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

We are reducing our exposure to the stock market today, and adjusting our asset allocation models as follows;

50% Equities: (Was 85%/Normally 95%) Aggressive
40% Equities: (Was 72%/Normally 80%) Moderately Aggressive
30% Equities: (Was 56%/Normally 60%) Moderate
20% Equities: (Was 36%/Normally 40%) Moderately Conservative
10% Equities: (Was 18%/Normally 20%) Conservative

There are so many 'Economic Lies and Distortions" that I really don't know where to start. This being said, I'm going with today's unemployment rate.

This morning the Labor Department said that the unemployment rate climbed to 9.7%, a 26-year high. The reported unemployment rate is deceptive because it no longer includes discouraged workers who have been unemployed for more than a year. These long-term discouraged workers are no longer listed on the rolls as unemployed.

To get an real picture of the actual unemployment rate, I encourage you to go to John Williams' Shadow Government Statistics website- click here.

"Courtesy of ShadowStats.com"

The chart above explains what the average consumer feels, suspects, and lives on a daily basis. The difference of course is the government statistics are not telling the truth.

According to the John Williams' Shadow Government Statistics;

"The U.S. economy is in a multiple-dip depression. The grand benchmark revision of the national income accounts on July 31, 2009 confirmed that the U.S. economy is in its worst economic contraction since the first downleg of the Great Depression, which was a double-dip depression. The current economic downturn increasingly will be referred to as a depression, and it is far from over. There will be intermittent blips of new activity, such as the current cash-for-clunkers automobile giveaway program that appears to be generating a one-time spike in auto sales. Yet, this downturn will continue to deteriorate, proving to be extremely protracted, extremely deep and particularly non responsive to traditional stimuli".

The average consumer is still pretty gullible, but is becoming increasing skeptical of the media as a source for accurate economic information. Over the past two months, Wall Street and the White House have hyped the temporary economic recovery as a sign of new bull market. The economy is not recovering, it's only in remission.

Millions of Americans have lost their jobs, their homes, and their pensions.

There is much more to report on the 'Economic Lies and Distortions", but we will save that for another day.

Fasten your seat belts! Any gains going forward are nothing more than manipulation. I don't know how many small investors- and institutions as well- will be suckered into this rally, but in the end they will probably pay a heavy price for their error in judgment.

Here is what I am seeing;

1) Last week, the Labor Department said that the unemployment rate climbed to 9.7%, a 26-year high. According to the John Williams' Shadow Government Statistics website, the government is lying, and the unemployment rate is much higher.

Incomes continue to get sliced and diced as Maine, Maryland and Michigan have closed State offices on Fridays. Last Friday, Rhode Island had planned to close on Fridays too but a court stepped in and blocked the closure.

2) The U.S. consumer is tapped out. They can no longer borrow in order to spend. Their jobs, pensions, real estate,and savings have collapsed. Millions more are homeless, and some have had to move in with family and friends.

Believe it or not, tent cities are popping up across the nation.

In short, the consumer economy which accounts for approximately 70% of GDP, is dead on arrival. Going forward, he real estate crisis is far from being over as increased unemployment will eventually lead to new home foreclosures.

3) The U.S. is deeply in debt to the tune of $13 trillion, and the White House said that the national debt would grow by $9 trillion over the next ten years, up from its previous forecast of $7 trillion.

Gold hit over $1000/ oz today as America’s largest creditor, China, and others are holding off on new dollar purchases, and opting to buy gold, raw materials and energy instead.

4) The Federal Reserve has monetized debt to buy Treasury bonds and hold down interest rates. This is like building the Hoover Dam out of wood and expecting it to hold back trillions of pounds of water.

The Federal Reserve has been printing money to keep the government going, and as a result the dollar is collapsing. Sooner or later more debt and money creation will fuel inflation and the Fed will no longer be able to hold down interest rates by buying bonds.

Today, a collapsing dollar caused crude oil to spike 4.5% or +$3.08 to $71.10/barrel, gold to jump over above $1000 per ounce in early trading before drifting back down.

5) Barrack Obama has kept his promise to reduce the number of troops in Iraq, but is proving he is nothing more than a puppet on a string by escalating military action in Afghanistan and coming close to initiating a new war in Pakistan.

With our nation $13 trillion (and climbing) in debt, the U.S. has spent $900,000,000,000 on the wars in Iraq and Afghanistan. Don't look now, but the House of Representatives passed a $636 billion defense bill this summer.

So, any American looking for a new job can find one with the U.S. military.

6) Commercial Real Estate is on the brink of collapse. Why? The consumer, who is 70% of the nations GDP is not, and cannot spend enough to prop it up. High unemployment, stagnant or declining wages, will cause consumers to spend less. Eventually, commercial real estate will get hit as mall operators will have less cash to make their mortgage payments.

7) "Read My Lips" Obama’s two top economic advisors, Treasury Secretary Timothy Geithner and director of the National Economic Council Larry Summers are hinting at a middle class tax increase.

Having an understanding of all the potential hazards, on Friday we reducing our exposure to the stock market today, and lowered our percentages in the asset allocation models;

50% Equities: (Was 85%/Normally 95%) Aggressive
40% Equities: (Was 72%/Normally 80%) Moderately Aggressive
30% Equities: (Was 56%/Normally 60%) Moderate
20% Equities: (Was 36%/Normally 40%) Moderately Conservative
10% Equities: (Was 18%/Normally 20%) Conservative

In addition, we are going to add a hedge to the DG ETF portfolio;

New Buy:

SDS: UltraShort S&P500 ProShares

Here are our Top 10 ETF's for the week of September 8th:

1) DBA: Powershares DB Agriculture Fund
2) IGF: iShares S&P Global Infrastructure Index Fund
3) DBE: PowerShares DB Energy
4) IYW: iShares DJ US Technology Sector Index Fund
5) IYF: iShares Dow Jones US Financial Sector
6) DDM: Ultra Dow 30 Proshares ETF
7) EWZ: Brazil Index
8) SDS: UltraShort S&P500 ProShares
9) CASH
10) CASH

Here are our Top 10 Fidelity Sector Funds for September 2009

1) FSPTX: Technology Portfolio
2) FSRBX: Banking
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSENX: Energy
6) FSCSX: Computers & Software
7) FNARX: Natural Resources
8) CASH
9) CASH
10) CASH

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

Corporate insiders are so excited about the markets new found life, that they are selling, not buying. Despite being more 4,000 points away from the Dows previous all-time highs, these people are selling in mass.

Here is the 2009 weekly insider activity on insider-monitor.com. You'll see as the market rallied, insider buying dried up, and huge sales began.

Checkout some of these sales;

THIS WEEK:

1) Gap Inc (GPS)

2) Berkshire Hathaway "B" Shares

3) Carnival PLC & Carnival Corp

FOR THE PAST MONTH:

1) E Trade Financial Corp (ETFC)

2) Microsoft Corp (MSFT)

3) Ameritrade Holding (AMTD)

4) Public Storage (PSA)

5) Wynn Resorts (WYNN)

6) Marriott International (MAR)

7) Berkshire Hathaway (BRKB)

8) Cvs Corp (CVS)

The main objective of my reporting is to tell you things that are not so obvious. Daily movement and news on stocks, bonds and the market can be found everywhere. Market hype and bearish comments are abundant. Sifting through the barrage of information is rare. That is what I try and do.

In my daily life, I have a very difficult time listening to people I call "one-siders". One-siders have a belief system that almost always takes the side of one group or one topic. One-siders have a difficult time believing that their way of thinking may have flaws, and always believe that those with opposing views are always wrong. As an investor, this is a very dangerous trait.

One-siders are either democrat or republican, white or black, liberal or conservative, christian or non-christian, and the list goes on and on. If your personal wiring doesn't understand what I am saying so far, the you may never understand.

Our entire system of news and information is set up for us to choose a belief system, and forces the masses to be a one-sider. Many republicans choose the Fox News Channel or Glenn Beck because their belief system is perceived as conservative. Others choose CNN or Keith Obermann because their belief system is perceived as liberal.

As an investor, I believe the one-sider way of thinking severely hampers the accurate thought process, and impedes a persons ability to make an accurate judgment. This is why so many investors are hesitant to sell into market euphoria, and unwilling to buy into hysteria.

If you stop and think about it, money doesn't have a one-sided belief system. Money doesn't care who has it, who owns it, and it certainly doesn't care how people made it.

After years of watching people, I believe those who make the best decisions, and make most money, are the ones that don't allow a one-sided belief system to hamper their judgment.

I'm certainly not saying you shouldn't have a belief system. I have one, but I also understand that those who control the money, and those that control the government, are atheistic in their beliefs when it comes to making money.

In order to keep from being blindsided, and in order to recognize opportunities, we must understand how the big money thinks. The big money is not your friend. The big money often becomes richer when people like you and I make mistakes.

These mistakes are many;

- In 2000, Wall Street analysts and brokerages were issuing bogus research reports, and make a ton of money through investment banking fee's by lying to investors. As CEO's and other executives were selling their stock, the small investor was buying. This is also known as a transfer of wealth. If you buy when someone else sells, you are transferring your money from your account to theirs.

- The same can be said for real estate. While there is more blame to be shared by those who bought at the top, the media hype over real estate surely didn't help. If some people lost money, others made money.

Oddly, the people buying real estate at the top basically transferred their money to some else who sold at the top. As an example, let's take a look at billionaire investor Sam Zell.

Zell is a real estate entrepreneur who has an estimated net worth of $3 billion dollars. Right at the top of the real estate boom, Zell sold his company, Equity Office Properties Trust to the Blackstone Group for $39 billion.

Now that real estate is in the tank, last month Zell put together a $625 million private-placement fund called the Zell Credit Opportunities Fund LP, to buy distressed assets including commercial real estate.

So, in short, Blackstone transferred $39 billion to Zell to buy his real estate company at the top, and now he is using $625 million of it to buy at bargain prices at the bottom.

Sam Zell certainly didn't allow his belief system to get in the way when he sold Equity Office Properties Trust for $39, and he isn't allowing his belief system to get in the way of buying distressed real estate from those who are filing for bankruptcy.

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

1) DBA: Powershares DB Agriculture Fund
2) IGF: iShares S&P Global Infrastructure Index Fund
3) DBE: PowerShares DB Energy
4) IYW: iShares DJ US Technology Sector Index Fund
5) IYF: iShares Dow Jones US Financial Sector
6) DDM: Ultra Dow 30 Proshares ETF
7) EWZ: Brazil Index
8) SDS: UltraShort S&P500 ProShares
9) CASH
10) CASH

Here are our Top 10 Fidelity Sector Funds for September 2009

1) FSPTX: Technology Portfolio
2) FSRBX: Banking
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSENX: Energy
6) FSCSX: Computers & Software
7) FNARX: Natural Resources
8) CASH
9) CASH
10) CASH

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

Every time the stock market attempts to sell-off, clearly there is something, or someone who interferes with the "natural" process. Something or someone is intervening, and causing prices to go higher. Can someone say..."the button pushers?"

Sometimes, there is no need for comment. Sometimes it's best if other people do the talking. You know how corrupt, with the help of Washington and Wall Street, our nation is. Now, I'm going to let others do the talking;

Dylan Ratigan, Formerly with CNBC, now on MSNBC: "The American people have been taken hostage"

Guard that Iraqi Oil! - As "U.S. troops are "withdrawn," their jobs are taken over by......mercenaries - the cost of the contractors is substantially higher than the cost of the soldiers they replace.

US credit shrinks at Great Depression Rate

Economist warns of double-dip recession

Doug Kass: Bearish Arguments Are Roaring in My Ears

James Research: New Stimulus Won't Cure Economic Woes

Thinking About Taking the Swine Flu Shot?

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

It's only a matter of time before the current market jeers turn to tears. As the markets head higher, more and more investors continue to pile money into the stock market in fears that the train is pulling away from the station.

As unsuspecting investors stand on the train tracks watching the caboose leave the station, behind them another train is getting ready to run over them.

This new locomotive has several rail cars attached to it;

1) Car 1: A $13 trillion dollar debt, and the White House said that the national debt would grow by $9 trillion over the next ten years, up from its previous forecast of $7 trillion.

2) Car 2: The Federal Reserve has monetized debt (printing money) to buy Treasury bonds and hold down interest rates.

3) Car 3: The stated unemployment rate is 9.7%, a 26-year high. Alternate calculation methods put the unemployment rate at 16-20%.

4) Car 4: Millions of Americans have lost their jobs, their homes, and their pensions.

5) Car 5: Commercial Real Estate is on the brink of collapse. Why? The consumer, who is 70% of the nations GDP is not, and cannot, spend enough to prop it up. High unemployment, stagnant or declining wages, will cause consumers to spend less. Eventually, commercial real estate will get hit as mall operators will have less cash to make their mortgage payments.

6) Car 6: Wall Street and the White House have hyped the temporary economic recovery as a sign of new bull market. The current economic downturn is far from over.

7) Car 7: Don't be fooled by intermittent blips of new economic activity, such as the cash-for-clunkers automobile giveaway program.

8) Car 8: Sooner or later more debt and money creation will fuel inflation and the Fed will no longer be able to hold down interest rates by buying bonds. Gold prices jumping over $1000 per ounce should be a wake up call.

9) Car 9: Corporate insiders are so excited about the markets new found life, that they are selling in mass.

10) Car 10: The rats are taking over the ship. Goldman Sachs paid out $11.4 billion in bonuses so far this year.

Health insurance companies (?), and the pharmaceutical industry spent between $100 million and $ 300 million to defeat healhcare reform in the 1990's. Can they do it again?

Now the Wall Street bankers (button pushers) are working overtime to rally the markets to get your mind off the one year anniversary of the stock market crash that lead to the demise of Lehman Brothers, Bear Stearns, AIG, Washington Mutual, Fannie Mae, Freddie Mac, Countrywide, Wachovia, and almost Merril Lynch.

See, the bankers know investors have a short memory. Throw investors a bone, and erase all painful memories. Oh Yeah! How about all those lost jobs? Can they make those go away quickly too? I don't think so.

Jeers if you take profits, tears if you don't.

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

You've heard the old saying, "Fool me once shame on you, fool me twice shame on me". This being said, how many times can investors get fooled by the Wall street con-artists before they wake up, and stop making the same mistakes.

President Bush was familiar with the saying...or was he?- video

As I watch the healthcare debate, I am saddened, but not shocked that the constant bickering over something that should be a right for humanity has turned into a turf war. That's all it is.

Doctors are trying to defend their right to enrich themselves by charging fees per illness, per procedure or treatment, or by owning a diagnostic or surgery center. Insurance companies, and their executives are defending their right to enrich themselves by denying coverage for pre-existing illnesses or claims for expensive procedures. And lawyers are trying to defend their right to enrich themselves by suing doctors, insurance companies, and even you if you happen to get in a car accident.

The entire paragraph above deals with nothing more than greed, and making money.

Below is the oath taken by doctors, and nowhere in this oath does it mention enriching yourself or making money. The oath is about helping your fellow man.

Hippocratic oath- medicine

Society, and many consumers were, and are, caught up in greed and self absorption. This is why they rack up huge piles of debt, and played Russian roulette with their financial futures.

The Stephen King movie, "Needful Things" reminds me of some of the craziness that consumers got caught up in on their way to new found riches. Only this time, the banks and the Federal Reserve were the Devil (Leland Gaunt-devil in "Needful Things"), and consumers were like the townspeople in the movie.

After all, didn't consumers think the were "needful of many things ?"

Members of Congress and the President also take oaths to to preserve, protect and defend the Constitution of the United States, but they haven't been very good at keeping it.

So, as we go forward, we are told that the stock market rally because the US Dollar is collapsing. This is a good thing?

In 2006, Barclays Capital said the 1987 market crash happened because of "a widening US current-account deficit, weak dollar, fears of rising inflation, a fading boom in American house prices, and the appointment of a new chairman of the Federal Reserve Board".

Here is another article on the 1987 crash, and the events leading into it.

Isn't this what we have today?

So, the market can continue to rally on a temporary blip in the economy, and even the lame excuse of a collapsing dollar.

All I've got to say is;

"Fool me once, shame on you. Fool me twice, you fool me you can't get fooled again"- George W. Bush

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

After watching the coziness that analysts had with corporate America during 2000 dot-com scandals, I look at Wall Street recommendations with a sharply critical eye.

For example, this morning a J.P. Morgan analyst upgraded Toll Brothers, and the entire home- builder sector to positive from negative.

Many analysts know the executives of the companies they cover. I don't know if this is the case with the J.P. Morgan analyst, and Toll Brother's, but this is what I know about the recent actions of the company's CEO Robert Toll.

Robert Toll, and a few more inside the company have been aggressively selling their Toll Brother's stock.

Here are some recent transactions;

Robert I. Toll

Richard J. Braemer

Bruce E. Toll

All Toll Transactions- dating back to December 2008.

Personally, I believe real estate is in a 10 year bear market. After so many people have been burned, it may take 5-10 years (like the NASDAQ) for wounds to heal, and courage to return.

While real estate prices have declined, the reduction from peak prices doesn't necessarily make it a bargain. Given the unfriendly nature of the state and local taxing authorities, combined with the higher cost of insurance, many investors will realize that real estate is still not a bargain even at current prices. Like the NASDAQ, I believe real estate will remain in a bear market for 5-10 years.

The last bubble to severely punished investors was the "NASDAQ, dot-com Bubble". Nine years after the bubble burst, the Over-the Counter (NASDAQ) index is still 50% below it's 2000 peak.

Demographic trends will hurt real estate as well. In particular, luxury home-builders like Toll.

Here is my rational;

I think the mindset of homeowners will change- if they haven't already.

-The collapse in real estate, and the con-job of our nations lenders, have shattered the dreams, an illusions of many homeowners. Seeing that real estate (for them anyway) was not the path to new found riches, homeowners going forward will live in more modest quarters.

a) Baby boomers will be dumping big houses on the market to downsize. This adjusted way of living is many due to the number of tragic hits to their net-worth since 2000.

b) Americans will still buy houses, but going forward they will be smaller, and less expensive. They may buy smaller existing homes and remodel them, or buy new homes that are smaller and less expensive to own.

c) Younger families, may start out in apartments, and eventually move to cost effective housing as they have children, and the children reach pre-teen years.

d) Families with children going off to college will look to downsize, and cut costs now that their immediate families are no longer at home.

Given this information, I can see why the insiders at the luxury home-builder (Toll Brother's-TOL) are selling. While the rich will still buy luxury homes, the wannabee rich will seek another path. IMO.

Over the past few months, the rally that investors have experienced needs to be defined as nothing more than "financial foreplay". Enjoy it while you can, profit from it what you can, but realize that you are being led on, and eventually will be dumped.

As long as the market continues to rally, the media will cheer-lead the gains and parade a host of bullish guests on their shows. As soon as the market reverses course, bearish guests will appear and the mantra will change.

The economic news has been spun tighter than "Charlotte's Web". This spinning gives the appearance of recovery while luring people back into the stock and real-estate markets where they can lose what little money that they have left.

I think Don Harrold hit the nail on the head when he said;

CNBC runs a new commercial series these days. It's called;

"2007: The Month Our Network Drove People Into Stocks at All Time Highs."

Some contend that the stock markets recent rise has more to do with a falling U.S. dollar than it does economic fundamentals. The same comments are being used with the rising price of gold.

Astute observers of economics know that stocks rise about 6 months before the economy recovers. They also know that interest rates do the same. If the economic prospects are truly improving, why are interest rates still at historic lows? Why is the Fed hesitant about hiking short term rates from (almost) zero, to something higher than 1 percent?

The only conclusion I can come up with is the economy is not in the midst of a sustainable recovery, and the stock market has gotten way ahead of itself.

The economic decline caused by the 9-11 attacks in New York drove the federal funds rate to a multi-decade low of 1% in 2003. The Executive Branch of the U.S. government called this an act of war, and military invasions of Iraq and Afghanistan followed.

The economic devastation caused by the investment banks New York did more economic damage to the U.S. economy than 9-11. This being said, the U.S. government didn't call this an act of war despite to the economic destruction, and the harm inflicted on of many of its citizens.

The Federal Reserve dropped the fed funds rate to a historic low of 0.25 percent, but no investment bank executive went to jail, and none of were hunted down by the military, and their homes and offices were not attacked by special forces. What gives?

The fed funds rate has been at the same 0.25% percent since December 2008. Despite what they say, the blame of this economic calamity keeps shifting away from the real culprits.

Wall Street, is the nation’s problem. They crashed the economy, they took trillions in bailout money, and to pour salt in the wound, they rewarded themselves with outlandish bonuses.

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

1) DBA: Powershares DB Agriculture Fund
2) IGF: iShares S&P Global Infrastructure Index Fund
3) DBE: PowerShares DB Energy
4) IYW: iShares DJ US Technology Sector Index Fund
5) IYF: iShares Dow Jones US Financial Sector
6) DDM: Ultra Dow 30 Proshares ETF
7) EWZ: Brazil Index
8) SDS: UltraShort S&P500 ProShares
9) CASH
10) CASH

Here are our Top 10 Fidelity Sector Funds for September 2009

1) FSPTX: Technology Portfolio
2) FSRBX: Banking
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSENX: Energy
6) FSCSX: Computers & Software
7) FNARX: Natural Resources
8) CASH
9) CASH
10) CASH

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

By far, Steve Leuthold of the Leuthold Group, has been one of the most accurate market guru's during over the past 12 months. Steve is not a flashy guy, one who doesn't want his face plastered all over the financial channels. He just manages money, and provides independent, contrarian research to institutional firms from his perch in Minneapolis, MN.

Here is Steve's call In March of this year- Video

In April, Steve called for the S&P to hit 1100, but is calling the rally a cyclical bull, and is expressing caution for 2010- Video

Wall Street Upgrades Stocks that Insiders are Selling

Clearly, the RSI (Relative Strength) values of each of these stocks put their valuations closer to the Distribution Zone (Sell Zone) than buys as these analysts suggest.

Analysts at Barclays Capital reiterate their "overweight" rating on Rockwell Collins (COL). The target price has been raised from $49 to $55.

Rockwell Collins (COL) Insider Selling

RSI Values: 7days-84.27, 7 weeks-78.8, 7 months-69.03

Credit Suisse upgraded the shares of Gap Inc. to "Outperform" from "Neutral" and said the clothing retailer was poised for better performance.

Gap (GPS) Insider Selling

RSI Values: 7days-81.15, 7 weeks-87.21, 7 months-74.77

Argus upgraded FedEx (FDX) to buy from hold on Monday.

FedEx (FDX) Insider Selling

RSI Values: 7days-60.48, 7 weeks-71.03, 7 months-64.67

On September 22, analysts at Credit Suisse upgrade Hewlett-Packard (HPQ) from "neutral" to "outperform." The target price has been raised from $44 to $55.

Hewlett-Packard (HPQ) Insider Selling

RSI Values: 7days-79.8, 7 weeks-87.65, 7 months-70.49

If you want to see the RSI's of the three market darlings, check out how Google (GOOG), and Apple (AAPL) are clearly in the "Sell Zone", and Research in Motion (RIMM) too.

Google (GOOG)- RSI Values: 7days-88.53,7 weeks-78.79,7 months-71.04

Apple (AAPL)- RSI Values: 7days-80.00,7 weeks-84.42,7 months-77.06

Research in Motion (RIMM)- RSI Values: 7days-77.88,7 weeks-69.74,7 months-59.89

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

I have made my feelings well know about the problems ($$$$$ wink, wink) with the U.S. health-care profit system. The problem of course is no one trusts our politicians to keep their hands out of the til, or government to be efficient enough to get it right.

It is stories (true by the way) like this one that makes U.S. citizens afraid of the Canadian system, or any other nationalized program;

"In early September I went to the emergency room with suspected kidney stones. I was in excruciating pain and arrived at 1:30 a.m. I was taken back to a room at 6:30 a.m. and at 8:30 a.m. a nurse actually came into the room.

My doctor can't see me until Sept. 22. Meanwhile, I have been in pain and feel like a ticking time bomb.

Now isn't that an awful way to treat someone? This lady is scared for her life, and she was in the emergency room for 15 hours before getting some kind of word as to what was wrong. To make matters worse, she had to wait about three weeks to see her doctor.

I agree with you. There is no way I would want to be under a health-care system that treated their citizens like this.

The Rest of the Story:

The above story was from a lady here in the United States- in my hometown of Pensacola, Florida. It was in my local paper a couple of days ago.

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

Sometimes what Wall Street doesn't want you to know is not reported, or even better, is under emphasized or reported. Here are a few news items to keep an eye on.

- 530,000 more people lose their jobs. And this is good news?

The number of people who have exhausted their unemployment benefits hit an all time high of 52.40% for August.

U.S. Initial Jobless Claims Decreased to 530,000

- Democracy is no longer the the best system?

Madeleine Albright: USA No Longer Intends To Be World's No.1 State

Marc Faber says US Government will collapse in 5-10 years-Video

Paul Volcker says, Reinstate Glass Steagall.

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

Clearly, Apple (AAPL), Research in Motion (RIMM), and Google (GOOG) have been the momentum players favorite stocks. Yesterday, RIMM's earnings disappointed the street, and now I believe Apple is next.

Here's my rational. RIMM's Blackberry is a great product. But, it is also expensive, and expensive to use. Apple's iphone is also a great product, but like the Blackberry, is very expensive to use. The monthly bill, and additional charges can cost the average user a ton of money.

The Blackberry and iphone is easily affordable for many corporate users, but the average consumer, who from 2003-2007 was spending money they didn't have on things they didn't need is finding both of these products eating heavily into their monthly budgets.

Granted, some generation "D's" would rather have the latest and greatest cell phone than have money to buy food. But, I would not be surprised if some who bought the last generation phones (Blackberry & iphone) aren't getting their services turned off for lack of payment.

Oh, by the way, generation "D's" means...Dummies.

Someone on the financial channels speculated that Apple is taking business away from RIMM. I agree they may have, but I cannot believe the average consumer can afford, or justify, the purchase price, and monthly usage charges of an iphone.

Today, On TipsTraders.com, I am initiating a short position on Apple.

In addition to weak consumer spending, I made mention on Wednesday that the RSI value of Apple was clearly in the "sell" territory.

Apple (AAPL)- RSI Values: 7days-80.00,7 weeks-84.42,7 months-77.06

RIMM sold off 13 points today, and their RSI's were not as high as Apple's.

Research in Motion (RIMM)- RSI Values: 7days-77.88,7 weeks-69.74,7 months-59.89

Another scalp trade on the downside could be Google (GOOG). Don't talk to me about advertising rebounding anytime soon. Clearly Google is also priced for perfection.

Google (GOOG)- RSI Values: 7days-88.53,7 weeks-78.79,7 months-71.04

The Rest of the Story

Hewlett-Packard's (HPQ) CEO came out yesterday and said Mark Hurd said H-P's portfolio of computer hardware, software and services has put the company "in the best position we have been in" for several years, and that despite the recent slowdowns in IT spending, H-P's "best days are ahead of it, not behind it."

Oh, Yeah. Well explain this Mark. Why are you, and several other HPQ insiders selling your stock, and exercising options and selling?

HPQ insider totals

HPQ individual insider sales

The 2009 bear market rally has been impressive, but according to the weekly market tracking in the September 26th addition of The Economist, Emerging Market stocks have soared 62.5%, while the Dow and S&P have risen 10%, and 15% respectively.

So, what's going on?

According to the "Mother Jones" website, the list of items that caused the economic crisis in 2008-2009 contains enough causes to mistrust the current rally . It's not that investors mistrust the free markets or government, they mistrust the people who run them.

Here is Meltdown List, according to Mother Jones that probably keep investors skeptical of any market rally. I have to say that their concerns are valid.

1. Housing bubble
2. Mortgage securitization mania
3. Massive growth of complex credit derivatives
4. Mortgage fraud, growth of NINJA/liar/HELOC/option ARM/etc.
5. Asian savings glut
6. Long-term current account imbalances
7. Ratings agency flimflam
8. 2007-08 oil shock
9. Overuse of leverage on Wall Street
10. Easy money policy from Fed
11. Reliance on bad risk models (VaR, CAPM, etc.) that led to consistent undervaluation of risk
12. Too much debt (both household and financial sector)
13. Government efforts to increase homeownership
14. Repeal of Glass-Steagall
15. Pay practices that provided incentives for risky behavior
16. Greenspan/Bernanke put (i.e., the widespread belief that Fed would bail out any big bank that failed)
17. Inadequate regulation of shadow banking sector
18. Poor bank capitalization regulations that allowed too much off-balance-sheet risk.

Last week, the media, and Israel, started ranting and raving about Iran and its nuclear intentions. Real or not, I find it odd that that every possible threat, or potential military conflict involves countries that have oil that is not under U.S. control.

You have to ask yourself, do I have the ability to think outside the box on this issue? If Iran was secretly producing weapons-grade uranium to attack someone like Israel, they would face total annihilation and mass extinction. Now who would be stupid enough to do this?

Now, I have to go back to the oil issue. Here is (according to our politicians, the media, and Israel) list of the countries who have faced, or might face, military action. Any similarities?

Who Has the Oil?

Percentage of World Oil Reserves:

22.3%- Saudi Arabia
11.2%- Iran
9.7%- Iraq
8.4%- Kuwait
8.3%- UAE
6.5%- Venezuela
6.1%- Russia
3.4%- Kazakhstan
3.3%- Libya
3.0%- Nigeria
1.8%- United States
1.4%- China
1.4%- Canada
1.3%- Qatar

Countries where the U.S. has heavy influence, and equals 39% of the worlds oil supply:

22.3%- Saudi Arabia
8.4%- Kuwait
8.3%- UAE

Countries the U.S. has labeled as terrorists, and have attacked or threatened to attack (30.7% of worlds oil supply):

11.2%- Iran
9.7%- Iraq
6.5%- Venezuela
3.3%- Libya

Countries with pipelines important to for transporting oil to a port:

Afghanistan

The War on Terror has the U.S. is involved in military operations in Afghanistan. In addition to the terrorist operations against the Taliban, interim Prime Minister of Afghanistan, Hamid Karzai (a former top adviser to Unocal), helped Unocal negotiate with the Taliban to construct the Central Asia Gas pipeline.

Have you noticed that most, if not all, terrorist threats we are constantly reminded about come from countries that have the largest abundance of the worlds oil, or is a country by where pipelines were built to transport the oil?

Coincidence?

I'm not suggesting there is no terrorists or terrorism threats. What I am suggesting is all of this is very strange, and something we must keep in mind.

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

1) DBA: Powershares DB Agriculture Fund
2) IGF: iShares S&P Global Infrastructure Index Fund
3) DBE: PowerShares DB Energy
4) IYW: iShares DJ US Technology Sector Index Fund
5) IYF: iShares Dow Jones US Financial Sector
6) DDM: Ultra Dow 30 Proshares ETF
7) EWZ: Brazil Index
8) SDS: UltraShort S&P500 ProShares
9) CASH
10) CASH

Here are our Top 10 Fidelity Sector Funds for October 2009

1) FSPTX: Technology Portfolio
2) FSRBX: Banking
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSENX: Energy
6) FSCSX: Computers & Software
7) FNARX: Natural Resources
8) CASH
9) CASH
10) CASH

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

The rally has been fun. It's given many of us a chance to sell stocks and pocket some cash. The truth however is abundantly clear. The markets foundation is built on sand, not on rock.

According to an article in the NY Times, "Job seekers now outnumber openings six to one, the worst ratio since the government began tracking open positions in 2000."

What you and I should look for in a sustainable recovery, is one that is lead by consumer spending, not a business lead recovery. Business lead recoveries are temporary, and are built on (sand) a lower number of workers, rather than top-line growth. Given the high number of lost jobs, top-line growth cannot occur.

Now investors are starring down the barrel of another potential war in the Middle East. This one could get nasty especially if China or Russia begin to chime in. How many times do we have to hear the words "Weapons of Mass Destruction", get our people killed, and find that the weapons were never there. Here is a great article by President Reagan’s Assistant Secretary of the Treasury on the issue- Paul Craig Roberts

Economist, Peter Schiff (video) (who has been very accurate on the economy) says- "Americans must prepare for deepening unemployment, inflation and possible breadlines."

Americans are very upset, and are tired of seeing their jobs sent overseas in the name of globalism. Here is a video of the protests in Pittsburgh during the G-20 meetings. The police must agree with the protesters, for here they are posing with one for a photo.

While all of this is happening, here is an article explaining how TARP has not stopped home foreclosures or job losses.

I repeat, Thanks for the Rally; Its was nice doing business with you...

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

This morning the Chicago PMI was released, and to the surprise of the people who believe Wall Street, the number showed the economy was contracting, and not expanding. The prior number came in at 50, and today's number was 46.1. The consensus estimate was within a range of 48.5 - 54.0.

For those of you not family with the PMI, readings above 50 percent indicate an expanding business sector.

Nike (NKE) announced earnings that exceeded analysts’ estimates. Like I had discussed yesterday, they beat earnings by cutting costs. This is not top-line growth, and the average consumer (if they're smart) won't pay $100 bucks for a pair of sneakers.

The market sold off aggressively after the PMI number was released. Google (GOOG) dropped almost 13 points, which tells me traders have their finger on the sell buttons for the high beta stocks. Given last weeks Research in Motion (RIMM) slaughter, I would be real cautious about owning Apple (AAPL) at these levels.

The financial proctology of your wallet is continuing as your (not mine) elected officials continue to debate health care. I'm confident that our politicians will do what's best for their buddies in the health care, as well as themselves. It's just the way things work here. Will we ever have a health care system as good as France? I doubt it.

After 21 years as a financial professional, I can tell you that caring about our citizens is not a top priority. It's all about the bucks, and we are all nothing more than a revenue stream for those who make the rules.

I think the old-timers had it right. For those who don't remember the 1960's, or even 1950's, families watched what they spent. Meals were prepared at home, families ate together, and money wasn't wasted on i-pods, TV's in cars, and all the other junk that people indulge in today.

I really miss the days of decency, honesty, and respect for others. Unfortunately, our society has been trained, and continues to be trained by the likes of cable TV with MTV, VH1 and BET. In the 50's, and 60's kids played outdoors, and took 20 cents to the corner store for a soft drink and gum.

What is sad is you are paying cable TV to destroy the morals of your family, and the good ole American ethics we had in years past. I really don't understand what''s so appealing about rap videos depicting violence and drugs, images that doing drugs is cool, or a women being called a "hip hop bitch" in a so called song. You can thank companies like Viacom, and others, for all the "youth terrorism' they are spreading around the globe.