Bond lowered in interest rates, and the Dollar moved sideways.

Gold fell to below $1100/ounce.  This is the first buy range for those of you who want to buy gold.  The “buy” signal for significant buying is $1050 or lower, and I am waiting for that to happen.  If Gold goes below $1000/ounce, it will be a “buy with both hands” signal.

Oil and gasoline fell, and that’s good news for us all.

In the news today…..

Initial jobless Claims – rose last week and were counted at 482,000.  This number is way too large for a recovering economy, so it is a poke in the eye to all who say that we are coming out of the recession.  This also means that the national unemployment rate will undoubtedly rise when it is next calculated.  The 3rd Q of 2009 showed a significant slowing in the jobless claims number, as companies slowed their layoffs.  Many economists thought this meant that companies were poised to start hiring.  This isn’t proving to be true.  Companies slowed their layoffs because they had made all the layoffs that they wanted to make, so they could make their profit numbers.  However, as the economy isn’t picking up, so the companies aren’t hiring.

Congress and the Max Deficit – Congress proposed to increased the cap on spending at $14.3TRILLION, and increase of $1.9TRILLION.  The spending is still out of control, and the message from Mass was clearly to shut down the spending, and get it under control.  Congress isn’t doing this, and that’s why I say “Throw all the scumbags out!!!”

Interesting Tidbit – you can buy an app for your Iphone that translates a baby’s cry – any baby – into one of five distinct categories – hungry, annoyed, tired, stressed, bored.

Russia’s Central Bank – is busy buying Canadian Dollars and Gold to diversify itself away from US Dollars.  Is this a political move, or an economic move?  I believe it is the latter, and they are pointing the way for future Dollar values.

US Mortgage Rates – fell to 4.99% for a 30 Year fixed rate loan.  This is 3 weeks of falling mortgage rates which follow the falling bond market interest rates.  The recent all time low for 30 year fixed rate loans was 4.71% in early December.  The FED has fed $1.25TRILLION into buying mortgage back securities in play to lower mortgage interest rates.  Now, that’s a lot of money.

GM Dealers – are fighting to get back their franchises that were cancelled by either GM or Chrysler last year.  700 dealers are going for binding arbitration to try to get back their dealerships.  GM Chairman says that hundreds of them will get their franchises back through this process.  Huh???  Why did GM and Chrysler cancel them in the first place if there is a valid case for them to remain a franchise.  Is this just another sign of lousy management in these companies?  I think so.

Tonight’s Dinner Conversation…..

A smaller Obamacare Bill is being proposed by the Administration and the Democratics in Congress.  This has been caused by the Mass (home of the original Tea Party) election and the “Scott heard round the world.”  The idea being proposed is to drop out some of the proposals in the existing bill, and then get some Republican support, and pass it.

I fear that the Democrats missed the message from Mass.  The message was “throw that bill away, and start over.”  They don’t want to start over; they want to just slightly amend (reduce?) the bill, but keep the government control pieces in place.

Here is the topic for tonight’s discussion.  Is this a government control health care bill?  It doesn’t have the “public option” in it, so it isn’t government control – right?  I heard this argument on the radio, and it really got me thinking.  What makes the proposed legislation to be a “government control” takeover of the health care industry?

My answer is that there are many, many, many government committees and regulators being legislated inside this bill, and those bureaucrats are the ones who will determine what REALLY happens with health care – whether its the public option, or the current insurance company versions.  Those bureaucrats work for who???  The government, of course.  They rule!!!!  That tells me that the legislation is a government control mechanism, AND I believe the Democrats won’t touch that aspect of the bill.

What is being proposed by the Tea Party crowd?  Start again.  They aren’t saying that health care doesn’t need reform.  They are saying that health care shouldn’t be destroyed by government control methods.  The Republicans have made dozens of legitimate, cost saving proposals for health care, but the Democrats have ignored all of them.  The next few months should be interesting.

Here are the last numbers for today:
Dow Jones 30 Industrial – 10,390 (down 213)
10 Year Treasury Bond – 3.61% (down 0.05%)
Euro – $1.4095
Gold – $1094 (down $18)
Oil – $76.04 (down $1.70)
Gasoline – $1.98  (down $0.06)

Stocks moved sideways today, after its massive gains for the past week.  Bonds lost some interest (rate) by losing some value.

Oil and gasoline moved sideways, as did the Dollar.

Gold gained, and have you been noticing the recent rise in Gold?  It’s great to see it happen.  Is this a run to $1000?  Don’t know, but I think it’s too early to have that happen.  I expect that in September.

In the news today…..

Goldman Sachs – bought back their warrants for $1.1B.  Those are the warrants that WE got for lending them that TARP money that they previously paid back to us.  Did we get a fair price for those warrants?  Who knows?  The Treasury did the negotiation, and used a mathimatical model to determine the actual value.  That model has been criticized by Congress as undervaluing those warrants.  So, did Goldman – the darling of the FED and the Treasury – get a sweet deal???

Healthcare – the battle of the year is on.  The President will pitch his dream for universal healthcare tonight.  Will he be able to answer all his critics who say it costs too much, and won’t do what he promised it would do?

Congress is up to its eyeballs in trying to get consensus.  But, they are failing.  The President has shown no leadership in this bill.  He has left it to Congress to work it out.  There are 3 different versions of a healthcare bill floating around Congress today.  No one has read them, and no one knows what they mean.  No one knows what they cost.  As a history lesson in leadership, when President Clinton tried to pass healthcare (or was that Hillarycare?), the President sent a fully written bill to Congress to pass.  Where’s the leadership in the White House?

Who is writing the bills floating around Congress?  Well, from the information that I can get my hands on, it looks like the healthcare industry (our favorite lobbyists) are writing the passages.  They are putting things in there that YOU will hate, as it will make them rich.  For example, one well hidden clause says that if you get a medical condition from a medical condition that is being treated, the new problem WON’T be paid for by healthcare.  Think about this for a second.  This is crazy.

I’m bringing this up because some of the plans being proposed will bankrupt our country.  It’s important for all citizens to be aware.  Here are my recommendations:

1. Insist that your representative read any bill BEFORE voting on it.
2. Insist that your representative give up his Congressional healthcare plan, and use the new healthcare plan.

That should piss all politicians off.

Here are the last numbers for today:
Dow Jones 30 Industrial – 8881 (down 35 points)
10 Year Treasury Bond – 3.55% (up 0.08%)
Euro – $1.4214
Gold – $953 (up $6)
Oil – $65.40 (down $0.21)
Gasoline $1.84 (up $0.03)

Oil went higher on potential oil supply cuts in the Middle East.  Gasoline
just went sideways today.

Gold fell $25 today ­ more profit taking.  This provides an additional
opportunity to buy gold.  It may bounce up again tomorrow, or it may fall ­
no guesses on my part today.  We must wait and see.

The Housing Crisis…..

At the heart of our economic crisis and bank illiquidity is the continuing
housing price decline.  Here are some thoughts on this phenomenon.

Let¹s look at the gross numbers:
1. There are about 126 million houses/condos in the US.
2. The average family size in the US today is 3.19 people per family
3. At the current population, there are about 91 million families.
4. Conclusion = we have about 26% too many houses for families to have one
house per family
5. However, some families have second (or more) homes, and the 26%
conclusion doesn¹t take this into affect.
6. However, many people cannot afford a house, so that counterbalances
multiple homes per family.
7. The trend of having families come back together and live in the same
house, called multi-generational families, is increasing with the economic
slowdown, and started about 3 years ago.  There was 2 million
multi-generational families in the US, and now there are 6 million.  This
trend makes the housing problem worse also.

While this is a gross and inherently inaccurate calculation, the conclusion
is probably right ­ that is there are too many houses in the US.

What solutions exist out there??
1. Increased immigration could fill those houses.  Definitely a political
football with the topic of illegal immigration not being dealt with by our
Congressional leadership ­ shame on them.  Are they cowards?
2. Planning on which communities we want to grow, and which ones we are
willing to let die.  Who¹s brave enough to debate this political football?
3. President Obama has announced a program to help underwater homeowners
stay in their home.  While this is a step in the right direction, the
program will not solve the problem by placing a ³floor² under housing
prices.

Some thoughts on our Health Care System in the US….

We clearly have a big problem in the US as our health care system is just
too expensive, and is increasing in cost much faster than inflation.  In
fact, as we had a deflation recently, have you noticed any health care costs
going down??  I don¹t.

How about this thought???

In 2007, 40% of adults and 10% of children tried complementary and
alternative medicine (CAM) for their ills.  These are things like dietary
supplements, massage, acupuncture, etc.  These are things that are typically
not covered by today¹s insurance plans, and are definitely not covered by
Medicare.  Medicare is our big future problem in the US budget deficit
fight.

This number of people wouldn¹t by trying something that definitely doesn¹t
work!!!!!  Why doesn¹t the government start thinking about CAM and
preventative medical practices, including CAM???  (Naturally, the answer is
that the pharmaceutical companies don¹t want this to happen ­ but that¹s
just a political problem that can be solved by removed the current
politicians.)  I would also emphasize that only ³proven² CAM methodology be
included in Medicare ­ so this is something the government could spend
(stimulate) the economy doing.

I assert that this could significantly reduce the overall Medicare costs of
the US.

Here are the last numbers:
Dow Jones 30 Industrial – 6547 (down 79 points)
10 Year Treasury Bond ­ 2.89% (up 0.06%)
Euro – $1.2637
Gold – $918 (down $25)
Oil – $47.07 (up $1.55)
Gasoline – $1.34 (no change)