low dollar problems

Hey



There is an interesting article below that talks about the level of petrodollar union being busted for a petroeuro system because of the falling value of the dollar. That could cause some trouble bond wise.

http://www.enn.com/energy/article/24437



The markets bounced yesterday. Continue to buy the basic companies with strong earnings and dividends (PEP, GE, GS) while continuing your research into oversold financials. I know there are some out there who didn't get sucked into the sub prime hype like Goldman Sachs. They are the ones to buy. Did I mention Goldman Sachs isn't in trouble? I just want to make sure I mentioned that Goldman has so far avoided the subprime mess.

Speaking of subprime, the Wall Street Journal has an article today talking about the smart banks and the dumb banks. As I do not have a subscription, I cannot provide a link. I can only let you know that it is on page A2 of today's paper.



Keep an eye on Apple. The stock was hit to a tune of 20% and that to me sounds alarms technically. If it does not eclipse its high during the Xmas shopping season with the new Ipod Touch (which is certainly possible), I would look to sell.

Like I said in a previous post, I am currently only holding retirement accounts while continuing my education. But come the first of the year, I will be investing again.

support

Hey

The Dow might be hitting a range here. It hit this level earlier in August and I think it will stay somewhere between 13,000 and 14,000. There are a few aspects that can change this such as world tensions, the subprime mess, and the dollar. But there is some major support around 12,900.

Speaking of the dollar, there are many different articles on SeekingAlpha in regards to the dollar's plunge during the Bush Administration.

Don't forget to check out the Trader Feed blog in my blog listings. Brett has some solid analysis on trading and the markets in general.

Etrade and last week

Hey

Etrade is now currently trading at 4 bucks a share. There is a chance that they might have to declare bankruptcy. The Yahoo article is below.

http://biz.yahoo.com/ap/071112/apfn_e_trade_out_of_the_gate.html

The slide in stocks will slow but I am starting to believe the market will be in a trading range. This might be a time to sell some out of the money calls to pick up some extra cash in stocks in markets such as food (MCD, PEP, KO). The extra cash could be used to pick up some shares within these companies that will continue to make money.

If you are looking to speculate, look no further than alternative energy. First Solar has continued to move up into the 200 dollar range. This might continue with the oil market consistently making new highs. As long as oil is up, so will the other energy markets.

Being that it is veterans day, the thought of investing in defense contractors seems like a solid bet for the forseeable future. But do your homework and find the right company. This is just a thought.

Good luck and happy veterans day!!!!

41 billion dollar question

Hey



This past week, the Federal Reserve decided to cut the interest rate to 4.5% from 5.25% in two months. They also just put 41 billion dollars into the banking system.



Now, if you look at these two headlines, you might think that the country is headed for a recession and in big economic trouble. The problem is that the government just reported a GDP increase of 3.9%! How bad do they think the future will be economically? What exactly is going on?



I think these cuts are not to serve the country but to save those in the financial industry who made large bets and lost big. You need to look no further than the irresponsibility of the major financial firms like Merrill Lynch and Citigroup. Their earnings reports look so terrible, they had to give their respective CEO's severance packages worth over $100 million just to go away so the companies could clean up their mess. What do the other banks' earnings look like?

I am worried about the continued descent of the dollar. This action by the fed will undoubtedly help the dollar continue to fall against other major currencies.

Please add your comments as I am not sure if there is even a model that this current economic situation falls in.

trouble brewing ahead

I have been keeping up with recent news and feel out of whack with what is going on in the economy. I see the stock market is moving up but don't feel confident in why the market is up while the economy slows. I have a few reasons



1) The fed is trying to cover up the foreclosure disaster by lowering interest rates. In the meantime, commodity prices are flying through the roof and the dollar is getting its butt kicked like its an opponent of the New England Patriots. Ultimately, this action will create longer lasting economic problems for the US. I don't see a problem with the rise in foreclosures. People who bought houses without even reading what the adjusted interest rate would be were stupid and deserve some short term pain. Let them go back to renting.



2) The price of oil is skyrocketing. And there is no end in sight. The instability in the middle east is growing. Iraq cannot govern itself, Iran continues on its nuclear mission, and Turkey has joined in the mess with their squabbling with the Kurds. I feel that this is just the tip of the iceberg as Russia and China will become more involved. A barrell of oil currently costs over 90 dollars a barrell. The silver lining in this issue is that research and development into other sources of energy have also skyrocketed.



3) A larger percentage of the GDP is covering health care costs. To be fair, more Americans are living longer. But that is inconsequential to other issues like prescription drug legislation or the profiteering of HMO's and insurance companies on the health of Americans. Unless we find a way to curb these costs, they will impact our work productivity in the long term.

taking profits and educating

Hey everyone

I have made a decision to go back to school. In the process I have found that I will need the portfolio's assets to pay for it. I look forward to the challenge and will continue to write about the topics concerning finance and wealth.

Mike Keane

The Pres said what?!!!

Hey everyone

I know it is all to easy to catch our fearless leader in a confusing phrase but this comment from Yahoo! regarding the economy shows just how clueless he really is.

"There is no question that there is some unsettling times in the housing market and credits associated with the housing market," the president said. But he said he didn't see that spreading to the broader economy.
Bush said he was optimistic about the economy. "But I would be pessimistic if I thought Congress was going to get their way — and they're not. We're not going to raise taxes," he added.
Pressed on whether he thought there was any risk of recession, Bush said: "You need to talk to economists. I think I got a B in Econ 101."

So, let me get this straight. He makes a judgement on the effects of the housing market on the rest of the economy and then comes back and explains that because he received a B in Econ 101, he isn't qualified to comment on whether or not we are headed for a recession? Unbelievable.

- This is the time to pick up some investment real estate. This is very similair to the stock bubble. I think the recovery will be just as profitable as the stock market recovery has been for the last four years.

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AGG Bond ETF
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