The Grass is Always Greener

• The Summer stock market selling season looks to be under way and I would understand anyone who has taken or considering taking chips off of the table. The difficult decision is figuring out when to get back in, but the key to remember is that one can get back in.
• The market continued where it left off yesterday, and continued to fall. Economic concerns ruled the day. The dollar was pounded, treasuries were pounded, natural gas was pounded, and gold rallied. Market volume was relatively light, but there have been plenty of distribution days recently so I don't think that's much solace to the bull case.
• The favorable ratings for former President Bush and Vice President Cheney have gone up. What? The grass is always greener on the other side of the fence. Once the country went to the other side of the fence, it's amazing how similar the view is. But you only get a chance to hop the fence in the even years.
• Cheney has been fun to watch. He's the Charles Barkley of politics. Cheney needs some sidekicks like Earnie and Kenny!
• Sometimes the toughest decision of the day is what kind of picture to put up with the blog entry. I never tire of Grace Park. But I do try to find something in the news that ties in to something I'm writing about. If not or I'm being lazy, then I just go with Grace. Or Lakers Girls. But I found out that "Terminator: The Sarah Conner Chronicles" is not being renewed. So lets go with Summer Glau today. I liked that show. But I do like the sci-fi and adventure themes more than the hospital dramas. It must just be me. Oh well, see you soon on something else, Summer.
• Underappreciated rocker? Greg Kihn!
• American Idol: As a coworker commented, there really hasn't been anyone as original and dynamic as Adam Lambert. Also that Kris Allen was "a dime a dozen" type. I was never a fan of Adam's shrieking and some of his reworkings didn't quite work. If that's what made him unique, it was hit or miss. We'll see how the music sales go. I don't think it was an "upset." Heck, Adam was in the bottom two the previous week with Danny Gokey, and you know the majority of Danny's votes had to go to Kris.
• Both Adam and Chris will do well. I think Allison Iraheta will do well, too. She was my favorite this season. Love the women rockers.
• You know, just to get back to energy for a second, I think a pullback in natural gas is interesting. Sometime when you have nothing better to do and you're watched enough Mika Tan videos for the moment, read all the bull-bear cases for UNG. Plenty of views from both sides on the future of natural gas.

Thank God It's Freida Randomosity

• I bought my first ebook on $AMZN for the $AAPL iPhone Kindle application. You buy it from Amazon's website, and when you run the iPhone Kindle app, the book shows up via Amazon's Whispernet.  The reader seems to work just like other readers I've tried.  The cool thing is not having to transfer the ebook to the iPhone.  It's just there when you turn it on.  Plus, Amazon's book library is pretty extensive.  Also seems like Amazon pricing is better than the other ebook vendors I've used. 
• It's a winner.  Like Freida Pinto.  And thank goodness it is Friday.  It's been a long week.
• The market is tanking as I contemplate what to have for lunch.  Maybe rice and beans.  No, that may be coming later for all of us.  When the futures were up this morning, I could almost sense the false optimism on CNBC.  As if even though the futures were up, just give it time.  The sellers were still hitting their snooze buttons.  Once they got up, the selling commenced.
• Looks like the Nasdaq is catching up after a few months of outperforming.  I think I need air quotes around "outperforming."  Right?
• The Japanese Tokyo stock price index (TOPIX) is at a 25-year low.  Nice.
• $GM at lowest price in 75 years.  Nice.
• The job market is nearing 1982 levels.  The government’s broadest measure of unemployment and underemploymentwas 14.8 percent in February. That includes some of the people who havestopped looking for work because they don’t believe they can find jobs.It also includes part-time workers who want to be working full time.  Nice.
• The anatomy of a natural gas spike.  Interesting.
• Why Wal-mart is surging.

Stop the Bailouts!

I was critical of many of the Fed members last year when they were worried about inflation. But here's a good column from former member William Poole, Stop the Bailouts.  Excerpts, and my comments:

THE fundamental causes of this recession, unique in the experience of the United States, were mortgage defaults and the consequent insolvency of major financial firms. These insolvencies, and especially fear of them, damaged normal credit mechanisms.

You'll hear folks talk about the need for more regulations or the "greed of Wall Street."  I think that's just an effort to politicize the crisis.  The bottom line on why we are where we are is that loans were made that never had any hope of being paid off.  If the mortgages were paid monthly, everything would've worked.  But folks couldn't make the payments.  Yes, these folks were caught up in the greed of it all and wanted a piece of the American dream before it got away, and lenders preyed on that.  All bubbles seem to work in that fashion.  But the bottom line of the crisis is that mortgages went into default  A lot of mortgages.

The self-correcting nature of markets will ultimately prevail. We should not underestimate the power of monetary policy; with the sharp increase in the nation’s money stock starting in September, monetary policy is now extraordinarily expansionary. I believe, though without great confidence, that the recession will end in the second half of this year.

Businesses that make bad decisions go out of business.  If loans were made to folks who didn't have the means to pay them back, it was a bad decision by companies to make those loans.  In a world without government bailouts, these firms would go out of business.  The free market wouldn't allow them to survive.  It would be painful, but those businesses that made more prudent decisions would emerge the evolutionary winners.  The strong survive, the weak perish.

The government is trying to stimulate the economy, and now is where we should start watching for signs of inflation.  Especially as we begin to recover.  The economic indicators provide a rear-view mirror snapshot of what has happened in previous quarters.  It'll be important to watch the bond market.

My thoughts are that the worst of the recession is already over, and that the employment numbers are lagging indicators.  I also say this realizing that I underestimated the severity of the recession!

Federal policy is damaging the economy’s prospects. It fails to provide the needed tax incentives for investment in factories and equipment, incentives that were central to efforts to revive the economy during the Kennedy-Johnson era and under Ronald Reagan. But government spending can’t lead the way to sustained recovery, because its stimulating effect will be offset by anticipated higher taxes and the need to finance the deficit.

The federal government is trying to prop up businesses that would otherwise fail.  I believe this postpones the inevitable for these companies.  I don't believe there is enough stimulus in Obama's stimulus package.  More should've went to tax relief and less to earmarks. (Such as $200,000 for tattoo removal in LA).  These earmarks are less stimulative than putting money in people's pockets.  Obama stood up and told us that there were no earmarks in this package.  There are over 8000.  C'mon, Mr. President.

In addition, many states are raising taxes and fees as the stimulus is being releases.  In CA, Governor Arnold Schwarzenegger is raising the sales tax, gas tax, car registration tax and income taxes.  This will more than suck up the stimulus Obama is providing families in direct tax relief.

Obama also promised "not a dime" in tax hikes for those making under $250,000.  C'mon, Mr. President.  Be honest.  He's raising the gasoline tax.  He's raising taxes on electricity, natural gas and heating oil.  Don't folks making under $250,000 pay those?  He's also lowering tax deductions for mortgage interest for folks making over $209,000.  That's a tax hike, sir.

And no serious energy policy.  Windmills and solar panels today contribute less than 1% to our energy grid. Obama wants to double this over the next decade.  Ooooooh.  What about nuclear power, as Italy and Sweden are now embarking on (and many other countries are already doing)?  What about using natural gas for our federal vehicle fleet?  The latter would have a quick impact on our consumption of foreign crude.  Wait until oil goes back to $5 a gallon.  Lots of the stimulus package will flow to OPEC.

I'm digressing.  I realize that President Obama was voted in because folks wanted to make changes.  And Obama is delivering.  But I think it's fair to criticize his actions if they don't make much sense and there are other options available.

Phew.  Thanks for listening.

Energy

Just a quick note on energy. I was listening to Bob Brinker's show on Saturday. In the last hour of the program, Dr. Bill Wattenburg was on talking about energy and mentioned that he had taken out an advertisement in the Washington Post. I went to Dr. Bill's website and found the advertisement, and I have to admit it makes a lot of sense. The advertisement urges President Obama to consider using natural gas for the federal vehicle fleet.

No matter where one stands politically, I believe we all want the economy to mend and grow. My fear is that we've taken our eye off of the ball on energy. I believe that the United States will recover, and when we do our energy demand will increase. That could mean $5 gasoline again. What a shame it would be to see a large chunk of the stimulus package end up in OPEC.

Trying to Hold On

• Does it feel like the market is just holding on here? The market really hasn't done too much for months.  But even with dire headlines and investors turning up their noses at the heavy hand of government, the SP500 is still at 826.  Except for that brief trip to 744, the lower 800's has held the range lately.  Will it continue to hold?  Will it eventually fail?
• I'm remaining bullish.  I can't see initiating new sells down here.  Reason for optimism?  Recessions don't last forever.  This period of bad economic times has been going on for awhile.  I'd imagine that we're closer to the end of it than the beginning of it.  And everyone seems bearish.
• Doesn't help to have President Obama badmouthing the economy.  I know he's just trying to sell his stimulus package while the irons are hot and he has high approval ratings.
• By the way, have you noticed how the Democrats are always trashing corporations, yet the Democrats say that they're "pro-jobs?"  How does that work?  Wouldn't you be doing things to help corporations thrive?  Or are we at the point where the government is going to provide the jobs?  Oh... the stimulus package. 
• I've been battling a stomach flu this week.  Bleh.  Getting tired of it.  The first day was the worst and things are settling down some, but still as settled as I would prefer.  And I'm tired.  Nap-city, man.
• Natural gas is under $4.50 as I type.  Seems like a raging buy to me.  I don't know about the one-day, one-week, or one-month performance of buying here, but I believe it will go higher.
• Controversial "American Idol" contestant and former child star Joanna Pacitti has been booted off the talent show, apparently due to her past in the music business.  I always wonder about folks who are already in bands or in the business participating in American Idol.
• Should weak banks be nationalized?  Uh, yikes.
• I can't believe they made a second Pink Panther movie, as the first one was pretty bad.  Steve Martin laughs off criticism, saying comedies always had to overcome critical snobbery and that the genre was "not a critics' medium." This one has Aishwarya Rai Bachchan as the female lead, so maybe it's worth a rent down the road.   Which may be in a few weeks.  LOL.