Ben Stooge
07-10-07, 01:40 PM
http://www.itulip.com/images/benstooge.jpgAnother View of the Economy from Abroad
by Ben Stooge, Corporate Press Weasel
I've been in a hotel in Germany for a few days smoking dope. Now you know why I sound the way I do when you see me on TV. I feel compelled by generous impulses to offer investment advice to readers based on the vast experience I have acquired these past few days from my perch at the hotel window and downstairs at the bar.
I'm pecking away at my HP (HP (http://finance.yahoo.com/q?s=HP)) laptop here in Berlin. The view out the window of the run-down Berlin Plaza Hotel is of the bear cages at the zoo. That's where bears belong! Doesn't smell as bad as you'd expect, as long as you keep the window closed. Then the problem is the bathroom. The toilet is the old "toilet shelf" version unique to Germany and familiar to old timers or anyone who stays in a brothel like this one.
After smoking a fat one, a few thoughts on sex and kangaroos occurred to me. I can't remember what they were. So I'll talk about the economy instead.
Subprime Sublime
You've been reading about the subprime mortgage meltdown and a few lenders balking at the latest ridiculously overpriced private equity deals, and the slathering of corporate balance sheets with gazillions in debt so that they can't even make the first payment, like some crank junky in North Carolina who bought a zero down, interest only, stated income, adjustable rate mortgage. Don't panic! Not yet. Wait until everyone else does, then try to sell! The other writers on iTulip say panic now and avoid the rush. That's irresponsible.
If I've told you once I've told you a million times, subprime is an itty, bitty slice of the mortgage market pizza pie. Maybe it's one slice of an eight slice large pizza. What's that? Maybe 15 percent? (Pizza's sounding really good right about now.) Maybe 15 percent of these crank heads don't pay up, so what's 15 percent of 15 percent? I don't know, but it's not much. Even if they all burn their houses down they'll still sell for half what they're worth. Maybe that's 1 percent of the $13 trillion US economy. Who'd notice? Not me.
The Economy is Kicking Ass!
Thank God some of the LBO deals are coming apart. Just shows that the banks have finally sucked all the money they're going to get out of the retail market for now. Did I say that? What I meant was that lenders are clearly using their heads for a change, instead of making decisions using other parts of their bodies. And that's good and healthy. Do you think banks are stupid enough to fund a private equity deal for $39 billion for a commercial real estate company at the tippy top of a commercial real estate bubble? Of course not. I rest my case.
And these deals are nothing, irrelevant in the context of the mega huge US economy. Why worry about private equity players having to shell out more for loans at the same time mortgage rates are rising, credit spreads are widening, the CDO market is melting down, the rating agencies are lowering ratings on ASBs, housing prices are falling, retails sales are dropping, and firms are slowing their hiring? Why worry that these things might signal the top of the credit bubble and maybe a recession? Waste of time. Go back to sleep!
Actually, I take it back. If interest rates keep rising, we got problems. Say they go up two percentage points higher. That will put a sledge hammer to the net present value of stock market earnings and dividends. But the market doesn't think that is going to happen or it would have crashed already. But don't rule it out. It takes a lot of euros to buy a beer or ten here, so I can say with authority that the dollar is not doing so well, especially considering the euro is a joke. U.S. Treasury rates are feeling their way through a post "we don't want any" auction last week. Meanwhile, the US aircraft carrier Enterprise joins the fleet in the Persian Gulf, where Iran awaits them with Russian SS-N-22 Moskit and SS-NX-26 Yakhont torpedos designed to defeat the defenses of a carrier battle group, militants almost succeeded in assassinating Pakistani President Pervez Musharraf, and then Iran doesn't need to build its own nukes. But I'm rambling.
Selling is for Morons and Traders
Fact is the economy is kicking ass big time. Profits have reached a permanently high plateau. I'll say it again. Don't panic yet!
You see, you just don't matter. This is a traders' market. They sell with the press of a button on the keyboard. Bang! Your money's in their account. Your job is to stay on the other side of that trade, the wrong side. My job is to help you stay there.
Not convinced? Ok, so we have all these problems now. But I'm loving the long term prospects for the U.S. economy. Sure you got your nuclear terrorism, your potential sinking of the US carrier fleet and the closing off of 30% of the world's oil supplies, and that might happen tomorrow. But if you live for another 20 or 30 years, these problems will have either blown up or been resolved, and if they do you'll look back and say, "I sure wish I'd listened to Ben Stooge and bought stocks July 2007!"
International Conspiracy
I can see Europe booming out my window. These Germans sure live well, considering you can't fire them and their taxes are sky high. Their health care is better than in the US. It's weird. And they haven't invaded anyone for decades. Same with the rest of Europe, except maybe France, where they have all the riots and problems with mooslins.
You'd all love watching TV here. No, I don't mean the bondage channel. I mean the investing. You can invest in Africa! Can you believe that? Europeans haven't abandoned Africa to China the way the US has. They also encourage investment in Russia. You can buy your own gas and oil contracts so you don't freeze your ass off like a Ukrainian. The world economy sure is on fire, or will be soon enough.
What's this to you? Buy Templeton Emerging Markets Fund (EMF (http://finance.yahoo.com/q?s=EMF)). It operates as a diversified, closed-end investment company. It primarily invests in equity securities. The fund's investment portfolio comprises investments in semiconductors and semiconductor equipment, wireless telecommunication services, metals and mining, diversified financial services, industrial conglomerates, household products, commercial banks, and machinery sectors. It's only up 300% since 2002. What could possibly go wrong?
Keep buying Emerging Markets Telecommunications Fund Inc. (ETF (http://finance.yahoo.com/q?s=ETF)). Sure, it's up more than 400% since 2003, as telecommunications takes off everywhere. What's going to stop it? Not me.
You Dress Like a Child so Knock it Off
Americans dress for work like slobs and children, even when doing LBOs. How are you supposed to feel good about paying $39 billion to kids in t-shirts and blue jeans? Me, I'd rather get ripped off by a guy in a $6,000 Brioni.
Pulling it all together, life is better for these German Socialists that I expected. They dress well, but the toilet stinks. You should dress better, but stick to American toilets and buy stocks now.
Ben Stooge is a corporate press guy who writes for iTulip. He does not own any of the stocks, ETFs, or other crap he shills and rarely knows what he's talking about, but that doesn't keep him from expressing his opinions.
iTulip Select: (http://www.itulip.com/forums/showthread.php?t=1032) The Investment Thesis for the Next Cycle™
__________________________________________________
Special iTulip discounted subscription and pay services:
For a book that explains iTulip concepts in simple terms see americasbubbleeconomy
For macro-economic and geopolitical currency ETF advisory services see Crooks on Currencies (http://www.isecureonline.com/reports/CRC/WCRCH100/)
For macro-economic and geopolitical currency options advisory services see Crooks Currency Options (http://www.isecureonline.com/reports/CCO/WCCOH212/)
To receive the iTulip Newsletter or iTulip Alerts, Join our FREE Email Mailing List (http://ui.constantcontact.com/d.jsp?m=1101238839116&p=oi)
Copyright © iTulip, Inc. 1998 - 2007 All Rights Reserved
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Nothing appearing on this website should be considered a recommendation to buy or to sell any security or related financial instrument. iTulip, Inc. is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. Full Disclaimer (http://www.itulip.com/forums/../GeneralDisclaimer.htm)
by Ben Stooge, Corporate Press Weasel
I've been in a hotel in Germany for a few days smoking dope. Now you know why I sound the way I do when you see me on TV. I feel compelled by generous impulses to offer investment advice to readers based on the vast experience I have acquired these past few days from my perch at the hotel window and downstairs at the bar.
I'm pecking away at my HP (HP (http://finance.yahoo.com/q?s=HP)) laptop here in Berlin. The view out the window of the run-down Berlin Plaza Hotel is of the bear cages at the zoo. That's where bears belong! Doesn't smell as bad as you'd expect, as long as you keep the window closed. Then the problem is the bathroom. The toilet is the old "toilet shelf" version unique to Germany and familiar to old timers or anyone who stays in a brothel like this one.
After smoking a fat one, a few thoughts on sex and kangaroos occurred to me. I can't remember what they were. So I'll talk about the economy instead.
Subprime Sublime
You've been reading about the subprime mortgage meltdown and a few lenders balking at the latest ridiculously overpriced private equity deals, and the slathering of corporate balance sheets with gazillions in debt so that they can't even make the first payment, like some crank junky in North Carolina who bought a zero down, interest only, stated income, adjustable rate mortgage. Don't panic! Not yet. Wait until everyone else does, then try to sell! The other writers on iTulip say panic now and avoid the rush. That's irresponsible.
If I've told you once I've told you a million times, subprime is an itty, bitty slice of the mortgage market pizza pie. Maybe it's one slice of an eight slice large pizza. What's that? Maybe 15 percent? (Pizza's sounding really good right about now.) Maybe 15 percent of these crank heads don't pay up, so what's 15 percent of 15 percent? I don't know, but it's not much. Even if they all burn their houses down they'll still sell for half what they're worth. Maybe that's 1 percent of the $13 trillion US economy. Who'd notice? Not me.
The Economy is Kicking Ass!
Thank God some of the LBO deals are coming apart. Just shows that the banks have finally sucked all the money they're going to get out of the retail market for now. Did I say that? What I meant was that lenders are clearly using their heads for a change, instead of making decisions using other parts of their bodies. And that's good and healthy. Do you think banks are stupid enough to fund a private equity deal for $39 billion for a commercial real estate company at the tippy top of a commercial real estate bubble? Of course not. I rest my case.
And these deals are nothing, irrelevant in the context of the mega huge US economy. Why worry about private equity players having to shell out more for loans at the same time mortgage rates are rising, credit spreads are widening, the CDO market is melting down, the rating agencies are lowering ratings on ASBs, housing prices are falling, retails sales are dropping, and firms are slowing their hiring? Why worry that these things might signal the top of the credit bubble and maybe a recession? Waste of time. Go back to sleep!
Actually, I take it back. If interest rates keep rising, we got problems. Say they go up two percentage points higher. That will put a sledge hammer to the net present value of stock market earnings and dividends. But the market doesn't think that is going to happen or it would have crashed already. But don't rule it out. It takes a lot of euros to buy a beer or ten here, so I can say with authority that the dollar is not doing so well, especially considering the euro is a joke. U.S. Treasury rates are feeling their way through a post "we don't want any" auction last week. Meanwhile, the US aircraft carrier Enterprise joins the fleet in the Persian Gulf, where Iran awaits them with Russian SS-N-22 Moskit and SS-NX-26 Yakhont torpedos designed to defeat the defenses of a carrier battle group, militants almost succeeded in assassinating Pakistani President Pervez Musharraf, and then Iran doesn't need to build its own nukes. But I'm rambling.
Selling is for Morons and Traders
Fact is the economy is kicking ass big time. Profits have reached a permanently high plateau. I'll say it again. Don't panic yet!
You see, you just don't matter. This is a traders' market. They sell with the press of a button on the keyboard. Bang! Your money's in their account. Your job is to stay on the other side of that trade, the wrong side. My job is to help you stay there.
Not convinced? Ok, so we have all these problems now. But I'm loving the long term prospects for the U.S. economy. Sure you got your nuclear terrorism, your potential sinking of the US carrier fleet and the closing off of 30% of the world's oil supplies, and that might happen tomorrow. But if you live for another 20 or 30 years, these problems will have either blown up or been resolved, and if they do you'll look back and say, "I sure wish I'd listened to Ben Stooge and bought stocks July 2007!"
International Conspiracy
I can see Europe booming out my window. These Germans sure live well, considering you can't fire them and their taxes are sky high. Their health care is better than in the US. It's weird. And they haven't invaded anyone for decades. Same with the rest of Europe, except maybe France, where they have all the riots and problems with mooslins.
You'd all love watching TV here. No, I don't mean the bondage channel. I mean the investing. You can invest in Africa! Can you believe that? Europeans haven't abandoned Africa to China the way the US has. They also encourage investment in Russia. You can buy your own gas and oil contracts so you don't freeze your ass off like a Ukrainian. The world economy sure is on fire, or will be soon enough.
What's this to you? Buy Templeton Emerging Markets Fund (EMF (http://finance.yahoo.com/q?s=EMF)). It operates as a diversified, closed-end investment company. It primarily invests in equity securities. The fund's investment portfolio comprises investments in semiconductors and semiconductor equipment, wireless telecommunication services, metals and mining, diversified financial services, industrial conglomerates, household products, commercial banks, and machinery sectors. It's only up 300% since 2002. What could possibly go wrong?
Keep buying Emerging Markets Telecommunications Fund Inc. (ETF (http://finance.yahoo.com/q?s=ETF)). Sure, it's up more than 400% since 2003, as telecommunications takes off everywhere. What's going to stop it? Not me.
You Dress Like a Child so Knock it Off
Americans dress for work like slobs and children, even when doing LBOs. How are you supposed to feel good about paying $39 billion to kids in t-shirts and blue jeans? Me, I'd rather get ripped off by a guy in a $6,000 Brioni.
Pulling it all together, life is better for these German Socialists that I expected. They dress well, but the toilet stinks. You should dress better, but stick to American toilets and buy stocks now.
Ben Stooge is a corporate press guy who writes for iTulip. He does not own any of the stocks, ETFs, or other crap he shills and rarely knows what he's talking about, but that doesn't keep him from expressing his opinions.
iTulip Select: (http://www.itulip.com/forums/showthread.php?t=1032) The Investment Thesis for the Next Cycle™
__________________________________________________
Special iTulip discounted subscription and pay services:
For a book that explains iTulip concepts in simple terms see americasbubbleeconomy
For macro-economic and geopolitical currency ETF advisory services see Crooks on Currencies (http://www.isecureonline.com/reports/CRC/WCRCH100/)
For macro-economic and geopolitical currency options advisory services see Crooks Currency Options (http://www.isecureonline.com/reports/CCO/WCCOH212/)
To receive the iTulip Newsletter or iTulip Alerts, Join our FREE Email Mailing List (http://ui.constantcontact.com/d.jsp?m=1101238839116&p=oi)
Copyright © iTulip, Inc. 1998 - 2007 All Rights Reserved
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Nothing appearing on this website should be considered a recommendation to buy or to sell any security or related financial instrument. iTulip, Inc. is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. Full Disclaimer (http://www.itulip.com/forums/../GeneralDisclaimer.htm)