Arnold’s Ramblings 2-22-2011

[sharenow]

Hi,

The past week has been another amazing week! Now, not only is Egypt, Tunisia, Yemen almost certain to have a change in government; but Libya looks like another certainty. It appears as though before long the entire Middle East will fall. Bahrain is seemingly next; and Bahrain is connected to Saudi Arabia…

The Situation in Wisconsin has gotten a great deal of attention. Governor Walker’s demands against the union(s) and the demonstrations against Governor Walker. Arnold would like to make a few observations:

  1. Wisconsin was the first “Progressive” state in the Union. Wisconsin was the first state to encourage (read allow) collective bargaining for the public unions.
  2. There are somewhere near 350,000 employees affected by the potential legislation; yet less than 25,000 demonstrated. And with the higher numbers estimated at between 50,000 and 65,000; over two-thirds of the demonstrators came in from other states.
  3. There are several issues: the pension payments by the employees, the payments for health insurance by the employees, (these apparently have been accepted by the union), the state would no longer collect the union dues for the union, and the union would have to have an annual vote to be re-certified. The real issue is that the state will not collect the dues; which means that the union will have to collect the dues; which apparently is a daunting task.

The success (should there be success in Wisconsin) would spread to other states and this would potentially save the state’s budget shortfalls. There are 49 states that are looking at huge budget shortfalls.

The Republicans are proposing a $61 billion cut to the 2011 budget as though this were balancing the budget. The Tea Party people are screaming (correctly) that $61 billion is nothing (less than 2% of the entire budget); and the Democrats are acting is if the cuts are $2 trillion. I do not believe that the budget battle is going to be a successful result.

  • The DJIA is still looking higher, though I still can’t say why.
  • Oil has soared due to the Libyan situation. If we break $100 a barrel, prices will probably head toward $125.
  • Gold has risen back above $1400 the ounce; and we could see $1500 or even $1600 within the month or so.
  • The dollar is falling and should reach support before summer.
  • Interest rates are still in the 4.6% to 4.7% range for 30 year Treasuries.
  • Real estate pricing is now confirmed today to be at the lows and falling.
  • The economy continues to look weak to me.

Arnold
Disclaimer: Arnold’s Ramblings Inc. and/or its writers, representatives, employees, shareholders, executives and affiliates may have a financial interest in any security recommended to readers or otherwise mentioned. Nobody associated with this website or Arnold’s Ramblings Inc. is a registered investment advisor. Everyone should review investment materials in detail and with due dilligence when possible, and should consult proper counsel prior to investing. All information and advice presented by Arnold’s Ramblings Inc. is believed to be accurate and reliable when posted, but cannot be guaranteed.

Copyright 2011 Arnold’s Ramblings Inc., All Rights Reserved.

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[sharenow]
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