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by John Dalt

4/28/09

Sen., Arlen Specter of Pennsylvania decided to switch back to the Democratic Party this morning. He is facing a tough election in 2010 since he voted the for $787 billion stimulus plan. Many supporters had expressed outrage over this vote, and publicly announced they would work to defeat him. His affiliation with Democrats gives them 59 votes in the Senate. If Al Franken prevails in Minnesota, the Democrats will have a filibuster proof 60 majority. This should have been expected even though Specter had voiced his intention to remain a Republican as recently as March 17. Specter was a Democrat until 1965 when he won his first public office as a District Attorney. He maintained his registration as a Democrat, running as a Republican, until he was declared the winner of the contest. OH! Bama called the new democrat and reportedly told him, “We are thrilled to have you!” The Washington Post has an updated story.

The Wall Street Journal reported that Citi and Bank of America are in need of additional capital, according to the “stress tests” administered by the Federal Reserve. Banks are meeting with regulators today to argue for better scores, and avoid raising money in today’s tough market. The Treasury can convert preferred shares to common stock, as we discussed yesterday, to avoid additional cash outlays from the government. This is problematic, because common shares come with voting rights. Ken Lewis at Bank of America and Vikram Pandit at Citi do not seem too excited about having Uncle Sugar on the Board of Directors. Who would? Ken Lewis has accused former Treasury Secretary Paulson and Fed Chairman Bernanke of threatening to fire him and his board if he revealed the problems at Merrill Lynch late last year.

The market fell out of bed at opening today, dropping over 100 on the DOW but regained momentum midday only to sell off in the last hour to close down 8 at 8016

The UAW looks to get 55% of Chrysler, and representation on the board, according to a report in Bloomberg.  Fiat would get 20% with incentives to go to 35%, and the government keeps 10% for footing the bill.  It does not look like there is too much left.  The government will own up to 50% of GM.  I guess Ford builds a good car.

I sent sweet Karen to Walmart last night to buy some of those cute surgical facemasks.  It is the latest fashion statement, they were sold out.  I was thinking of using them for practical jokes, but my sense of humor cannot be rewarded today.  Have you noticed that people are dying in countries that have nationalized health care?

The dollar slumped today and interest rates rose as treasury is in the midst of a $100 billion auction of two, five & seven-year bonds. Paradoxically, gold and oil closed down.

Fox has turned down the White House for a prime time “news conference” Wednesday night; instead, they will broadcast their regularly scheduled show “Lie to Me”.  Fox News and Fox Business Channel will broadcast the president.  Major networks regularly turned down other presidents, including Ronald Reagan, still the White House is upset.

There is a great article in the Wall Street Journal about House Speaker Pelosi and her denial of any knowledge of water boarding and other enhanced interrogation techniques. This story is not going away, as the president has authorized release of photographs of suspected terrorists that were in the care of the U.S. at overseas facilities. You might want to read about the duplicitous nature of the amnesia that seems to be affecting Washington. If you have not read the TOP SECRET documents concerning enhanced interrogation we have them available on our web site, you can access them under diversions or just click on TOP SECRET.

She gets 4 kilometers to the bushel, very little gas!

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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