Three Days in A Row!
Research for Online Investors

by John Dalt

3/12/09

GE credit was downgraded before the bell this morning.  Their financial unit bonds were rated AA down from AAA.  This was expected, and not as bad as it could have been, and caused GE to gain 10%.

General Motors told the government they do not need emergency funds before March 31.  This created excitement and GM rallied 10%.  The joke is they may not NEED it, but they will file bankruptcy if they do not get $10 billion on April 1st.

Robert Hetz, Chairman of the Financial Accounting Standards Board (FASB) appeared before the House Financial Services subcommittee and committed to new ‘mark to market’ guidelines within three weeks.  This commitment plus the SEC working on the ‘uptick rule’ gave the market a boost.

$56 Billion was pulled from mutual funds Feb 29 to March 7  When markets are falling, everyone wants their money back!  This dries up liquidity by taking buyers out of the market when funds are liquidating to raise cash to pay out.  This scenario has played out for the last six months as the falling market created a negative feedback loop.  As the market fell, redemptions increased, creating more selling pressure on the market making it fall more.

We grabbed our third day up today.  This may turn out to be something, if buyers come back into the market.  Everyone wants to be part of a bull market.  I hope that it will not end before the new buyers show up.  The SP500 closed at 750; technical analysis looks like we have a clear run to 820.  That doesn’t mean we are going straight up, a little see saw action may make us sea sick, but we should work our way up to that level.  Use this rising market to get out of some of the weaker companies that looked attractive before the last dip to 666.  We have a couple of weeks before early earnings reports may throw cold water on everyone.

An interesting article appeared in the New York Times today about Maxine Waters (D) congresswoman from California.  You know who she is, if you have ever seen her, you will not forget the embarrassment.  Every time she utters half sentences, you wonder how she was elected.  It seems she intervened with the Treasury last fall to funnel some Federal funds to a bank that her husband served on the Board of Directors.  Read the article here.

When incompetent people are elected to government, and government becomes powerful, rather that limited.  This is the dilemma in ‘Atlas Shrugged’, inspiring our name GaltStock.  This is the danger we are facing today.  People that could never survive, except by charity, attain power and use it to line their pockets and punish true producers of wealth.  All I can say is work hard and be careful to protect your wealth, the do-gooders and planners want most if not all of it.

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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