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Getting worse at a slower pace is good news?

Benny' BLOGBenny’s picks & predicts BLOG

Benny … “The Smartest Cat in the Room”
benny@AskBennyTheCat.com

Happy Father’s Day to all you Dads! . . . I hope you did something fun for your special day! . . . I laid around outside on the patio and counted hummingbirds! . . .Now that’s what I call a full day!

Gas prices are going up at the pump again.  In fact, gas prices went up at the pump at the beginning of last summer, and the summer before that, and the summer before that, etc.  In fact, when I was just a kitten, I can remember my Dad commenting that gas prices seem to go up every summer for no apparent reason.  When in fact, there is an apparent reason.  Summer is the time when people go on vacations and people drive more during the summer . . . short weekend trips, flying and renting a car, cross-country road trips, or school’s out party animals going out to the beach.  Everybody drives more during the summer.  So, if you owned a gasoline refiner, or distributor, or a whole slew of oil wells, why wouldn’t you raise gas prices every summer?  It’s like found money.  And, if you think I’m making this up, go look at a chart of retail gas prices going back 10, 20, 30, 40, or more years.  Every year, just before summer, there’s a spike up in retail gas prices.  Go figure.  If you listen to the shippers, there’s oceans of oil out there looking for someplace to go.  But I’ll bet it won’t find a home until Fall when vacations are over and everyone’s back in school.

Can we take any more from the “worst is over”crowd?”  It seems that we are living in a world where things getting worse at a slower pace is being interpreted as good news!  We keep hearing from the talking heads that recovery has started, stocks are cheap, commodities are expensive, and there’s green shoots sprouting up all over.  I say, “cat poop!”  Apparently, these people don’t remember the last 40 years (or weren’t born yet) and don’t understand how long it took us to get into this mess and how long it’s going to take to get out.  Let’s go back to the early 1970′s when America started to outsource jobs to Asia to save money and put that extra profit to the bottom line.  First it was manufacturing jobs and then higher-skilled jobs that exited the country.  We then became a services (mostly financial) country.  This started large drops in the average American’s income and the beginning of the debt bubble that is now bursting.  Back in the 1970′s, one parent worked and the other stayed home to raise the family and they got by very well.  Now, both parents work and they can hardly make ends meet.  In fact, if you take into account inflation, the average American’s income has dropped 40%+ since then.  But all that time it seemed our lifestyle increased.  Why?  One word: CREDIT!  Then came a windfall for the banks issuing credit cards.  In 1978, the Supreme Court passed a law that allowed banks to charge the highest rate in their home state.  So banks moved their credit operations to Delaware and South Dakota where there were no limits.  Credit cards could fund the illusion of wealth and Americans quadrupled the debt they had on credit.  All the while, Americans were making less each year and spending more.  This is the exact fiscal plan the Government uses.  In the last 40 years, tax revenues have risen only 40% but government spending has gone up 2,600%.  To fund all this nonsense, we issue Treasury debt that we hope foreigners keep buying so we can spend more.  The other problem is jobs.  All these spending bubbles only created temporary jobs.  The housing bubble created a lot of construction jobs, the high-tech bubble created a lot of high-tech jobs, etc.  These faux jobs were fueled by people with no income and no assets getting mortgages. The real jobs…where we actually made things…were all sent overseas.   Legacy costs like pensions and medical care for retirees put GM into bankruptcy.  When you consider that the news tells us the U.S. will have a $1 Trillion deficit this year they are not telling you the whole story.  If you figure in Medicare and Social Security costs, we could see a $9 trillion deficit!  What’s really going to bring us to recovery is not throwing $787 Billion at a stimulus package (a mere drop in the litter box) but some real jobs where people make things again and we sell them to the World.  We need skilled workers not investment bankers, but we’ve thrown away $2 Trillion at Wall Street and insolvent banks.  Just wait until that derivatives meteorite hits the world!  Maybe we also don’t need military bases in 170 countries?  We’re starting to look like the Roman Empire, aren’t we?  Let’s start preserving and protecting the good ‘ol USA right here.  Let’s spend time and money getting people back to work making things again and stop worrying about Jon and Kate.

  • Read about how all asset classes are in a free-fall at this way cool site where I go to get all my “secret” information!
  • Let’s have some fun with these long picks for the week….AIPC (American Italian Pasta Co.), AU (Anglo Gold), CAJ (Canon Inc.), MRK (Merck), DRI (Darden Restaurants), and GG (Goldcorp Inc).
  • And here’s my “dogs” for the week (notice they call bad performing stocks dogs!) . . . XLE (Energy Select Sector SPDR), AZO (Autozone), SKT (Tanger Factory Outlet Centers), BBY (Best Buy), PG (Procter & Gamble), and MBB (iShares Lehman MBS Bond Fund).
  • Here’s a head’s up, Benny Fans!  I read in the CR News Reports© where more and more money is pouring into the market from retail investors.  However, at the same time, insider selling is at a high.  This smells fishy, and I don’t mean in the good way . . . you know, like Yellowfin Tuna Florentine.  I mean that you better watch yourself out there.  Someone’s looking to pull the plug and flush the little fish down the toilet in July.
  • Why listen to Cramer when you can listen to the Cat?
  • Did you ever realize that the news is never new?  It’s a history lesson by the time you receive it.  Get the News Before It Happens …Click on this link . . . www.CRNewsReports.com . . . and sign up for the FREE Trial.  Your Life, predicted ahead of time!  Be the smartest cat in your family!  Fill out the form in the upper left-hand corner of the Home page then watch your inbox for a confirmation email.  Why wake up to the news when you can get the news that wakes up the World?
  • When all the stores at the mall close up and commercial real estate developers are insolvent, what will we do with that space?  Find out at this blog entitled “Ghost Malls.”  You don’t want to miss this brilliant commentary.
  • Get the economy moving again…invest some of your money in something that will give you a long-term return – a Benny Mug!  Prove your Benny fandom and start your day with a giggle!  . . . Meow for Now! . . . Benny.

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