often. You way to park your money next to
Bush, Cheney, Thatcher, Trump, Buffet and everyone else who wants to flee
someday!
(email me for free booklet)

Obama Play- PKB  or other infrastructure stocks such valves, pumps,
engineering.. PKB is an fund of this sector and should pop nicely when he
announces his "plan".

Finally,
Remember the truth and be outraged! - Senator Chris Dodd and Barney Frank
took thousands in lobby money from Freddie Mac and Fannie Mae, then
repeatedly stopped inquiries and investigations into the soundness of these
companies way back in the mid 2000's. See Barney as well as others on video
here.      http://www.youtube.com/watch?v=fa0agm7lIPQ
Now we look to these men and women  to FIX the problem they tried and cover
up? To strange to be true but it is. Where is the outrage?

Taxes:
Don't forget to rack up those expenses to reduce your taxes and make every
effort to MAX OUT your retirement accounts. Consult with a CPA or tax
advisor on how to max out IRA accounts and reduce money you send to Uncle
Sam thru legal deductions and credits.

Upcoming Shows; 
January we begin a new year of Money Matters 2009!

That's it for now.

Happy New Year!

Marc

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