John Mugarian's Dynamic Growth

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

It's true. the old Yogi Berra saying, "It Ain't Over til it's Over!" applies to the stock market and the financials today as the Swiss banking giant UBS said it would write-down another $19 billion and announced the resignation of its Chairman Marcel Ospel. Over the past 9 months, UBS has taken $40 billion in write downs.

Lehman Brothers raised $4 billion with the issuance of a 7.25 percent convertible preferred to raise capital. There was no word as to who the buyers of these securities were.

In another April Fools twist, many investment banks are trading sharply higher as the brokerage brotherhood is suggesting "the worst is over", and the "bottom is in".

I am not smart enough to know if we have seen the bottom or not. This is why I like to use the time tested approach of "dollar cost averaging".

What I do know is what I have said many times before;

"Throughout our history, the track record is clear. Solutions to major problems always appear".

Yesterday, an unofficial branch of the US Government (Pharmaceutical Industry) was called on the carpet after a study released at the American College of Cardiology conference revealed that Schering-Plough and Merck's cholesterol drugs failed to work any better than cheaper generics such as Zocor.

I challenge you to count the number of drug ads as you sit down at night to watch you favorite TV programs. It is astounding! The Pharmaceutical Industry has a drug for everything and a cure for nothing.

After spending trillions of dollars on research, we still do not have a cure for cancer, and the best treatment options for the disease are the same as they were 40 years ago; Chemo and Radiation.

Take for example the founder of the natural gas exploration and development company Occidental Petroleum (OXY), Armand Hammer.

Prior to starting Occidental, Hammer attended medical school at Columbia University. His family owned several drugs stores while he was in medical school, so the bright young man knew a thing or two about pharmaceuticals.

Late in life (early 80's) he was diagnosed terminal cancer and only given a few months to live. Hammer who was criticized for being a socialist went to Russia for medical treatment. After returning from Russia, Hammer lived to age 92 and eventually died of bone marrow cancer.

According the article on Hammer in Wikipedia, "Hammer appeared on The Cosby Show, saying that a cure for cancer was imminent." This was over than 18 years ago, and...still no cure.

The Start of a New Quarter

Today is April Fools Day, and the first day of the second quarter. Is today's rally the start of a new bull market? Is the bottom of the market in? Are happy days here again?

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

After yesterday’s rally I was listening to interviews on Bloomberg and CNBC as some suggested that the bottom was in, and now was the time to buy. They were unusually positive on the financial sector.

While I agree that we are in the midst of one of the best buying opportunities we have seen in over 17 years, I don't think the all clear signal can be sounded just yet.

Like most stock market hurricanes, the eye of the storm passes over giving people hope that the worst is over. After the eye of the storm passes, that final half shortly follows.

For example, we will know the worst is over for the financials when insiders from companies like Bank of America (BAC) begin stepping up to the plate and begin buying large blocks of stock.

This has not happened.

I look at Bank of America as an important bellwether for the industry. Insiders from other banks (WB, FITB, and other regionals) have been aggressively buying, but not the insiders at BAC.

A few weeks ago, BAC feel to an new 52 week low of $33.12 (1-22-08). As the stock price dropped to these unbelievably low levels, you want to know how many insiders jumped in and bought? None, Ziltch, Nadda. Not one insider had enough conviction to buy BAC at these levels despite an incredible dividend yield of 7.7%.

Now I must admit the Wachovia (WB) insiders are singing a different tune. These guys have bought, and bought aggressively.

When the insiders at Bank of America show the same conviction as the insiders at Wachovia, I'll be ready to unload even more cash to my bank holdings. Until then, I am not confident that the financial crisis is at its end.

Today Fed Chairman Bernanke told Congress the economy is close to recession, and the economy may weaken in the first half of the year. I guess he means statistically because from where you and I sit the economy has been on thr rocks for several months.

Yesterday, either fund managers around the globe had mental telepathy or someone pushed a program trading button to create a buying frenzy across the board. Since I don't believe in fund manager telepathy, I'll side with someone pushing a button.

See, these things do happen in the preception of free and open markets. How someone can perceive combined $23 billion in subprime writedown by UBS and Deutsche Bank being postive is beyond me. I guess the button pusher thought the news was positive.

While someone was pushing a button on the overall market, another was pulling the plug on commodities and bonds. I don't believe the long term run in commodities has come to an end. In another month or so, we may be looking at another great opportunity to buy the "stuff" stocks and ETF's.

One of the "stuff" companies, Monsanto, warned that profit this year may miss estimates, and shares closed slightly lower ($112.00, -.95).

For the day;

DJIA: -45.44
S&P: -2.65
NASDAQ: -1.35

The CBOE Volatility Index is back near its low at 23.43 after peaking at 37.57 on January 22nd. We may have a little more upside near term if oil prices can break lower. Today's weekly inventory report put a damper on that as Brent Crude closed up $3.42 to $103.59 for the May 08 contract, and Crude Oil spiked $3.77 to 104.75.

The Energy Information Administration (EIA) said gasoline supplies fell by 4.5 million barrels last week, twice the decline forecast by analysts. According to Bloomberg, consensus estimates for inventories of Gasoline were suppose to be down 2.875 million barrels.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Yesterday's ADP Employment Report turned out to be a major head fake after the release of today's initial jobless claims. Jobless claims jumped 38,000 to 407,000 which was way above the expectations of most economists.

The oversold rally is continuing despite today's jobless claims numbers and yesterday's jump in crude oil prices. Crude, precious metals, and commodities will go lower as the US Dollar is finally picking itself up off the canvas.

I was watching Fed Chairman Bernanke, Treasury Undersecretary Robert Steel, SEC Chairman Christopher Cox, and the head of the Fed's New York operations Timothy Geithner get grilled by the Senate Banking Committee on TV. I have to admit it was fun to watch these guys squirm a little.

The questions were quite pointed, and here are a few along with my own commentary;

Who let our financial system become so fragile that one failure jeopardizes the health of the entire system?"

Yeah you idiots! I want to know who these people are and I want them thrown in jail. I realize you guys represent the "untouchables", but we do have to put on a good show for the TV viewers.

Until you see executives from the major investment banks get thrown in jail, the testimony in front of the Senate Banking Committee is nothing more than a dog and pony show.

The people responsible for the Subprime Crisis was Congress and Bill Clinton when they repealed the Glass-Steagall Act in 1999. Glass-Steagall was enacted in 1933 to separate commercial banking from the securities business.

President Bill Clinton and the members of Congress responsible for Glass-Steagall's demise were repeatedly warned by General Accounting Office (GAO) that banks need to build up adequate capital levels before being allowed to enter the securities business.

Glass-Steagall prevented securities speculation from destroying bank capital, but since its repeal, look what has happened as a result. All of the people responsible for the repeal of Glass-Steagall should be held responsible for their misdeeds.

But, and this is the sad part, none of these people will be held responsible for their actions.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Making money in stocks is all about being in the market leaders when they're running. Making the "big" money in stocks happens when you buy the market laggards before they make their turn. Warren Buffett knows this, and so do the mega rich who own second homes in Palm Beach, Florida.

Let's call the Palm Beach crowd the quiet wealthy. With their mega millions and billions, they have enough money to buy up enough politicians to do the talking for them.

The market mantra for the past few years has been;

1) buy U.S. Treasuries,
2) buy commodities, & precious metals,
3) sell the financials, and
4) sell the U.S. dollar/ buy foreign currencies.

Like most one side trading philosophies, sooner or later the party ends.

-The party ended in 2000 after we were told that the internet was going to shut down most brink and mortar businesses.

-The party for oil ended in 1980 after the experts of the day continued to call for crude to surpass $100/bbl, gasohol was added to fuel, solar panels were encouraged, smaller cars were produced, the speed limit was lowered, and politicians told us to turn down the heat and shut off our lights.

- In 1990, the party ended for the Japanese stock market after the experts of the day inflated the Nikkei by hype after the index hit 40,000. The bear market that followed lasted 14 years.

In short, I feel its wise to ignore hype and to focus in on areas of the market that have been severely punished.

Today, it's more of the same. The Non-farm payrolls were released and showed the US economy lost 80,000 jobs last month. This was the third straight month of payroll declines. As a result the unemployment rate rose to 5.1%, and confirms what we have been saying that the U.S. is in a recession.

Crude oil is traded up today as the dollar continued to weaken. The front month May contract is trading up $0.82 to $104.65/bbl.

The latest CFTC futures and options report showed that large speculators decreased their net long positions in crude. My guess is we are near an important intermediate top in crude.

During yesterday's testamony in front of the Senate Banking Committee, Ben Bernanke made a comment that is extremely important to investors buying stocks in the quality financials.

He said "the Fed expects to recover most, if not all, the $29 billion worth of loans it made to keep struggling Bear Stearns Cos. from collapse."

Simply put, not all of the loans assumed are bad. The problem is with pricing the mortgages. At this point in time there is no market because everyone is scared. Once investors realize that not every loan is bad, the market for these securities will return. Until then, we have panic, and an illiquid investment.

Now, when you consider the writedowns taken by the banks, not every loan they wrote off was bad. In the months and years ahead watch for the banks to begin adding some of those written down assets back to their balance sheets.

Dynamic Growth: ETF Portfolio

Here are our Top 10 ETF's for the week of April 7th:

1) FXF: Currency Shares Swiss Franc Trust- .570
2) DBA: Powershares DB Agriculture Fund- .522
3) SLX: Market Vectors Steel Index Fund- .484
4) EWZ: Brazil Index- .475
5) EEB: Claymore ETF BNY BRIC- .438
6) OIH: Oil Services HOLDRS- .372
7) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .350
8) PGJ: PS Golden Dragon China Fund- .258
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated

Honorable Mention:

None

Notes:

We are cautiously optimistic since Merrill Lynch has decided to upgrade the financials this morning. I say cautiously because I like to take a contrarian approach to beaten down sectors, and I would feel much better if Merrill continued its negative stance.

In any event, I feel when the negative sentiment for the financials subsides, we will be looking at a multi-year advance for the sector.

I would feel more confident with the financial sector if insiders at Bank of America (BAC) and a few others would buy aggressively with their own cash. I have yet to see this happen.

The Swiss Franc Trust (FXF) has taken over the top spot in our ETF portfolio, and we remain positive on Agriculture, Steel, Brazil, and the BRIC nations as well. China remains in the duldrums, but we believe the Chinese Government will put their best foot (economically & politically) as we go into the 2008 olympics.

Here are our Top 10 Fidelity Sector Funds for April 2008:

1) FSESX- Energy Services
2) FNARX: Natural Resources
3) FDFAX: Consumer Staples
4) FSENX- Energy
5) FSCHX: Chemicals
6) FSMEX: Medical Equipment
7) FSCGX: Industrial Equipment
8) FSDPX: Materials
9) FWRLX- Wireless
10) FSRBX: Banking

Honorable Mention (Holds):

FSDAX: Defense & Aerospace

Notes:

Energy continues to dominate our top 10 holdings in the Fidelity Sector Fund portfolio. It seems that investors are holding out an outside chance that John McCain may be able to compete with any of the two Democratic candidates in November.

With the economy in recession, oil prices remain high due a weak dollar, and the Feds policy of ignoring inflation. One the Fed in finished lowering rates, the dollar will strengthen, and oil prices will probably decline.

Keep in mind that despite a mild correction, oil prices will likely remain firm as we get into the summer driving season, and hurricane season.

The Week in Review:

This morning Merrill Lynch analyst in London, Stuart Graham, upgraded European banks to ``neutral,'' saying credit markets are ``past their worst''. Specifically, he upgraded UBS to ``buy'' from ``neutral.''

Pointing to the rescue of Bear Stearns by JPMorgan Chase, and the UBS write down of $19 billion, Graham showed some courage by identifying these two events as a potential bottom.

Oddly, here in the US, Merrill Lynch downgraded Bank of America last week from "neutral" to "sell", and lowered its 2008 and 2009 earnings estimates.

I guess the right hand is not aware of what the left hand is doing.

I hate to keep pounding on the Wall Street Gang, but they make the job so incredibly easy. The current oversold rally does not necessarily constitute a market bottom.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Today's economy seems a lot like 1973-74, only that people today are different.

I remember 1973-74 very well. Growing up in the suburbs of Detroit, I remember a lot of people who were hurting because high energy prices and inflation had all but killed the automotive industry.

My dad was in the car business (the blue collar side), and times were tough. I love onion soup, but when my mother boiled 2 onions in beef broth for three consecutive days, I knew something about dinner wasn't normal.

Today, Detroit is in shambles. The wonderful urban atmosphere of playing ball with your friends, riding the bus downtown, and visiting Henry Ford's home in Highland Park are all but gone. Don't get me wrong, you can still do all those things, but you might get killed in the process.

People have changed too. As accurately described in David Callahan's book, "The Cheating Culture", crimes against innocent people have escalated beyond the urban environment to just about every aspect of society.

Professional Athletes Cheat
Wall Street Cheats
Medical & Dental Professionals Cheat
Blue Collar Professions (Plumbers, Electricians, etc) Cheat
Corporate America Cheats
Bankers Cheat
Politicians Cheat
News Media Cheats
Students Cheat

And round and round we go. It seems today that everyone has an angle, and character, honesty and discipline has gone by the wayside.

Yep, people have changed. I attributed most of it to a lack of discipline. Discipline can be lacking in many aspects of ones life. It can be a lack of fiscal discipline (spending, real estate, the NASDAQ in 2000), or behavior discipline.

Discipline is often obtained thru behavior modification where punishment is the outcome for a person who does not act in accordance with rules of conduct. Ever since "timeout" took the place of a belt on a behind, or a good slap across the face, kids have become more unruly and lack respect.

ABC has made a fortune on society's lack of discipline when they came up with the TV show "Supernanny". My mother and dad would have put "Supernanny" out of business in about 5 minutes. After 5 minutes with my mom and dad, the little brats you see on this show would be acting like perfect little ladies and gentlemen.

What is occurring in the economy is a good ole dose of old fashion discipline.

I received a folder from a guy recently asking for my help on one of his clients who bought too much real estate. As I looked over the portfolio of "dirt" the first thing that came to mind was, "this guy never played or won a game of Monopoly".

If people had invested in real estate in the same manor as one who seriously wanted to win a Monopoly game, they would never have gotten themselves into the mess they are in.

The problem of course goes right back to the lack of discipline. The consequences for this lack of discipline will be a monetary belt on the behind, or a good fiscal slap across the face.

The only reason I can see that a person would buy 5 pieces of property they couldn't afford, versus two pieces that they could, is greed. I guess this is why greed is called one of the seven deadly sins.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

With the housing and credit markets in turmoil, and energy prices hitting new all-time highs, investors have pulled in their horns and have altered their spending habits.

This morning United Parcel Service (UPS) said that a weaker economy and higher fuel costs are killing them.

The IMF's new estimates showed that the sub-prime crisis would hit $945 billion, while the losses in the US would be 0.5 percent, and the United Kingdom's losses would be 1.6 percent.

Warren Buffett has yet to unleash his massive hoard of cash into stocks which signals to investors that the bottom in the equity markets has yet to been seen.

As I continue to comb through the latest insider buys and sells, corporate executives with the big blue companies have not bought as aggressively as one would think given the magnitude of the markets downturn.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

I had to just shake my head this morning as I heard the Wall Street "spin-machine" begin pumping Wal-Mart (WMT) right at a tradable high. It is amazing how the system works isn't it?

In August 2007, I wrote a "Journal" piece entitled, "Wal-Mart: Sorry Merrill, you're wrong again!".
This was the day that a Merrill Lynch analyst issued a "sell" recommendation on Wal-Mart when the stock was trading at $43 and some change.

In a little over 7 months, WMT is up 27%, trading just shy of $55. With the stocks 7 month rise, the Relative Strength readings are now close to registering a "sell" signaling for traders.

Wal-Mart now has a RSI reading of;

RSI- 7 months: 68.33
RSI- 7 weeks: 76.07
RSI- 7 days: 61.24

The RSI or Relative Strength Index measures overbought and oversold levels. Basically, when a stocks RSI rises above 30 it is considered a buy, while a RSI reading above 70 is considered a sell.

You can follow Relative Strength on overbought and oversold stocks by visiting the RSI Stock Blog.

The argument for buying Wal-Mart on CNBC this morning was consumers were hurting, and they were going to Wal-Mart to get more bang for their buck. Correct me if I'm wrong, but I said this 7 months ago when the stock was at $43, and not today with the stock at $55.

As we view this chart (barchart.com), you'll see that Wal-Mart is trading at the upper-end of its trading range which dates back to 1998. If you want to wait until the stock reaches $60 before you take profits, that's up to you. If you bought the stock when I first mentioned it in August 2007, I certainly wouldn't wait around for $75 before pulling the trigger.

There is one thing you need to understand about Wall Street's stock opinions. When you hear the Merrill says buy this, or Morgan Stanley says sell that, it is often one person’s opinion. In the big scheme of things, the opinion of one or two people doesn’t amount to a hill of beans.

Please take the opinions of analysts with a grain of salt. Any Wall Street analyst that has to put this disclaimer on the bottom of every research report cannot be trusted;

(Name of Firm) does and seeks to do business with the companies covered in this research report. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.

ENOUGH SAID ?

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Would you form your stock market opinions from a financial TV anchor with a pierced stud in his tongue? I guess this is known as tongue ring to the youth spending culture.

As I flip between CNBC and Bloomberg to get some pundit updates, I thought I noticed that Bloomberg's Matt Miller had a tongue ring. The more I watched, the metal little ball became more and more apparent. Being the curious person that I am, I began to wonder why a person of non Aztec and Mayan descent would inflict this type of pain upon themselves just to fit into a relatively small group of freaks.

As I began to ask this question, I got answers like fashion, a desire for pain, and intimate reasons. Oh, really?

I really don't care what other people do as long as it is not detrimental to me and my family. But, I have learned that people who pierce their tongues and other parts of their body are doing so to be different, and enjoy bucking the establishment. I guess this is the younger generation’s way to be cool and fit in. Okay, fine...I don't care.

But is there any better proof that young people like Matt Miller don't have the first clue about the inter-workings of the financial markets. Is there any better proof that Bloomberg's Matt Miller, or Betty Liu are nothing more than readers of financial news from a tele-prompter?

After viewing this Erin Burnett clip on Apple, we can clearly see that she is doing nothing more than reading off the tele-prompter. Calling Apple the sh*t stock for 2008 can't be her own opinion.

Obviously these people are very talented readers to make us believe that they actually know what they are talking about.

There some very good are financial commentators. I like CNBC's Joe Kernan and Mark Haynes. Kernan was a former stock broker, and often push the envelope except when interviewing the boss, GE's Jeff Immelt.

Mark Haynes is really my favorite, and looks like a guy dying to jump down someone throat whenever he feels the person he is interviewing is not being forthright. I guess that's why Mark is no longer in the studio, and CNBC banished him to the trading floor.

I do miss Mark Haynes. He would question a CEO or CFO like a Philadelphia Lawyer to get to the truth. As investors, you and I expect to hear the truth before we make important financial decisions, unfortunately Mark Haynes isn't there to protect us, and Joe Kernan can't do it along.

Dynamic Growth: ETF Portfolio

NEW BUYS:

None

NEW SELLS:

None

SWITCHES:

None

Here are our Top 10 ETF's for the week of April 14th:

1) FXF: Currency Shares Swiss Franc Trust- .555
2) DBA: Powershares DB Agriculture Fund- .519
3) SLX: Market Vectors Steel Index Fund- .495
4) EWZ: Brazil Index- .479
5) EEB: Claymore ETF BNY BRIC- .437
6) OIH: Oil Services HOLDRS- .370
7) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .356
8) PGJ: PS Golden Dragon China Fund- .251
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated

Honorable Mention:

None

Here are our Top 10 Fidelity Sector Funds for April 2008:

1) FSESX- Energy Services
2) FNARX: Natural Resources
3) FDFAX: Consumer Staples
4) FSENX- Energy
5) FSCHX: Chemicals
6) FSMEX: Medical Equipment
7) FSCGX: Industrial Equipment
8) FSDPX: Materials
9) FWRLX- Wireless
10) FSRBX: Banking

Honorable Mention (Holds):

FSDAX: Defense & Aerospace

The Week in Review:

The DJIA lost -256.56 points on Friday, while the S&P 500 was down -27.72, and the NASDAQ dropped -61.5

For the week the DJIA lost 2.3%, down 13% from the highs set in October 2007. The S&P 500 fell 2% for the week, and is down 15% from October. The tech heavy NASDAQ fell 2.6% last week, and is down 20% since October.

The big news last week was the earnings disappointment from a big market bellwether, GE. The company blamed its earnings shortfall on a slowing U.S. economy, and losses at its financial services business.

Treasury Secretary Henry Paulsen and Fed Chairman Ben Bernanke were meeting with the G-7 this weekend to drum up support for a sagging US Dollar. The solutions to the dollars woes are pretty straight forward; raise US interest rates, lower rates in Europe, or intervene in the currency markets and buy dollars.

The president of the World Bank, Robert Zoellick and the world’s economic ministers said Sunday that "shortages and skyrocketing prices for food posed a potentially greater threat to economic and political stability than the turmoil in capital markets."

This is an interesting comment given the magnitude of the financial crisis that seems to be spreading in the US and around the globe.

One of my sources to the economic problems facing the US said that the (perceived) food shortages, and massive inflation that we are all experiencing gripping is a direct result of a "poor energy policy and global demand for industrial materials."

Since he wishes to remain anonymous, here are some comments;

A poor US energy policy has caused the price of meat, milk and bread to go higher. The ethanol mandate and associated blending subsidy (52 cents a gallon) is responsible for as much damage as anything wrought by congress in my lifetime.

-And energy policy would be limited to subsidizing research on sustainable alternative fuels, and would let market forces will determine when they are economically feasible.

My bet is their will be a concerted effort on behalf of the G-7 to buy dollars to provide stability. Round two will happen in 6-12 months when the Federal Reserve begins raising interest rates to fight inflation. This will happen when the Fed Chairman and Treasury Secretary are confident that the US banking system is no longer in danger, and all major banks are re-liquefied with fresh capital.

As we head into the November elections, I am looking for the dollar to begin stabilizing, and energy prices to decline. Despite this tidbit of good news, I feel the distain for the Republicans will be so strong that the devil him- (or her)-self on the Democratic side could end up winning the White House.

It's (Lack of) Earnings Season!

In the first week of the Q1-08 quarter, 421 reported their results. On average earnings fell 17% year over year.

On Friday, GE reported disappointing earnings and cut its outlook for 2008. This report does not bode well for the rest of the economy.

To add insult to injury, consumer sentiment has been falling, pending home sales dropped, oil futures surged, and commodity prices continue to soar.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

In a world of constant economic BS, yesterday we were told that retail sales (including food & energy sales) were up 0.2 percent in March.

Today the PPI numbers were released, and excluding food & energy, the core rate was up by just 0.2 percent, while the overall March PPI was up 1.1% vs. expectations of up 0.6%.

Clearly, inflation is out of control as a lower dollar and higher energy prices are causing prices for commodities to soar.

As one of my talented sources said yesterday, much of today's inflation problems can be blamed on a failed energy policy here in the US.

If you keep wondering why the bold heading at the top of the page says, "in a minute, you're going to hear the rest of the story", now you know. Basically, I am sick and tied of economic data, and misleading political statements that try to get us to believe one thing when often times what is being said isn't true.

Here are two examples from John Williams at the Shadow Government Statistics website. The first example shows how the unemployment rate reported to investors greatly understates the real numbers.

Politicians are more interested in painting a rosy picture instead of telling the truth. The government likes to massage the economic numbers by making gradual changes to economic data, and then try and report it as fact.

According to Williams, with the adjustments and spin, if the same method of measuring unemployment were used today as they were decades ago, the current rate of unemployment would be 13%, and not the 5.1% number currently reported.

Williams also estimates the current CPI at 12%, which is three times higher than the 4% figure being reported to investors.

Oddly, our politicians could care less what their constituents want or think. They are going to do what is best for themselves, and the people who tell them what to do.

On Easter Sunday, a reporter from ABC News told VP Dick Cheney that "two-thirds of Americans say it's not worth fighting." Cheney's answer was, "so?".

On The Political Front

The war in Iraq and Afghanistan (the constant chasing of Pink Elephants) has ruined our reputation in the world, and according to the Nobel economist Joseph Stiglitz, has cost the US tax payers "between three and five trillion dollars".

As a result, the price of oil and gasoline has tripled, the price of gold has quadrupled, and the dollar has declined rapidly to wooden nickel status.

We need to understand that there are some very powerful lobbies in our nation that want us to not only continue the war in the Middle East, but escalate it as well.

Its clear to me that some of those very powerful lobbies are backing John McCain. Other lobbies such as the health care industry, have now made Barack Obama their second largest recipient of donations, while numero uno remains Hillary Clinton.

You folks who grew up in the 1940's, and 50's have seen the morals and principles that made our nation great be driven right into the toilet. Those who grew up in the 60's and 70"s are shaken by some of the changes, but have accepted them. People who grew up in the 80's, and 90's are too deep in debt to worry about anything else. And the people growing up today do not have a clue as to what's going on around them.

As I watch people interviewed on TV as to who their favorite candidates are, I quickly realize they don't have a clue about the "New World Order", the "North American Union", "NAFTA and CAFTA", the "NAFTA Super highway", "Bilderberg", and everything that surrounds these topics.

What a shame!

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

The stock market leap higher right out the gates this morning as Intel's first-quarter earnings were in-line with expectations ($0.25) and the company raised its forecast for revenues, gross margins and capital spending for the second quarter and 2008.

I just bought a new laptop and desktop from Dell, and I paid less for the two new ones than I did for my old desktop. That just goes to show you that all is not necessarily bad in a down economy. Remember the old saying, "buy low". Oh, I forgot, in recent years the old saying was, "buy high" because it’s going higher.

The other news that was spun positively this morning was JP Morgan's (JPM) earnings shortfall and news the company would need further reserves for $5.1 billion in credit losses. The company's CEO Jamie Dimon said the bank JPM had enough cash to weather the credit crisis, but stopped short of giving the all clear signal.

Wells Fargo (WFC) beat earnings expectations, and Bank of America (BAC) rose in sympathy with the report. That's all well and good but there has not been any insider buying in either company to get me excited right now.

Value investors should be accumulating the quality bank stocks on days of sharp sell-offs. Once the carnage is over, banks will have easy y/o/y earnings comparisons to beat over the next few years. In addition, while some (and more to come) banks have cut their dividends, I think they will aggressively raise those dividends as a giveback.

The March consumer price index (C-an't P-roject I-nflation) rose 0.3%. The market is calling the number "in line with expectations". Excluding stuff we use (food and energy), the core rate rose 0.2 percent.

One of my economic sources said (and I agree) that the "stupid energy policy" that we have in the US has led us into the black hole that we are currently in. He said;

Core inflation is due to poor energy policy and global demand for industrial materials. The Chinese want roads, so yellow metal, and all the inputs to produce it, are in demand. The Indians want office buildings for their call centers so copper and fiber optic are in demand. Both are causing concrete to go through the roof.

Never mind that only a very small portion of us will put ethanol into our cars to burn at less than 70 percent of the efficiency of gasoline. It takes more energy inputs to grow corn, ferment it under heat from natural gas, truck it to a jobber who pumps it into his fuel stores, and then truck it to the gas station, so can be realized from burning in an internal combustion engine.

Nuff Said ?

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Think outside of the box with me for a moment. Prior to the last Presidential election, and the two previous mid-term elections, oil prices magically decline a few months before.

I could care less what the media says, you have to keep in mind that the US media is not the only news source in the world. Unfortunately, the public’s opinion is formed and swayed by what is reported on TV. If I didn't know better, I would think that’s the way the system was designed.

As an example, was your opinion on stocks, the market, and the economy swayed in 2007 by these media phrases?

- The Goldilocks Economy
- Soft Landing
- The Resilient Consumer
- "Points above new all-time high" on your TV screen.
- Valuation models suggest stocks are too cheap to pass up at these levels.

And this comment by CNBC's Erin Burnett takes the cake- "move over Goldilocks- Economic Nirvana"

Are you getting my drift?

Now extrapolate these opinions on the financial markets into everything else meant to sway your opinion on CNN, Fox, and MSNBC, and tell me what you come up with?

My point in this little exercise is to cross reference everything, and remember what you hear from US news sources didn't come out of the "Burning Bush".

Getting back to the possibility of oil prices falling ahead of the election;

"a senior Iranian oil official said on Saturday he expected the oil price to fall ahead of November's US presidential election, suggesting Washington would seek to push it down for political reasons.- Source Arabian Business

Now most Americans are conditioned to believe that any news that comes from a Middle East source should be immediately ignored or discounted. We have been told the same thing about every other news source who does not agree with the "Establishments" agenda.

Oh, I get it. The Arabs are trustworthy when they throw billions of dollars at our investment banks to prop them up, but they're untrustworthy when they give an opinion.

In the weeks ahead, I am looking for oil prices to decline and commodity prices too.

Today's the market closed slightly higher DJIA (+0.89), and S&P (+0.85), while the NASDAQ (-8.28) closed lower. All eyes were cautiously on Google, but after the bell the company reported earnings of $4.52 per share dispelling rumors that the company may disappoint.

Shortly after the release, Google shares rose over 50 points in afterhour trading.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

I scan insider trades from various sources throughout the day, and insiders are exercises and selling at a very high clip. This being said, I think you'll find that the old "Sell in May, and go away" saying may actually mean something this year.

Checkout today’s insider activity, and look at the number of options that were exercised and cashed in- Insider-Monitor. You can also click on the "past buys and sells" and see what insiders have bought and sold over the past 7 days.

Today was options expiration, so trading volume was heavy. Much will be made of the markets technical breakout above 1380 on the S&P, closing at 1390.33 today. To quote the guys I use to play ball with in the streets of Detroit, "It ain't nothin but a thing". For those of you not familiar with this term it means "no big deal".

Actual overhead resistance on the S&P remains the 1380 to 1410 zone. The DJIA looks like it could reach the 13,000-13,500 before running into trouble.

With all that’s happening in the credit markets, oil, inflation, and our worthless currency, you're probably wondering why the market is so euphoric. I'll tell you what I think.

The market smells a bailout coming for real estate, and hence the credit markets. Rumors have circulated that FHA will take millions of sub-prime mortgages off the hands of lenders, and the second rumor is the possible rebirth of the "Resolution Trust Corporation" that bailed out the real estate crisis in the 1980's.

While I believe solutions like these are in the works, the timing of implementation is the million- I mean trillion- dollar question.

Dynamic Growth: ETF Portfolio

Here are our Top 10 ETF's for the week of April 21st:

1) FXF: Currency Shares Swiss Franc Trust- .487
2) DBA: Powershares DB Agriculture Fund- .542
3) SLX: Market Vectors Steel Index Fund- .477
4) EWZ: Brazil Index- .467
5) EEB: Claymore ETF BNY BRIC- .431
6) OIH: Oil Services HOLDRS- .446
7) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .360
8) PGJ: PS Golden Dragon China Fund- .228
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated

Honorable Mention:

None

Here are our Top 10 Fidelity Sector Funds for April 2008:

1) FSESX- Energy Services
2) FNARX: Natural Resources
3) FDFAX: Consumer Staples
4) FSENX- Energy
5) FSCHX: Chemicals
6) FSMEX: Medical Equipment
7) FSCGX: Industrial Equipment
8) FSDPX: Materials
9) FWRLX- Wireless
10) FSRBX: Banking

Honorable Mention (Holds):

FSDAX: Defense & Aerospace

The Week in Review:

Investors holding a large percentage of their assets in bonds with maturities longer than 5 years may want to take some profits. By all means this doesn't mean sell that you should sell all of your bonds, but we feel interest rates will be more attractive 24 months from now than they are today.

I feel the bond market is in the middle of a bubble due to the current credit crisis. Investors have fled everything and anything due the risk associated with CDO's, CMO's and SIV's. Banks have held some of these assets, and various money markets have done the same. Since large investors are dealing with the unknown of just how widespread these risky are, they have piled into Treasury's as a safe haven.

In addition, foreign central banks have diversified away from U.S. government bonds and into other currencies because of the dollars extreme weakness.

Since I believe the next Fed cut in interest rates will be their last, a window of opportunity exists for investors to take profits in bonds.

The next problem the Fed will address will be the weak dollar, and inflation. To ward off the possible effects of stagflation, the Fed will focus on pumping up the dollar to relieve the inflationary pressures investors are feeling in energy, and commodity prices. The only way to do this is to focus on supporting (buying) the US dollar.

More than likely the support for the dollar will start with buying by the Fed, and help from other sources (Bank of Japan, etc.) around the globe.

I am not smart enough to know how long the dollars rally will last, but I feel comfortable with the opinion that a substantial rally is in the works.

When the dollar begins to rally, energy and commodity prices will correct sharply as will precious metal prices. The media's attention has been entirely focused on these three asset classes for such a long time, my contrarian bones are telling me a correct cannot be far behind.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

The "Great American Land Grab" of 2008 is well under way as Timothy Geithner, president of the Federal Reserve Bank of New York, accurately predicted at the annual Bilderberg conference in Ottawa, Canada in June 2006.

These comments by Geithner prompted one unidentified Bilderberg attendee to say, "“stupid Americans deserve their fate.”

Two years later, the predictions Timothy Geithner have come true.

With speculators getting creamed, the real estate market in turmoil, energy prices sky high, consumers laden with debt, there is no way we are at the beginning of a sustained upward trend in the stock market.

If I were you-let me rephrase- I am not interested in spending any of my cash on stocks until we get around 11,000 on the DJIA. At this level, the DJIA would be down greater than 20% from the October 2007 highs.

Don't be fooled, the welfare checks (economic stimulus package?) being passed out by the government will be great for companies selling beer, cigarettes, tattoos, food (grocery stores), but I don't think it will benefit much more than that.

The other shoe to drop in the financial sector will be the repos of vehicles from cash strapped consumers who don't have enough money to make their car payments.

The "stupid Americans" (not my words- its the Bilderberg guy above) that used their homes as ATM machines, bought more home than they could afford, speculated on real estate, bought three cars instead of two, and paid $200 for a pair of $5 dollar sunglasses are now poor.

After years of greed and questionable lending practices, "stupid lenders" are now having their hats handed to them also. "Stupid Wall Streeters" that repackaged sub prime loans as safe and viable investments are now puking up ABS's-CDO's-SIV's.

Peoples selfish desire for money, wealth, and foolish possessions are coming back to bite them in the butt. By time its all said and done, there will not be much to chomp on.

As Warren Buffett has said, "When the tide goes out, you'll know who has been swimming necked".

The only hope for consumer and the economy is a massive government bailout for real estate, and the credit markets. Rumors have circulated that FHA will take millions of sub-prime mortgages off the hands of lenders, and the second rumor is the possible rebirth of the "Resolution Trust Corporation" that bailed out the real estate crisis in the 1980's.

While I believe solutions like these are in the works, the timing of implementation is the million- I mean trillion- dollar question.

There is a lot of good news among the bad. First, bear markets and corrections do not occur when times are good. It is, believe it or not, the bad times that allow investors to buy stocks on the cheap. Eventually, when the economy recovers, those with the courage to buy during the tough times are handsomely rewarded.

This time will be no different.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Crude oil is trading down this morning after a slight build was reported in crude inventories by the EIA. Despite the builds, the June crude oil contract is only down .34 to $117.73.

The financials came under pressure this morning after Ambac Financial (ABK) reported heavy losses in its CDO mortgage-related holdings.

Liberty Mutual announced it was buying Safeco for $6.12 billion.

Today I thought I would provide you with a few opinions from some stock market experts whose opinions and insights I admire. In addition, I have provided you with some information not widely covered by the mainstream (controlled) media.

Bill Cara

Bill discusses the Bank of England's plan to allow banks to temporarily swap "their mortgage-backed and other securities for U.K. Treasury bills, to ease the current credit crunch".

"This emergency tactic of the Bank of England is really about helping to usher in a 2000-2002 recession-occurring Bear market rather than a 1930’s era Great Depression and mother of a Bear market. You see, the UK is in every bit of trouble as is the US… and Europe, and Japan. Even proponents of India and China are going to see what happens to 5% and 6% economic growth with the inefficiencies that are in those markets."

Jim Rogers

Rogers says, "Ben Bernanke should resign and the Fed should be abolished as a way to boost the falling dollar and speed up the recovery of the U.S. economy".

Marc Faber

"I think the stimulus package will be an ill-fated attempt to revitalize the economy. If you look at the problem of the economy, it’s been excessive credit growth that came from easy monetary policies. And what they want to do now is essentially to implement another set of monetary policies and other measures to stimulate consumption, when consumption precisely has been the problem of the United States – the excessive consumption".

George Soros

"Billionaire George Soros called the current financial crisis the worst since the Great Depression and said markets will fall more this year after a brief rebound."

News Not Covered by Mainstream Media
Paul Craig Roberts

Roberts, the former Assistant Secretary of the Treasury under Ronald Reagan says, "Exactly as the British press predicted, last week’s congressional testimony by Gen. David Petraeus and Green Zone administrator Ryan Crocker set the propaganda stage for a Bush regime attack on Iran".

Texans March on State Capitol to Stop NAFTA Super Highway

For Peyton Gilbert, the battle over the Trans-Texas Corridor is reminiscent of the moment in 1836 when Lt. Col. William Travis drew a line in the sand at the Alamo and invited those willing to fight thousands of Mexican soldiers to step across.

"That line in the sand is the Trans-Texas Corridor, and it's a threat to our sovereignty again, just like at the Alamo," said Gilbert, 14, who is from Whitehouse, near Tyler.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

The stock market was rangebound for most of yesterday after oil prices finished at 118.30, up 23 cents on the day. The EIA released its inventory numbers showing Crude, Gasoline and distillates had larger than expected builds.

Crude is trading down this morning as the dollar rebounds. The front month June contract is trading down 93 cents to $117.37/bbl.

Commodity prices were lower in response to a stronger dollar.

United Parcel (UPS) lowered its full year outlook, but managed to meet estimates.

The Labor Department reported that claims for unemployment benefits declined by 33,000 last week to 342,000. This came as a surprise to many economists who had predicted claims would jump by 3,000.

Amazon (AMZN) and Starbucks (SBUX) said that weak consumer spending is hurting business, while Yahoo (YHOO) and Boeing (BA) beat analyst estimates.

The Rest of the Story

I am old enough to remember the 1970's. As Yogi Berra would say, "this is deja-vu all over again".

To predict what is going to happen in the future, you have to remember what has happened in the past.

The idiots in congress and Bill Clinton were responsible for the Sub prime Crisis when they repealed the Glass-Steagall Act in 1999. Glass-Steagall was enacted in 1933 to separate commercial banking from the securities business.

Once again it seems obvious that these government employees don't work for people like you and I, but rather for big business who write the "big" checks.

When I was a young college coach I told one of my colleagues, "Boy, I can't wait until next year when we get some of the new players in, and get rid of the one's with a bad attitude". He said, "Nothing changes but the names and the faces". I think the same goes for historic market cycles, economic mistakes, and the idiots that keep making them.

The pendulum continues to swing. Regardless of what we want to believe, back and forth the pendulum goes. The mistakes from the past are the same mistakes being made today.

In the 1970's, prices of goods and services shot up because the federal government caused the supply of money grow out of control to maintain full employment. The same thing happened in 2000-2003.

The housing market woes are nothing new. We saw the same problems in the 1980's. Loose lending standards, greed, and bankruptcy are nothing new.

Same Old Problems- Same Old Solutions

Is it just me? Or, has there been a concerted effort to push this "Green" movement you and I have been hearing about lately. All of a sudden, we are hearing "Green" this and "Green" that.

Oh, and the cure for our nation’s energy woes... Same old solutions again... Ethanol today was Gasohol yesterday (1970's & 1980's).

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

The stock market closed higher yesterday after Merrill Lynch announced it has enough capital to maintain its dividend, and Credit Suisse said that its capital position remained strong despite a $5 billion write-down . Almost on cue a Deutsche Bank analyst predicted that the credit crisis "seems closer to the end." As a result, the financials rallied.

I have a hard time believing that the end of the credit crunch is near, particularly when consumers continue to walk away from real estate, and the new pre-foreclosure manta of "short sales" continues to gain strength.

Yesterday's strength was led by financials and technology stocks.

The NASDAQ Composite broke out during yesterday's session, but after the close Microsoft reported its third quarter profit fell 11 percent to $4.39 billion which was at the low end of expectations.

The Rest of the Story

Here's the real scoop, and theres no denying it, the consumer has collapsed and is suffering a financial coronary. Time is of the essence, and if the government EMT's don't come to the rescue quickly, the patient will die.

The problem of course is there are millions of patients, and only a handful of EMT's to help.

If you truly look at the big picture (political leanings aside), our nation is on a downward spiral into an economic abyss. You can thank the "New World Order" gang for our economic plight since their intentions are for economic equilibrium.

Regardless of who you vote for in the upcoming presidential election, they are all owned by the NWA gang.

Here's the skinny. You've heard me talk about NAFTA, but NAFTA is much more than free trade between nations. NAFTA is the great equalizer. Since NAFTA, foreign countries have bled us dry of decent jobs, and while we shift our wealth to other nations, the standard of living for poor nations rise while our standard of living declines.

Its just that simple.

To make consumers forget about the millions of jobs lost in the US, the idiots in congress and Bill Clinton repealed the Glass-Steagall Act in 1999, and set a mandate through The Community Reinvestment Act that banks loan money to anyone with a pulse.

Banks and lenders (being greedy) went a step further and decided to apply their own version of the Community Reinvestment Act by lending money to people who were not eligible under the act.

When the Federal Reserve lowered interest rates, the trap was set. Americans hocked their financial futures by taking the bait of 100-120% home loans, home equity loans, and opened multiple credit cards that were sent by mail.

Being the idiots that they are, consumers didn't have enough financial savvy to know you don't sign up for an Adjustable Rate Mortgage (ARM) when interest rates are at 40 year lows. In addition, some consumers got suckered into "interest only" loans which are for people who can't afford what they're buying in the first place.

Lenders, being the crooks that they are, took advantage of idiot consumers by offering Adjustable Rate Mortgages (ARM), and "interest only" loans because they could make more money off of them.

Now consumers are hit with higher mortgage payments, huge credit card debt, high energy and food prices, a decline in wages, higher unemployment, and a currency that is 40 % lower backed by a government that is $9.33 trillion in debt.

I don't know about you, but I have a hard time seeing the silver lining in all of this.

Now that President Bush is cozying up with Canadian Prime Minister Stephen Harper and President Felipe Calderon of Mexico, the “Security and Prosperity Partnership” (SPP) agreement can proceed according to plan which merges the economies of the United States, Canada and Mexico into one entity.

So, how will this all end? What will bring stability to the US currency, drive down energy prices, and bring inflationary pressures down? How about a new currency?

Well, why didn't I think of that! Once Americans beginning screaming bloody murder over higher energy costs, etc...they will be ready for anything that will fix the problem. Yes, this even means giving up their sovernity.

Everyone laughed when the prospects for a new currency was mention in Europe. Now they have the Euro.

In the years to come you'll find that all of the issues we have today were a set up to allow is to move to the new "North American Union" currency called the "Amero". Heven help us, or should I say, God save the king?

Here is Steve Previs from Jefferies being interviewed on CNBC discussing the implementation of the "Amero" in the US. Please remember his words, " It isn't being talked about".

If you have been wondering why President Bush hasn't secured our borders with Mexico, now you have your answer.

Dynamic Growth: ETF Portfolio

NEW BUYS:

None

NEW SELLS:

None

SWITCHES:

None

Here are our Top 10 ETF's for the week of April 28th:

1) FXF: Currency Shares Swiss Franc Trust- .427
2) DBA: Powershares DB Agriculture Fund- .484
3) SLX: Market Vectors Steel Index Fund- .490
4) EWZ: Brazil Index- .477
5) EEB: Claymore ETF BNY BRIC- .454
6) OIH: Oil Services HOLDRS- .381
7) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .369
8) PGJ: PS Golden Dragon China Fund- .228
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated

Honorable Mention:

None

Notes:

The best ranked ETF's (Crude Oil Trackers, Short Term Bond Funds, Dollar Bear, Commodities, and Select Currencies) are the ones we refuse to chase, and feel are in bubble territory.

To further prove my point that the "New World Order" gangs intentions are for economic equilibrium, please note that three of the best performing currencies in our research ETF rankings are the CurrencyShares Mexican Peso Trust (FXM-.553), CurrencyShares Canadian Dollar Trust (FXC-.348), and the PowerShares DB US Dollar Index Bearish Fund ETF (UDN- .518).

Just as Steve Previs from Jefferies said in his CNBC interview, the implementation of a new currency (the "Amero") for all of North America "It isn't being talked about".

Please remember the words, " It isn't being talked about".

Everyone laughed when the prospects for a new currency was mention in Europe. Now they have the Euro. In the years ahead you'll find that the issues we are discussing today will eventually lead to the new "North American Union" currency called the "Amero".

Here are our Top 10 Fidelity Sector Funds for April 2008:

1) FSESX- Energy Services
2) FNARX: Natural Resources
3) FDFAX: Consumer Staples
4) FSENX- Energy
5) FSCHX: Chemicals
6) FSMEX: Medical Equipment
7) FSCGX: Industrial Equipment
8) FSDPX: Materials
9) FWRLX- Wireless
10) FSRBX: Banking

Honorable Mention (Holds):

FSDAX: Defense & Aerospace

Notes:

On August 16, 2005, I wrote a blog entry entitled, "Where's Your Pain Threshold?". I am sticking to my guns that oil prices will not peak until Americans begin screaming bloody murder, and consumers begin demonstrating against high energy prices.

We are overweighted in energy in the Fidelity Sector Fund portfolio, and we will wait for the screaming, yelling, and demonstrations before we sell.

The Week in Review:

The stock market rally extended into week two as investors are betting that the Fed's next rate cut will be the last. In addition, US Government welfare checks (tax rebates) will be mailed early, and this will be great news for beer, liquor, and cigarette companies.

While most Wall Street guru's live in gated and guarded neighborhoods, spend their money on Worth Avenue (Palm Beach, etc), and at their Private Country Clubs, I am down in the trenches with you and see first hand what the masses are doing.

You and I know what the masses do, we know how they spend their money, we know that they are trend chasers, and impressing their friends is more important than doing the right thing. As a result they are broke because they chase things like the NASDAQ in 2000, and Real Estate in 2005.

A Modern Day Forrest Gump- A True Story!

My wife spent the weekend in a small town where her parents lived. She attended high school there, and worked in a bank for about 12 years. It is a small southern town with a population of about 7000.

In 1976 her graduating class included a boy named David. When David was born he had some medical problems and the doctors gave him too much oxygen which damaged his brain. Consequently, David had severe learning disabilities which challenged him throughout his childhood.

While most others moved on to college or went to school to learn a trade, David's disabilities did not allow him to do either. David was such a nice boy that the city fathers in this small southern town gave him a job picking up trash on the streets. David would walk up and down the streets with a trash bag on his left shoulder, and a sharply pointed stick in his right hand.

From 1976 to present day- 32 years, David met everyone in town. He never truly understood all that went on around him, but had an incredible memory for names. David memorized the name of every person he has ever met. One introduction is all it took. Once David knew your name, it was locked into his memory like stone.

If you think that is impressive, David didn't only memorize the names of everyone he met, he also memorized the license plate of anyone he met who drove a car. Today, if you walked up to David and mentioned someones name, he could rattle off the persons license plate too.

For 32 years David followed a very conservative lifestyle. Frankly, this is all he knew and understood. Every payday, David would go down to the bank and deposit his check. His only withdrawal was $10 in quarters to buy cokes at the corner vending machine.

Having a severe learning disability, David was never married and live with his parents. Assuming David worked a 40 hour week for 32 years at minimum wage, his savings account has to be quite substantial.

1976-1977@ $2.30/hr =$9568.00-$1040 Cokes= $8528
1978@ $2.65/hr= $5574.40-$$520 Cokes= $5054.40
1979@ $2.90/hr= $6032.00- $520 Cokes= $5512.00
1980@ $3.10/hr= $6448.00- $520 Cokes= $5928.00
1981-1989@ $3.35/hr= $62,712.00- $4680 Cokes= $58,032.00
1990@ $3.80/hr= $7904.00- $520 Cokes= $7384.00
1991-1995@ $4.25/hr= $44,200- $2,600 Cokes= $41,600
1996@ $4.75/hr= $9880.00- $520 Cokes= $9360.00
1997-June 2007@ $5.15/hr= $112,476- $5460 Cokes= $107,018
July 2007-April 2008@ $5.85/hr= $9360.00- $400 Cokes= $8960

Total Saved= $257,376.40
Approx. Interest- Taxes= $56,829.10
Approx. Total Saved = $314,205.50

There is no telling what another person has gone through unless we have walked in their shoes. How many times has David been looked down upon by others? What names has he been called? How difficult has it been?

In hind site, David is smarter than most people give him credit for. He has amassed a nest egg greater than the average person while having a learning disability, less knowledge, and less education.

David didn't try to keep up with the Jones', but he did know their names and license plate numbers. He wasn't sucked into greed and jealousy, and as a result, he feels no pain from a bad economy, a bad real estate market, a terrible credit crunch, or a downturn in the stock market.

Many people born with normal faculties just doesn't get it.

My wife saw David this weekend for the first time in 18 years. He looked at her and said, "hello Caroline, how have you been doing?"

Moral of the story.... I think you can figure it out.

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

I try very hard to get people to think for themselves. Believe me, this is not an easy thing to do.

Too often, investors, consumers, and the public in general have a belief system that is deeply entrenched . For example, I deal with numerous people on a daily basis, and rarely do I talk with someone who sees the "big picture". This makes my job that much more difficult.

One thing I was taught at a very early age is to understand anything is possible, to look at both sides of every issue, and pay close attention to detail.

If you want a small example of how people don't pay attention to detail, all you have to do is look at the majority of the cars on the highway as you drive around.

Car dealers know that most consumers are clueless, so what do they do? They sell the consumer a car, and plaster free advertisements for their business on the vehicle. Mindlessly the car buyer drives their newly purchased vehicle without even a thought that their car is now a billboard for the dealership.

I challenge you to drive around and count the number of cars carrying free advertising for the car dealer. You will be shocked.

Speaking of lack attention to detail, the FOMC continued its massive assault on the US dollar by lowering the Fed Funds rate and the Discount Rate by another .25 basis points to 2.00%.

I say massive assault because the dollar is quickly losing its status as the world’s reserve currency and medium of exchange. Already, nations around the globe have, and are diversifying their reserves away from the dollar, and into Euro's and other currencies.

In the Middle East, Iran opened a competing oil exchange where it asks its petroleum customers to pay in non-dollar currencies. While we are led to believe the the US Administrative Branch (a subsidiary of the oil industry) is upset at Iran for its nuclear ambitions, we have got to believe that a competing oil exchange has them equally upset.

We have to remember that any acts of aggression against Iran will be defended by Russia, and one of the largest purchasers of US dollar assets, the Chinese. The major problem for the US economy is that foreign investors and governments are losing their patience for a failed US foreign policy, as well as a failing U.S. dollar.

According to Gresham's law, "Bad money drives out good." A stupid monetary policy combined with a stupid foreign policy may be the last straw that eventually drives good money (Chinese, Japanese, & petro-dollars) away from the bad money which is the US dollar.

In addition to all of the above, how dumb is it for the Bush Administration to continue to buy oil at its all-time highs, and continue filling the Strategic Petroleum Reserves (SPR) while the average American struggles to pay their bills. Is this stupid, corrupt, or just plain dumb?

Heck, even the liquor barron by marriage, presidential candidate John McCain, said the government should "stop filling its strategic oil stockpile, with crude oil at a near-record at around $110 a barrel.

U.S. Equity Markets:

Extreme negative sentiments the past few months has led to an oversold rally that suggests the major market indexes have now entered a technical rally that is nearing the upper end of their respective trading ranges. As best we can tell, the trading ranges are as follows;

S&P 500- 1,250-1,450
DJIA- 11,750-13,000
NASDAQ- 2,150-2,500

If George Soros is right, the stock market will continue its decline after this brief rally. Soros said, “We had a good bottom, This will probably not prove to be the final bottom.’’

I happen to agree. If you thought Q1-08 earnings were bad, wait until you see Q2's.

The Rest of the Story

The latest advertising scam hitting consumers-seniors in particular- is "Reverse Mortgages". When a senior considers a "Reverse Mortgage", what does this say about the financial health of our nations seniors?

Just when you thought lenders were finished doing stupid things, they come up with something sneaky like "Reverse Mortgages."