Friday, September 07, 2007


They say opportunity only knocks twice but the market is giving you a chance to make serious money. Some goofy jobs numbers were reported this morning. The government says that the government lost 29,000 jobs. YUK, YUK, YUK! I suspect that the overall loss of 4,000 jobs will be revised upward by at least 100,000. Of course, this revision will be long after this democratic congress that is eager to raise taxes has had to pass the 2008 budget bills.

Karl Rove has left the White House but he has set the table for the 2008 elections. Between now and next fall, a lot of good news is going to flow. One way to make numbers look really good is to report low ball numbers and then revise them when it counts. No, I have no proof that there is manipulation and I am not big on conspiracy theories but the presidency is at stake. The temptation for playing games is certainly present.


The probability of an interest rate cut improves after each "bad" set of data is released. Since my new home is under construction, it will not hurt my feelings if rates are much lower next spring. I will not count on lower rates because the construction of 100's of refineries and power plants around the world will cause crowding out; interest rates will come down a little because of the current consumer loan problem, but literally trillions of dollars will be spent on major capital goods projects over the next 10 years.

Those who are building private windmills may eventually get their money back from energy savings but they sure will shell out the big bucks in the short run. Of course, those who got started early look smart right now but when the price of oil falls by about 33%, the wisdom of even these projects is in doubt.

History tells us that the market goes up an average of 19% within six months of a cut in the Fed Funds Rate. If I am correct, basic materials and energy sectors will not go up nearly as much as 19%. Thus, those who hit the right sectors will do much better than 19%. Ben may still have a creative move up his sleeve. Since the congress will not have acted by the 18th and since gold and other commodities have bounced as if inflation were out of control, Ben may delay the cut for a few more weeks.

Don't try to out guess him. When the market dips down, like today, then find a way to add to your accounts. The BIG MONEY IS MADE WHEN ONE STEPS UP DURING THE TOUGH TIMES! BUY BUY BUY!