Rally Holds
Research for Online Investors

by John Dalt

3/27/09

Yesterday’s late rally came after an announcement that the Treasury had a better reception at their auction of seven-year bonds.  Wednesday was scary; buyers sat on their collective hands forcing the interest rates higher on five-year bonds.  Thursday’s auction caused a sigh of relief and propelled the market higher in the last hour.

Earlier in the day, the labor department announced 5.6 million Americans are out of work.  The Bureau of Economic Analysis revised the preliminary GDP numbers higher for the fourth quarter to an annualized rate of 6.3%.  The market was digesting these bits of bad news when the good news of bond sales buoyed investor confidence.

I have been voting proxies the last couple of days.  It makes me sick the way the executives line their pockets.  Jeffery Immelt takes money hand over fist out of GE while he manages it into the ground, and helps OH! Bama.  Google re-writes options for almost everybody, except shareholders, while their CEO helps OH! Bama.  Potash wants to issue millions of new options to reward management, while their share price has been cut by two thirds.  None of them like shareholder proposals to vote on pay, or any other transparency issue.  My response, vote against them all.

B.W. let me know that “In God We Trust” is on the edge of the new dollar coin.  I had heard this, in a story some time ago about a few coins that were released without the edge stamped.  I was angry about moving it to the edge then, and now.  I wonder how long before it wears off?  Our fore fathers came to this country for individual freedom from oppressive governments, economic freedom to pursue their dreams, and religious freedom to worship God. They did not dream of religious freedom from God.  Society was organized and rooted in a strong belief in divine guidance.  I do not know, maybe it is just me, but it upsets me our country moves away from God, and becomes more tolerant of every deviancy imaginable.

The postal system is losing money, over $2.8 billion last year.  What is new you say?  John Potter, the Postmaster just got a big bonus.  How do government employees get bonuses when they lose money (they all do), and then criticize private business for losing money?  I am looking for a picture of the USPS private jet.  Send it to me if you find it at feedback@galtstock.com

The House Republicans answered OH! Bama’s call to bring a budget forward if they did not like his, they did, and he does not like it.  White House spokesman Robert Gibbs panned that it took him “several minutes to read it”.  Other democrats criticized the effort, as it did not give them specific numbers to attack.  The blueprint calls for “less government, lower taxes and economic prosperity” while capping tax rates at 25%, banning any more bailouts for banks, and cut all spending except for defense.  The Washington Post has a short article on the proposal.

The markets lost ground today, but it wasn’t a rout.  Support of 815 held on the SP500.  Next week will be interesting.  The rally looks intact, but there are a lot of moving parts.  I always think of Murphy’s Law, it will break at the worst possible moment.  Be cautious.  We have a great new recommendation in the Long-Term Portfolio coming out Monday.

If you have not visited the web site lately, you really need to watch the video clip with Milton Friedman on the bottom of the home page.  When I am down, I watch it.  Milton Friedman was a true gift to our country.  Also check out Alan Keyes on the Diversions page.  If you missed it, I post the current Investor Business Daily "Big Picture" every night for your use.  This is by subscription only, but I have permission to share it with you.  There is a link on the top left corner of the home page.  These are just a few highlights, I try to give information and important insights every day to make you a better investor.  I truly appreciate your trust.  If you have any friends that could profit from the site, forward this letter to them.  I appreciate that too! 

A question off the top of my head.  When did income taxes become ‘refundable’?  This is one of those great twistings of the English language that socialists are so adept at.  Since welfare is not popular, we have refundable tax credits.  I kick the dog every time a politician talks about ‘investing’ in government programs.  Governments do not invest in anything; they take money from taxpayers under threat of force and dole it out to buy votes and occasionally do something of importance (defense).

Here is a picture that warms my heart.  The First Lady at a Soup Kitchen.

Refundable tax credits bought his cell phone with a camera, but not enough to buy food.  Thank goodness for charity.

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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