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

After yesterday's Fed announcement, the DJIA was whipsawed from up 178 to down -11.81 on the close. The statement that followed yesterday's meeting left doubts as to the Feds real intentions. Isn't that what they are suppose to do? Yes, I think it is.

In its policy statement, the Fed said that economic growth remained weak, but removed or forgot to add the comments from the March meeting that said "economic activity has weakened further" and "downside risks to growth remain."

Well, I'll tell you this. Last night I went to our local Mall and walked around. The stores were empty, and I could count the number of people in Best Buy (BBY) on both hands. This may not seem unusual to you, but in our part of the world BBY is always jammed.

In my humble opinion, consumer spending has come to a screeching halt. So the Fed can leave out comments like "economic activity has weakened further" and "downside risks to growth remain", but I can tell you they are wrong.

Today, the Commerce Department released the consumer spending numbers which they report as up +0.4% versus estimate +0.2%. Now for the truth. The real numbers show that spending rose only 1 percent, the slowest growth since the recession in 2001. The INCREASE in spending came from increased prices in FOOD and GASOLINE.

WHY DON'T THEY JUST TELL YOU THE TRUTH? JUST SAY IT, WE CAN TAKE IT.

The CoNNerce Department also said excluding food and energy, inflation for the first quarter was 2.2 percent. All I have got to say is wow!

What was it including food and energy?

$168 billion in welfare checks (stimulus package) are beginning to hit direct deposit accounts and mailboxes. All I can say is this "Bud's For You" and stay off the streets after mid-night to avoid the drunks.

With oil prices beginning to pullback, and the dollar beginning to rally, I am wondering if the Republicans can really pull it off. With the election only 6 months away, no one would think the Republicans had even a remote chance of winning.

But... American's have a short memory, and the Republican's will have a lot (of oil) to lose in November. I still believe (by the price action in the financials) the Bush Administration will pull a rabbit out of a hat that will solve the credit crunch and mortgage crisis.

That's the wonderful aspect of being a contrarian. You know sooner or later something as important as the financial system will eventually be fixed.

Regardless of what party wins in November, they are both owned by the "Aristocracy". This is not new news, it has been going on since 1776.

The Rest of the Story

The American Revolutionary War was fought by the Colonists to overthrow British rule. Farmers with pitchforks took up arms against a highly organized British Army. The quest for freedom prevailed as the Colonists won their freedom.

Once the United States declared their independence on July 4, 1776, the citizens of the United States were no longer subject to British rule, instead the began to be ruled by a new kind of Kingdom. The new US Kingdom was known as an "Aristocracy", which is still very prevalent in society today.

You may have heard the term "Plutocrats" which comes from "Plutocracy" which means rule or power through wealth or by the wealthy.

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

The big news this morning was the April non-farm payroll report that showed the US economy had lost only 20,000 jobs vs. the consensus which called for a loss 70,000. The unemployment rate came in at 5.0%, while the consensus estimate called for an increase to 5.2%.

By now you should know there is much more behind the numbers than what is being reported. Its similar to the story you keep hearing about the inflation rate.

I guess if the government statistics say everything is good, who are we to question them? Its kind of like the war in the Middle East, "You are either with us, or you are with the terrorists". Pun is intended.

Welcoming the good news in the labor markets, crude oil rose by more than $3 per barrel while the US dollar rose against most foreign currencies. Huh, isn't the price of oil suppose to decline as the dollar rallies?

My guess is oil prices remain on edge as threats of a US and Israeli invasion in Iran are keeping traders on edge. Already the sales pitch to the American public has begun as national security advisor's keeping telling us Iraq is a threat.

I guess if you heard on TV that Iran was a serious threat, then it must be true.

The long and short of this is pretty simple. If Iran was a threat, and decide to launch a deadly missile toward Israel, Iran would be turned into a pile of glass after the sand melted from a massive nuke strike. They are not that stupid.

Speaking of a lack of intelligence, the financial nuke strike on the pocketbooks of many Americans is a direct result of a failed foreign and domestic policy here at home. The dollar has been destroyed, a failed energy policy and mandates for ethanol are driving food and energy prices through the roof.

How stupid would it be to start are war with Iran with oil prices hovering around $115/ barrel? Hey, why not? Just keep adding to the stupidity!

Believe it or not, I am not making this stuff up. If we really had a press that wasn't somewhat controlled, you might hear about some of this stuff too. Remember the quote from the Chief Aristocrat himself, David Rockefeller;

"We are grateful to the Washington Post, the New York Times, Time magazine, and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. ... It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during these years. But the world is now more sophisticated and prepared to march towards a world government which will never again know war but only peace and prosperity for the whole of humanity."

Oh, by the way, the Texas Department of Transportation was nice enough to build a website about the NAFTA superhighway. Here it is;

NAFTA Superhighway- Texas Department of Transportation

Technically Speaking

Baring any foreign policy blunders, the major market indexes continue to move higher as investors continue to bailout out of defensive areas like Treasuries, and are putting the money in stocks.

Yesterday we saw some rotation away from weak dollar sectors such as commodities and metals as the US dollar rallied. Today, there was some give back, but it will take some time to convince traders that an intermediate term top has been reached in the "stuff" sector.

If the trend gains momentum, we could see a fairly sharp correction in bonds as well as oil. Of course there is an election coming up, so why not? A sharp correction in crude, bonds, and commodities coupled with a dollar rally could carry the DJIA above our 13,500 target.

Dynamic Growth: ETF Portfolio

Here are our Top 10 Fidelity Sector Funds for May 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:

Its become very clear that the tailwinds that drove the US economy from 2003-2007 have now become headwinds. Of course I am talking about Real Estate and the availability of all the credit that had been extracted to fuel consumer purchases.

What I believe we are looking at is a traders market. Long term investors will become extremely frustrated as the major market indexes will probably seesaw between the upper end of the trading range to the lower end many times.

As it currently stands, the markets are now attempting to test the upper end of the trading range.

Savvy investors who don't mind paying short term capital gains will be able to buy the dips, sell the rallies, short, cover, and repeat the process several times.

The US dollar is being destroyed, and the nightmare scenario of oil producing nations rejecting the dollar as payment for oil has already begun. This is one reason why gold and commodities have rallied so sharply. These assets are viewed as the best hedges against a falling dollar and inflation.

Longer term (2-5 years), I believe the solution for the dollars woes will occur according to plan. Americans will be screaming for mercy as oil prices become unaffordable, and commodity prices cause food prices to spike even higher.

The solution of course is the one I have mentioned many times; replacing the dollar with a new North American Currency- The Amero. Once this happens, the implementation of the North American Union will be well underway.

Here is a video of VP Dick Cheney discussing the issue along with David Rockefeller.

Keep in mind I have no political statements to make when I reveal this information to you. I am of the opinion that both political parties are well aware of what is going on without any major opposition. I just don't want you to be the last to know what is happening around you, your country, and the sovereignty of the United States.

To be an astute investor, you must understand much of what is going on around you. Investing is not just about buying the right stock, it is having the ability to see the big picture, and understanding why certain things are happening around you. Without this understanding, you are guessing instead of knowing.

When word of a European Union first broke, citizens of the twenty-seven member states had pretty much the same reaction as you will when the Amero is introduced. Now, of the twenty-seven member states in the European Union, 15 of those member states have adopted the Euro as their currency.

Here in the US there will be a lot of opposition to the Amero. But, as in any other time of extreme economic pain, citizens will be more open to change if that change alleviates pain.

As we speak the US consumer is beginning to feel some real pain. Job growth in non-existent, food and energy prices are spiking, and the availability of credit has dried up. You know our citizens are hurting when lenders created and began marketing Reverse Mortgages to our nations seniors.

The Markets

The major market indexes moved higher last week after the FOMC lowered the Fed Funds and Discount Rates .25 basis points to 2%. Investors focused on the possibility that the Wednesday rate cut may be the last.

Immediately after the cut, the dollar began to rally and oil prices started to drop. The DJIA gained 190 points closing above 13000 for the first time since January. As the Dow moved higher, volume on the NYSE remained subdued which usually isn't a bullish sign. Lower volume rallies shows a lack of commitment from buyers.

Given the intervention by the "Working Group on Financial Markets", every sell-off has been met with resistance. This tells me that investors-speculators-hedge funds may give up on their shorts and possibly drive the markets higher as we go into the November elections.

Politicians, and the powers that back them do some very strange things around election time. Case in point, did you see how the potentially embarrassing issues of the DC Madam were dealt with prior to a big election?

‘D.C. Madam’ commits suicide

The DC Madam's List

Fox News- Gerald Rivera- Alex Jones- YouTube

Alex Jones- YouTube

Do you remember the quote from the movie The Godfather-1972, part one. Michael is walking down the road with Kay after returning from Sicily. He is trying to get her to give him another chance to marry him. She was reluctant and here is how the conversation went.

Michael: My dad is no different than any powerful man; like a senator or president.

Kay: Michael. Do you know how naive you sound? Senators and presidents don't have people killed!

Michael: Now who's being naive, Kay?

Bottom line: Strange things happen during election years. I believe some of those strange things will occur in the oil and commodities markets as well.

Earnings

We are half way through Q1 earnings season. Thus far, 2058 companies having reported and on average earnings are down 19% from Q1-07.

Economic Reports

On Tuesday, the S&P Case-Shiller Home Price Index showed that home prices for the 10-city composite index fell 13.6% in February from a year ago.

The Purchasing Managers Index (PMI) fell for the fourth consecutive month with a reading of 48.3.

Construction spending in March continued to decline dropping 1.1% down from 0.3% in February.

The number of jobs lost in April came in at 20,000, better than the 80,000 reported in March. The consensus estimate was for a loss of 75,000 jobs.

This Week's Economic Reports

Monday- April ISM Non-Manufacturing (Service) Index (previous 49.6).

Wednesday- Q1-08 Productivity (preliminary), previous 1.9%, March Pending Home Sales Index (previous -1.9%), March Consumer Credit (previous $5.28 billion).

Thursday- March Wholesale Trade (previous 1.1%).

Friday- March Trade Balance (previous $62.3 billion).

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

You & Us= UBS

UBS announced a first quarter net loss of 11.535 billion. UBS is the old Paine Webber. All I can says is "You" should let "UBS" continue to lose money on their own. I would get the heck out of there to protect "Us" from losing money.

Legg Mason posted a net loss of $255.5 million for the quarter after it took a big charge to a bail-out its money market funds that were exposed to risky mortgage backed securities.

Have you noticed the numerous ads on the radio from the Securities Investor Protection CorporationSIPC lately? I find this odd since I don't ever recall hearing an ad from SIPC in the past. Clearly something is going on that we are not aware of.

SIPC is suppose to cover investor losses in the event a brokerage firm fails. But, SPIC is not the same as the FDIC. Here are the details of what SIPC will cover in the event your brokerage firm goes under;

"Customers of a failed brokerage firm get back all securities (such as stocks and bonds) that already are registered in their name or are in the process of being registered."

This statement isn't very clear since most investors with brokerage accounts have their stocks registered in "Street Name".

Street Name means your name is not actually on the stock or bond certificate. The name that appears on the certificate is that of your broker, and this is referred to as being held "in street name".

This being said, if a brokerage firm fails, technically you own nothing. If your securities are held in Street Name, the name on your stock or bond certificate is actually the brokerage firms.

In the 1970s-1980s investors were insistent on having their stock certificates delivered to them by mail. This was to ensure that the name on the securities was actually the investors name,

Here are the rest of the details of what SIPC will cover;

"After this first step, the firm’s remaining customer assets are then divided on a pro rata basis with funds shared in proportion to the size of claims. If sufficient funds are not available in the firm’s customer accounts to satisfy claims within these limits, the reserve funds of SIPC are used to supplement the distribution, up to a ceiling of $500,000 per customer, including a maximum of $100,000 for cash claims."

Oh, now this is where things get dicey. The maximum your account is insured for is $500,000 per customer. So, if your account is over that amount you are SOL.

In addition, if your money market account value is over $100,000, SIPC will not cover anything over that amount.

Given the number of CDO's, SIV's, and CMO's in money market accounts and on brokerage balance sheets, I would do everything in my power to protect myself.

See the Legg Mason news above.

Bush vs Buffett : What consumers should do with their rebate checks

Bush: "This package will lead to higher consumer spending and increased business investment,"“Americans can spend this money as they see fit: to help meet their monthly bills, cover higher costs at the gas pump, pay for other basic necessities.”

Buffett: "Use the money to pay down your credit card debt. Paying an interest rate of 16-18% doesn't make any sense.

Microsoft- Yahoo

Does anyone other than CNBC or Bloomberg really care what happens?

Rice Shortage

Anyone who went out and bought rice to hoard after the so called shortage was announced is an idiot. The only people who care about a shortage probably have Asian roots.

Another Look at Outsourcing

I was speaking to a client yesterday that said he went to a convenience store to buy gas. He said a guy at another pump put $5.00 of gas in his vehicle, and then went into the store and purchased $20.00 worth of beer and cigarettes.

In a similar note, my wife and I went vulture shopping on Sunday looking at beach condo's that were selling at distressed prices. We went to several resort areas along the beach. Pensacola Beach was laced with trashy people (drunks, tramp stamps-tattoos, cigarettes hanging out of their mouths), and 60 miles east a very different.

If US corporations have to deal day in and day out with people like we saw at Pensacola Beach, or the guy my client saw at the convenient store, I don't blame them for outsourcing. I would do the same thing.

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

Ever since Warren Buffet helped Mars finance the purchase of Wrigley's, the takeover hawks began speculating that Anheuser-Busch (BUD) or Hershey (HSY) may be next. All I have got to say is- not so fast.

Mr. Buffett does have a 2.7% position in BUD, but the insiders are painting a more gloomy picture. One would assume an insider somewhere within the walls of BUD would know something if the rumors were true. Using an old Buffett analogy, "with a million dollars and the best insider information in the world, a guy could go broke in a year".

Here is what the insiders at BUD have been doing lately, and it certainly doesn't look like the company will be bought out anytime soon.

On the other hand, Hershey (HSY) looks to be an interesting stock investment without all the takeover buzz. HSY is attempting to cut costs by moving one of their plants from Oakdale, California to Mexico.

This move will eliminate about 600 US jobs, save the company money, and boost profits.

No Inflation?

The Markets

Today, Cisco (CSCO) announced earnings that beat expectations, but gave 4Q revenue guidance that was less than analysts had expected.

The President of the Kansas City Fed said inflationary pressures might force the central bank to hike interest rates, and these comments were taken as a sign that Fed may be at the end of its rate cut cycle.

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

They can blabber all they want, but the current rally in the stock market is nothing more than a bear market rally.

There are only two events that can turn the markets from bear to bull;

1) The government allows FHA to take millions of sub-prime mortgages off the hands of lenders, and/or they allow the rebirth of the "Resolution Trust Corporation" that bailed out the real estate crisis in the 1980's.

2) Oil prices must come down dramatically.

If one or both of these events do not occur, the markets will not only re-test the recent lows, but we are doing nothing more than "Delaying the Inevitable".

Not that I don't trust them, but the current rally may be due to the fact that Wall Street knows one of the two events above is are about to happen, or they are setting investors up for a huge sucker rally. Guess who the suckers will be?

The Markets

The EIA released its oil inventory numbers for the week, and Crude and Gasoline had larger than expected builds while Distillates (Diesel) had a surprise draw.

Crude Oil: Up 5.654 million barrels
Gasoline: Up 794 thousand barrels
Distillate: Down 107 thousand barrels

Since truckers use Diesel fuel, higher prices have, and will continue to be passed on to the consumer.

Today, Iranian oil minister Gholamhossein Nozari said that "oil has not become expensive," explaining instead that the main currency for trading oil, the US dollar, has declined significantly making oil more expensive here at home.

Before we begin pointing our finger toward the Middle East oil producers, we should start with pointing toward Pennsylvania Avenue (Washington, D.C.) first.

Like I have said many times, a stupid US energy policy combined with a stupid US fiscal policy is eating away at the pocketbooks of consumers.

Wal-Mart (WMT) boost sales last month by 3.2 percent helped by increased sales of groceries, flat-screen TVs and medications.

If Wal-Mart's same store sales are rising, it means consumers have retrenched.

Oh, remember when Merril Lynch said sell WMT when the stock was at $43, and I said they were wrong? The stock is now trading at $57.30. Do you have an account with these guys?

Toyota Motor (TM) said profits in the January-to-March time period fell 28 percent due to the rising yen and weak North American sales.

If Toyota's fuel efficient vehicles such as the Prius and Camry aren't selling, the spend thrift consumer is completely tapped out.

The European Central Bank left its interest rates unchanged today saying that they are more concerned with inflation than appeasing their banking buddies.

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

Yesterday, word broke that Congress passed legislation that would allow the federal government to insure up to 500,000 mortgages that are at risk of default. Representative Barney Frank of Massachusetts, spearheaded the legislation.

The House voted 266 to 154, with only 39 Republicans supporting the bill. The Republicans supporting the bill were seven from Florida, five from Michigan, four from Pennsylvania, three from North Carolina and two from Ohio and Illinois.

Oddly, President Bush threatened to veto the bill because the cost to tax payers would be around $2.7 billion dollars. Personally I feel this is a small price to pay given the magnitude of what is going on. Heck, we spend at least $200 million a day chasing pink elephants and protecting oil interests in Iraq.

The bottom line here is as conditions continued to deteriorate, I knew the potential for something positive to happen would increase. The problem however is no one really knows when potential solutions will come.

It's obvious (at least to me) that the housing and finance systems are in desperate need of government intervention in the form of a mortgage purchase program. The legislation passed yesterday is a step towards a possible solution.

Despite opposition from the White House, I am fairly confident a solution will be worked out.

Dynamic Growth: ETF Portfolio

Here are our Top 10 ETF's for the week of May 12th:

1) EWZ: Brazil Index- .484
2) EEB: Claymore ETF BNY BRIC- .442
3) SLX: Market Vectors Steel Index Fund- .465
4) DBA: Powershares DB Agriculture Fund- .480
5) FXF: Currency Shares Swiss Franc Trust- .431
6) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .353
7) OIH: Oil Services HOLDRS- .380
8) PGJ: PS Golden Dragon China Fund- .279
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated

Honorable Mention:

None

Notes:

In our daily "Journal" we have mentioned The "North American Union" several times. As I combed through our ETF research for the week, astoundingly the rankings of the CurrencyShares Mexican Peso Trust (FXM) are ranked #27 out of 439 ETF's listed, and the CurrencyShares Canadian Dollar Trust (FXC) is ranked #45.

What this tells me is there is a leveling of the playing field among the currencies in North America, and the answer to our dollar woes- The Amero- may be in the not so distant future.

To get Americans to accept the currency change, the powers behind this currency shift are drumming up support by causing Americans "extreme pain" at the gas pumps. Once the Amero is implemented, the pain will subside, and Americans will see the new currency as as welcomed relief. Unbelievable!

Amero Videos:

CNBC

North American Union

Dick Cheney- David Rockefeller

Alexis Glick

Here are our Top 10 Fidelity Sector Funds for May 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:

Stocks gave back most of what they gained last month as the Dow dropped 2.40%, the S&P 500 fell 1.77%, and the Nasdaq declined 1.25%. Oil spiked to $126 per barrel, and gasoline rose to $3.67 a gallon.

U.S. consumers are clearly feeling "real pain" as the price of oil, gasoline, and food continued to skyrocket.

A deteriorating housing market and declining earnings continue to add additional risk to the overall market.

Chain-store sales for April were up 3.6%, but the majority of the gains were from purchases of food and gasoline. Since these are necessary items, one can assume discretionary spending is all but dead.

Wall Street wants you to believe that the welfare checks (economic stimulus package) will boost the economy, and the two of the three stooges (Hilary and McCain) running for president are calling for a gas tax holiday.

Why aren't these people calling for the halt of oil purchases for the Strategic Petroleum Reserves?

Delaying the official announcement of a recession is foolish. But in reality, so may of the economic numbers have been watered down that no one really knows the real health of our nation economy.

Since no one in Washington rubs shoulders with everyday Americans (I do), I can tell you as we speak that the US economy is in the middle of a recession.

The housing market is in a deep recession, food and energy costs have soared, and debt is piling higher and higher.

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

Retail Sales

The Department of Commerce released its report on retail sales in the month of April, and sales ex-autos were reported up +0.5% vs. estimates that called for up +0.2%. The devil of course is in the details.

Now, the sales figures I reported above is what Wall Street wants you to see. They want you to see the gain, and not the details of what is going on. They do this to make sure you stay in the market, and they can collect their fees if you don't hold a larger percentage of your portfolio on cash.

Brokerage firms don't want you to have a large percentage of your investment portfolio in cash because regulators will frown on the fees they collect for portfolios not fully invested.

The details of the retail sales report showed that including auto sales, the number actually fell -0.2 percent in April following a +0.2 percent increase in March.

In the days ahead, you'll be hearing stuff like the tax rebates (welfare checks) helped boost sales. Oh, I certainly hope thats not the case. I would rather see consumers put their welfare checks to better use- like paying down their credit card balances. But, you know how the story goes- give a person a dollar, and they'll spend it!

The thing you need to remember about tax rebates is they are temporary.

Inflation

The Department of Labor said import prices rose considerably in April (1.8 percent vs 2.9 percent increase in March). The price of petroleum imports rose by 4.4 percent in April after spiking 9.2 percent in March.

The CPI data is so misleading that I really have no other explanation other than- the number is totally useless.

According to Marc Faber, editor of The Gloom, Boom & Doom Report, "food and health care are under-weighted in the CPI. In fact, the U.S. counts food as only 8% of the index. Whereas, it counts for about 10% in the United Kingdom, about 15% in the rest of Europe and more than 18% in Japan".

So the bottom-line here is who is conning who?

Trilateral Commission meeting in Washington

Investing successfully in the stock market is much more than buying a large diversified portfolio of stocks. You need to know what direction the US and the world are heading. For example, why would Warren Buffett buy such a large position in Burlington Northern Railroad while the insiders are selling? He obviously knows something, and it isn't book value or intrinsic value.

Burlington Northern Insiders

Warren Buffett Purchases

Let us examine a few reasons why the world's greatest investor is buying Burlington Northern (BNI).

Does Mr. Buffett know something we don't? You can bet he does!

Since Burlington Northern doesn't qualify under the normal investment parameters that Mr. Buffet uses, why is he so interested in accumulating 25% the stock?

Here are some of Buffett's parameters before buying a company;

1) Buffett identified the average rate of return on equity of American companies at 11%, and basically said he would not consider buying a company with an ROE of under 14%.

Burlington Northern ROE

2010- 11% as projected by Value line***
2006- 13%
2005-13.5%
2004- 11.6%
2003- 9.1%
2002- 9.6%

This being said, what does Buffett know that you don't?

Globalism & The North American Union

1) Burlington Northern is a Ft. Worth, Texas based railroad that strategically lies in the middle of the NAFTA super highway. It even goes thru his home-town of Omaha!

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

Consumer Price Index:

Ah, ha, ha, ha. Do you think for a moment I believe these numbers? You've got to be kidding me.

Today, the liar, liar, pants on fire numbers for the CPI data said- and get this, the headline April CPI was up +0.2% versus the estimate of +0.3%, and the core CPI number was +0.1% versus +0.2%.

I wish someone inside the Bureau of Labor Statistics would blow the whistle on this counterfeit report. On second thought, maybe they shouldn't. They might wake up one morning hanging in their garage like the DC Madam.

The CPI report said that "the index for petroleum-based energy fell 1.6%". Oh, really? But gas prices rose about 10% in April, and commodity prices continue to soar.

All I have got to say is this isn't the same honesty I was taught as a child. The manta today seems to be "baffle em with b***s**t and they'll never know the difference".

Market News

Carl Icahn has taken a large position in Yahoo.

The DJIA has been up by as many as 168 points, but closed up only 66. Oddly, volume is light, and the market keeps rising on...who knows what.

It looks as if the worst may not be over for the financial's since they decided to watch todays rally from the sidelines;

WB- $27.64, -.15
BAC- $36.80, +.19
WFC- $28.91, -.06

Freddie Mac (FRE) jumped $2.26 to $27.25 after the company said it lost $151 million in the first quarter, but would maintain its dividend. FRE also said that it plans to raise $5.5 billion in new capital.

Keep an eye on Fannie Mae (FNM) as well, the insiders at the company are showing renewed interest in the stock.

President Bush was is Israel, and is now on his way to Saudi Arabia.

For those of you who believe that the current energy crisis is a hoax (as it was in the past), you might want to watch this video by Lindsey Williams.

Here are some past energy crisis magazine covers;

July 2, 1979

October 6, 1980

Political Race

I have to apologize because the other day I compared Hillary Clinton, John McCain, and Barrak Obama to the Three Stooges. I have too much respect for Moe, Larry, and Curly, and I hope they will forgive me.

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

The Markets

The major market indexes all closed high today. The DJIA closed up +94.28 to 12,992, the S&P was up +14.91/ 1423.57, and the NASDAQ closed up 37.03 to 2533.73.

Technically, the rally from the March lows are carrying the major indexes into key resistance levels. It has also carried most of indexes into near term overbought levels.

DJIA: Resistance- 1420-1450
S&P: Resistance- 13,050-13,300
NASDAQ: Resistance- 2520

Crude oil closed slightly higher closing at $124.53, +.31.

The latest data from the AAII shows that bulls outnumbered bears by more than two to one for a third consecutive week. The VIX index has broken below the its 200-day average further showing extreme optimism among investors. This is not a positive sign since the latest consumer confidence numbers do not show the same optimism.

I continue to believe the new found life in the financial markets are nothing more than a bear market rally.

Economic News

The Labor Department said the number of workers applying for jobless benefits rose last week by 6,000 to 371,000. The total number of Americans receiving unemployment benefits climbed to the highest level in more than four years.

Manufacturing in the New York area fell in May for the third time in four months.

Federal Reserve Chairman Ben Bernanke speaking in Chicago said, he is "encouraged" by recent efforts by banks to raise cash. Financial and bank shares were under pressure after Bernanke said banks should keep raising capital to offset credit-market losses.

The Rest of the Story

Yesterday. I posted a video on the current energy crisis by Lindsey Williams- Video. The entire video is an hour and fifteen minutes long, and I wasn't sure I could watch the whole thing, but, I did. I found the video fascinating.

Doing homework on the market takes a lot of time. As I have told you in the past that I am open to any and all possibilities. I never close the door on any opinion, but I do cross reference everything I read, see, and hear.

In 2003, I was speaking with famed investor, Jim Rogers. Jim is a no-nonsense guy who just calls em as he sees em. I like people like that. Jim was a co-founder of the Quantum Fund along with George Soros. He accurately called the current energy crisis, and he accurately called the current boom in commodities. In short, he is a guy I listen to.

When Jim told me he was selling his home in NY City, and moving to China, I did not immediately dismiss his actions as bizarre like most. Some reading this blog will immediately characterize his actions as outrageous. I, on the other-hand wanted to know more.

I immediately thought, what does Jim know that me and the rest of the country doesn't. By his early moves into energy and commodities I recognized that he obviously knows a lot more than me and most who are reading this blog.

Jim comes from a town in Alabama where I lived for a year. Demopolis, Alabama is about as American as it gets. The town is primarily blue collar, people hang their flags, fight for their country, and attend church on Sunday's.

With gas prices approaching $4.00 a gallon, and commodities hitting new highs, who are we to question Jim Rogers reasons for moving to China or Singapore?

In a recent interview Rogers said, "Moving to Singapore and Dubai now is like moving to New York City in 1908". "If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City and if you are smart in 2007 you move to Asia".

What else does Rogers know that we don't? Here are a few quotes;

-"This is the China century. It's time for them to rule the roost".

On the Recession

-"In my view, the U.S. economy is in recession. I know the government says we're not. But as I look around, we know that automobiles are in worse than recession. The same thing is true for homebuilders. Much of the financial sector is in worse than recession. So many parts of America are in worse than recession, and yet the government says we're not in a recession. I don't know what's so strong that it's offsetting these major weaknesses in the American economy. I just assume that the government is lying".

On Inflation

-"We have terrible inflation in America, not according to the government but according to people who buy things. We have the dollar under terrible duress. What I said was, If they cut interest rates it's going to be a signal to the rest of the world that we don't care about the dollar, that we want the dollar to go down. That is what has happened. The rest of the world has read the signal very clearly. Inflation, of course, is going up. Commodities prices go higher in this kind of scenario. I think it's a terrible mistake. It may be good for Wall Street. It may bail a few people out. But it's not good for America.".

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

The Markets

Will the lies and mis-leading information ever stop? The answer is no. The stock market is a zero sum game. Somebody wins, and somebody loses. Unfortunately, those who follow the advice of some (not all) of the guests placed on financial TV, they will win, and you will lose.

Wednesday's news was the lies embedded in the CPI data. Yesterday, analysts began recommending Chipmakers and oil stocks.

I cannot make my views any plainer than this. Our economy is in a freefall, and as long as gas prices remain above $3.00 a gallon, consumers will zip up their pocketbooks.

Today's spin on housing starts is absolutely nauseating. The Commerce Department reported today that housing construction rose by 8.2 percent in April , but construction for single-family homes continued to weaken.

The rise in construction of 8.2% were for new apartments that are being built. Does this not set off a huge alarm bell in you mind? Why apartments? It's very simple. Housing is unaffordable, and the people who were once homeowners and have been foreclosed on need a place to live.

I have been looking at several apartment REIT's lately, and here are a few;

Camden Property Trust (CPT)- 5.32% yield
Apartment Investment and Management Company (AIV)- 5.92% yield
AvalonBay Communities (AVB)- 3.39% yield
EQUITY RESIDENTIAL (EQR)- 4.36% yield
Essex Property Trust (ESS)- 3.38% yield
United Dominion Realty Trust (UDR)- 5.25% yield
BRE Properties (BRE)- 4.34% yield

You may want to comb through the preferred stocks as well. You can search for them at Google Finance or at www.quantumonline.com.

Let's discuss oil for a moment.

Dynamic Growth: ETF Portfolio

Here are our Top 10 ETF's for the week of May 19th:

1) EWZ: Brazil Index- .451
2) EEB: Claymore ETF BNY BRIC- .413
3) SLX: Market Vectors Steel Index Fund- .465
4) DBA: Powershares DB Agriculture Fund- .492
5) FXF: Currency Shares Swiss Franc Trust- .455
6) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .330
7) OIH: Oil Services HOLDRS- .341
8) PGJ: PS Golden Dragon China Fund- .223
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated

Honorable Mention:

None

Notes:

For several weeks now, we have not made any changes to the DG ETF portfolio. Bonds, stuff stocks (commodities, metals, etc), and oil have dominated the top rankings and appear too overbought for new investment.

On the other hand, Brazil, Agriculture, and select South American appear to have more room to run.

Agriculture is benefiting from a world food shortage due in part to a questionable energy policy here in the US.

Here are our Top 10 Fidelity Sector Funds for May 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:

I am in Sarasota, FL writing this report. My sons high school baseball team is in the state final four, and is two games away from the state championship. As such, I will be cutting this weeks report a little short.

If the parents on this road trip are any indicator of the public in general, they are very mis-informed about what is really going on in the economy, and energy prices in particular. This is to be expected since their main sources for information is the major media outlets.

On Friday, the EIA and Bush Administration announced they would temporarily halt new oil purchases to the SPR (Strategic Petroleum Reserves) in July. We shouldn't find this as a surprise since the news comes a little more than 6 months from the November elections.

While halting new purchases to the SPR will give consumers "some" relief from high energy prices, voters are very upset with what they are paying. As such, I believe the incumbents are in serious trouble, and the outcome of the election will heavily favor the democrats.

If the congressional races are any indicator, republican candidates will continue to drop like flies.

This being said, many underground media sources are reporting that all three presidential candidates (John McCain (R-Ariz.), Hillary Clinton (D-N.Y.) and Barack Obama (D-Ill.)) are all bought and paid for, meaning not much will change despite the outcome.

At the recent Trilateral Commission meeting in Washington (April 25- 28), elite luminaries expressed confidence that free trade agreements will remain intact. One of the comments captured by the American Free Press went as follows;

“John (McCain) has always supported free trade, even while campaigning before union leaders,” said one. “Hil (Clinton)and Barack (Obama) are pretending to be unhappy about some things, but that’s merely political posturing. They’re solidly in support.”

Some believe those of us in finance can make accurate predictions about the markets and economy by simply following news on the economy. This is not true. The larger trends are set by governmental policy (energy, taxes, free trade, etc), and these things eventually affect the consumer (higher prices, taxes, jobs lost or gained).

Earnings:

Q1-08 earnings ended it sixth week. Of the 3569 companies reporting, earnings have dropped -28% compared to the same quarter a year ago.

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

Iraq's "Chemical Ali" (Ali Hassan al-Majid) death sentence is currently on appeal for his part of the mass killing against Iraqi citizens.

Here in the US, no one is being held accountable for the massive wealth destruction brought on by sub-prime derivatives, immoral lending practices, lack of financial oversight, or the selling out of a nation by the members of the global elite.

Not only have these people not been held accountable for their actions, their crimes against the American people never result in any of these people being charged. I wonder what the Chinese government would do to these people?

Today, the Federal Reserve said that economic growth will be less than they projected, and unemployment would increase in 2008. Those that have followed our comments know this is no surprise to us.

Yesterday, the meat-heads that calculate the PPI (Producer Price Index) finally bumped up their core number (excluding food and energy) by saying it spiked to 0.4% for the month of April.

The numbers are so off base that I can't believe anyone pays attention. In the month of March crude oil jumped 17.5% while natural gas prices increased 11.4%. For April, crude oil jumped another 4.5 %, and natural gas 4.3%.

In my estimation, inflation over the past year (including food & energy) is somewhere between 10-15%.

Today, we began to see inflation closing in a major corporations as American Airlines (AMR) said surging fuel prices are killing the company. AMR announced they would cut thousands of jobs, get rid of some planes, and charge passengers $15 bucks to check in a bag.

I don't know about you, but I don't feel very comfortable flying when an airline is trying to find ways to cut costs. What do they say when the gas truck pulls up? Give me a half a tank?

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

On Wednesday, famed hedge fund manager George Soros- speaking at the London School of Economics- said "that recent market gains mark a "bear-market rally" that will wilt as the global credit crunch continues to run its course".

He went on to say the recent rebound is "just a bear-market rally based on the false conception that the authorities can handle all these crises."

Thanks George, I happen to believe as you do.

This morning, UBS said it would sell new shares at a nearly one-third discount to raise the 16 billion Swiss francs ($15.6 billion) it needs to strengthen its balance sheet. The new shares will be sold at a 31% discount to Wednesday's closing price.

I'll bet that UBS is cursing the day that they joined forces with Paine Webber here in the US. The once safe bank thought they could make in-roads to the US investment banking business, and now they are hanging on by the skin of their teeth to survive.

Standard & Poor's Equity Research upgraded Wachovia (WB), Sovereign Bancorp (SOV), and and Capital One Financial Corp. (COF) from sell to hold Thursday, saying that a recent drop in share prices makes the firms attractive.

S&P raised their price targets for Capital One by $4 to $50, by $2 to $9 for Sovereign Bancorp and by $1 to $26 for Wachovia. Wow, nothing like going out on a limb!

Gold futures closed sharply lower Thursday, as the dollar rose and oil prices declined. Gold dropped $10.30 to end at $918.30 an ounce.

Pimco's Bill Gross said the U.S. government has been understating inflation. Thanks, Bill. We already knew that.

Excluding profits from the major integrated oil companies, US corporate profits are showing their worst profit increases in ten years. Without the $70 billion earned (???-stolen) by the oil companies, profits among the overall S&P 500 fell 26 percent and 30.2 percent as of last week.

Energy profits made up almost half the income growth reported by S&P 500.

The Rest of the Story

I was talking to a young man from England during lunch, and I asked him about living England, and about their heath-care system. He said, "oh, you must have seen the Michael Moore movie Sicko". I told him that I did, and asked him if everything Michael said in the movie about the NHC system was true. He said it was.

Get this. If you are too sick to get out of bed, the doctors in Britain come to your home. He said he went to a US doctor once and all they wanted to do was test after test, and when all was said and done he was charged $3000 bucks.

For profit health-care is a crime. US health-care providers want their piece of the American dream whether or not you need the test, operation, or dental filling. Accept it, that's just they way it is.

To add insult to injury, this young man from England also said there is no tuition for students who want to go to college.

Excuse me if I'm wrong, and I might be mistaken, but isn't Great Britain a democracy? If so, what the heck do you call what we currently have in the US? Survival of the fittest? Dog eat dog? Die if you can't pay?

Ok, enough of that. You know you're being screwed, so why rub it in. The people who push the buttons in our nation know there really are no Republicans or Democrats anymore. They just want you to believe you have a say, and want you to align yourself with a political party to keep you fighting for something that will never happen.

While we are bickering among one another, the big boys just sit back, ship jobs overseas, work on open borders, buy up land in Mexico to profit from the upcoming North American Union, and sit back and laugh at us silly "little people".

If you watch the "fat cats" long enough, you'll see that once in a while they'll throw the little people a bone- the NASDAQ bubble of 1998-2000, and the 2002-2005 real estate bubble, lower interest rates.

The cool thing about fat cats is they give the little people a chance to become prosperous. But they know that the majority of the little people cannot handle the success. They know that greed eventually destroys the little peoples chances of acquiring wealth.

When faced with economic prosperity, many little people cannot handle the success. Have you heard about the "Curse of the Lottery Winners ?".

Here are a few examples;

ABC News

Winning the Lottery, Curse or a Blessing?

Lottery Post

As the old saying goes;

"The Lord giveth, (and people screw it up) and the Lord taketh away".

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

Ok, I've seen enough of the nonsense, it's time to take profits in some of our oil positions.

Effective today, I am selling the OIH: Oil Services HOLDRS in the DG ETF Portfolio.

Our cost basis is $182.33 (purchased on 9-17-07), and I have locked in a sale price of $210.92, a gain of $28.59 or 15.68%. Annualized the gain is 23.55%

We will be replacing the OIH: Oil Services HOLDRS with a trading short. Today we are buying the Ultrashort Oil & Gas Proshares- DUG at a price of $27.85.

In the DG Fidelity Select Sector Fund Portfolio, we are selling;

FSESX- Energy Services
FNARX: Natural Resources
FSDPX: Materials

As of yesterday, the gains in the three funds were 31.92%, 22.09%, and 16.95% respectively. The annualized gains were higher.

Hold the proceeds in cash, and we will re-deploy the assets at a later date.

We will continue to hold the FSENX- Energy Fund to keep an energy position in the portfolio.

In July, the Bush Administration will temporarily halt oil purchases for the Strategic Petroleum Reserves. They like to do things like this before an important election. You know, it's a sheeple (leading the people like sheep) thing

I will have more updates for you in this weekends briefing.

Dynamic Growth: ETF Portfolio

NEW BUYS:

Ultrashort Oil & Gas Proshares- DUG: Bought Friday, May 23rd at a price of $27.85.

NEW SELLS:

OIH: Oil Services HOLDRS- Sold Friday May 23rd at $210.92.

SWITCHES:

None

Here are our Top 10 ETF's for the week of May 23rd:

1) EWZ: Brazil Index- .451
2) EEB: Claymore ETF BNY BRIC- .413
3) SLX: Market Vectors Steel Index Fund- .465
4) DBA: Powershares DB Agriculture Fund- .492
5) FXF: Currency Shares Swiss Franc Trust- .455
6) ADRE: BLDRS Emerging Markets 50 ADS Index Fund- .330
7) DUG: Ultrashort Oil & Gas Proshares- Not Rated
8) PGJ: PS Golden Dragon China Fund- .223
9) KBE: KBW Bank ETF- Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated

Notes:

By selling the OIH: Oil Services HOLDRS we locked in a gain of $28.59 or 15.68%. The annualized the gain is 23.55%.

We replaced the Oil Services HOLDRS with an oil short. We bought Ultrashort Oil & Gas Proshares- DUG at a price of $27.85.

Fidelity Sector Fund Portfolio:

NEW BUYS:

None

NEW SELLS:

FSESX- Energy Services: on Friday at a price of $108.30
FNARX: Natural Resources: on Friday at a price of $43.93
FSDPX: Materials: on Friday at a price of $62.42

SWITCHES:

From HM to top 10:

FSDAX: Defense & Aerospace

Here are our Top 8 Fidelity Sector Funds for May 2008

1) FSENX- Energy
2) FSCHX: Chemicals
3) FDFAX: Consumer Staples
4) FSMEX: Medical Equipment
5) FSCGX: Industrial Equipment
6) FSDAX: Defense & Aerospace
7) FWRLX- Wireless
8) FSRBX: Banking
9)
10)

Honorable Mention (Holds):

None

Notes:

I decided to sell three of our four energy holdings on Friday. With all the attention oil was getting, it sounded more like a short term bubble than a viable long term investment. All I know is the oil trade looks very speculative at this stage of the game.

While oil prices can continue to climb, I believe the politicians will eventually punish the oil companies with a windfall profits tax. This is especially true if the democrats take the White House and Congress in November.

We are holding only 8 funds in the top 10 for now, so hold the remaining proceeds in cash for the time being.

By selling our three of our four energy funds, we locked in some very healthy gains;

FSESX- Energy Services

Bought 07-02-2007 98.2641 shares @ $87.65
Sold 05-23-2008 @ $108.30
Gain +$2029.15 plus dividends of $448.08= +$2477.23 (+28.76%/ annualized=+32.20%)

FNARX: Natural Resources

Bought 10-01-07 245.297 shares @ $38.01
Sold 05-23-2008 @ $43.93
Gain +$1452.12 plus dividends of $338.50= +$1790.62 (+19.20%/ annualized=+29.82%)

FSDPX: Materials

Bought 07-02-07 149.53 shares @ $55.73
Sold 05-23-2008 @ $62.42
Gain +$1000.43 plus dividends of $286.94= +$1286.94 (+15.44%/ annualized=+21.52%)

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

Buy and Hold: I Don't Think So!

I'm am not going to bore you with the release of every economic report since I am more interested in the big picture trend, and not the weekly gyrations that get revised up or down.

The trends are very clear, and the economic conditions remain treacherous.

This being said, I believe the market is poised for a tradable rally starting as early July, and ending by late summer. The main catalyst for the upcoming rally will likely be spurred by a sell-off in energy and commodity prices.

The Bush Administration will throw voters a bone by temporarily halting new oil purchases for the Strategic Petroleum Reserves. Oil speculators who have driven oil futures well beyond normal supply and demand pricing will be anxious to take profits and wait for better buying opportunities.

The US dollar will magically find support, and short sellers will cover adding more fuel to the sell-off in energy.

Gold and commodity prices will take their cue from a stronger dollar, and a weakening economy and correct as well.

The major integrated oils will come under increasing pressure from politicians, and the oil trade after the November elections will be oil futures and ETF's that trade the commodity, and not the oil company.

For now, I am comfortable with our Oil & Gas short position- Ultrashort Oil & Gas Proshares- DUG which we bought on Tuesday at a price of $27.85. The current price is $28.78, +3.33%.

As we head into late July, I will be interested in buying commodity related oil ETF's such as;

United States Oil (USO): spot price of West Texas Intermediate (WTI) light, sweet crude oil.

MACROshares Oil Up Tradeable Shares (UCR): Same

PowerShares DB Oil (DBO): tracks excess returns of futures contracts on Light Sweet Crude Oil (WTI).

Assuming a democratic victory in November, I can envision a similar scenario to the 1970's when oil companies were punished (so was the consumer) with a windfall profits tax, and crude prices skyrocketed.

If John McCain happens to win the presidential election, crude will continue to do well, but the major integrated oils may be spared from a WFP tax.

Any rally in the broad market has to be viewed as a rally within a bear market. Clearly inflation is a major problem that must be dealt with.

Yesterday, the dollar rose to the highest level in more than a week after Fed Governor Fisher said the central bank will raise interest rates if inflation persists.

Well inflation remains a major problem, and we saw some of the effects after Dow Chemical (DOW) announced they would increase prices across the board by +20%.

Dow is not the only ones raising prices. Many companies have done the same, and many more will follow. But here is the good news. Once inflation subsides, companies who substantially raised their prices will not lower those prices in the years ahead. So, as their costs decline, their prices will remain elevated ensuring massive profits in the years ahead.

As far as the 2,3,and 4% inflation numbers are concerned, you can see that they are nothing more than manipulated lies.

The other lies to the public are the constant, and ridicules reasons why energy prices spike everyday. I am so sick of hearing about Nigerian violence as an excuse. This is absurd! It reminds me of the day VP Cheney suggested that we (you & me) go out and buy plastic and duct tape for our windows to protect us from Saddam’s weapons of mass destruction.

You do remember that don't you? How absurd is this?

I happened to be shopping a Lowe's a few days later, and I asked one of the associates if anyone actually came in and bought duct tape. He said, oh yes, they were sold out.

I haven't heard a story this good since I read my son "Chicken Little" ten years ago.

Interest Rates

Don't get sucked into thinking interest rates are going to stay down for a prolonged period of time.

With massive inflation and a dollar that is worth less than a decent size Hershey's bar, interest rates must go up.

Here's the scoop on our dollar. Go overseas and see what they will give you for it.

1 US Dollar= .504 cents in British Pounds
1 US Dollar= .991 cents Canadian (and they call the Canadian currency "Loonie"?)
1 US Dollar= .639 cents to the Euro

See what I'm getting at here? This is not the currency of the greatest country in the world.

Interest rates will rise or the currency will collapse.

Former Federal Reserve Chairman Paul Volcker said the modern financial system has ``failed the test'' of the marketplace. When asked whether he predicts a ``dollar crisis,'' he said, ``you don't have to predict it, you're in it.''

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

I have some serious doubts about the current "green movement", and the current craze for alternative energy.

In order to understand what is going to happen in the future, we need to understand what has happen in the past.

My comments come from an understanding of what has happened in the past, and my rejection of the possibility that in every reoccurring crisis, the media and Wall Street wants us to believe "it is different this time".

The "it is different this time" theme came up during the NASDAQ bubble in 2000, the Real Estate bubble a few years ago, and every oil crisis in the past. While it maybe "different this time", the current energy crisis, and the potential solutions are eerily similar to the solutions of the past.

1) Wind- Nothing new, and an old solution. Southern California (Lajolla) has had huge wind farms in place since the last energy crisis. The new "green movement" came out of nowhere, but has become the new mantra for corporate America.

At this weeks Exxon shareholder meeting, the Rockefeller-Green Movement- clan tried to get Exxon executives to diversify more into alternative sources of energy. They were rejected and laughed out of the room.

While there is money to be made in wind as the alternative energy craze continues, my question is what happens if all of the "it is different this time" assertions turn out to be false. Its happened in the past is my point.

2) Solar- Again, nothing new, and an old solution.

During the Carter years, solar panels were placed on the roof of the White House. When Ronald Reagan took office, he said, get that crap off my roof. During those same years, the "green movement" convinced people to buy solar panels for their homes. Many in California did, and others across the nation did not take the bait. My neighbors across the street had solar panels on the roof of their garage in 1990-1992. In 1993 the new owners took them down.

3) Oil Shale in Colorado- During the oil crisis in 1980, Exxon spent $5 billion on the Colony Oil Shale Project in Colorado. Two years later, oil prices declined, and May 2, 1982 became known as "Black Sunday" when Exxon abandoned the project, laid off 2,000 workers, and left behind a trail of foreclosures and empty oil shale mines.

My point is obvious, and I may be wrong, but I don't see new solutions, just the old ones rearing their ugly heads.

Advanced nations are going nuclear. The "Green Movement" doesn't want that because of the obvious dangers. 78% of the total electricity produced in France comes from 59 nuclear reactors. France implemented nuclear power just after the 1974 oil crisis.

In addition, France has high speed rail systems, and one of the best healthcare systems in the world.

The power brokers in the oil business do not want viable alternatives for the product that keep them kings, and us their pawns.

While the "green movement" may win in the short run, history tells us the potential for disappointment exists.

Just my thoughts.

Have a great weekend.