strategist

Worlds collide: US Sec of Treasury with Plans to Save the Financial Markets

The very idea of saving Wall Street while letting Main Street go down in flames is going to be a tough one to sell for many reasons. One, why should taxpayers save the Wall Street fat cats who earn those multi-million salaries? Two, what ever happened to the moral hazard thing I studied at school? Three, having to sell one's Porsche or house on the lake is not a signal of a sad event when so many regular folks are having to sell their homes at rock-bottom prices. And last, it would be nice to see some of those pompous MBA-holders seeing how the real people live: within their financial means.

Though I have never personally met Paulson (I did see him one day when he popped into my office for a visit so many years ago), the US Democratic-controlled Congress will never allow the Bush White House to ride into town and save the people. Not going to happen. The Democrats will do their very best to let this drag on until the elections.

Perhaps the US government can nationalize Bear Stearns and then, recapitalize the firm to the tune of a couple of trillion bucks and then, go out and buy up all the distressed mortgages throughout the country. This would allow good people to remain in their homes and try to work out their mortgage problems. And for those who choose to walk away, the US government can use all those homes as 'mark work projects'. Those empty homes will need to be fixed up and resold. All that work is going to help a lot of unemployed people.

Sen. Obama's Speech: What is the future for the Union?

I never caught the speech on video but I did read it in full thanks to the NY Times. With a strong voice, he told his fellow Americans and the rest of the world that 'yes' - he is ready to be the Democratic nominee come November. And 'yes' I believe he can be a great president. My only worry is that the extreme right wing of the GOP may come at him and the Democratic Party with attack ads that will tear about the union. And by doing so, the extreme right may look at dismantling the past 40-50 years of US history.

I am sure that many who belong to the fringe of the GOP would love nothing better than to bring back, "separat but equal", "full segregation" and "laws preventing inter-racial marriages". The Dem nominee and his/her brain trust have come up with more than ads about 'Iraq' and the 'economy' in order to win the White House and take over both the House and Senate.

I know that should Hillary get the nomination, the attack ads will start immediately. Both Dem and Repub political strategists and their financial backers are preparing for the fight of the century. And in a knock-down rumble, Clinton & Co. are better suited for the war. Now, if the McCain Camp and his backers are willing to fight according to the Queensbury rules, then Obama and Team should be on the battlefield.

This summer is going to get very ugly and bloody on Sunday morning political talk shows. And satellite radio is going to get much more brutal.

BOJ Chief: Job Vacancy

With the two major political parties fighting to see who can spit the farthest, the world markets are anxiously waiting to see who will takeover as Head of the BOJ. Fukui-San has already left the building. With no one watching the 'candy store', I suspect currency traders may try to sink the dollar (sell it really short) and see if/when the LDP forces the DPJ to accept another yet-unnamed former vice-minister from the MOF. Possibly, we'll be able to see the Yen pop beyond the 95 mark by the end of next week.

Bear Stearns: RIP?

With the Fed and Chase backing Bear Stearns is there any chance the bank will survive? I don't think so. Anyone with a brain who is working at Bear has got to be (1) taking any call from a headhunter, (2) updating their cv, (3) praying that the company will give them a very generous severance package and (4) hoping that some sucker will pay top dollar for their overpriced and over-sized apartment in NYC.

If the Bush White House is smart, it would stop funding the Iraq War and the War on Terror and use the monies to (1) nationalize all banks and mortgage lending institutions immediately, (2) start charging countries around the world the going daily rate of $10M to keept US soldiers stationed in foreign lands, and (3) sell off at least 1/3 of its gold stockpile. With gold hitting $1000 an ounce, only a fool would want to hold onto the metal now. Take the money and run - is a smart thing to do.

Japan's SWF: US$1 Trillion

If the Japanese government is serious about putting the country's foreign reserves to better use via a SWF, I would be happy to help. Okay - I won't hold my breath on PM Fukuda asking me at anytime soon. I'm sure the LDP and DPJ are getting some hard sales pitches from the likes of Morgan Stanley, Goldman Sachs, Lehman Brothers and the rest of the Otemachi Street Gang. Here's what Japan should buy:

1.) General Electric (dump Universal and NBC) (then, start building a dome over the country with GE Plastics),
2.) AOL (then, put it down for good and instead, do something with Netscape),
3.) Panama Canal (then, raise the fees on container ships by 100x),
4.) Nevada State (in 50 years, Nevada will all be beachfront property), and
5.) McDonalds (it really is a license to print money).

Next Educational Challenge: Law

I have decided to give the study of laws a shot. While I won't have the right to practice laws as an attorney, nor do I wish to do so, I will have the opportunity to gain a better understanding of the laws in general. I am torn between grounding my programme around corporate laws or a general study of laws. Tune back in a couple of years and see well I am doing with my programme.

JPN Yen: 101 in March 2008 (Part II)

Well, the JP Yen hit the 101 level versus the US dollar last week. I guess it is time to revise downward the US dollar in light of the vast consensus that markets will continue to put downward pressure on the greenback. With oil hitting $106 per tub and the US Congress unwilling to take on the Bush White House, you can understand how little confidence investors see the US economy getting better soon. Here are my next set of predictions:

US$: global markets will put an extreme amount of pressure on the dollar and let it fall to the 95 yen per dollar by spring 2009. The Euro will climb another 10-15% against the dollar as well.

November Elections: The Democratic Party will emerge with a strong mandate for change. They will take the White House and take both the House and the Senate. With control of both, world markets will both celebrate and worry. Celebrate in the sense that the US may withdraw its military forces overseas and try to make peace instead of war. And at the same time, the markets will worry that the US may begin to erect stronger barriers against foreign trade and take a more aggressive stance against the imbalance of trade.

EU: The global power balance shift will move away from the US and land on the doorstep of the EU. The men and women in Brussels face a daunting task: take a strong stance against the US and move more toward Eurasia and APAC or mainstain the status quo.

JPN Yen: 101 in March 2008

Talk in Tokyo that the JPN Yen will hit the 101 mark (US$) in March. I do not believe it. I feel the JPN Yen will rise above 100 yen and may actually touch 98 by the end of the month. This new surge in interest in the JPN Yen will be result of three major factors: (1) US credit crisis is spilling over to all global credit markets, (2) expectations that many US companies Q1 results are going to be horrific, and (3) the Fukuda government caught between a rock and hard place now that the DPJ is going to make the LDP's life in the lower chamber a living hell. Nothing good will come out of having the Japanese government (upper and lower houses) split between the two main groups. If the LDP regains power of both houses, I would expect some good to come. But, the next election is far away.

Prince Harry Serving Overseas

When I read in the news that Prince Harry was serving in a war zone, I was both proud and scared. Proud that a British Royal was serving and scared at what might happen should he be injured or worse. It is most unfortunate that his presence overseas was publicized early and he could not finish his tour. Regardless of his past indiscretions, he is making Britain proud by fighting overseas. For England!