Thoughts on Markets

Wednesday, November 12, 2008

Thanks to God our true and only Savior

Does this graph look familiar? Too bad, but it seems the boyz are at it again. They may be, but with the DJI down 275.34 to 8415, other have had to sell to cover their margin calls. That means more downward pressure on precious metals. DROOY is trading around 3.40 now. I have order in to buy another 500 @ 3.39. Hope to get it for my trading stock. It has been trading in the 3.50+- to 4+-. A nice trading range for some profit on each buy at near low and sell at near high. That is what I am doing! You make your own decisions.

China exports rose 19.2% over those of October, 2007. However, this was down from 21.5% in September, 2008. Inflation has also dropped 4% October, 4.6% September, and 8.7% February. China continues to hang tough with a reasonably good economy. They are in the world with strength of dollar reserves and cash being spent to improve the infrastructure and help provide work for the citizens who are becoming consumers on a grand scale.

Oil is staying around $60 per barrel. Yesterday it was down 3.08 to 59.33. We welcome the relief at the pumps with gas below $2 here. Some stations are still around $2 to $2.09. These seem to be more the exception now.

There was a giant dollar rally on Veterans Day which knocked the Euro down to around 1.25 from 1.31 recently. The Yen held well as it joins the dollar as the center of carry trade based on lower interest rates. Entities borrow at the lower interest rates and invest in higher interest rate debt instruments and pocket the difference. Nice work if you can get it. It is almost as good a the central banks producing currencies out of thin air and lending them to collect real interest payments.

A bailout (rather rescue plan) is in the works for our failed automobile manufacturers. This is simply a method of perpetuating inefficient industries which fail to compete satisfactorily and waste scarce resources in doing so. A free market would let them fail or change their ways for success in the market place. Thus, inefficient industries and other forms of businesses would disappear yielding more efficient use of labor and other resources. But we have not had a free market in about a century. This is true, even when all our problems are said to be caused by capitalism which does not exist or at least only to a very minor degree. Of course, our benevolent government needs a scapegoat to blame for its failure.

Then the Consumer Confidence report is the lowest since 1982. Not really encouraging. However, we must recognize that the consumers no longer have the home ATM for ready cash and most are maxed out on credit.

Many are saying we have reached the bottom of the bear market, but I don't really believe we have. The market is still under a great deal of unwinding. We are also nearing the sell for loss period as folks attempt to save on income taxes and avoid Obama's increased capital gain taxation, if it passes as he has said. His tax package will be devastating in the market place.

Rest assured in the promises of our Sovereign God and Savior. Though the state would present itself as a savior, it is no true messiah. It only seeks to may us slaves which feed at the government trough like pigs. It wants us to be tied to it from the cradle to the grave. It is no fun to be ruled by on out of control liberal government. Turn to the only God of God, Light of Light, Very God of Very God, even Jesus Christ our Lord and Savior.

Best to each, Doug

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