Galt Stock Daily
Fast Profits, Limited Losses in a Changing Market!

by John Dalt

12/15/08

On Friday, the retail sales report by the U.S. Commerce department was better than the market expected.  After the high unemployment numbers earlier in the week, the market was expecting a significant drop.   Retail sales declined by 1.8% in November, lead by car sales flat lining and the price of gasoline down by over 50%.   This was the fifth straight month of falling sales.  The encouraging breakdown of this report is that if you exclude car sales, gasoline and building materials; retail sales actually increased 0.05%, the most since May.  The market traded sideways today waiting on the FED to cut rates tomorrow and the White House to give away money to Detroit.

Many are familiar with the term “Austrian Economics”, but may not have taken the time to understand the importance of this school of thought.  I am reading F.A. Hayek’s classic “The Road to Serfdom” and thought of OH! BAMA!, Al Gore and the other world improvers when I read the following:

“Planning unites almost all of the single-minded idealists, all the men and women who have devoted themselves to a single task.  The hopes they place in planning, however, are the result not of a comprehensive view of society but rather of a very limited view and often the result of a great exaggeration of the importance of the ends they place foremost.  This is not to underrate the great pragmatic value of this type of men in free society like ours, which makes them the subject of just admiration.  But it would make the very men who are most anxious to plan society the most dangerous if they were allowed to do so.”

Hayek is not writing about our present politicians, his classic was first published in 1944!  His warnings were to England so they not follow the political path blazed by Nazi Germany and Stalin’s Russia. Totalitarian governments are a result of gradual democratic assignment of powers to regulatory planners that try to direct the economy.  Hayek warned us over 50 years ago, we are marching down the path that has been stumbled down before.  You can order the book here.

I will bring you more excerpts in the future as the author is impressive in his insight and arguments. 

A Quote from one of my favorite political humorists:

 "When buying and selling are controlled by legislation,

  The first things to be bought and sold are legislators”

                            P.J. O’Rourke

WARNING:  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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