DOW JONES INDUSTRIAL AVERAGE BEATEN BY "MATTRESS" INVESTING

My business associates and vendors have started asking me more and more about "what stock should I buy this year?"..."what will be the best performer this year?".

I thought hard about that and came up with a list of stocks that seemed like they may have some staying power this year; it was a very short list.

Actually it seemed like a list of stocks that are likely not to GO DOWN as much as other stocks, so I thought about that some more. Why would I want to buy stocks that will go down, but not that much?

What is the alternative to this strategy, of NOT LOSING TOO MUCH?

It dawned on me that this was a pretty stupid strategy...to not lose too much, but yet lose some money.

I did a little more research, and it seems that the investment advice gurus throughout the country, all seemed to be touting the fact that some managers out there, lost LESS than others.

They had statistical tables and comparisons of who lost less then others...and these smaller losers were touted as be best of the best. Those who lost less than the 50% decline of the DOW JONES AVERAGE, were described as performers to follow, performers to recommend as investment gurus!

Imagine that; if your investment adviser lost less then 50% of your money in the last 12 months, he could be a genius! You should be proud of his "outstanding" performance on your behalf.

I would argue that he should be hung upside down, and then you get to pick up the change that falls out of his pockets as your own (as a minimum).

These charts of who lost less than the DJIA, all stopped in the negative...every one of the "well known" recognized experts lost money on the comparisons, some less than others, and some MORE!

So, I thought about that, and wondered how I, not a financial guru could be compared to these experts? What about my financial advice? How would my advice as to the financial strategy compare to these investment mavens in the lst 12 months?

The DOW Average lost 50% of its value, the gurus "beat" that performance by losing only 44%, 35%, 30%, 20% and the best performers lost 15%-19%!

WOW, I BEAT THEM ALL !!!!!!!

My advice caused absolutely NO LOSS. I was at 0% loss, and 0% gain...my advice was the best overall performer among all the gurus in the investment field!

My advice beat the DOW AVERAGE, and it beat all the well known names in the business all of whom LOST MONEY!


What is my advice for this outstanding performance?

Is this something that the average investor can use ?

YES, my secret strategy can now be revealed; IT IS YOUR VERY OWN MATTRESS!

Everyone has always known this secret, it is widely discussed (put your money into your mattress).

If all the investment gurus just put YOUR MONEY into a mattress, you would have done the best for yourself. Your investments would have been ZORO LOSS AND ZERO GAIN. You would have outperformed pretty much the entire invetment community, worldwide!

Even though past performance is no guarantee of future performance, (the usual disclaimer used by investment advisors) my suggestion for the next 12 months should again be a top performer!

PUT ALL YOUR MONEY INTO YOUR MATTRESS!

TAKE ALL THE INCOME FROM THE TOP 2%, STILL NOT ENOUGH!

The 2% Illusion

Take everything they earn, and it still won't be enough.

President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it. On Tuesday, he left the impression that we need merely end "tax breaks for the wealthiest 2% of Americans," and he promised that households earning less than $250,000 won't see their taxes increased by "one single dime."

This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.

Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.

Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.

But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006.

Mr. Obama is of course counting on an economic recovery. And he's also assuming along with the new liberal economic consensus that taxes don't matter to growth or job creation. The truth, though, is that they do. Small- and medium-sized businesses are the nation's primary employers, and lower individual tax rates have induced thousands of them to shift from filing under the corporate tax system to the individual system, often as limited liability companies or Subchapter S corporations. The Tax Foundation calculates that merely restoring the higher, Clinton-era tax rates on the top two brackets would hit 45% to 55% of small-business income, depending on how inclusively "small business" is defined. These owners will find a way to declare less taxable income.

The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can't possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well.

On that point, by the way, it's unclear why Mr. Obama thinks his climate-change scheme won't hit all Americans with higher taxes. Selling the right to emit greenhouse gases amounts to a steep new tax on most types of energy and, therefore, on all Americans who use energy. There's a reason that Charlie Rangel's Ways and Means panel, which writes tax law, is holding hearings this week on cap-and-trade regulation.

Mr. Obama is very good at portraying his agenda as nothing more than center-left pragmatism. But pragmatists don't ignore the data. And the reality is that the only way to pay for Mr. Obama's ambitions is to reach ever deeper into the pockets of the American middle class.

FROM THE WALL STREET JOURNAL

"WE WILL RECOVER"-WHO EXACTLY IS "WE"??

Finally the long anticipated words for America's recovery were uttered by our President..."We will rebuild, we will recover, and the United States of America will emerge stronger then before."

Those were the words of our new President to a joint session of Congress.

Who exactly is the "WE" he is referring to in this speech? It did not come across clearly to me at least.

Maybe he was talking about people I do not know, politicians maybe, or their relatives or people that they all know.....I must have missed something...who is the "WE" again?

I listened intently to the entire speech, since as an employer and business owner, I was very interested in knowing all about the "WE" thing.

I too am eager to see the recovery and the "rebuilding" thing he mentioned. I wanted to feel good and upbeat and I wanted to start to cheer on the President and his proposals to help ME and our country.

I waited....I waited....I waited and I listened. I did not even go to make myself a sandwich so as not to miss any part of what he said.

As I waited, started hearing things that did not make me want to cheer, but rather make me want to throw my shoe at the TV set. "What is he talking about?", I thought to myself.

He wanted to "invest" on my behalf in energy ?

He wanted to "invest" in health-care ?

He wanted to "invest" in alternative energy and conquer the global warming crisis?

These investments, he explained were necessary to ..."restore America's economic strength...".

Huh?

What does that mean ? How are these "investments" going to restore what ?

I kept asking myself how are these "investments" going to impact me ?

No answers were forthcoming and at the end of the speech, I knew nothing more than I heard previously. I wanted to cheer, I was all ready to cheer the recovery, and cheer for our President as his number one cheerleader, but he gave me nothing to cheer about. NOTHING!

I did not want him to invest my money, seeing how well the government has invested it so far such as those great investments in AIG, GM, Chrysler, CITI BANK, FANNIE and FREDDIE, etc....you name it and their investment strategy gives no comfort.

I would not hire them to invest for me based solely on their track record of losing on every investment so far.

Remember, they are mostly lawyers and politicians that do not know the difference between DOW JONES and Bobby Jones, so trusting them to invest for us is probably the dumbest thing that we can do.

Just yesterday at the President's economic forum, Larry Summers was shown falling asleep while attending that meeting (asleep at the switch so to speak).

These apparently are the folks that will be "investing" for us.

I can safely say that none of these investments are going to do anything for me, for my company or for my employees...correct that; the apparent increase in unemployment benefits now mandated to states that accept the stimulus money will give my laid-off employees some more weeks of payments than they could have had previously.

The laid off employees can now wait a little longer for the recovery to kick in, while they collect the unemployment benefits.

They can also marvel at the new electronic health records available at the free clinic (since they can hardly afford the COBRA payments), and watch and wait for fuel to be made from potatoes, swine dung, and bird excrement-the new bio-fuel technologies that billions are allocated for.

Too bad all these technologies have not yet been invented, and none of them will be working at those new technological plants right after their unemployment insurance payments run out.

Oh yes, the final key ingredient of the recovery will be that all possible employers and their management, will be taxed more-that will surely speed up the recovery. Tax the wealthy, that is the secret to the recovery. Tax those last 5%, who pay most of the taxes now...make them pay for the recovery. Everyone else, according to our President, will get a "break".

The top 5% however, will be punished. The US based corporations that sometimes produce almost all its profit abroad, while maintaining a fleeting remnants of their US business, will be punished. High salaries will be punished by mandating lower salaries. there was even a movement in congress to cap all salaries !

So the only "WE" I could gather out of this plan was the part about how my part of the recovery was that I could expect to pay more in taxes, pay more for the services that will be government mandated and also that "health-care reform" and more government regulations (which apparently were not sufficient so far) was next to stimulate all us employers.

I did not see any assistance to my employees, to my business or any hope for improvement in the future, as it stands now. How can there be a recovery when nobody that is capable of creating the recovery is being motivated to do so ?

There is a saying..."I never got a job from a poor person..." So how is this going to work by punishing the job providers?

How exactly is this recovery going to work for the "WE" he keeps talking about?

Maybe WE need a new word here...perhaps such as "very few"; "select"; those in select secret societies"; "those who do not want to work"; "special relatives"; "certain endangered mice varieties in Nancy Pelosi's district"; "sea otters"; "whales"; "polar bears"; "those who can not read contracts for financing $400,000 houses that they can not afford.".

Why can I not be a "WE" that he described? Why am I cursed to be a success in America, and then be punished?

I want my share of the pot taken from those top 5%! I want to be poor, I want to be in "crisis" so that I can get to be part of the "WE". It no longer pays to be "rich" or aspire to be rich, I guess.

I almost forgot, the last part of the speech stated that America will emerge from this "crisis" "stronger than ever before".

How exactly is that supposed to happen, after the employers are discouraged from making money, and if they do they have not the fruits of their labor to look forward to, but rather higher costs, more regulation and taxes??

Oh boy, "....and this is only the start..."said the President.

Frustrated, and Puzzled
New York

FICO REVENGE, THE ATTACK OF THE FICO PEOPLE!

It was bound to happen, it finally happened...the long anticipated but always misunderstood FICO people attacked !!!!

Who are these FICO people?

Well in case you never had a credit card or bought anything ever on credit, you my fellow Americans, are not actually human (surprise!) you are just a FICO score!

Secret computers calculate everything you have done financially; bought a car, paid a loan, even a utility bill timely or late payment, may be considered by these faceless computers in determining you FICO score.

So, your entire life is down to your FICO score.

Based on this score, you can get a high or a low rate for your credit cards. Based on this score, you can get or not get auto insurance and the rate you pay will also be based on this score.

You may or may not get a job based on this score...but most importantly, your ability to get a home loan and at what rate, and terms, will be determined by your FICO score.

So my friends, the most important thing in YOUR life is not your spouse, your children or grand-children, but it is your FICO score.

During this financial "crisis", your FICO score is very important since it will determine if you can re-finance your home, or not. It will determine if your credit card company will give you a larger credit limit on your charge cards. It will determine if, after being tossed out of your house through foreclosure (a real FICO score killer), you will be able to rent an apartment.

More and more people now understand thei FICO score and know how to obtain it. The services that offer this, love the business, because you feel compelled to check it at least monthly, and each month is a fee to them to satisfy your curiosity.

Each of the three credit bureaus (you know who they are) can never seem to agree on what you FICO score is, so they each give you their version of your FICO. For instance, in my FICO score, one of the bureaus is always lower than the others even though all report the same information.

So much for computers! FICO this, you faceless computers!

The revenge was bound to happen..it happened on live TV on CNBC...a most unlikely place.

Its Chicago well known reporter (Rick.......) started ranting about the mortgage bailout being available only to the losers...to those low FICO score people (sort of a "Morlock" race) who all the rest of us other FICO's are forced to support.

The people around him on the floor of the CME (Chicago Mercantile Exchange) started howling how they agreed with him and then he wanted to send a message to President Obama...that they will not accept such actions; rewarding the low score FICO people, the losers at the expense of the higher FICO people...those who are working , those 97% that are not getting anything out of the rescues, bailouts, tax credits, etc....

The FICO attack has started. All the FICO people now want money, help, bailouts, mortgage rate adjustments, principal resuctions on their debt,...they do not want all this to only go the the low FICO's.

Why not, everyone needs a FICO improvement....not just those that have been lying on their applications for loans they could not afford, and those who are not responsible in their financial affairs.

A poll was taken and showed 94% of people polled siding with Rick.....2% were NOT SURE.

Well Rick...we're with you....lead the FICO attack!

GENERAL MOTORS, CHRYSLER-ZOMBIE COMPANIES ATTACK AGAIN

The ZOMBIE companies are back for more money, their life line. Without this money they are DEAD...well not really, they will go into a debtor's "heaven", called bankruptcy reorganization.

The leader of GM, Rick Wagoner (also known as NOSFERATU), was back with his Zombie plan to keep the Zombie company alive another few months....and with him, as the me too Zombie, Jr., -Chrysler...the "minnie me" Zombie.

These are true Zombies, Zombie companies, truly the walking dead!

They are back looking for $39 BILLION now!

Why do WE have to feed the Zombies ?

GM and Chrysler do nothing to help us the consumer....nothing. Let me correct that, they raise prices on automobiles beyond the ability of the average Joe to afford them, and they artificially cause wages and benefits to exist for work that is not at a competitive rate.

If people do not want to buy a car because it is too expensive, or lacks the expected standards of workmanship, why do we or our government have to keep them propped up, on life support ?

Why does the government think that it needs to support an unaffordable product...?

Why would this company be able to pull out a miracle by just borrowing more money that it can NOT repay?

That thinking does not make any sense.....lending more money to a company that is in a death spiral due to costs that are out of line and will continue to be so?

Both GM and Chrysler need to get their costs in line though a new employee contract that brings wages and benefits to the new reality....not a fantasy!

If the companies are allowed to reorganize, they will become viable...they will never be viable as ZOMBIES...do we need this many auto companies to begin with????/

The entire auto industry worldwide has the capacity to produce 90 million vehicles (1500 different models)....yet this year it would not likely produce 60 million.

If we lose a name or two, or if they offer less vehicles, so what!

Maybe they can merge, maybe they can get more creative etc....maybe they can make cars people want to buy NOW.

Do not feed the Zombies, they will eventually take over it you do, as is clarly the case with these two Zombie companies.

Worst of all, the government is providing funding to BAD companies, to losers that will never pay back the loans, and it is cutting off credit to worthy companies that are making it that are providing jobs and a future for their employees and stockholders.

Go figure...in the "real" world, not the fantasy world of political agendas, the good companies get the loans.....not the one's that will not repay them.

STIMULUS, SWIMULUS, OH NO, NOTHING HAPPENS NOW

The government has now spent our money, our kids money and their children's money and their children's money on a STIMULUS plan.

Now mind you that NOBODY knows what it really is, as the drafters have not "read" it, before leaving on world-wide junkets. They voted for it however....and like the dummies that they are, they do not know what is really in it...in its fine print.

One thing for sure though is that we will average $13 a week in that bill just for us, to spend as we see fit.

No government program will stimulate the economy...it will help a few road-building companies, and it will pay some past due Medicaid bills to doctors throughout the states that have not paid their bills.

But it WILL NOT make anyone, in the general population feel stimulated. Correct that, those recipients of SS benefits and disability payment recipients will get about $250....that's just about enough to pay about 15 days worth of heating bills this winter.

The plain fact that our politicians do not understand is that the world is oversupplied by goods, goods made in countries with cheap labor.

These goods are in over-supply, and they compete with domestic produced products.

So, to make this simple, as the economy is stimulated, which goods will you buy...the more expensive domestically produced goods, or the cheaper versions flooding our stores to compete for your stimulus dollars...those $13 weekly dollars you have to spend now?

The government programs that were announced will do absolutely nothing for the economy, and will not stimulate any consumer spending, other than the $13 weekly, which will probably go towards the interest paid on your credit card bills.

Are the people we elected this clueless?

Yes, apparently they are...at least those who voted for the STIMULUS.

Oversupply is a problem. One can boost demand, but what will the stimulated consumers buy?

It is not likely to be a GM car since it is too expensive for people whose FICO scores just tanked, and their home was foreclosed. Count those people out...that is probably about 30 million people, that is fully about a third of all working Americans.

The world can produce 90 million new vehicles annually, it however will produce about 60 million, if that in 2009. Add to that the problem with a lack of financing, and you got nothing stimulating demand.

The resulting lower prices for all types of goods will be great for consumers, since everything will cost less...but these goods will be competing for the consumer dollars with domestic producers and foreign producers including car makers and steel producers, and producers (manufacturers) of just about everything.

Keep in mind that there will be plenty of products, mostly foreign, and they will be demanded to be sold at the lowest possible price.

So how is this going to stimulate anything?

Here is the second part of all this....

The domestic manufacturers will start showing losses, and that in turn will cause their banks to restrict lending to losing companies, which in turn will cause them to lay off employees.

Now multiply this by 13 million businesses in America. If each business only lays off one employee, that's another 13 million unemployed!

Do you think that each business will only lay off 1 employee?

The credit crunch will get worse since the requirements for every well run bank would be to lend to profitable businesses, and therefore they will restrict lending to marginal businesses, and those businesses will have to lay off employees.

Is this becoming clearer? The government is only lending money to businesses that are losers, yet the banks can only lend to businesses that are not losers....so go figure.

Our government is NOT supporting the lending to strong business that can prosper and survive, they are instead lending to the losers, and restricting lending to the marginal businesses or the profitable businesses by advising banks to be careful who THEY lend to.

Go figure...feel stimulated yet ?

Lost in Manhattan

GM and FORD Opening China Plants, Closing US Plants

We need billions, please give us billions, is the cry from General Motors and the US auto industry.

Ok, that worked for GM it may get $25 billion? or as they say, if they do not get the money to stay afloat another few months to pay the salaries of the overpaid executives there, it may cost the government $100 billion in a bankruptcy.....let them fail, already and stop this nonsense.

What the Washington crowd does not understand or even ask, is that GM has auto manufacturing facilities all over, including.....China, where it is probably the largest builder of cars.

GM has invested $3 billion into a new plant there, Ford has invested similarly into two plants.

So while the US plants are closing, and using up wads of money to stay afloat only to delay the inevitable, the China plants are growing.

Will the new funds also go to support the China operations ?

There are no limitations on the use in the company's operations of the billions given them as a loan....

There was a great line in the movie FORREST GUMP....."stupid is as stupid does."

Our congress spending our money...maybe there should be a rule that they have to put in their money into the loan too ?

I wonder if that would result in a different result????

$13 STIMULUS JUST FOR ME ! WOW, thanks Harry Reid

Well, the proud Senators, most of whom have never in their lives employed somebody (although many have made the "honest" mistake of employing illegal aliens and "forgetting" to pay their payroll taxes in employing them), finally let us working stiffs know what all those promises of lowering our taxes was all about.

THE GREAT PLAN WAS FINALLY ANNOUNCED, THIS IS THE PLAN WE HAVE WAITED FOR HOLDING OUR BREATH.

We finally know the great plan to save us, to save America, to start the great economic recovery; $13 a week over the next year or so, directly into our pockets! Ok, so there are some conditions, but what the heck, it's $13 bucks, directly into our pocket.

Ok, that's the maximum...but you can still get something....unless you are an "employer" making the really big bucks....well not really the big bucks...at some point you get nothing (the assumption is that you do not need the generous $13 bucks), you have plenty of bucks already.

Now let's see, here are my options for how to spend this stimulating amount, after all I want to help all I can and put in my contribution toward the economic recovery of America. But wait, was this supposed to go into my pocket, or was I supposed to immediately take the $13 bucks and put it into another guy's pocket...sort of like that game where I get $13 bucks, and I give it to you, and you give it to another guy, and he gives it to another guy...etc..

So, exactly how is this $13 bucks going to stimulate, and whom, and how ?

Now I'm lost. I get $13 bucks, but I have to spend it as quickly as I can, preferably on instantly disposable stuff like paying the kid next door to rake my leaves so he can go out and buy a video game (it would have to be a used game at Game Stop since none are so cheap)made in China and sold at the WAL-MART?

The other option is that I can do something more meaningful and buy something bigger.

Perhaps I can go and get a stereo, a computer or a TV at the RENT-A-CENTER, even if I have absolutely no credit, since they advertise that if I can pay $13 a week, I need no credit to get this stuff from them, and, best of ,after only 500 weeks of those payments,(overstated for hilarity purposes) I will own it outright!

I can use the entire savings provided me by the Congressional generosity to get stuff for me, thanks to Senator Harry Reid and Speaker of the House Nancy Pelosi.

Also notable is that all this generosity could never have been possible without the help of those three "brave" Republican Senators who "crossed the isle" (that isle must be quite a dangerous place) and voted those $13 bucks for me (wait a minute, won't that $13 bucks come out from me by adding to the deb that I and my kids are going to repay?) the "little guy" that they always fight for...for me, they are truly my champions!

I did just some basic thinking about what $800 billion represents to the typical working person in America....let's calculate about 100 million working adults...if the government took that $800 billion, and divided it equally among all those working people, they could each get about $8,000. That's without denying these funds to the rich..those let's say making $50,000 a year.

If every adult in America got $8,000.....they would surely feel stimulated to buy something...maybe even something made in America. Surely this spending spree would be noticed in the economy...will the $13 bucks be noticed, or $8,000 bucks be noticed?

The bottom line is that billions and billions will go to businesses that will not in ANY WAY impact any of YOUR present endeavors or your lifestyle, but they will surely stimulate the BIG businesses that are failing like the American car industry rust buckets to stay on life support a little longer, without disconnecting them from the ventilator.

A lot of the money will go to prop-up mismanaged state governments that have deficits and can not finance them.

Ask yourself this question....if you are an employer or an employee....
"What will I, or my company get because the government is spending $800 billion, besides the $13 bucks reduction in my witholding each week?"

Now that you thought about it ......There is your answer...NOTHING, right?

So, maybe the next $800 billion will be better spent, maybe.

P.S. Oh, but wait, all that stuff is made in China or Vanatu (where is that anyway?) or Croatia, not in the USA....so am I really contributing to the economic recover of the USA? Too late now to think about it, it was important that the plan got passed as soon as possible.

An Optimist.....

DEADBEAT COUNTRY (ALMOST)…..USA

DEADBEAT COUNTRY (ALMOST)…..USA

What if you had a banker or another creditor who did not really like you, but you owed him $1.3 TRILLION dollars?

What if you however, want or desperately need more and more money to be borrowed from this person?

Under those circumstances, could you say and do anything you want and risk getting this person angry?

But, what if this person had run out of money to lend you any more money to support your apparently lavish lifestyle which obviously requires more and more borrowings from him?

WELL FOLKS THE LENDER IN THIS CASE IS CHINA AND JAPAN, AND THE NEEDY DEADBEAT IS THE GOOD OLE USA.

The USA needs money to support its “lifestyle”, but its biggest creditors are running out of money to buy TREASURY securities, since their economies are not generating the cash surpluses any more, which could then be used to buy more of the securities.
Is that simple to understand?

What if then, instead of buying more debt, the creditors simply say that they need the money back?

Think about that, what happens when you do not have the money to pay back YOUR creditor….your FICO score suffers, and you pay exorbitant interest rates!

Then another thing happens….as consumers and businesses of every type try to borrow money they will be competing for the available money with the government!
So far, it does not sound like a recovery is coming, does it?

Get A Loan from These Stupid Lenders

Get A Loan from These Stupid Lenders

Don’t you just feel great is you walked into a bank to get a loan, and you discovered that there was no lending standards?

You just happened to come into the bank during a special lending period during which there were no requirements for collateral, nobody cared if your business was profitable, nor did you have to make any sense explaining how you were going to pay back the loan?

In reality the only thing you had to say was that “you needed the loan, now, today preferably, before you walked out of the bank. And if possible, could it be for a billion dollars, no, make that $25 billion!

Well folks ,that is the short explanation of what public education educated congressional watchdogs of our tax money are now doing. So, get in line, the patients are running the asylum !
Any lender, in fact anybody with any brains will tell you that a bank will consider lending money to a business with a history of successful operations, and a profit forecast that shows how the loan can be repaid.

Our politicians, most of whom have never had a real job or ever run a business, do not know this “secret” to successful lending.

They in fact are ONLY willing to lend money to borrowers with NO CREDIT, NO possibility of repayment of the loans, and only if they are in business models destined to never make money, such as the auto industry in America. They are only lending money to losers, instead of successful businesses that will continue to operate at a profit, and will actually continue to employ people.

They are not even remotely considering lending money to any successful business. They are only supporting losers. They say that they are doing this to save jobs.

This is what they would have said to the last horse buggy manufacturers, and the last street gas light manufacturers, and the last steam locomotive manufacturers, and the last horse plow manufacturers and the last horse rental business, and the last musket manufacturers. “We have to save these jobs!”.

Dummies….this is elementary…the auto industry will NEVER be saved by government supported artificially unrealistic wages and benefits of $75 an hour. Nobody can afford the cars that they build.

I just saw at a WAL-MART, a Chrysler Charger automobile with a sticker price of $45,000!
The last time I bought it, it was $3,900, and therefore it was affordable.

The auto industry needs no saving. There will be a need for autos, and they will always be built by some company. Do these autos have to be built by companies that are pricing their product out of reach of their buyers? Yes….so go figure, they want to save an industry from shutting down even though consumers do not want their product…go figure.

There will always be auto companies to meet consumer demand….at some price and on some terms that only a free market will dictate.

Just name one thing the government can do correctly ? Go ahead…Think about health care the government way…think the VA hospitals for instance; rats, mice mold and dicey healthcare provided by people that can hardly speak English.

Now, they only want to lend money to losing businesses…what a business model for guaranteed failure.

I will give you odds as a bookie on how much GM and Chrysler will re-pay of the loans…make that 100 to 1 that they will never repay the loans…..

DOW JONES AVERAGE down to 6,000 or 5,500???

2009...DOW JONES AVERAGE down to 6,000 or 5,500 ?????

Investors all over the world follow the DOW index of 30 stocks…that’s right, I am amazed at how few people know that this index is composed of only such a small group of stocks.

These 30 stocks alone, have the daily eye of the world, investors all over the world watch this number….the “Dow was up 200 points, the Dow was down 400 points..”etc.

As I watched the forecasters who are attempting to predict where the market will be this year, their predictions are as varied as one can only speculate. Some are calling for it to go back to 10,000-11,000, other see it “steady…in a range of 7,800-8,000.”

Do these people live on the same planet ?

Do these forecasters do any research to back up their forecasts, or do they just talk not knowing at all what comprises the DOW-what makes it move up or down…???

I did my own non scientific analysis of the individual stock that comprise this daily index. As a result, I liked the fact that McDonald’s was on it since their dollar menu items and coffee choices are driving up their profits. I like spending $1 on a meal that presents a great value.

Then as I looked at the other stocks that comprise this index, I started feeling that there was a great black cloud over it, and I wondered how could anyone in his right mind consider that this group of stocks are going to go up in price/value this year.

For instance, there was General Motors-a long lived component of this index.

I can safely predict that it’s over for this stock, even though it does not have far to go to get to ZERO.

Other components included an industrial metals producer, a manufacturer of earth moving equipment, and engines for trucks, a retailer of building products for the home and for building contractors, a theme part operator, a computer manufacturer, a prestigious credit card issuer who is writing off unpaid balances from high FICO score clients who are not paying their bills.

There is also a mix of others that also scared me, but not as much as this group listed above.

Now let’s start the analysis:

If people are out of work or have diminished incomes do they spend $2,000 a day at a theme park in a far away expensive resort, that sells a soda for $5 ? No.

If the home building is at a low point that nobody can even remember, is the home building products retailer going to sell lot’s of lumber and things related to building ? No.

Are contractors going to buy new earth moving equipment and new trucks with engines that have new mandates for pollution, and there is less business for them to haul ? No.

If people with high previous credit scores can not pay their bills, will they pay their unsecured fancy credit card balances ? No.

Will we all go out and buy a lot of new personal computers ? NO.

Well that’s our analysis of where these stocks will go. Would you see a reason to buy any of these, if their 2009 future looks bleak ? No.

There are those that may well do ok, like WAL-MART which is a component of this index, but the others look like SELL candidates to me, rather than HOLD candidates.

If these all decline, where will the DOW be this year ?

Remember, in 1987, the last great market decline…the Dow was at 1,000 !!!!!!! Does that feel that long ago ?