"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!