Sunday, April 1, 2012

Review of Barron's -- Dated 2 April

April Fool!  No, I will review this weekend's Barron's because it's actually a pretty good issue.

The Cover Story is Jim McTague's article on how he is pretty sure that the Republicans will win the Senate and hold the House this November, probably even if Obama wins re-election.  Currently "Team D" has a 53 - 47 edge in the Senate, but they have a lot of D's up for re-election along with some retiring.

I have not been doing much political research, just listening to the radio, which does not provide the kind of analysis that McTague, a real pro, provides.  He writes of an interesting concept I had not run into before, namely that what is often MOST CRUCIAL in close races is NOT the most money raised, but the most money raised WITHIN the state in question (for Senators).

A lot of dominoes have lined up well for "Team R", money, redistricting (uh, the correct term for "gerrymandering"), anger among voters re Obamacare, etc.  McTague predicts about a 53 - 47, but with Team R in the majority.

McTague brings along some other expert views, including well known UVA politics guru Larry Sabato.

The article is excellent.  Bravo Mr. McTague!


Barron's pet bear Alan Abelson writes of Spain, which is currently undergoing strikes and high unemployment.  Even the "escorts" in Spain have gone on strike, if you are a BANKSTER!  Spain is the 4th largest economy in the EU, so the pain in Spain is felt mainly by the plain Joses...  Sorry...  He wrote that!  Spain having big problems is BAD for their banks and would be VERY BAD if Spain collapses.  He thinks that Spain will hang in there, barely, as will the Euro.

China had a bad week too, and may be heading for a hard landing...

Abelson then goes on to write about Apple (ticker: AAPL) and how much influence the company now has on the Nasdaq index.  Apple jumped a majestic 48% in the first quarter of 2012, doing better than the equities market as a whole, which had its best first quarter since 1998...

He finishes up with some interesting information on oil prices and inventories.  It seems to be recognized that there is an Iran premium built into current prices, but it turns out the we hold MUCH higher crude oil inventories than normal.  Crude oil prices could very well go down, maybe hard.

I always read Alan Abelson, one of the many pros there at Barron's.


Michael Santoli ("Streetwise") writes that LOTS of insiders are selling...

I also saw at the "144 Filings" that Howard Schultz (SBUX) sold $47,000,000 of Starbuck's stock and Robert Toll of Toll Brothers (TOL) sold $48,500,000 of stock.

These are relatively big numbers since I have been following the 144 Filings.


"He Said":

"We did stop the meltdown...  Without the forceful policy 2008...we could've had a much worse outcome."

The Bernank in a lecture to students, FWTW...


There is an interesting article on oil pipelines and changes that may be coming to how oil is moved about and refined in the US.  Bill Alpert writes ("Going With The Flow") writes that there are several projects being looked at (building pipelines, and reversing the flow of oil in existing pipelines) that will allow more crude to get to the Gulf of Mexico refineries (as opposed to the refineries in the central USA).  One or more of these proposals would help to narrow the big difference between West Texas crude price vs. the Brent crude price.  One result might be that refiners in the central USA would get hurt.

A very interesting article, highly recommended if you follow energy or oil.


Vito J. Racanelli has an interesting interview with Howard Schilit, who is perhaps America's premier forensic accountant.  These are the guys who burrow deep into companies' books to look for fraud, etc.

It seems that auditors care more for getting the legalities right ("CYA") rather than providing investors with all relevant information...  And the monkey-business keeps going on...  That is why Schilit came out of retirement, still LOTS of bogus info, with a disclosure in footnote 23...


Tiernan Ray (Technology Week") looks again at Apple and their impressive recent performance and how BIG they are relative to all the rest.  Apple's market value increased by $180 BILLION in the first quarter, more than the value of most of the Dow's components.

He also writes of the travails of Research In Motion (RIMM).  Their new CEO is trying to make RIMM a player again, it is unclear what the fate of RIMM (makers of the Blackberry) will be.


Mark Veverka ("Plugged In") writes about's (CRM) new social networking product for companies (sort of like Facebook for businesses).

There's a race on in this sector...


Brendan Conway ("ETF Focus") writes a column on the ETFs making it possible to trade on the VIX (a volatility index).  There is even a 2 x VIX (ticker: TVIX).  The most popular of these VIX plays is the VXX ETN.

Um, IMO amateurs ought not play this stuff, not me, no gracias!


In the book review section there are four promising books:

-- Thomas Thwaites, The Toaster Project, in which he attempts to build a toaster from scratch using only components from the UK (where lives), turns out it was VERY HARD to do that.
-- Adam Lashinsky, Inside Apple, a different take on Apple than the recent Steve Jobs (yeah, he was an "a--hole") book.
-- Robert Kagan, The World America Made, a defense of the USA's foreign policies.
-- Eric Klinenberg, Going Solo, about the joys (?) of living alone...


Thomas Hazlett pinch hits this week for Thomas Donlan ("Editorial Commentary").  He writes an interesting piece (not really an editorial, but...) on the apparent shift in power from the telecom carriers (AT&T, Verizon, Sprint Nextel, etc.) to Apple (yeesh, these guys are going to take over the world!) and Google who provide the CONTENT and operating systems.  RIMM has kind of missed the boat, but companies like Microsoft, Apple and Google (none of whom any telecom network infrastructure) are now making the money and setting terms of cell phone services...


In the Market Week Section Vito Racanelli again lets us know stocks rose a very good 12% in the first quarter, the best since 1998.

Dan Strumpf writes at "Commodities Corner" that the very low prices of natural gas could go down even lower, even on a year or so basis.  There is just a lot around, and it is not being used up.  But, the future is better, as power plants are switching to cheaper and cleaner natural gas.  [ed. note, and we cannot switch some of OUR vehicles to natural gas like PERU has done?!?!]

Wow, LOTS of Classifieds this week!  A "cash cow" air cargo airline.  The 25,000,000 lbs of Chabazite is still for sale (for radioactive Cesium adsorption), 9 miles of Pacific coastline up for auction in Baja California Sur, and other interesting items.

Money Stuff:

-- Fed Total is at $2.933 trillion, IIRC that is even lower than when I left for Peru
-- No significant changes in M1, M2, or currency in circulation (although there was a 1.39% drop in the Monetary Base, FWTW).

And, yes once again The Mighty Peruvian Sol smashes upward yet again!  2.667 soles to the US$.  Good thing I got my haircut last week when it was about 0.01% cheaper!


Verdict:  YES, buy this issue, even if your reviewer was late in writing this up!

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