Builders Combine, Still Going Broke
Research for Online Investors

by John Dalt

4/08/09

The market futures were down before open this morning based on Alcoa’s quarterly profit.  News that Pulte Homes and Centex would merge to form the nation’s largest homebuilder created some excitement.  Together these two lost over $1 billion in the fourth quarter of 2008.  They hope that by combining they will be able to survive the current housing downturn.  The combined company will have a market capitalization of $4.1 billion, enough to last all of 2009.  If the market discounts losses, it is still a race to 0.00  The New York Times covers the story.

The conviction of Sen. Ted Stevens of Alaska eight days before last year’s general election and subsequent vacating of the conviction has taken another turn.  Judge Sullivan has hired a prosecutor to investigate the Justice Department and recommend whether charges should be pursued against the federal attorneys.  The Washington Post has some details and good background.  The democratic winner of Stevens’ Senate seat has no plans to submit to an election, now that the conviction of Sen. Stevens is vacated.

It looks like Al Franken is leading Norm Coleman in Minnesota for the Senate seat.  Coleman still plans to appeal to the State Supreme Court.  A few issues left concern him.  Like ballots that were photocopied and then counted twice, but it is becoming more difficult for Coleman to prevail.  The Washington Post has up to date information on the case.

Pennsylvania’s Governor Ed Rendell has himself in a bit of a stew.  It seems he hired a private law firm to represent the state in prosecuting a subsidiary of Johnson and Johnson.  The problem is the law firm he hired contributed money and airplane rides for his re-election campaign.  A lot of money.  Add insult to injury, he signed the no-bid contract after the contributions, and the firm is on contingency.  Whoever said politics is a dirty business?

Now that the G-20 Summit is behind us, and OH! Bama has apologized to everyone he could find, the ugly reality sets in.  I did not realize we were such a bad bunch, until I heard him say we were ‘arrogant, dismissive, and non-Christian.’  He could have added ‘individualist’, maybe he did, he considers that a bad trait.  He has added importance to the IMF, a group of do gooders and world improvers that will turn on him just as they have on our country.  He promised to increase funding from the U.S. so the IMF could “help” solve the financial crisis.  The IMF will now be able to sell 400 tons of gold, a sale the Bush administration had blocked last year.  This gives them even more money, to spread their big government remedies.  It takes 85% of voting members to approve any actions at the IMF; the U.S. holds 16% of the voting rights.  This percentage is in line with the amount of money each country contributes.  Too bad we do not allocate voting rights in the U.S. according to the voter’s tax bill.  It would be a lot harder to approve deficits, welfare, and refundable tax credits if the voters that paid the bills had any say.  I guess that is why our founders were against democracy, opting for a republic.  If you would like to read all about the IMF, here is their website.  Use the sitemap; go to the bylaws, and the Articles of Agreement. I found them interesting reading.  A lot of pablum.

Galt’s Long-Term Portfolio is steaming along. We are collecting nice dividends on most of our holdings and enjoying nice capital gain increases in values. I am working on our next recommendation for Monday. Natural resources and commodities look to present some great opportunities in the future. Where are the biggest profits? Should I buy USO, SLB, UNY, UNG, GDX, SLV, GLD or none of the above? I have a few great ideas that give us a chance to make a 100% as the economy recovers. You can join us for less than a dollar a week, only $49 per year. The price goes up to $99 on April 16. Read all about it.

While the President was overseas, bashing our Country, the market staged a nice rally.

Be careful, he is locked and loaded!

Our last closed trade from the SwingTrader Service:

PO T—held 16 days for gain of 15.3%
11 trades in the last 40 days with avg. gains of 9.5%....NO losers.

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.

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