Hey there,
What did you think of the Vice Presidential debate between Palin and Biden last night? I thought it was fairly even which probably benefits the Obama camp. McCain really needed Palin to hit a home run and be the spark plug that she was when she first got appointed as his running mate since he has been losing ground to Obama in recent polls. The fact Palin held her own (the folksies dog-gon-it betcha and constant eye winks were a bit annoying…I really thought she was winking at me) was a home run in itself as the media has had a fun time with her lately. Well, I am looking forward to Obama and McCain squaring off next week.
Not sure if you saw, but the unemployment rate in the US held steady at 6.1%, an increase of 1.4 percentage points from a year before, with the construction, manufacturing, and retail sectors again serving as the culprits of the weakness. More specifically, payrolls fell by 159,000 in September. What’s more concerning is that the US government was the only sector to report an increase. Doesn’t that seem odd to you? During a period of time when the US economy is contracting, Wall Street has all but disappeared, consumer spending is down, homes are being foreclosed on at alarming rates, 401Ks are going south, and the US debt is out of control, and foreign investor confidence in the US economy is decreasing, the government is able to add more jobs? Sounds backwards to me. If anything, they should be leaning up and trimming off the fat. You can’t but feel that this is a sign for worse to come. In the end, this is another negative economic stat for the US and more reason to have cash on hand, precious metals investments, and an eye on potential stocks with low debt and high market share to buy.
What’s going on with this bailout plan? Will it pass today? The government wants us to call it a “rescue plan.” Why? It doesn’t sound any more positive. Maybe, they should call it the “America Investment Plan.” That sounds better. However, with each passing day, I have less and less confidence as to how this plan will benefit the people (the middle class). Maybe, the Fed should mandate that a bank must provide $1 in credit to the consumer for every $1 of crappy paper that it dumps into the bailout fund. That would increase credit to consumers. It looks like the revised bill is simply the previous version with a bunch of personal agendas attached to it, ultimately bailing out the ubber wealthy on Wall Street. Actually, the bill has grown from 3 pages to 450 pages! That’s a lot of personal agendas. In my opinion, the real reason the financial system is collapsing is because the financial firms no longer trust each other. The Fed Funds rate hit a record 7% on Tuesday. So banks are charging each other 7% on inter-bank loans. If the guys in the financial markets don’t trust each, why should we trust them? I really think this plan, if it gets passed, will be another finger in the dike. Our system is broken and needs to be fixed, rather than patched up. Maybe, that means the crooks need to be allowed to fail and then weeded out. That’s the only way we can ultimately change behavior.
Well, the market up nicely today. Maybe, this is an opportunity to cash out of stocks that focus on discretionary spending by the consumer. The companies that focus on the basic necessities are better positioned to prosper in this environment. Here is an interesting article to better understand my line of thought.
Hope all of you have a nice and relaxing weekend and try not to get into too much trouble. 
cheers,
Moolah
