About that summer rally

I'll be out of town this weekend and won't be posting my planned market update on Friday. There are some ominous "bear trap" signs developing, in regards to this upcoming rally. On marketedge.com (subscription required) the historical models show that we should be in a rally condition. With the market oversold, they would appear to be right. In Jim Cramer's book "Real Money", the Fed cycle model shows the place to look right now are paper, chemicals, and to a lesser extent "smokestack" stocks. Back on marketedge, almost all of these stocks are short sale candidates, with the warning "wait for pullback". In other words, let the rally get going before moving in for the kill. I have a healthy respect for short sellers, having been burned by them in the past.

After the rally starts, we should see a dip in gold prices. An alternative strategy might be to buy gold on the dip. With the credit crunch now projected through 2009 and beyond and the Fed stuck in neutral, this may be a good long term play as well. Of course, sitting it out is always an option. In any case, there's nothing to do but watch this week and await further developments.

The Blog Roll

When I started this blog, I made the conscious decision to keep it simple. I like the minimalist look. Some other blogs have very long favorite sites entries. This is supposed to be helpful in finding other bloggers with similar interests. However, I've found, as a general rule, that the longer the list, the more likely half of them are inactive. This is very irritating. For this reason, my "Sites of Interest" has been, and will continue to be, noticeably short. Mine will be more like a Hall of Fame, as opposed to a list of every blogspot I've ever visited.

Resolved: I, localsoandso, acting as Permanent Absolute Monarch of this blogspot, nominate, second, and approve by unanimous consent, the addition of "Marion" to the Sites of Interest.

I've never actually met Marion, but we have crossed paths at various Republican Conventions over the last several months. Since Republicans in Nevada seem to hold monthly conventions, we're bound to run into each other at some point. Having worked for Sun Micro-Systems, she is a technologically advanced life form. Being retired, she seems to spend most of her time gallivanting through the forest with someone named Duke. Who can blame her?

Sine Die

First of all, there are state laws and statutes, Republican National Party rules, Nevada Republican Party rules, and Roberts Rules, all of which form a labyrinth in which I easily become lost. I don't know if what we did yesterday was legal, proper, or even right. It seemed like the right thing to do at the time. Showing unity can be important at times. People of like minds but differing opinions coming together, agreeing on a set of procedures and working out their differences in a fair, transparent, and equitable way is also important. The time for unity is after a convention not unnecessarily before or during.

The disagreement here is whether or not the convention was properly called into recess. Assembly District 32 candidate Mike Weber and Congressional District 2 candidate James Smack along with 324 other delegates are of the opinion that it was not. I believe that every effort was made to settle the disagreement with what can only be described as an intransigent and secretive state leadership. The Weber/Smack team clearly had their strategy and tactics thought through. By taking the position of "no recess" we did not need a quorum to restart. The leadership now will need a quorum to have any argument at all at the national convention. It was also smart to stay focused on the delegate selection issue without changing the rules or platform that was agreed on in April. I was impressed with Mr.Weber's knowledge, along with his willingness to explain what was happening and the ramifications of what we were voting on. He runs a very tight ship.

I was also impressed with Dr. Terhune. I went in half-expecting some fire breathing RP maniac. Boy, was I mistaken. It would be hard to find a more mild mannered, temperamentally conservative man who is unaccustomed to the spotlight. Judging from the involvement of his kids, I'd guess they are his main motivation for paying the tab. A good and decent man that Dr. Terhune.

So for me, the fight is over. I've done what I could do given my lack of knowledge and experience in these things. I leave it in the Weber/Smack team's hands. Tuesday I'll be attending a precinct captain seminar, where hopefully, I'll learn how to register voters, update voter rolls and promote Republican candidates. One journey ends, another begins.

Convention and Brews

I stopped by the Brews and Blues Festival after the alternate convention today. I'll have more to say about both after I sober up. The short version is, I actually got to hear what the nominees for the national convention thought, and voted on them accordingly. Wow, What a concept. I also got a serious buzz from something called Red Elixor, a micro-brew out of Costa Mesa CA. I'm hesitant to post this right now, but what the heck.

Market Update 6/27/08

The Dow was down for the 4th straight week, losing 4.19%. It is now at its lowest point of the year, having lost over 1200 points 14.5%, and over 20% since October. GM is selling at its lowest since 1974. The NASDAQ has lost 12.7% YTD. The coal stocks I liked two weeks ago have all flattened out. The projections I'm seeing show another drop of 600 points, possibly by the end of next week.

The good news is a summer rally is in the making, although it's projected to be a short one; 12 weeks maximum.

Long term, we're at an interesting point. With the fed undecided on whether to raise or lower interest rates, they are therefor nuetral leaning towards raising them. That means, historically speaking, that paper and forrest products are the place to buy. This group has some of the ugliest charts I've ever seen. Some of these companies have lost over 70% just this year. It would take alot of guts to buy anything in this group. But, who knows, maybe in two weeks it will all look different.

About Budgets

Once again Muths Truths offers some interesting statistics. In a post about state employee 4% COLA's we learn the last raise the governor got was 20.5% ($114,000 to $141,000); the Attorney General 20.9% ($110,000 to $133,000); the Secretary of State 21.3% ($80,000 to $97,000). I could go on, but you get the idea. I suppose that with dollar in the toilet, the legislature figured they could hand them out like gumdrops.

Add to that, this article from the Wall Street Journal. The FHA lost $4.6 billion on their idiotic loans last year. So what is congress doing? A bill passed the house and will likely pass the senate to bail out the banks to the tune of $300 billion. In other words, the worst of the deadbeat home owners get debt forgiveness, the bankers walk away free and clear, presumably to make even more idiotic loans, and the taxpayers get stuck with a bill for $304,600,000,000. Needless to say, we'll probably have to borrow it, thereby increasing the supply dollars, which reduces their value, which increases the relative cost of commodities (gas, food etc.) and at some point we'll all be on the barter system. Would anyone like to trade their loaf of bread for my used CD player?

There are times when I think our leaders are trying to ruin the country on purpose. But, what's the motive? The only alternative is they're stupid. They've all been to Harvard or Yale, so that's probably not it either. The silver lining here is that when the dollar finally becomes completely worthless, the politicians will stop begging us for donations. Unless of course, they'd like a used CD player.

Queen Suzanne?

OK, so this is NOT a picture of Miss New Jersey of 1973 and current Nevada State Republican Party Chairman, Sue Lowden. But, never let it be said that your humble reporter ever let a good picture go to waste. Note the uncanny resemblances; the schizophrenic laugh/cry expression that only a woman getting what she wants can produce; the penchant for parading before the multitudes sporting a fine tierra; and of course, the supple wrist action giving her Hitlerian salute such flair! Oh, the fun we could have had with this. But, it was not to be. This is just some other skinny blonde lady on the road to making the rest of us miserable.

Call me an old chauvinist pig, or just write it off as a guy thing, but there is something deeply disturbing about being led by a beauty queen.

Upping the ante

I just received a letter from Sue Lowden about the "Official" Reconvene Convention. It reads like one of those letters my apartment manager sends me just before he raises the rent. Although the Peppermill is aparently giving them the room,the reconvene will"force us to incur expenses we had not anticipated." And, here it comes, "each delegate must send $35.00 to the Nevada Republican Party." Excuse me, but I already paid $50 for a convention where our leaders did not anticipate delegates wanting to vote. I had a mild idealogical interest in the rEVOLution convention and now I have a financial interest as well. It's not so much as the expense for mic's, lights and chairs, but they have hired "extra security due to the concerns about safety so many delegates have expressed as a result of the earlier session." In other words, they don't want someone like me rolling a little old lady McCain voter during the proceedings. Good Grief! I grow more disillusioned by the day. See you at the Grand Sierra.

Market Update

We could be in for a really lousy week. Quarterly earnings are due out from Lehman Brothers (LEH) on Monday, Goldman Sachs (GS) on Tuesday, and Morgan Stanley (MS) on Wednesday. Bottom fishing should commence on Thursday.

Over the last two months, coal, waste management, and factory equipment have all been having a good run. Assuming a pullback next week, two possible coal company buys are Arch Coal (ACI) and Consol Energy (CNX). I'm also looking at Graftech INTL (GTI) in the factory equipment sector. I didn't find anything I liked in the waste management group. I'll likely be doing some selling this week.

Pass the tater's

"Let's see, should I go to Reno and support my choice for President of the United States, or stick around town and pay ten bucks to eat hot dogs with this guy?"



That's the choice Clark County Chair Berni Zadrowski has put to Las Vegas based Ron Paul supporters by announcing an "All-American Barbecue" on June 28th; the same day as the rEVOLution convention at the Sierra Resort. I'm inclined to believe that even the thickest RP supporter will opt for the open road that weekend.

Days of our lives

I'm officially giving up on trying to post something about the soap opera, aka Nevada Republican Convention, every time there's a skirmish. I didn't start this site until the drama was already well underway. I'm also still in my rookie year of this local politics thing, so I'm still learning the cast of characters as I go along. For anyone who has missed an episode, you can catch up here. Although it is hosted by the Beers/Lowden Axis, it is refreshingly even handed.

Fun with Inflation

I've added a link (to the left) to an inflation calculator. This is by far the best one I've ever run across. Most calculators only use the Consumer Price Index (CPI) and have a very limited time frame. This one has up to ten different measurements, depending on what question you would like answered, and can track the dollar back to 1774. Considering the U. S. dollar was not created until 1793 that's quite an accomplishment. I'm not sure how they do that. In any case, if you prefer the English pound, you can track that back to 1264. I haven't tried pounds yet.

As an example of what this can do, consider the life and times of Ulysses S. Grant. In 1857 a destitute Mr. Grant pawned his gold watch for $22. What would that get him in today's dollars? Classifying a watch as a household good, the CPI yields a value of $524.26. Enough to get you by for a little while, or a little less than my last set of tires. If we want to adjust for the watch as a status symbol compared to what other people earned at the time, using nominal GDP per capita, the value increases to $6,866.01. Two years later, in 1859, while preparing for a move to Illinois, Mr Grant set free the family slave rather than put him up for auction. In the late 1850's the St. Louis market price for a male field hand in good health was roughly $1,300. As a household good, the CPI yields a value of $32,516.13. As a status symbol the nominal GDP per capita yields a value of $402,629.14. The real eye opener here is the relative share of GDP which is a measurement of economic power. The value per slave was $3,913,790.01. At nearly $4million a pop one begins to get a sense of the power, and therefor political influence, of the large plantation owners in the years preceding the Civil War. It is also instructive to consider what kind of man it takes who would pawn his watch for $500 while taking a pass on $30,000 for a principle.

If this is the best...

I just received my Economist magazine in the mail. The headline above these two says "America at its best". The article goes on to describe the upcoming election as the "doughty but sometimes cranky old warrior" vs the "inspirational but sometimes vaporous young visionary." Leave it to the British to use the word "doughty" in a positive sense. As for vaporous visionary, it's the same vaporous vision the left has been preaching since before grandpa was born. Command economies just don't work. The law of supply and demand, like gravity, works the same for socialists and capitalists alike. It can be overcome for a short time, but always wins in the end.

Republicans flunk curmudgeon test

Chuck Muth of Citizens Outreach (COPAC) rates the 2007 Nevada legislative session and it's not pretty. Based on expanding the size, growth, scope, or cost of government, the Republican legislators voting records in the 2007 session received a cumulative 61.1%. Bob Beers, Ty Cobb and Chad Christensen received over 70%, but the other eleven, for the most part, scored in the fifties. My state rep. Heidi Gansert scored sixty, but then one can't expect a woman to be much of a curmudgeon; their feelings get in the way of sound fiscal management.

Over in the state senate, all eleven republican senators flunked. My own state senator, Pete Townsend, tied for last with a pathetically dismal 36%. Unfortunately, he's not up for re-election until 2010. Bill Ragio, The majority leader scored 43%, but the good news here is that he is being challenged this year by a hard-charging, Reaganesque curmudgeonette Sharon Angle. Good luck to her!

He offered his honor...

After five weeks of silence from the state Republican leaders, Wayne Terhune, an alleged Ron Paul supporter, offered to foot the bill for reconvening the state convention. ( nevada4ronpaul.com/nvnewsarchive ).

But she didn't honor his offer...

Republican state party chair Sue Lowden (suelowden.blogivists.com) responded

...be advised that this meeting is not sanctioned by the Nevada Republican Party and quite possibly be in violation of our bylaws, Roberts Rules of Order and Nevada Revised Statute.

Thereby ruining a perfectly good joke.

The rEVOLution convention is now set for June 28th at the Grand Sierra Resort in Reno. The official convention will be July 26th at the Peppermill Hotel.

This is all greatly entertaining. I think if the leadership would let the RP types have their say, they could then walk off the field with their chins up after McCain stomps them. Let's try to remember, we're going to need all the votes we can get in November.