8/4/08

Economics

a disruption in global oil supplies (It is not the price of oil but its availability that will cause severe economic dislocation.). The hypocrisy of the US energy policy:

http://www.american.com/archive/2008/july-07-08/oily-hypocrisy

And Charles Krauthammer on the lack of congressional action on drilling offshore and in ANWR:

http://www.realclearpolitics.com/articles/2008/08/pelosis_moratorium_puts_planet.html

A graphic analysis of the causes of rising oil prices:

http://www.washingtonpost.com/wp-dyn/content/graphic/2008/07/26/GR2008072601566.html?sid=ST2008072601558&pos=list

Some thoughts on the power of capitalism in times of (near?) recession from Jonah Goldberg (this is pretty good):

http://article.nationalreview.com/?q=MDdiYTgxOGE0ZjNiZTEzZmI3OGQwMzBmYWFlNWE1MDg=

protectionism (Free trade is a major positive for world and US economic growth.) The Doha round of trade talks collapsed last week:

http://www.timesonline.co.uk/tol/comment/leading_article/article4438959.ece

Former presidential economic advisor Larry Lindsey comments on the Fannie Mae/Freddie Mac bail out legislation:

http://online.wsj.com/article/SB121754567926302543.html?mod=opinion_main_commentaries

This doesn’t look good (rising Alt-A mortgage defaults):

http://bigpicture.typepad.com/comments/2008/08/second-larger-w.html

Another graphic on who pays how much in taxes:

http://mjperry.blogspot.com/2008/08/tax-facts-of-day.html

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I spent this weekend reviewing the details of the economic data reported the last two weeks; and my bottom line is that I will be lowering our economic forecast for this year and next. It looks like the economy either is or has slipped into a mild recession. What persuades me is (1) the weakening employment data. As you know, I have been persistent in saying that you can’t have a recession if everyone has a job. Well, fewer people have jobs. (2) it is becoming clear that inflation is being understated in the national income accounts, which means that real domestic income and spending are being overstated--that means the growth rates being reported are overstated.. I don’t think that the downturn will be catastrophic--there is still strength in some sectors; and I don’t think that a shift in economic forecast from a slow rate of growth to a slow rate of negative growth will impact our Valuation Model by much. I will be working on revising our economic model and our Valuation Model this week. If I come to any startling conclusions I will communicate them in our Morning Call.

Politics

Domestic

International War Against Radical Islam

The Market

Technical

Fundamental

Seven blunders of equity investors:

http://www.investopedia.com/articles/basics/08/blunders.asp?partner=forbes-am

Subscriber Alert

At the Market this morning:

The High Yield Portfolio will Add to its positions in Rayonier (RYN-$47) and RPM Int’l (RPM-$20).

http://finance.yahoo.com/q?s=RYN

http://finance.yahoo.com/q?s=RPM

The Aggressive Growth Portfolio will Sell a portion of its holding in US Global Shares-Gold (USERX-$15) and Buy a one third holding in Schlumberger (SLB-$100).

http://finance.yahoo.com/q?s=USERX

http://finance.yahoo.com/q?s=SLB

In addition, the stock prices of T Rowe Price (TROW-$55), UGI Corp (UGI-$26), and Illinois Tool Works (ITW-$45) have re-entered their respective Buy Value Ranges. Accordingly, they are being Added to the Dividend Growth Buy List. The Dividend Growth Portfolio already owns these stocks. While may Add to these holdings in the future, it will take no action at the moment.

http://finance.yahoo.com/q?s=TROW

http://finance.yahoo.com/q?s=UGI

http://finance.yahoo.com/q?s=ITW

The stock price of Wells Fargo (WFC-$30) has risen above the upper boundary of its Buy Value Range. Therefore, it is being Removed from the Dividend Growth Buy List. The Dividend Growth Portfolio does not own shares in WFC, so no additional action is necessary.

http://finance.yahoo.com/q?s=WFC

The stock price of Staples (SPLS-$23) has fallen below the upper boundary of its Buy Value Range. Accordingly, SPLS is being Added to the Aggressive Growth Buy List. The Aggressive Growth Portfolio already owns Staples and no additional share will be Bought at present.

http://finance.yahoo.com/q?s=SPLS

The stock price of Blackrock (BLK-$219) has risen above the upper boundary of its Buy Value Range. Therefore, BLK is being Removed from the Aggressive Growth Buy List. The Aggressive Growth Portfolio will continue to Hold this stock.

http://finance.yahoo.com/q?s=BLK

News on Stocks in Our Portfolios

A positive write up on Amphenol (Aggressive Growth Portfolio):

http://www.thestreet.com/p/_htmlrmw/rmoney/technicalanalysis/10431553.html

A statistical look at ExxonMobil’s (Dividend Growth Portfolio) profits:

http://mjperry.blogspot.com/2008/08/exxons-record-capital-and-exploration.html

http://mjperry.blogspot.com/2008/08/putting-exxons-income-taxes-in.html

http://mjperry.blogspot.com/2008/07/exxon-posts-record-3236-billion-tax.html

A positive write up on Chevron (Dividend Growth Portfolio):

http://seekingalpha.com/article/88864-the-long-case-for-chevron

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