"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.".
On Bernanke
-"I will tell you that I was terrified recently when I saw Bernanke testifying before Congress, and he said that if an American buys only American products in American currency he is not affected by the decline in the U.S. dollar. I couldn't believe the man said that! I was looking at him to see - Is he lying? Is he just using government propaganda? Or does the man just not know? He's supposed to be an economist, and he doesn't know how the economy works!"
On Moving to Singapore and not China
-"We would like to move to China, but the air is so terrible, the pollution is so bad, that we can't bring ourselves to do it".
"Everything works in Singapore. It's an astonishing place. It's got the best education system in the world. It's got the best health care in the world. And it's Chinese-speaking. Our 4-year-old daughter, Happy, goes to a school where they only speak Chinese".
I am confident Jim Rogers knows a lot more about what is going on in our nation than what he letting on. He is anti-fed, thinks the government is lying to us when they report economic numbers, and even likes Ron Paul for President.
Since Jim Rogers believes Ron Paul would be the best candidate to be President, he must agree with Ron Paul's views that;
1) The United States invaded Iraq under false pretenses.
2) Lower taxes allows more spending, saving, and investing.
3) Make all medical expenses tax deductible.
4) The disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation, are some of the greatest threats facing our nation today.
5) Secure our borders from those who would cross them to do us harm.
6) The biggest threat to your privacy is the government.
7) Existing federal rules force disabled veterans to give up their military retirement pay in order to receive VA disability benefits. No other group of federal employees is subject to this unfair standard.
8) We must withdraw from any organizations and trade deals that infringe upon the freedom and independence of the United States; International Criminal Court (ICC), NAFTA, GATT, WTO, and CAFTA are a threat to our independence as a nation.
Maybe Jim Rogers is sick and tired of watching our nation be ruled by a group of Aristocrats who control our elected representatives, and will not tolerate their agendas to rule his life.
Like people who once lived in a nice neighborhood that has become over run by thieves, drug dealers, and low lifes, Rogers did what most of us would do under the same circumstances. He moved!
