Agora Financial’s Rude Awakening

Jump to Comments

Sousse, Tunisia

• An “A to H” of America’s economic weakness (think dollars, oil and big “guvmint”),
• A couple more housing bust pair trades to jolt your thinking,
• Suck that gut in fellas, it’s random body scan time! All that and more…

Joel Bowman, reporting from the Russian vacation town of Sousse, Tunisia…

Before we hear your thoughts in today’s special mailbag edition of the Rude Awakening, let’s take a quick snapshot of the market activity. A dour day for the Dow yesterday; the industrial average slid about 108 points and will begin today’s session on 12,160.30. The S&P and Nasdaq followed similar trajectories. The two dipped .68 and .69% respectively and will start the day off on 1,350.93 and 2,457.73.

The greenback took a breather after two days getting pounded by the Yen and the Euro. The buck snapped back slightly yesterday and will buy you 108.26 Japanese yen or 0.6458 euros.

Over in the commodity pits, oil refuses to budge much from the mid 130’s, despite assurances from the Saudi King that another few hundred thousand barrels per day will be hitting the market next month. Crude trades at $134.70 as of this writing.

And, in the shadow of oil’s headline grabbing rise, gold holds steady around $886 an ounce.

In lieu of government reports regarding consumer confidence and inflation figures, we decided to take the Rude pulse to bring you a feel from ground zero of the economic slowdown. If you’d like to send in your own comments, market observations and “ah-ha” moments, please direct your emails to the address at the bottom of this message. Enjoy…

—- Penny Stock Fortunes Special Report —-

Get Ridiculously Wealthy as Tiny Stocks Explode

How you can turn just $200 into $1.2 million, or MORE!

You Could Be Getting Rich With Scientifically Selected Penny Stocks. My CXS Money-Multiplier System Finds Enormous Gains, and It’s Incredibly Easy. I’ll Tell You When to Buy and Sell. The Profits Can Be Astounding. You’ll KICK Yourself if You Miss This Chance!

Grab Your Detailed Report Right Here

——————————————–

We begin today’s mailbag with the bad, then move through to the good, and finally wrap it up with the ugly. A good dose of doom and gloom up first…

In my humble opinion, we are a nation stressed beyond our ability to spring back. We have no resilience left. This was brought about by a number of things that all contributed to our eventual demise as a strong economy. One cannot point to one particular item and say that it has caused our financial downfall. For instance, the high price of oil was due to the devaluation of the dollar (at this point). At a later date, higher oil prices will be due to lack of new discoveries of economical to extract oil.

Some of the contributing factors are as follows:

A) A free floating dollar as the world’s currency. This allowed us to flood the world with a wasting asset beginning in 1971.

B) Loss of manufacturing and exports has drained our financial resources beginning with our complacency for efficiency and quality.

C) The “forever” war in Iraq has severely strained our financial health to a point of no return. There will be no end to this drain.

D) Fiscal incompetence of our politicians and a lack of statesmanship among our administration and legislature.

E) The general public’s lack of education regarding finances, governmental and personal, and preparation for their own future.

F) Taxation beyond the 25% mark has severely restricted growth and capital investment in America.

G) The Federal Reserve and it’s short circuiting of normal financial corrections has caused the coming crisis and depression.

H) Lack of responsible business character to the public of bankers with mortgages and credit card accounts.

— Your Account Has Been Flagged —

As an Executive Series member, you’ve been invited to upgrade your account to receive our finest financial publications…for life.

You’ll also grab over $6,000 discount to our most elite investment circle if you choose to take us up on the offer.

But you must act fast – the Agora Financial Reserve is only open for a very limited time… Read On Here

———————————————-

And another, from reader Charley Orr…

Here’s my take on the greatest threats/issues facing market stability in the months ahead.

1. The credit crunch will continue to force the Fed to pump cash to the extent that the dollar will continue to decline to its real value (%#&*). Related defaults in finance, housing and commercial categories will exacerbate the pain.

2. All this will push commodity prices higher yet, particularly oil and food with their fundamental tailwinds of demand and scarcity.

3. The Gulf States will delink from the dollar for the coup de gras.

4. Interest rates will skyrocket shutting down the economy, igniting unemployment.

5. The solution is to GET OUT OF DEBT AND:

a. Short the dollar, S&P 500, Treasuries, finance sector, auto sector.

b. Own physical precious metals (not ETF’s or certificates) and automatic weapons.

c. Long gold/silver stocks.

d. Open overseas investment accounts and bug out of the USA. Move to South America – Brazil, Argentina, Uruguay, or move to Panama and buy a farm.

e. Lay low until the dust settles in 10 or so years.

Regardless of who the next president is, things will get suckier in the USA.

If you can’t do the above items, learn how to say, “Do you want fries with that?” in Mandarin, grow a “defeat garden,” collect firewood and rain water. Get your hands on a sturdy cardboard box now while they’re still available.

If this isn’t gloomy or doomy enough, add a big war over oil and global famine in the mix.

All this is the worst-case scenario. Surely it won’t be this bad.

If you don’t like this take, you can stay tuned to CNBC and everything will be great. If you can move as close as possible to Larry Kudlow’s house you might even see Goldilocks.

——————————————–

Next up, reader Amy had this to say about our recent article, “The Demise of the RV.”

Unfortunately, I don’t have any thoughts about which depressing trend I could cash in on. I was, however, very interested in your article on RVs.

RVing never really “penciled out” as an economical means of travel. By the time you bought the RV, towed it or put (cheap) gas into it, and then parked it at a campground, you could have easily paid for airline tickets, food, rental cars, and a few nights at Motel 8 for several trips. We tent camp and I’ve have wanted a pop-up camper for a while. I figured out that we could buy brand new tenting/camping equipment each year for 10 years for the same cost of 1 used pop-up camper. Needless to say, that damped my enthusiasm for the pop-up camper quite a bit. RV’ers who buy a “Class A” vehicle trade 5-10 $8K trips just to pull their motorhome out of the parking lot.

It’s interesting that one of the cheaper components of the whole experience is causing middle America to calculate the costs of the RV travel. Not the $5k-$80K to buy the RV, not $50+ nightly campground fees, but gasoline prices that are still significantly cheaper than Europe’s. Gas prices obviously have a very special place in the American psyche.

And a suggestion from reader Brad Schug…

These RV manufacturing companies should be reinventing them selves. Why not use their manufacturing base to make the products that people really need in good times and bad that are now being made in China? Lower profit margins required to compete with Chinese companies is better than bankruptcy and higher U.S. unemployment!

— New Easy Money Options Report —

At last, the “secret” is revealed…

SUCCESS WITH STOCK OPTIONS: Once Difficult, Now Made Easy

The “pros” love ‘em…the gurus brag about ‘em…but maybe you were just never sure how to make stock options work for you…

Finally, the secret to making options pay… with much less risk and much less work… has just been revealed…for anybody who’s finally ready to get started… Details Here

——————————————–

And here, a couple of responses to our recent Rude group research project, in which we solicited a “long” and a “short” way to play the ongoing squeeze on consumer spending. [In case you missed the original group research columns, you can view them here: Part I and Part II.]

Reader Paul Jaber suggested:

Here’s another pair trade for you and Eric. How about short CCL, Carnival cruise lines, and go long TK, Teekay shipping.

Going forward ships are going to be better suited for transporting valuable cargos of oil rather than overweight, over indebted baby boomers who’ve decided they’ve waited in one buffet line too many. Keep up the great work guys.

Reader Kevin Beck weighed in with:

Buy Cash America (the pawnshop chain) and Sell Williams-Sonoma (the upscale appliance store).

I know this is a little late for the subject, but this one just came to me last night (in a dream). The thought here is that there might be less spending on things of conspicuous consumption, combined with more spending for items of similar utility in a less expensive fashion.

———————————

And finally, Zach Turcotte draws our attention to the continued erosion of individuals’ liberties at the airport. This one gets us every time.

Dear Rude,

I love the work you do. I am sure this article caught your eye today, but if not, I just can’t help but to pass it along.

Random body scans now at the airport. I know I feel safer knowing that 70 year old women along with a uniform cross section of society will now be humiliated before boarding their flights. What’s next, rubber gloves and cavity searches?

[Rude Endnote: Some can only hope, Mr. Turcotte. Not us though. When he lived in Baltimore, your younger editor used to amuse himself by standing outside random bars and restaurants and, in plain clothes, asking patrons to show their identification before entering the premises.

It’s absurd how easily people will give up their personal details these days. We always gave up the gaffe, of course, and pointed this absurdity out to our fellow citizens. Most thanked us. Others didn’t seem to get the point of the exercise and marched on, ready to surrender whatever personal items the next joker arbitrarily demanded from them. Strange days, indeed.

Until tomorrow…

Cheers,

Joel Bowman
Rude Awakening

aussiejoel@the-rude-awakening.com