Angry Dog at your Throat
Research for Online Investors

by John Dalt

9/24/09

Subscriber M.C. sent us a “Market Insight” from J.P. Morgan.  Their three conclusions were to stay out of Treasury bonds, get ready for higher taxes, and build your nest egg.  Good advice, but what I found amusing was the closing that compared the growing federal debt to an angry dog.  “Sometimes, when you pass an angry dog on the street, you are advised to ignore it and it will go away.  This is not such great advice, however, if it lunges for your throat.”

Oh! Bama and the democrats have painted themselves into a corner. They have spent too much money, counting on the economy recovering and growing their way out of the problem. Their problem is all the regulations and job killing plans that are part of their agenda of centralized planning, cap and trade, and national health care hurt the recovery. History tells us the U.S. economic engine will recover, but it will limp under the weight of new regulations. If you kill or injure the golden goose, where do you go?

Jimmy Carter and the democratic congress left a mess for the Gipper.  President Reagan instituted monetary restraint and tax incentives to get the economic engine running again.  To his discredit, he also let the democratic house increase spending faster than increased tax collections from the economic expansion.  The Republicans controlled the Senate by a narrow margin, until his last two years.

Bush 41 fumbled by giving in to the democrats (majority in both houses) and increasing tax rates, after promising not to, so they could spend even more money.  This led to B.Clinton, the philanderer in chief.  With his democratic allies in congress, we saw an earlier vision of the present socialist agenda.  Because of the democrat’s lack of fiscal discipline, and arrogance, the “Contract with America” helped usher Newt Gingrich and control of the House and Senate.  With the narrowest of majorities, they made mistakes, but the house originates all spending bills, and they slowed the spigot.  By 1999, the budget was going into surplus as spending was restrained and the economy (and taxes) grew.

The nation’s security required increased spending by Bush 43, but he also proposed other spending increases beyond what many in his base approved of.  Adding to the drama was the acquiescence of the Republican majority in Congress.  It is very difficult to criticize the President’s agenda when he is the titular head of your party.

When the democrats took control of the Congress in 2007, all limits were off, and spending was off to the races.  Bush 43 was rightfully criticized for not using his veto to slow the increase in spending.  The congressional republicans were out of power and the mainstream media marginalized their message.

Because of they neglected listening to their base, fielded a weak candidate for President and the economic turmoil, which the democrats were able to spin as the republicans fault, the country now has democrats in complete control.

What will save our country?  The House elections in 2010.  Remember all spending bills starts in the house.  Can Boehner and company get their act together to stop the juggernaut to socialism?  I do not know, but am certain there is more economic pain ahead of us.  When the dog jumps for voters and taxpayers throats, hopefully they will see the fallacy of the socialist and fascist dreams the world improvers have foisted on us.

Subscriber T.W. sent in an alarmist email about registering guns.  Sorry T.W., I told you about that bill on March 3 and 4 last spring.  The gun ban bunch will never give up; their goal is to take your guns along with all other liberties you enjoy.  You can read the bill here.  I had trouble finding it, so I added a search box for our subscribers use.  It is on the right side of every page, just type in “gun control” or a stock symbol or company name.  Your results in our MarketToday articles, Investor Resources or other editorial content will be listed for you to research.

The G-20 meets today and tomorrow.  Nothing good can come of World Leaders meeting when we are represented by the present administration.  After the president has apologized at every stop, we risk turning into a lap dog rather than be accused of “being arrogant.”  The Chinese and India are not going do anything to slow their economies; they want us to restrict ours, so they can capitalize on our zero growth.

The U.S. population currently has a 5% savings rate; this has increased as people pull back spending and pay off debt.  China had a 50% savings rate in 2007 and 35% last year.  No wonder they have money to lend.

We recommended SRS in the SwingTrader Service this morning.  Why?  Look at the chart below, SRS dipped last Thursday setting its 52 week low.  The slow stochastic had bottomed and moving higher.

     The fast line was moving above the slow line.  Here ^

We are up over 9% today on SRS.  Never underestimate timing and luck.  We do it everyday in SwingTrader!

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

MarketToday Home Page

Back to Top