John Mugarian's Dynamic Growth

As cruel as this may sound, investors, turned speculators are learning the hard way that leverage, or borrowed money, can be very seductive, and will eventually drive you into bankruptcy. What is shocking however, is that people who are highly educated individuals, and run companies should know better. Obviously this was not the case.

As I watched housing prices double between 1995 and 2005, I knew that a mania had built, and the trend was clearly unsustainable. If the mania was so obvious to me, I was amazed that it wasn't obvious to the CEO's of banks and other managers of fortune 500 companies.

This is what happens when a company, and the individuals that run them, focus on greed instead of consistent profits. CEO's and other executives know that dramatic outperformance of a companies earnings translates into huge bonuses and stock grants. Just like the small investors in the NASDAQ bubble in 2000, and the real estate bubble a few years ago, they got caught up in the greed that higher returns leads to higher bonuses.

So, if a corporate executive that graduated from a ivy league school can get caught up in a mania just like a plumber who bought an overpriced condo, then IMO, the ivy league guy is no smarter than the trade school guy.

With the world economies now in shambles, governments and central banks around the globe are taking dramatic steps to stabilize the global economy. I think they'll succeed. Many the worlds greatest companies are very cheap on a historical basis. With the massive hoard of cash now sitting on the sidelines, I am optimistic that the move into stocks will happen sooner rather than later.

Expectations for corporate profits are extremely low. In the quarters ahead beating lowered expectations should be easy which will fuel optimism, and allow the bargain hunting in stocks begin. When stocks rally, and the move is seen as sustainable, more cash will be deployed which will eventually fuel more optimism. CEO's will sense that the picture for corporate profits is improving, and this will eventually improve the employment picture.

The media is now squarely focused on the negatives. Today, the Dow closed below 6800, and the S&P 500 briefly dipped below 700 for the first time since October 1996. On Saturday, Warren Buffett released his annual letter to shareholders which said the economy "will be in shambles throughout 2009." Of course, the media parlayed this soundbite, and focused on the negative rather than the comment that he was "still optimistic about America long term."

While some TV personalities on the financial channels are telling you that the best approach right now is to stay out of the stock market, and protect what investments you have left, billionaires like Buffett, and many others are buying.

The S&P 500 is now down 57% from the Oct. 2007 highs. I have a very difficult time not buying quality businesses when they are down 50-75%. If a polo shirt was down 50-75% you would jump all over it. This is how I feel about buying some of the greatest companies on the planet.

Today, the stock market sold off after AIG reported a $61.7 billion fourth-quarter loss. Truth be known, if former CEO Maurice "Hanky Panky" Greenberg wasn't so well connected, a decent government would allowed them to go bankrupt last fall. I haven't care for this company since the early 90's when they suckered investors into fixed annuities with high teaser rates, and then low-balled them in subsequent years.

The lows in the market are coming. I don't know if it will be tomorrow, or after the employment report on is released on Friday. Keep in mind that after decent a rally off the lows, most lows are eventually retested.

As far as where we are in the five stages of grief (Denial, Anger, Negotiation, Depression, Acceptance), I believe we are in the final capitulation phase which isacceptance.

Here are our Top 10 ETF's for the week of March 2nd:

1) DBA: Powershares DB Agriculture Fund
2) EWZ: Brazil Index
3) DBE: PowerShares DB Energy
4) USO: U.S. Oil Fund
5) EEB: Claymore ETF BNY BRIC
6) DDM: Ultra Dow 30 Proshares ETF
7) GLD: SPDR Gold Shares
8) IYF: iShares Dow Jones US Financial Sector
9) PGJ: PS Golden Dragon China Fund
10) SSO: ProShares Ultra S&P500 Trust

Here are our Top 10 Fidelity Sector Funds for March 2009

1) FBIOX: Biotechnology
2) FSPTX: Technology Portfolio
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSCPX: Consumer Discretionary
6) FSCSX: Computers & Software
7) FSCHX: Chemicals
8) FNARX: Natural Resources
9) FSENX: Energy
10) FSRBX: Banking

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

As the U.S. financial markets continue to resemble the ones of some piss poor South American nation, several oddities began to capture my attention.

Don't You Find it Odd?

1) That many adds on TV for the past several months start with the phrase; "In these troubled times", "In this bad economy", or "We know how tough it is for consumers nowadays."

2) The economy, stock market, and investors 401k's are now the brunt of jokes by the late talk TV shows.

We heard the same responses from the late shows just before the market bottomed in 2002. Here are a few jokes I have heard over the past 6 months;

"Boy, another bad day on Wall Street. Things are getting ugly. Dow Jones is starting to look more like Paula Jones." —Jay Leno

"A huge blizzard covered the East Coast with 10 inches of snow. Police said there would've been traffic jams if people still had jobs to go to." --Craig Ferguson

In the past, jokes similar to these, as well as magazine covers portraying the negative effects of the economy were the mantra of the day just months before the stock market and the economy began to rebound.

I know, I know, "but, it's different this time." How many times have we heard this phrase? "It's different this time" was used to keep investors in the NASDAQ at the top in 2000, and it was used again during the real estate bubble in 2005. Be very careful with the phrase.

Today's Market

Once again, I am stunned by the corruption, and manipulation of the U.S. financial markets. As an example, today's poster child is General Electric (GE).

Bill Gross came out today and said the selling in GE today was "partly driven by technical selling by overseas participants. GE stocks and bonds are widely held by sovereign wealth funds."

Rumors were circulating that GE would eventually become the next AIG. Bill Gross said that GE WOULD NOT become the next AIG.

Clearly, rumors, short sellers, and slime balls are spreading news and creating a bear run on GE for their own personal gain. These things happen in very corrupt nations. What's even more amazing is if the rumors are true, then people acting on these rumors are receiving some sort of privileged information that is not available to the public. U.S. Securities Laws are suppose to prevent these actions from happening, but obviously nothing is being done.

The investors in the stock market need to know that the deception and manipulation imposed on the capital markets by small group of scumbags connected to Wall Street will be stopped in their tracks. One way to do this is to implement the actions I thought were a no brainer months ago.

- Suspend the “mark-to-market” accounting rules"
- Ban naked short selling.
- Re-implement the uptick rule for short sellers.

Reasons why they won't do it;

One of the main reasons is the system is corrupt. I told you about the high level former cabinet members who are or were involved in Hedge Funds or Private Equity firms after leaving office.

You know who they are. People like Former Secretary of State Madeleine Albright (Albright Capital Management), Former Treasury Secretary Lawrence Summers (D.E. Shaw), Former Treasury Secretary John Snow (Cerberus Capital), Former Vice President Dan Quale (Cerberus Capital), and Former Secretary of State Henry Kissinger (adviser to hedge funds).

Doesn't the whole system just have the putrid smell? Don't You Find it Odd?

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

I can't recall the level of pessimism being this negative since 1973-74. Of course back then, we had no internet, and only 3 TV stations. Greater access to information doesn't necessarily mean that the information is accurate. Regardless of what information you are searching for, bias opinion is everywhere. This is obvious when it comes to political views, but is not so obvious when it comes to the financial markets. Oh, but rest assure, the information you receive on the financial markets is just as suspect.

1) At Dow 14,000, the financial media was using catch phrases to get you to buy stocks at the highs;

This one that takes the cake. Here's CNBC's Erin Burnett saying "Move over Goldilocks- We have economic nirvana."- January 31, 2007

Jim Cramer February 25, 2007

VIDEO

2) To show you that the financial media is told what to say (they read from a teleprompter), Check out CNBC's Erin Burnett calling Apple Computer the s**t stock for 2008.

VIDEO

In the book, "Wall Street Meat" by a former analyst for Morgan Stanley, Andy Kessler, Kessler said that the big Wall Street firms had the ability to manipulate the media, and got them to report whatever they wanted to manipulate stocks they wanted investors to buy.

3) Much touted financial futurist, Harry Dent gets a lot of airtime from the media. He is also one of the best contrarian indicators I have ever seen. If an investor had done the opposite of what Dent had predicted, they would have sidestepped two huge market declines and sold their real estate at the top.

He has written several best sellers including;

The Roaring 2000s (1998)- Just before the NASDAQ Crash

The Next Great Bubble Boom (2004)- Just before the Real Estate Bubble burst, and the Bear Market that started in October 2007.

In 2006, Dent predicted, “The Dow hitting 40,000 by the end of the decade, the NASDAQ advancing at least ten times from its October 2001 lows to around 13,500, and potentially as high as 20,000 by 2009.

So what is Harry up to now? Yep, you guessed it. Here is his new book;

The Great Depression Ahead (2009)

4) Obviously no one knows for sure what the future holds, but my experience has been that the worst investing advice usually arrives near the top and bottom of stock market cycles. In addition, the news we receive is rarely as good or bad as what is being reported.

We often believe that the news we receive is truthful based on the size and perceived reputation of the media outlet doing the reporting. For example, if you read an article in "Business Week", your first thought would be, "its got to be true."

Here is an article from Business Week touting Harry Dent.

Here is an article from the "Tampa Bay Business Journal" from 2006 saying Dent says stocks are ready to rally.

The lessons here are very simple. Be careful with convention wisdom, and those touting opinion as fact.

Deposits at banks have soared. When you take into account the spreads between returns on deposits and borrowing costs, there is a huge built in profit margin for banks. When you couple this rare phenomenon with the possibility of adjustments to the mark to market accounting rules, along with savings generated from lower dividend payouts, you have a recipe for a doubling in prices of bank stocks very quickly.

Clearly, the fear among investors is at an unprecedented high. Along with this fear is an opportunity to buy the best quality companies in America at once in a lifetime prices.

Confusion as to what company is good and which one is bad always occurs during times of turmoil. Clearly, there are more good than bad. Obviously, this will not become evident until the market and stock prices are much higher.

It's very difficult for me to be frightened of the market below Dow 8000. I was terrified of the market when the Dow was above 14000.

Every sector is extremely oversold, but I want to add two new sector funds to the ETF portfolio with great yields, are dominate players, and have excellent prospects going forward.

Here are our Top 10 ETF's for the week of March 9th:

NEW BUYS:

VIS: Vanguard Industrials

Top 10 Holdings:

MMM, BA, BNI, CAT, EMR, GE, LMT, UNP, UPS, UTX

Dividend Yield: 2.97%

52 Weeks: High $74.53- Low $ 27.35- Price $ 28.21

IXP: iShares S&P Global Telecom

Top 10 Holdings:

T (16.8%), China Mobile, Deutsche Tele., France Tele., Nippon T&T, NTT DoCoMo, Telefonica, Telstra, VZ (10%), Vodafone.

Dividend Yield: 5.36%

52 Weeks: High $72.50- Low $39.53- Price $39.60

NEW SELLS:

GLD: SPDR Gold Shares
EEB: Claymore ETF BNY BRIC

1) DBA: Powershares DB Agriculture Fund
2) EWZ: Brazil Index
3) DBE: PowerShares DB Energy
4) USO: U.S. Oil Fund
5) VIS: Vanguard Industrials
6) DDM: Ultra Dow 30 Proshares ETF
7) IXP: iShares S&P Global Telecom
8) IYF: iShares Dow Jones US Financial Sector
9) PGJ: PS Golden Dragon China Fund
10) SSO: ProShares Ultra S&P500 Trust

Here are our Top 10 Fidelity Sector Funds for March 2009

1) FBIOX: Biotechnology
2) FSPTX: Technology Portfolio
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSCPX: Consumer Discretionary
6) FSCSX: Computers & Software
7) FSCHX: Chemicals
8) FNARX: Natural Resources
9) FSENX: Energy
10) FSRBX: Banking

Through the years, many have said "a picture is worth a thousand words." Well, as I look at the charts below, I have to agree.

Wall Street and the media has done a great job scaring the hell out of investors. In fact, the more they spoke, the more bears they interviewed, the more the market and economy tanked. Obviously, insiders had a different take on the situation.

Charts are a courtesy of insider-monitor.com.

2006- As the bull market was beginning to peak, insiders were clearly signaling caution.

2007- Here, the insiders were running for the exits as some in the media were calling the market, "Economic Nirvana."

2008- While the market was tanking, insiders were buying.

As General Electric (GE) was being attacked by the Wall Street mafia, GE insiders were buying;

2009-03-02

Nunn Samuel A (Director) 30,000 @7.66 =229,800
Neal Michael A (Vice Chairman) 25,000 @7.59 =189,750
Gonzalez Claudio X (Director) 20,000 @ 7.75 =155,000
Larsen Ralph S (Director) 30,000@ 7.65 =229,500
Neal Michael A (Vice Chairman) 50,000 @ 7.90 = 395,000
Immelt Jeffrey R (Chairman and CEO) 50,000@ 8.26= 413,000

2009-03-03

Neal Michael A (Vice Chairman) 25,000@ 6.99= 174,750
Rice John G (Vice Chairman) 50,000@ 7.04= 352,000

2009-03-04

Neal Michael A (Vice Chairman) 50,000 6.24 312,250

2009-03-05

Lafley Alan G (Director) 30,000 @ 6.73= 201,900

I cannot resist quoting George Carlin when it comes to the Wall Street Gang playing with the emotions (and lives) of investors;

"It's all bullshit folks, and it's bad for ya."

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

Jim Cramer (Mad Money) made a great comment the other day. He said that "Wall Street enjoys more freedom than Las Vegas Boulevard." What he was getting at is the casino business is more heavily regulated than Wall Street. Given these comments, it's obvious that the real gangsters, the real mafia is on Wall Street and not in Las Vegas.

1) Only Wall Street can create crap like SIV's, CDO's, and package good mortgage bonds with sub-prime assets and get a AAA rating.

2) Only Wall Street can get the shysters in Washington to repeal the Glass-Steagall Act.

3) Only Wall Street can get the shysters in Washington to get rid of the uptick rule for short sellers.

4) Only Wall Street can get away with naked short selling, and allow others shysters to place trades on US exchanges that don't require them to borrow shares before shorting a stock.

5) Only Wall Street can get the shysters in Washington to allow hedge funds to go unregulated, and wreak havoc in the US markets.

6) Only Wall Street can allow a crook like Bernie Madoff to be chairman of the NASDAQ.

If you want to go back in time, I'll really tell you how crooked Wall Street is.

- NASDAQ bubble, investment firms issuing bogus research reports, and knowing companies were cooking their books.

If you want a real education, read books such as;

-"Liar's Poker"
-"Dangerous Dreamers: The Financial Innovators from Charles Merrill to Michael Milken"
-"Den of Thieves"
-"Wall Street Meat"
-"Running Money: Hedge Fund Honchos, Monster Markets and My Hunt for the Big Score"
-"When Genius Failed: The Rise and Fall of Long-Term Capital Management"
-"The Asian Storm: Asia's Economic Crisis Examined"
-"When Government Fails: The Orange County Bankruptcy"

Movies;

-"Enron: The Smartest Guys in the Room (2005)"

Oh, the mob is definitely alive and well on the corner of Wall Street and Broad. But, it is times such as these that investors can take advantage of turmoil and carnage to enrich themselves.

When all is well, and the markets mend, next time don't forget to sell.

Last week the market experts were calling for some extreme downsides, and the market rallied. Now, the market experts (Bernanke included) are calling the market bottom, and a possible end to the bear market. Who do we believe?

Clearly, four days of upside does not make a trend. What we do know is that bear markets love to retest their lows. What we do know is the Obama gang was out in full force last week attempting to reverse the negative sentiment, and boost confidence among investors.

So, all the jawboning aside, let's look at what the numbers are telling us.

The bear market trend that started in 2000 was eventually met by a bear market rally that reached new highs on the DJIA and S&P in 2006-2007. On March 6th, the S&P found support near the mark of the beast (666) which marked a -61.8% decline from the October 2007 highs. The 17 month bear market decline now stands as the second worst on record. The worst of course was the 1929-1932 decline of -86.2%.

The current bear market rally better gain some traction in both strength and volume or a resumption of the downtrend will take place shortly. Previous rallies have stalled after gains of around 20-25%. If the downtrend is to be broken, it must do it aggressively after these gains have been achieved.

A successful retest of the lows would be encouraging, but stands as a major inflection point. A violation of the longer term downtrend from the 1940's as well as 1974 and 1982 would not be a good omen.

We are holding out hope that the market will successfully manage these lows, and eventually mark the end of this painful decline.

Here are our Top 10 ETF's for the week of March 16th:

1) DBA: Powershares DB Agriculture Fund
2) EWZ: Brazil Index
3) DBE: PowerShares DB Energy
4) USO: U.S. Oil Fund
5) VIS: Vanguard Industrials
6) DDM: Ultra Dow 30 Proshares ETF
7) IXP: iShares S&P Global Telecom
8) IYF: iShares Dow Jones US Financial Sector
9) PGJ: PS Golden Dragon China Fund
10) SSO: ProShares Ultra S&P500 Trust

Here are our Top 10 Fidelity Sector Funds for March 2009

1) FBIOX: Biotechnology
2) FSPTX: Technology Portfolio
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSCPX: Consumer Discretionary
6) FSCSX: Computers & Software
7) FSCHX: Chemicals
8) FNARX: Natural Resources
9) FSENX: Energy
10) FSRBX: Banking

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

You need to understand, despite of all the political jawboning over AIG bonuses, nothing will change. Oh, there will be a lot of talk, hearings, and nasty comments in the press, but many of those doing the talking are nothing more than "Prostitutes for the Wall Street Pimp."

1) In 2000, when Wall Street analysts and brokerages were issuing bogus research reports, none of these people were found guilty or went to jail. The analysts, as we later found, were nothing more than a "Prostitute for the Wall Street Pimp."

2) Most of the brokers I know are nice guys, but they are also "team players". Being a team player for a brokerage firm means you nothing more than a "Prostitute for the Wall Street Pimp."

3) Investment banks are constantly sending every Presidential Administration a Prostitutes to fill cabinet positions to represent the interests of the Wall Street Pimp.

4) AIG bought bad assets from the Wall Street Pimp, received bailout money, which eventually flowed through to the Pimps for advice and council.

5) According to "Wall Street Watch", between 1998-2008, "Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.725 billion in political contributions and spent another $3.4 billion on lobbyists." The pimps paid the prostitutes well.

Where is the Stock Market Going?

Now that investors are depressed and totally fed up with investing,the stock market, and Wall Street is ready to transition from a secular Bear to cyclical Bull.

With investors sentiment firmly entrenched in depression, cash has been building on the sidelines, and an important bottomed was being formed.

In my opinion, the current rally will be viewed with skepticism, so the initial rally will be ignored. After a brief pullback, the market will stair step higher. Investors will be reluctant to buy on the pullback on fears that the rally was nothing more than a head fake.

The recent good news and strength of financial stocks will not be fully realized until prices are much higher. Even the much talked about, GE will probably muster a meaningful advance.

Just as the market reaches a short term overbought level, investors will tiptoe back into the market just before a minor correction. Some will sell in disgust, others will buy on the pullback. As the short term overbought level is corrected, the market will stair step higher to a new, and higher level.

As we get into the late summer, we could see the DJIA back around the 10,000 mark. Stay tuned, this could get very interesting.

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

I'll show you something more outragious than the AIG bonuses; the Merrill Lynch bonuses. Why isn't anyone focusing on that?

Merrill's bonus payouts were much more outrageous than the ones given out to AIG employees. Oh, but the politicians aren't saying anything about that.

In December, just before Bank of America completed its acquisition of Merrill, CEO, and country club frat boy, John Thain paid out $858 million in bonuses. This is 5.2 times more than the $165 million paid to AIG employees.

Merrill Lynch was clearly a sinking ship, and going forward only an idiot would continue doing business with these guys.

Oh, before I forget. I am sick of seeing the "You and Us" ads by UBS. What a bunch of crap! When I was a broker at JC Bradford, the joke going around the office when UBS PaineWebber took over was UBS stood for, "U Be Screwed".

To show you (again) how intertwined the relationship is between Wall Street and Washington, Senator Chris Dodd came out on Wednesday and admitted he sneaked language into the stimulus bill allowing $165 million in bonuses to AIG executives.

The slime balls are all over the place.

So, with everything on the table, how can Wall Street make you forget about their past crimes and misdeeds? Very simple... Rally the markets!

Investors have short memories when they begin making money. It happened after the NASDAQ crash in 2000, and it will happen again in the months and years ahead.

Good news is beginning to seep out slowly.

General Electric said that GE Capital should show a profit for the quarter. The company also said that GE Capital would not need any additional outside capital.

Bank of America said they were hoping to pay back the TARP money by the end of the year.

Initial jobless claims were not as bad as forecasted, but still remained above 600-thousand for a seventh straight week.

After a sharp 20% rally in the S&P 500, some giveback is to be expected. Volume was rather heavy which showed that buyers were there soppy up stocks from the profit takers.

It looks like the investing mood is beginning to improve!

Shortly after the bubble burst, the Federal Reserve took interest rates down to historical levels. Fueled by cheap money, the massive bubble was caused by combination of excessive speculation, and corporate and investor greed.

The above comments came shortly after the NASDAQ bubble burst in 2000. Sound similar to today?

If you have watched the boom and bust cycles for any length of time, you'll see that the culprits of every crisis are always the same. In short, it's Wall Street. They're always in the middle, and always cooking up the next crisis. Period.

After hitting a 12-year low on Monday, March 9, the rally since has most believing that the crisis is far from over. In reality, the market is showing flickers of stabilization, but many will not believe it until prices are much higher.

After a 20% rally in only eight days, the market spent a little time digesting those gains, and the bears spent the time trying to muster more fear. Fear and concern during a market rally is actually good news, and this type of concern is just what the market needs to leap to higher levels.

The recent good news and strength of financial stocks will not be fully realized until prices are much higher. Investors will be reluctant to buy on pullbacks fearing that any rally is nothing more than a head fake. With investor sentiment firmly entrenched in depression, cash on the sidelines is looking for somewhere to go. I believe the market will continue to stair step higher to a new level.

As we get into the late summer, we could see the DJIA back around the 10,000 mark.

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

1) DBA: Powershares DB Agriculture Fund
2) EWZ: Brazil Index
3) DBE: PowerShares DB Energy
4) USO: U.S. Oil Fund
5) VIS: Vanguard Industrials
6) DDM: Ultra Dow 30 Proshares ETF
7) IXP: iShares S&P Global Telecom
8) IYF: iShares Dow Jones US Financial Sector
9) PGJ: PS Golden Dragon China Fund
10) SSO: ProShares Ultra S&P500 Trust

Here are our Top 10 Fidelity Sector Funds for March 2009

1) FBIOX: Biotechnology
2) FSPTX: Technology Portfolio
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSCPX: Consumer Discretionary
6) FSCSX: Computers & Software
7) FSCHX: Chemicals
8) FNARX: Natural Resources
9) FSENX: Energy
10) FSRBX: Banking

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

I don't believe the current move can be sustained after April. Many technical indicators (RSI- Relative Strength, and the technical momentum indicators) are getting stretched. I know, I know, you're probably saying that the DJIA is still down over 6000 points from the 2007 highs, and "how in the world can the market be overbought".

As I have said many times, you and I do not have anything to do with the markets wild swings. Like it or not, we are just along for the ride. The button pushers at the investment banks control the markets, and right now they are throwing us a bone.

This rally will probably get very extended before it gives way to profitaking. Some believe by October, we may even revisit the lows set earlier this month. I don't know about that.

What I do know is a sharp decline from higher levels may give back at least half of the gains. My possible upside targets include a DJIA target of 9000, and an S&P target of 910-930. This would be a nice rally.

As fear of further declines turns to fear of missing the new bull, sideline money will be deployed just in time for the next downturn.

I plan to take some profits along the way, but I also believe the market may not decline to the March lows. If it does, I will have ample cash to take advantage of bargains. The difficulty comes when the market correction begins, and despite negative news, never declines enough to convince investors to buy. Sometimes, when buying stocks, you have to grit your teeth and make a decision.

I am going to the Bahama's for a wedding tomorrow, and while I'm there I plan to see Bill Cara. I'll have more on the markets next week.

Have a great weekend!

I had a short, fast trip to the Bahamas this weekend for a family wedding. To be honest, the water was beautiful, Paradise Island was nice, but the rest of the country was a little disappointing.

I was hoping to have time to stop by the Bill Cara Advisors conference, but time constraints and communications issues prevented me from doing so.

As took a few moments to lay by the pool at the very expensive Wyndham Resort (Bahamas), I began to ponder all of the events taking place in the U.S. economy over the past few years. When you take time to think, things begin to become much more clear.

A few things hit me during my brief time off;

1) The media is used to constantly pit one American against another. To keep our citizens confused, they really want us to believe you have to be on one of two sides; conservative or liberal, republican or democrat, black or white, gay or straight, pro-choice or pro-life, etc...

To add insult to injury, further distractions such as (like the war in Vietnam; who we now outsource to) the "war on terror", "weapons of mass destruction", "anthrax/ buying duct tape for your windows", were nothing more than scare tactics to keep you even more confused.

In reality, those behind the scenes know what their doing. Changing the fabric of our nation requires keeping the little people distracted.

For example, the financial mess could have been fixed in short order, with very little pain by simply suspending the mark-to-market rule, reinstating the uptick rule, and have the Federal Reserve announce that it would back all deposits of every lending institution. These efforts would have required very little cash.

2) Another issue that came to mind as I traveled through various airports this weekend was healthcare. Knowing how seemingly incompetent the US Government is suppose to be, I was amazed of how quickly the The Transportation Security Administration (TSA) was up and running after the 9-11 terrorist attacks.

If the US Government is really as incompetent as those who oppose a national health care system say they are, then I have to say I am impressed. Obviously those in opposition a national health care system are either lying, corrupt, or have skins in the game.

The recent (concocted?) economic crisis has caused an additional 6.8 million Americans to lose their health insurance.

I was speaking to a Canadian businessman (I've spoken to many others as well) in the Atlanta airport yesterday. I asked him what he thought about the nationalized healthcare system Canadian, and if all the fear tactics being used in the US were correct.

He said the fear tactics used in the US were propaganda and lies (other Canadians agreed). He said there were waiting periods of about 3 weeks for elective surgeries, but all serious cases were dealt with immediately by the best surgeons, at the best hospitals.

He also said, the Canadian government would fly a person with a serious illness to the best hospitals with the best doctors, and not just to a local hospital for surgery. And get this one. While in the US, the Canadian businessman I was talking to said he had to go to a podiatrist for a minor foot surgery. He paid the US doctor, and the Canadian system reimbursed him for the cost.

Not to belabor the point, but don't you feel, as a patriotic citizen of US that you are nothing more than an income stream or a source of revenue for all the various factions that put money in the pockets of politicians?

Today we learned that General Motors CEO, Rick Wagoner was quitting. Actually, if you think about it, bankrupting the automakers to get rid of the union contracts would go even further in completing the globalists agenda. They would kill the biggest union in the nation, and open the door for outsourcing even more US manufacturing jobs. How perfect!

The market IMO is in a short term overbought condition, and a 50% giveback would not surprise me. My finger is on the buy button, not on the sell button. Investor optimism has been on the rise, so waiting for a meaningful pullback makes sense.

With increased optimism, the market likes to go against majority opinion. Selling calls a month out 20% higher on stock positions will allow you to pocket some change as the market corrects.

As we get well into spring, the economy will show signs of life, and the stock market should rebound to levels higher than most thought possible.

Here are our Top 10 ETF's for the week of March 30th:

1) DBA: Powershares DB Agriculture Fund
2) EWZ: Brazil Index
3) DBE: PowerShares DB Energy
4) USO: U.S. Oil Fund
5) VIS: Vanguard Industrials
6) DDM: Ultra Dow 30 Proshares ETF
7) IXP: iShares S&P Global Telecom
8) IYF: iShares Dow Jones US Financial Sector
9) PGJ: PS Golden Dragon China Fund
10) SSO: ProShares Ultra S&P500 Trust

Here are our Top 10 Fidelity Sector Funds for March 2009

1) FBIOX: Biotechnology
2) FSPTX: Technology Portfolio
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSCPX: Consumer Discretionary
6) FSCSX: Computers & Software
7) FSCHX: Chemicals
8) FNARX: Natural Resources
9) FSENX: Energy
10) FSRBX: Banking

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

On Wednesday, March 18th, I wrote a journal piece entitled "Prostitutes for the Wall Street Pimp". Yesterday, after seeing the article below, I never thought I would be proven right so quickly;

Ex-Wall Street Analyst Becomes a Stripper

There are a lot of people who lose their jobs, but what you do to make-up the shortfall in income eventually speaks of your character.

In the situation above, Randi Newton, a former financial analyst at Morgan Stanley took a job as a stripper after losing her job.

If you stop and think about it, Wall Streeter's are looked at as conservative people who are expected to hold themselves to a higher standard. After all, these are the people who are suppose to give you accurate, intelligent, investment advice.

The background checks and psychological profiles that they give you prior to employment are suppose to uncover any potential character flaws. I don't think that the former financial analyst at Morgan Stanley suddenly changed her stripes overnight, and became a stripper. A person either has those morals and character beforehand, or they don't.

After spending over 14 years in the business, I saw things change. The industry became sleazy, and forced brokers, analysts, and executives into becoming "Prostitutes for the Wall Street Pimp."

In 2000, Wall Street analysts were issuing bogus research reports on DOT-CON stocks, yet none of these people were found guilty or went to jail.

In recent years, these same pimps ordered their rank and file prostitutes to develop bogus mortgage derivatives, packaged them as investments, and sold them to anyone stupid enough to buy them.

Between 1998-2008, Wall Street, commercial banks, hedge funds, real estate companies and insurance made $1.725 billion in political contributions to the guys in Washington to get them to look the other way.

Wall Street is sleazy. They have been for quite sometime. They manipulate the media for their own benefit by pumping a bull market at the top, and putting people like Nouriel Roubini on at the bottom. This is how they play the game.

Here is Roubini's bio, as you can see he has had connections with the gang for quite sometime. Roubini was at the International Monetary Fund, the Federal Reserve, World Bank and Bank of Israel. He was also worked as a senior adviser to Treasury Secretary Tim Geithner, and with Larry Summers at the Treasury during the Clinton years.

I guess what I am saying is I am very skeptical of his current views given his background and associations. If he had not been connected with part of the "gang", it would give his views more validity.

Yesterday, the White House rejected the automakers reorganization plans, and said bankruptcy may be a better option. This does not mean that GM and Chrysler would go away. It means they can reorganized and bust the union contracts so they could look more like the Japanese companies. This would be good for the companies, and bad for the highly paid autoworker.

The financial sector sold off after (Roubini's buddy) Tim Geithner said that banks still might need "large amounts of assistance." Of course he was not specific as to which banks, but I'll bet his pals on Wall Street already know.

After being short term overbought, the market was due for normal pullback regardless of the news. Yesterday's selloff was on low volume, and we need to keep in mind that the S&P 500 rallied 24% in three weeks.

The CBOE Volatility Index spiked to near a three-week high of 45.54. Soon, the Financial Accounting Standards Board will vote on April 2nd as to whether they will relax mark-to-market accounting rules. If they do this would substantially help banks' earnings, and the financials could become the next stock rockets.

For now, be careful what you hear from the "Pimps and Prostitutes".