We Have Tried Spending Money...
Research for Online Investors

by John Dalt

2/2/10

How long will it be before we hear this admission before the House Ways and Means Committee?  “We have tried spending money, we are spending more than we have ever spent before and it does not work. I say after eight years of this administration, we have just as much unemployment as when we started….and an enormous debt to boot.”  Don’t you wish OH! Bama would read the testimony of Henry Morgenthau, Jr. Treasury Secretary for FDR? This testimony was in May 1939, unemployment was above 20%, six years after the NEW DEAL’s inception.

How many times have we heard Bernanke or Geithner tell us, the great unwashed, they are not going to make the same mistakes that were made in the Great Depression?  They are making EXACTLY the same mistakes.  The Federal Government went on a spending binge in the 1930’s thinking if the government didn’t do something….   What they did was expand government, borrow money, and still unemployment remained high.

Yesterday’s MarketToday article on the Budget Death Spiral was a research nightmare.  As happens some times, we spend more time researching than we do writing.  Sometimes your editor gets distracted by information found during the research and changes directions, or notes it for another day.

Some data begged to be covered more than yesterday’s article allowed.  Next year’s budget is for $3.83 trillion, an estimated 26% of GDP.  THE HIGHEST RATE SINCE 1943 thru 1945  This year’s deficit is projected at 10.6% of GDP.  THE HIGHEST RATE SINCE 1942 thru 1945.  Higher than 1930 to 1941 in both cases.

I just hope Maobama does not start a war to take people’s attention away from his failures.  War, and the patriotic swell that follows, is the last option for narcissists.  When citizens begin to see the king has no clothes, an enemy must be defined to take the gaze off his bareness of substance

Ford (F) is trading near its 52-week highs, we were reminded today why.  In January Ford increased sales 24% year-over-year, while General Motors sales rose 14%.  Toyota lost 16%, some attributable to their sticky throttle problem.  Honda lost 5%, and Chrysler trailed with an 8% loss.  Everytime I look at Chrysler, I think of 'Dead Man Walking.'

Ford benefited from fleet sales and rental company purchases for 37% of their sales.  Showroom sales were down, as expected, by 5%  Reuters has the bad news for foreign automakers, “Ford, GM outsell recall-wracked Toyota.”

Subscriber D.E. sent in a link to the Foundation for International Community Assistance (FINCA) page on Haiti, with his personal recommendation.  FINCA provides microloans to poor people in developing countries.  The headlines will be bad out of Haiti for some time; FINCA serves over 11,000 people in there.  Ninety percent are women, with the average loan of $320.  I would think some of these budding entrepreneurs will be integral in rebuilding the country.  Perhaps this is an organization that fits your desire to help.

We also want to thank our subscribers who gave money to Hospital Albert Schweitzer (HAS).  We are working in Galt’s Long-Term portfolio to make your money back for you!

It feels good to help people who have suffered from a natural disaster.

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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