Thought this might be of some interest to Dollar Den regulars.
Thought this might be of some interest to Dollar Den regulars.





As a 'parting shot', all I can say is that nobody should find any of the author's comments surprising !!! After all, we have been discussing the author's primary issues in Dollar Den for some time now ... i.e. tax free muni bonds, tax favored alternative energy industries, significant increases in both income tax and capital gains tax rates (with likely renegging on promises for 'middle class' tax cuts), increases in social spending as a result of rising 'permanent' unemployment, etc.
I would also add that all historical statistics relative to market performance under Democratic or Republican administrations cannot be fairly viewed in the 'vacuum' of a simple market index value comparison. In order to accurately compare past and present performance, the loss in US dollar purchasing power / currency 'inflation' must also be taken into account. With that adjustment considered, the Reagan and GWB years don't look all that bad and the LBJ and Carter years look even worse than they appeared !
With that said, what is the author actually saying about probable future economic developments under an Obama administration ...
- rich Americans will move money from 'productive' investments in regular businesses and industries into 'non-productive' but tax favored investments in order to avoid the consequences of impending tax increases
- partly because of the above, as well as because of previous bubble collapses and globalization measures taking advantage of much cheaper offshore labor costs, the percentage of 'permanently' unemployed Americans will rise ... and remain high. As such, the gov't social spending required to provide benefits to a high and growing number of 'poor' will also rise and remain high. This will create pressure for Obama and the democratic congress to consider moving forward the repeal / expiration of the GWB income tax cuts, as well as to reneg on campaign promises to enact 'middle class' tax cuts, in order to (partially) fund this increased and ongoing social spending.
- government borrowing and spending will be the only apparent 'economic engine' to push America forward over the next year. Of course, the word apparent takes on a huge significance since such spending of money that must be borrowed from foreign sources (or newly printed) has always translated into significant declines in the US dollar's 'purchasing power' a.k.a. 'currency' inflation.
~
Last edited by Melonie; 01-07-2009 at 11:00 PM.
Uhm not quite.
For those who didn't read it for themselves here's the REAL basic summery.
1. Look for overall improvements as they are historically better unders Dems.
2. Favorable market valuations likely.
3. Look for middle class friendly tax breaks
4. Capital gains taxes will likely move from 15% to the 20% that existed through most of the 1990s. But with the current market environment it's the best time to enact these changes, as most investors are holding many positions at unrealized losses.
5. Large US infrastructure firms, and an ETF, that could benefit include and worth considering investments in :
General Electric (GE)
Foster Wheeler (FWLT)
Jacobs Engineering (JEC)
Fluor Corporation (FLR)
SPDR FTSE/Macquarie Global Infrastructure 100 ETF (GII)
In addition to those the following Alternative Energy ETFs :
PowerShares Wilderhill Clean Energy (PBW)
First Trust NASDAQ Clean Edge US Liquid (QCLN)
Market Vectors Global Alternative Energy ETF (GEX)
In terms of Bonds:
SPDR Lehman Municipal Bond (TFI)
iShares S&P National Municipal Bond (MUB)
Market Vectors Lehman AMT-Free Int Muni (ITM)
SPDR Lehman Short Term Municipal Bond (SHM)
Market Vectors Lehman AMT-Free Shrt Muni (SMB)



invest as you wish, but I'm thinking further devaluation of the dollar makes it very possible that even these darling stock and bond recommendations can cause one's portfolio to still lose value.
alot of different ideas out there, but it seems energy and gold are today's best hedge against US currency devaluation and when done appropriately can mitigate some of the tax increases.
Oh Canada, we stand on cars and freeze...



LOL... did you catch my '08 returns? I'm not one to shy away from risk!
And also, some say the least risky investments are the ones that cost the most... Anyways, I've been brought up to be not a buy and holder, but usually buy and hold for 3-5 years... not to infinity, but to hold until a 'target price' is achieved. It worked for me as a kid and has done well up until the last 2 years of my investing. However, I took it off of the chin investing this way even while having a good portion in cash.
As for the article, Employment has to be kept up... that is not an option. Cutting hours of workforce is more likely (even having people work 20% less)... you have to keep people employed. The government needs to run a more efficient model. Investment in infrastructure has to continue. Certain tariffs need to be employed & will be good for the economy- especially with regards to global trade. Considering tariffs on Global trade should take into consideration the effects on health care benefits, the environment and labour costs. Trade has always been based on capitalistic opportunity. We need to consider these other factors as well (much as what European countries do). Regulations such as a Minimum 15-20% downpayments on houses should be implemented to further stabilize things. Taxes will need to be added to revenues to offset growing debt and deficits.
Even in Canada, I fully expect to see an incredible amount of bankruptcies in the next 6 months. You really have to pick and choose your investments. Some things are just too dangerous.
As for gold the commodity or gold stocks, I feel that gold stocks generally move better and are a little 'cheaper' to store. hehe...
a hint for advice going forward- watch out for stocks that carry more debt than revenues. but, then again you can find something wrong with every opportunity... an example is a stock i am currently examining and have been watching them for the last 6 months (the minimum time i study a company before buying a position). Check this out:
MTM.TO (Mitec on the Canadian TSX)
currently $0.095
Summary:
Mitec Telecom Inc. (Mitec) is a Canada-based company engaged in the design and manufacture of telecommunication products. Its operations are divided into two segments: telecommunications (Telecom), and satellite communications (Satcom). Mitec sells its components worldwide mainly to network providers for incorporation into high-performance wireless communication infrastructures that enable voice, data/Internet and ultimately multimedia communications. Mitec’s equipment is integrated into telecommunications systems and then sold to telecommunications service providers, including telephone, cellular, paging, data and broadcast companies, who use it in constructing their communications networks. The Company designs and manufactures wireless, microwave and satellite transmission system products, such as amplifiers, duplexers, filters and isolators/circulators and integrates these components into memory file systems (MFSs).
Financials (In millions of CAD)
Income Statement
Total Revenue 36.18(20033.81(2007)
Gross Profit 8.12 5.45
Operating Income -6.52 -11.73
Net Income -6.42 -12.37
Balance Sheet
Total Current Assets 25.70 21.86
Total Assets 40.04 33.16
Total Current Liabilities 11.76 7.06
Total Liabilities 13.01 7.44
Total Equity 27.03 25.72
Cash Flow
Net Income/Starting Line -6.42 -12.36
Cash from Operating Activities -1.90 -7.68
Cash from Investing Activities -1.87 9.02
Cash from Financing Activities 2.21 3.43
Net Change in Cash -1.50 4.82
Where are they now with regards to Key Stats & Ratios ....
Net Profit Margin -9.21%
Operating Margin -9.48%
EBITD Margin - -1.71%
Return on Average Assets -10.87%
Return on Average Equity -15.42%
Employees 401
Improving Balance Sheet in the last 2 years shows that management is responsible... the question is when does that reflect in it's stock price?
I have orders in for insurance companies and none have hit my buy-in prices yet...
XL Capital at $3.11 rumours are Warren Buffett is looking into buying it (don't know how true it is...) upside is staggering but could go into chap 11.
Citigroup $2.91
MBIA $2.91
Bank of Ireland ADR $1.90
and for Canadian banks I just bought Preferred Shares of RBC and National Bank.
Last edited by XxAmber89xX; 01-27-2009 at 01:38 PM.
Oh Canada, we stand on cars and freeze...
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