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Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Friday, September 16, 2005

Post Bush Speech Impressions

People are reviewing how they can cut their fuel bills and whether
to trim or defer spending on the most discretionary items. So, maybe
oil/gas demand growth will decelerate for a while in the US at least.
Ditto for Europe.

The massive mid-Gulf redevelopment program will favor heavy industry,
construction, technology and industrial and commercial services.

Rotation should be pro-cyclical in the stock market.

As orders flow in to production sites, operating rates should rise,
and inflation pressures will broaden.

The bond market viewed rising oil and gas prices as a tax on consumption,
not an inflationary development. It will be vulnerable to rising operating
rates and higher sensitive materials prices.

Gold is a mug's game. It was safe enough to buy it in recent years
when it was selling below its commercial value, but it has just
moved above that level and the gold bugs and hucksters will be
coming out of the woodwork to tout it.

The economy is slowing now, but looks to pick up speed in 2006
as the big project down south unfolds. I do not know what the Fed
will do Sep. 20, but if the redevelopment program is as large as it
now looks to be, short rates could eventually go quite a bit higher.

There should be no dollar dumping from abroad, not when the US is
working out of an emergency situation. US retaliation would be swift.

You know George, he is going to try and borrow all he needs to
run the war, redevelopment and other programs that may be on
his short list. That could be a negative for the bond market.

The mis-handling of the rescue efforts in the Gulf in the
early going gutted Bush's presidency. If this inept man drops the
ball on the redevelopment program, his Party could be badly mauled
in 2006.

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