After Four Died, Obama Lied

Normally I try not to make politics too big a piece of my blog.  But, at this time it appears that Obama and various in his administration have LIED about what they knew (and when they knew it) re the terrorist attack in Libya.

Obviously not all of the details are in, and some of the media is trying hard not overplay this, but I have some comments (with links) here.  These are everything I could get as of some 5:00 PM US ET.

The below is a CBS news item telling what they know so far:

http://www.cbsnews.com/8301-18563_162-57538689/emails-detail-unfolding-benghazi-attack-on-sept-11/?tag=AverageMixRelated

They knew.  In that CBS piece, there are three emails sent to the State Dept. in Washington, DC re terrorists attacking.  This was HOURS after the attack, Obama and Susan Rice came out and blamed the "Mohammend Video" AFTER receiving these emails, make sure you see the third one:

http://www.cbsnews.com/8301-18563_162-57538689/emails-detail-unfolding-benghazi-attack-on-sept-11/?tag=AverageMixRelated


Reuters:

http://www.reuters.com/article/2012/10/24/us-usa-benghazi-emails-idUSBRE89N02C20121024

CNN:

http://www.cnn.com/2012/10/24/us/libya-benghazi-e-mails/index.html?hpt=hp_bn3

Snippet from above CNN story (excuse formatting):

The administration also suggested that an anti-Muslim video produced in the United States likely fueled a spontaneous demonstration in Benghazi as it had in Cairo, where the U.S. Embassy also was attacked.

Clinton, State Department spokeswoman Victoria Nuland and Susan Rice, U.S. ambassador to the United Nations, all cited the video as a motivating factor in the attack.

On September 13 -- two days after the attack -- a senior U.S. official told CNN that the violence in Libya was not the work of "an innocent mob."

"The video or 9/11 made a handy excuse and could be fortuitous from their perspective, but this was a clearly planned military-type attack," the official said.

However, it wasn't until September 19 that Matthew Olsen, the nation's counterterrorism chief, told senators that it was a terrorist attack. The next day, Carney also said it was "self-evident that what happened in Benghazi was a terrorist attack."

ALL of the above are Obama's friends!

And, to be "fair & balanced" here is a Fox News item:

http://www.foxnews.com/politics/2012/10/24/clinton-downplays-emails-implicating-al-qaeda-tied-group-within-hours-libya/

***

One could make a case that this scandal is bigger than Watergate was (no one died in the Watergate scandal).  It has been almost two weeks since the September 11, 2012 attacks in Libya.  They knew terrorists were behind this within hours (remember, September 11, oh, and WHERE WERE the mobs re the video???).  And STILL we have no clarity from the administration.   Yet the Left sure did make a big stink about "four dead in Ohio" (Kent State), which of course they were CORRECT in doing.  Why no cries now?  Hmm?

Time to come clean, Mr. President.

Review of Barron's -- Dated 22 October

Barron's has been on a roll lately with interesting Cover Stories.  This weekend's edition is a special report: "Technology Outlook: R.I.P. PC" engraved on a tombstone (maybe a tad early for Halloween?).  "PC" of course meaning the personal computer.

Author Tiernan Ray writes an important article for anyone following technology companies as a possible investment.  On Friday (October 26) Microsoft (ticker: MSFT) is expected to roll out its long-awaited Windows 8 operating system, specially geared to capture a slice of the smartphone market (from Google's Android, Apple and RIMM's Blackberry).  It is not clear to Ray (nor to me) what will happen (I presume to MSFT), but he writes that tech investors may be disappointed.

He then goes on to write that there will be winners, losers and companies whose fates are not clear (Intel (INTC) and Oracle (ORCL)).  he does not discuss IBM, which even though it is not in the PC-space, it IS a player in "The Cloud".

Most of us have been following at least some of this rather amazing technological transition, from PCs connecting up with the Internet to the rise of tablets (really, small PCs) as well as the smartphones (Apple and Android).  For example, all three of us in my family own a smartphone, and our daughter owns an iPad.  She does not even have a telephone landline, like many of her generation.

Mr. Ray produces two graphs, the one of greater interest is the value of smartphones, PCs and tablets sold over the past few years.  Eyeballing the graph I see that in 2011 smartphone dollar value sales for the first time equaled PCs, which have been holding relatively flat (at approximately $220 billion).  In 2012, smartphone sales volume is expected to grow well past PC dollar volume.  Tablet sales (mostly iPads and Samsung tablets) are expected to grow to almost half of PC sales this year (vs. essentially ZERO in 2009).

He is careful to write about some newcomers to The Cloud, who may have great influence later but not now (he mentions Qlik Technologies (QLIK), Splunk (SPLK) and Workday (WDAY) as all having potential later on), but I will not examine these, as I know nothing about them.  In any case, he is bearish (short-term anyway) on those three companies.  Ray then goes on to produce this table of tech companies and their prospects:

		Stock
Company	Ticker	Outlook	Comment
Adv. Micro Devices	AMD	down	Failed to grasp decline of PC
Amazon.com	AMZN	down	High PE vs. their cloud opportunity
Apple	APPL	up	Cheap shares, more innovation
Dell	DELL	down	Enterprise promise, PC peril
EMC	EMC	up	Big Cloud player
Facebook	FB	down	Make mobile pay off?
Google	GOOG	up	Smartphones & The Cloud
Hewlett-Packard	HPQ	down	Long restructuring ahead
Intel	INTC	neutral	Smartphones up, PCs down
Microsoft	MSFT	down	Depends on success of Win. 8
Oracle	ORCL	neutral	Data opportunity vs data challenge
Rackspace Hostg.	RAX	down	PE too high, risky
Salesforce.com	CRM	down	Workday could get them…
Samsung Electr.	*	up	Smartphones, tablets, low PE

* Samsung Electronics' ticker is 005930.Korea, your broker can probably get it if you want it.

[Ed. note: I do not know if he wrote his article before Google's disappointing earnings (and 68 point stock drop), but with that drop it may be a good time to look at buying it...  Of course CNBC had a recent guest on who said Google might not even EXIST in five years...]

Tiernan Ray is a well connected guy in tech-land, a writing pro and been at this a long time.  I cannot argue with any of his comments re the above comments nor the main points in his article.  Furthermore, if you are interested in technology, this article is worth the $5.00...

***

Alan Abelson starts his weekly column with a reference to Google's and earnings (and so its big price drop), but before going too deeply into the subject of disappointing tech earnings he had this little gem from his reader Edd McDermott:

"Always go to other people's funerals.  Otherwise, they won't come to yours."

Hah!

Abelson advises that the markets are uncertain...  He then notes that investor surveys indicate that the spread between bulls (more) and bears is narrowing, so we may not be approaching Armageddon...

Abelson then goes on to write that David Levy (who has apparently been right about lowered gains in corporate earnings this year) who is worried about 2013 (and who isn't?).  The USA has been really the only major player not to plunge back into recession [yet].  Levy thinks the world has many challenges (that will hurt us too, at least in the short-term) such as high energy prices, high food prices, continuing unemployment, political instability, etc.  But, Levy ends positive at the end re the USA: that we have withstood all kinds of challenges without collapsing or losing our free markets and culture of innovation.

Abelson, then mentions that David Levy's father, S. Jay Levy, recently died after a long career following the markets for decades.  A talented family!

***

Kopin Tan writes this weekend's "Streetwise" column and suggests getting OUT of telecom.  Telecom companies (ATT, Verizon, and of course other minor players) have racked up BIG valuations (PE ratio gorwth), yet will likely not grow much.

***

"Review & Preview" this weekend features a short column on THREE separate views on bonds: one very bearish and two, well neutral outlooks (latter includes David Rosenberg of Gluskin Sheff, I would have guessed he would have been bearish).

"She Said":

Citigroup's "bad performance and an underperforming CEO -- those are the kinds of situations that lead to a change."

Former FDIC Chief Sheila Bair on Citi CEO Vikram Pandit's "resignation"

William Waitzman writes a short piece saying that HSBC says that 40% of the world's population (mostly in the merging world) will join the middle class.  The bank expects that countries like China, India, the Philippines, Peru and Russia should see annual growth in real incomes of 4% (while the developed world sees less than 2% growth).  Well, we'll see!

***

Sandra Ward writes a bullish piece on Texas Industries, the last "pure play" on cement in the USA. She sees good prospects ahead, and maybe a buyout (by France's Lafarge or Colombia's Cementos Argos), as TXI is rather small.  She sees increased housing demand (?) and a better economy (as well as TXI's main markets of California (?) and Texas getting better) helping the stock.

[Ed. note: I remember reading an article in "The Economist" some 12 years ago saying that the cement industry and the bearing industries were the most boring of all industries...]

***

Jack Hough writes an article on a subject getting near & dear to my heart: dividends!  He suggests that instead of chasing high-yielding stocks (dangerous -- crowded trade!) that stocks yielding in the 1.6% - 2.1% range BUT that likely will raise dividends in the years to come as good picks.  He selects four companies with good prospects of dividend hikes by 2014:

Associated Banc-Corp (ASBC), projected 2014 yield: 2.4% (now 1.6%)
Coca-Cola Entreprises (CCE), projected 2014 yiled: 2.7% (now (2.1%)
IBM (IBM), projected 2014 yield: 1.9% (now 1.8%)   (???, big deal...)
Stryker (SYK), projected 2014 yield: 2.0% (now 1.6%)

Part of his argument for stocks like these is that as the share prices move up, the increased dividend yields bring MORE total return in.  Worth thinking about...

***

Christoper C. Williams writes a bullish piece on National Oilwell Varco (NOV), the country's largest maker of equipment for oil & gas drilling rigs (which I already knew) and a strong presence in deep water offshore drilling (which I did not know) will likely lead to great results in the future irresepctive of who wins the election (both guys said we need more drilling...).

NOV has a lower PE than some its smaller competitors.

Disclosure: I own NOV, and I am NOT letting my position go!

***

Economist Gene Epstein ("Economic Beat") laments that neither Obama nor Romney seem to have a good grasp of free-market economics...  Both of them are beating up on China (true).  Epstein has proven to me over the years to be pretty much a free-markets guy.

Both candidates are pandering as well re green energy jobs in Iowa and Colorado (undecided states, see realclearpolitics.com)...

Epstein backs up his words with books by Adam Smith, Bjorn Lomborg, Diana Furchtgott-Roth and an essay by Frederic Bastiat...  All are heavy hitters.

But, politics is politics...

***

Barron's DC pro Jim McTague writes on yet another cliffhanger (above and beyond the election and the the "Fiscal Cliff"), namely that of onerous EPA regulation being proposed.  There are about 620 of these in the pipeline (50% more than at the same last year of George Bush) and that some of these are extreme: one would essentially close off large swaths of the USA for new business (I presume he means new industry or other large users of energy).

While the Congress can stop these EPA decrees, they need a steep 51 votes to do so...  McTague finishes:

"If the Senate remains split after Nov. 6, as it is today, then brace for a fall in the value of your stocks."

Uh oh.

***

Lawrence C. Strauss interviews Michael Hasenstab (Portfolio Manager, Templeton Global Bond Fund).

His views on the various regions and countries of the world were interesting.  He LIKES (bond investments) in Ireland, the USA, many emerging markets and parts of Eastern Europe and Asia.

He does not like Japan or Europe.

***

CEO Spotlight features Graham Mackay, CEO of SABMiller, the second largest beer maker.  It is headquartered in South Africa (and a few years ago took over Miller of the USA).

Mackay started out as an engineer by training and came to SAB to help better integrate their IT systems.  As CEO, he now tells us that getting beer to taste "just right" is a big challenge (I ad once read a similar comment re Budweiser, and how German, yes, GERMAN, brewers would come to Budweiser to learn the secrets of keeping a mass-produced beer tasting EXACTLY the same).  SABMiller (SAB.UK) is now Number One in Africa, the world's fastest growing beer market.  SABMiller's stock price has approximately quintupled since Mackay took the reins (1999), way outperforming most stocks.

***

There is an interesting essay in the occasional Barron's "The Long View", essays on business history.

Starting in the mid-15th century, European ships got big enough so that they could travel long distances and carry a lot of goods for far cheaper than land transport.  Historian John Steel Gordon traces changes in the technology of sailing ships. more interesting than I had expected!  Highly recommended!

***

Editor Thomas Donlan appears to have great fun going after the latest recipient of the Nobel Peace Prize: The European Union.  Donlan lists a few dubious prior winners: Barack Obama, Al Gore, Henry Kissinger, Yasser Arafat and Mohamed El-Baradei...

He then goes on to review Europe's recent (post WWII) history of an ever closer union, which started out well.  But, since the Euro currency experiment, a lot has gone wrong.

Maybe as ANY country becomes wealthy, there is a lot of pressure to "spread the wealth around" (B. Obama, 2008)

***

In the Market Week Section, Vito Racanelli notes the 25th Anniversary of the 1987 market crash, a day vividly remember.  Fortunately, FRiday's drop in stocks was nowhere nearly so dramatic...

"European Trader" author Jonathan Buck suggests that Italian stocks might be ready to rally.  Ahh, no thanks!

"Asian Trader" author Assif Shameen writes about Masayoshi Son (briefly famous) and his company Softbank's proposed acquisition of Sprint Nextel.  Masayoshi SOn was briefly the world's second richest man.  He is making a risky bet, Shameen writes, but perhaps one should never count Mr. Son out...

Reshma Kapadia ("Emerging Markets") suggests that Chinese consumers might drive certain stocks.  Most US multinationals sell some, but on the whole not much, in China.  This seems to be so for a lot of other well known Western companies.  It turns out that only about 11% of the Chinese stock market is in CONSUMER stocks, most is in materials, energy and finance.  It has become a near mantra (my words) that China needs to focus on internal consumption to better grow their economy and keep their people satisfied.  She names three companies (Baidu (BIDU), Tencent Holdings (TCEHY) and Tsingtao Brewery (TSGTF)) as candidates for stocks re Chinese consumption as well as some ETFs.

Michael Aneiro ("Current Yield") writes that lower yields are a hazard (as one would expect) when the time comes that higher-yielding old debt expires.  Average junk-bond yields hit a record low 6.19% last week, while the 10 year Treasury moved UP in yield to 1.766%, thus tightening that spread.  I would not be in the junk-bond markets unless you have PLENTY of other safer investments to balance out that risk...   But, hey, that's just me...!

I pay attention when Tayana Shumsky writes the "Commodity Corner" column.  She writes about different plays on agriculture.  She discusses fertilizer companies, John Deere (DE), and AGCO (AGCO).  There are also ETFs that invest in the agricultural sector (Market Vectors Agribusiness: MOO).  What interested me the most was her description of a Luxembourg based company called Adeco-agro (AGRO) which owns and operates about 740,000 acres of farm and ranch land in South America...  One of George Soros' companies owns about 21% of this one...  Hmm....

Kohl's (KSS) was really the only company that had BIG insider selling this week (almost $48 million).

I am going to make a change in my Barron's reviews from here on out.  Much as I like tracking the Peruvian Sol (which declined a tiny bit this week), I am not sure if there is much value to be added by including this information.  Reader comment is welcome!  Of course, I will follow and comment on the Sol periodically, but not probably not every week from now on.

Verdict:  Yes!  An excellent issue!  Feel free to buy it!

Jim Cramer Tonight Visits Timken

CNBC's own Jim Cramer is in Ohio today, and will do his show "Mad Money" from there this evening (6:00 PM US ET and 11:00 PM US ET), one of the Ohio companies he will discuss is US rolling bearing manufacturer Timken (ticker: TKR).  Here is a (daily prices) six month chart (and source) of TKR's price movement over the last six months:

http://www.freecharts.com/stocks.html?page=chart&sym=TKR

(Click on either image for a better view)

The below chart shows TKR's weekly prices (same freecharts.com):

There, that should take care of it.  I stored the two graphs as .jpgs using MS Paint...

***

Timken is approximately the world's third largest bearing manufacturer, Timken invented the tapered roller bearing.  That type of bearing accounts for about 22% of our 2012 (actually that would be a bit higher, as there are tapered roller bearings included in some of our hub & bearing assemblies).  "'trb" is our internal coding for tapered roller bearings.  2012 sales figures are as of October 12, both other years (2010 and 2011) are full year sales figures.

B_TYPE	Total Sales	2010	2011	2012
bb	$1,876,725.65	$584,071.73	$610,880.49	$681,773.44
bdr	$5,744.54	$376.37	$3,043.70	$2,324.47
op	$10,741.39	$3,556.48	$5,952.30	$1,232.60
or	$187,871.37	$88,085.49	$61,003.83	$38,782.05
trb	$676,018.75	$223,342.72	$241,130.67	$211,545.36

(FYI, "bb" is our coding for ball bearings, which for us and worldwide are the biggest selling type of rolling bearing, ball bearings sell even higher for us than is typical, as the Daewoo Tico uses ball bearings in its wheels (vs. tapered bearings), and the "Tico" cars represent some 15% of our bearing sales).

***

Timken is a company that I do not closely follow, as they have declined to sell to us in Peru.  Their prices are also very high, which is a big deterrent in Peru to selling well.

Timken has, at various times, declined to sell to us.  So, "we dance with who brung us: KOREA!"  The Koreans treat us better than my own country's only world-class manufacturer.

While acknowledged as "perhaps" the world's highest quality bearing (we do not have that kind of laboratory handy, so we cannot know), Peruvians (for the most part) are NOT willing to pay some 20% higher prices than a comparable Japanese piece.  And Ameru has pretty much abandoned even importing JAPANESE bearings, as the price competition is already so brutal.

Timken has a fairly small share in Peru, certainly in automotive bearings.  Timken is very respected in industrial applications (including mining, BIG BUSINESS in Peru) and is desired by owners of, say, US-made trucks as replacement bearings as well as machinery. But, Peru is NOT a manufacturing powerhouse.

***

I do not really have a comment on Timken shares as an investment.  The stock does pay a dividend, and has for a long time, a point of pride (and of course, a big plus) for them.

Timken, at least in the past, had to beg for TARIFF protection vs. "the big, bad foreigners" while claiming (as the US Department of Commerce did) that they were the world's most efficient producer of tapered roller bearings.  Timken's plants are typically unionized, a big red flag for me.

***

I have been somewhat derelict in my duty as a bearing buyer in keeping a close eye on Timken.  I will pay some more attention to them.  Particularly if they will open up to selling to Peru's fourth largest independent bearing importer...

Review of Barron's -- Dated 15 October 2012

Barron's has lately been putting very bullish titles on their front cover, this weekend's edition almost begs to be refuted or at least debated.  The Cover Story is "14,165 -- Almost There". referring of course to the Dow's 2007 all-time high.  Right there under the title, they note that we are just 6% away from matching the high (not taking into account inflation).

Author Andrew Bary writes the below three sentences to kick off his article:

"There's an old saying that the stock market climbs a "wall of worry", and that's never been truer this year, as the U.S. market indexes barreled ahead, brushing aside concerns about concerns about economic weakness in Europe, China and the US.  AT its recent high, reached about a week ago, the Dow Jones Industrial Average was up 11% on the year and within 4% of its peak of 14.164.53, reached five years ago, on Oct. 9, 2007.  Powered by Apple (ticker: AAPL), Google (GOOG) and General Electric (GE), and other stock giant stocks, the STandard & poor's 500 was doing even better, with a gain of 16.5% at its high, making it one of the strongest major indexes in the world."

Even though the Dow lost some 2% last week, he still is bullish, if not this year then in 2013.  Strategist Jim Paulsen (CIO at Wells Capital Management) believes the S&P could make its new highs by the end of the year.  One easy way to play the Dow going up would be the SPDR Dow Jones Industria. Average ETF (DIA).

Bary goes on to write that the earnings yield (the inverse of the P/E ratio) is around 8% now (meaning a Dow P/E of about 12.6 vs. P/E of about 17.7 in 2007) which is much better than in 2007.  The index's dividend yield is now some 2.5%, and that could go up.

Bary notes that five companies have replaced AIG, GM, Kraft, Altria and Honeywell in the index: Cisco Systems (CSCO), Bank of America (BAC), Chevron (CVX), Travelers ((TRV) and UnitedHealth Group (UNH).

He notes two more things: that an economic slowdown would hurt (and that companies need to start making more money) and that it is bullish that retail investors have NOT been along for the ride.

[Ed. note:  Look, these guys at Barron's know much more about Wall Street and stocks than I do.  And a case can be made for stocks when bond yields are so low, yet the Dow dividend yield is some 2.5%]

***

Alan Abelson takes note of something that ought to stir anger (or something!) among the electorate.  He notes that the citizens of our country have lost an astonishing 39% of our wealth (I presume that means the average, maybe median) while our representatives have INCREASED theirs by some 5%...  Some of this increase (though he notes that some 27% have lost wealth while in Congress) was ill-gotten (insider-trading, etc.)...  "The rules that apply to us do not apply to our Congress-critters." (my words).

He then writes a small piece, rather wishy-washy by his standards, about market valuation, saying it may be premature to run for the hills.  [Ed. note:  If you have substantial stock gains, you should consider selling some, unless you are RICH...]

Abelson finishes with comments by Frank Getz (of Wellington Shields), who offers up somewhat similar non-committal advice.

??? this week, Alan...

***

Kopin Tan writes this weekend's edition of "Streetwise".  He writes that it is QE and technicals that override the fundamental picture.

He may very well be right, I think so as well.

He finishes by noting that the tech sector has been weak lately (yes) and that Apple's 10% recent drop has not fazed many analysts who follow the stock.

***

"Review and Preview" had three items that caught my attention.  Wiliiam Waitzman and Zach Trenholm write a short piece noting that holdings of DERIVATIVES have gone up lately, and most of them held by the same four usual suspects: JPMorgan (JPM), Citigroup (C), Bank of America (BAC) and Goldman Sachs (GS), despite toughened (?) rules of Dodd-Frank...  [Ed. note: It's beginning to look like the huge Dodd-Frank bill is going to be a disaster...]

"He Said":

"We didn't participate with the [Fed], OK?  We were asked to do it.  We did it at great risk to ourselves.  Would I have done Bear-Stearns again...?  It's real close."

-- Jamie Dimon, CEO of JPMorgan on its takeover of Bear-Stearns

A short piece (author unlisted) shows a graph very similar to a recent Zero Hedge piece about the price of the AS&P 500 nearing its two peak prices (March 2000) and October 2007) with a warning that it could go down, WAY down, very similar to hte ZH piece.  While ZH said we could lose 808 points ("could lose"), Michael Belkin ("Belkin Report") said the S&P is in danger of falling if the business cycle turns down.  Yes.

***

Lawrence C. Strauss writes a bullish piece on BlackRock (BLK), the world's largest investment manager (hey, can learn something every day).  The stock has not done well over the past three years, yet Strauss says that they have a good team and responding to competition  from competitors Vanguard and Schwab.

Founder and CEO Laurence Fink is also rumored to be in line to be US Treasury Secretary should Obama win re-election.  Thought you might like to know that...

No thank you!

***

Alexander Eule writes a bullish piece on CarMax (KMX), the national used car chain.  He says that normally CarMax would be getting lots of lightly used vehicles were it not for the fact that not many have come in sice the financial crisis started.  He writes this may change, and that CarMax may climb 20%, even I note on his chart that CarMax sells at some $32.55, much higher than its 8-and-change low late in 2008.

No thank you!

***

Jack Hough writes an interesting piece (though hard for me to gauge, as I do not know private equity well, nor the companies in question).  It seems that "Private Equity" has LOTS of cash now, and if they don't put it to use, they may have to give it back to their shareholders (and forego fees...).  He takes note of Carl Icahn's offer to buy out Oshkosh (OSK) a specialized truck manufacturer at a 21% premium) and lists the below four companies that could be targets of private equity takeover:

Big Lots (BIG)
Charles River Laboratories Int'l (CRL)
Guess (GES)
Terex (TEX)

***

From time to time I encounter guys on the internet writing that a great global play in the coming years would be companies in the WATER business.  Author David Englander writes a bullish piece about one of these major players: Layne Christensen (LAYN).  This company has a number of divisions (drilling water wells, building water-treatment plants and drilling for mining companies).  The stock is down from its 2008 peak in the upper 50s to about $21.00 now.  Their new President is apparently has been making changes at the company, one of the main changes at a severely under-performing division (that lost money under-bidding for municipal contracts).

Maybe.  "Caveat Emptor" (Buyer Beware)

***

Tiernan Ray ("Technology Week", Mr. Ray hardly ever misses writing this column, either he takes little vacation or he likes his job) writes that the "Arms Merchants" of tech-land are doing better then the chip companies themselves.  He means the equipment makers that allow Intel (INTL), Samsung Electronics (005930.Korea), Taiwan Semiconductor Manufacturing (TSM) to make their chips.

The equipment manufacturers include Applied Materials (AMAT), ASML Holding (ASML), and other firms  that are somewhat smaller.  As a group they have prospered lately, while the chip companies have not.

He is bullish (qualified) on the "Arms Merchants"!

***

Lawrence C. Strauss interviews Wall Street veteran Byron Wien.  I have seen Byron Wien's name mentioned many times over the years, but I did not have a feel for where he stands.  Strauss and Wien now have helped me see where he comes from.

Wien saw bigger problems back in 2008 than the bulk of Wall Streeters.  He turned out to be right.  He saw a slow recovery (no further crash), right again.

He made a number of calls over the years, many of them right and just a few wrong (at least in this interview).  He is an optimist, he took care to make that point a couple of times.  He feels blessed to be able to go to work at almost 80 years old, work he evidently likes.

So what investments does Byron Wien like?  Almost everything!  Including gold and commodities (as the currencies are being debased).  He recommends diversification...

Bravo interview, Mr. Strauss!

***

Jim McTague, not taking this election lying down, again gets GOP demographer John Morgan's take on who will win..., of course Morgan says Romney.  McTague provides Morgan's map that is "redder" than the map I usually follow (at realclearpolitics.com), meaning more states are now Romney (rather than toss-up).  McTague and Morgan both make clear, however, that this race will be very close.

I agree, both close and a win for Romney.  One of my friends is well connected politically.  He says that it will be a big turnout by Republicans that will decide this time.  The young and the minorities will not turn out as much for Obama this time.

***

PENTA (a column and daily blog now apparently), oriented towards the $5 million and over crowd, waxes about value to be had traveling around in Italy...  Short version: get off the beaten track of the Tourist Trail.

***

My brain fogged-over trying to read Carolyn T. Geer's story on "How to Pay for Long-Term Care"...  This IS an important topic, and I do not mean to make light of it, but it is complex.  The take I got from her piece is that insurers in this space are trying to re-design their offerings for long-term care, and that each of us should "self-insure" (that would mean "save more" for those of you in Yorba Linda).

If long-term care is an issue in any of your lives, dear readers, you might want to buy this issue of Barron's and read this piece!

***

Gene Epstein ("Economic Beat") writes about the continuing fall-out of the possible fudging of the unemployment number down to 7.8%.

Epstein takes the sensible (to me) position that these statistics fluctuate all the time, and there is probably nothing nefarious about that.  It has happened in all administrations.

***

I salute Editor Thomas Donlan for his stand against BOTH Romney and Obama re China and the supposedly manipulated currency and other practices supposedly injurious to America.  Being able to import cheap Chinese goods is a BIG PLUS to American consumers (whose voice is dampened because they hardly notice).

Donlan believes that the USA and China should strengthen our partnership with each other, for mutual benefit.

+ 1

***

In the Market Week section, Vito J. Racanelli discusses last week's 2.2% fall in stocks, the sharpest weekly fall in months.  He then goes on to write about stocks that may raise their dividends, of interest to those of us looking for INCOME...  [Ed. note: I really need to study this income issue, and write something helpful]


"European Trader" author Jonathan Buck notes that Burberry (BRBY.UK) has been doing very well lately, even vs. other European luxury brands, and especially in China.  He notes that fashion is very fickle though... Buck then mentions that EADS shareholders will likely be happy as the Airbus manufacturer dropped its plans to take over BAE Systems (a British weapons maker) amid heavy political opposition.

Assif Shameen ("Asian Trader") likes INDIA, and brings in two analysts who do too.  I mentioned recently that India's Manmohan Singh has put real reforms on the table over there.  The author and the two analysts think that India's stocks will go up...  He specifically mentions Bajaj Auto (BJAUT.India) which actually makes small motorcycles (you see them in Peru: they put a small cab on a two wheel axle on the back and are used as "moto-taxis" (to haul one or two people and/or stuff for fairly short distances in Lima urban neighborhoods).  [Ed. note:  NO, there is no money to be had in supplying replacement bearings for Bajaj in Peru, too much competition...]

Reshma Kapadia ("Emerging Markets") asks: "Is South Africa a Deal Yet?"  South Africa has some serious problems recently (miners killed, a nationwide trucker's strike, etc.).  She writes some comments by analysts, who sound bearish to me.  Is South Africa a deal yet?  For me, no thanks!

Michael Aneiro ("Current Yield") still benefits from the world of topics to choose from re the bond (and similar) markets.  This week he notes that housing 30 year loans stand at a VERY LOW 3.39% (average).  He then goes on to note that it is THE BANKS and MORTGAGE BOND HOLDERS who are benefitting more from this latest QE, what a surprise...  JPMorgan chief Jamie Dimond thinks that the housing market "has turned the corner" and he is encouraged by improving credit trends.  [Ed. note:  Hey, Mr. Dimond, where is all of the money still owed to MFGlobal's customers?]

It must be time for insiders at LinkedIn (LNKD) to be allowed to unload their shares, seven insiders did for a total of some $42.7 million.  An insider at Liberty Media (LMCA) unloaded some $39 million worth.

Finally, the Mighty Peruvian Sol once again inched higher by a tiny 0.3% vs. the US$.  Hey, up is up, I'll take it (some readers will recall that a stronger Sol vs. our dollar is good for our company down there).

Verdict:  If long-term elderly care is important to you, or f you need further details on anything discussed above, yes, buy this issue.

Brer Robert Takes On A Lefty!

I spend plenty of time (too much?) on the computer, and today I read an article that burned my butt!  This was so typical of the garbage that I see coming from (most of) the Hard Left that I felt forced to email the author with my critique (below) of his article.

Ron Jacobs wrote this article: www.counterpunch.org/2012/10/12/lessons-from-korea/, and it would perhaps be worthwhile to read it for proper context.  My critique of his article is pretty straightforward, so it is not necessary to read, but it would be better.

[begin critique]

Dear Sir,

I am American who works with my in-laws in Peru.  We import rolling bearings into Peru (I live here in America), most of them as replacement parts for cars and commercial vehicles there.  Most of our bearings come from South Korea.  In May, I went to visit our two main suppliers (comments on them at my blog, May 2012).

WOW, your article comes close to making N Korea the rough equivalent of S Korea by your hagiography of George Katsiaficas and his book, and your NOT mentioning at all the absolutely brutal regime, for decades, of the Kim Dynasty in North Korea!  Yes, there have been ugly characters with blood on their hands in S Korea's post WW-II history.  But, the uprisings in S Korea have been tolerated and, yes, suppressed with relatively little bloodshed.  ANYTHING similar in N Korea would have been bloodily crushed, and YOU know it.  Shame on you.

S Korea's GDP per capita exceeds that of the UK.  They have a fairly good democracy now.  

They also have very advanced manufacturing (eg, Samsung and Hyundai).  Their bearing plants (I visited four) were unlike anything I have ever seen, right out of Star Trek...  In one of the provincial plants, I noted that it was not the traditional "one man, one machine" so often seen at other bearing plants, but "one man/woman, 20 machines".  Yes, women on the (clean and safe) factory floor.  They need BRAINS not brawn at Jecheon...  N Korea exports weapons, fake money and drugs.  I also took note of the complete freedom in S Korea, the youth there are free to be as idle or involved in "Korea Pop" as they so choose.

I understand that CounterPunch is hard left (which is great, First Amendment and all), and perhaps you have to toe a line (I visit CP fairly often, but more as an observer from the libertarian right).  But, your leaving out the ALMOST INCREDIBLE achievements of the South Korean people, and yes, with the aid of the USA, is reprehensible.  N Koreans flee to S Korea, while N Korea has to kidnap people from Japan's shores to gain "skills" and "instructors" they need.  N Korea seeks the Nuke, counterfeits our money, regularly attacks (verbally and militarily) the South and is an active participant in the Asian drug trade.  How can you discuss the Koreas, even if just reviewing a book, without mentioning the most barbaric, the WORST place on earth: North Korea?  Have either you or Katsiaficas been to North Korea...?  Or even seen the clandestine photos taken by tourists (Google them)?

As we say at Zero Hedge (www.zerohedge.com, you can start YOUR re-education today): minus 1

I know you have to play for your audience, but shame on you for not letting your fellow "Progressives" know of the logical extreme of Socialism.  Such one-sided pieces are why the Left is in trouble here in the USA.  The rest of us call this: "Selective Lying".  That's the trouble with the Left, especially the Hard Left, lies are the main tool in your kit.  

May you progress in your thinking and in your knowledge.

Best,

Robert A. Mix

[end critique]

Real Friends and Virtual Friends

Since I started publishing my blog about a year and a half ago, I have started numerous email and "chat" conversations with several "virtual friends", people I do not know in real life (and found over the Internet, especially from Zero Hedge), but who have similar interests to mine and who are friendly at the same time.  Before starting my blog, I had about two virtual friends, now I have several that I keep in regular contact with.

My "real friends" are people who I actually know in person and try to visit with whenever possible. They are a diverse lot, and it looks like I am about to tap into a new source of friends from a group I have recently joined.

The best definition of a "friend" is someone you with whom you enjoy their company, passing some time with them.  Friendship has been shown to have numerous benefits: lowering stress and keeping self-perceived happiness higher are just two of them.

I even now have what I will call "hybrid friends" (NO INSULT!!!), those who I know (personally) SOME, but am staying in contact with...

***

I read a few years ago a book that predicted that the Very Rich would eventually identify more with their "class" (as in "Upper Class") more so than their nationality.  The book made a powerful case, in that the Very Rich would have similar interests and problems (mainly those who would confiscate their wealth as well as exploring business & investment opportunities).  I regret that I cannot remember the title of that book...

I suspect that is probably happening today, the Very Rich getting together when they can, more so than in the past, because the Internet makes it easier to find each other.  I do not mean the Elite (Bilderbergers, etc.), as they (the Elite) have always gotten together...  We know this has been going on, the Very (Very) Rich getting together to plot and plan, because we know a lot about the founding of the Federal Reserve (1913) and the planning that went on YEARS before.

But, this article is about virtual friends and real friends.  My virtual friends have almost always approached me in response to something I had written, whether at Zero Hedge or at my blog itself. I have met personally with two people from Zero Hedge, one was a virtual friend for sometime (and has since moved north, que pena...) and the other who has since moved on (maybe because our interests are not as much as in common as we had guessed).  At least one is from Europe.  I stay in regular touch with at least TEN virtual friends, and I occasionally hear from a few others.  All of them are friendly.  All of them share at least some common interests similar to my own.

My virtual friends share an interest in gold, the financial system and related topics.  I have had extensive communications with some, have offered advice (FWTW, which is nearly zero) and just sending links and jokes with each other.

My sort-of infamous Joke List (up to about 45 people) has about 50% virtual friends on it.  We do not even KNOW each other, yet we stay in touch...

***

I do not know if someone has studied this (probably so, almost "everything" has been studied...), but this phenomenon cannot be happening to just me.

My thinking is that this is mostly a very good thing.  Yes, there are risks that the weak and/or unwary can be entrapped or make some mistakes in dealing with people they do not even know.  But, so far, I have not had any real problems.

Hey, with ONE exception, no one in my family knows anything or even cares about gold...

***

Another thought I would throw out for my readers' review is that the risk of making and keeping Real Friends might be at risk, especially by those of us who spend a lot (too much?) time on the computer.  Yes, I see the risk.  Writing thoughts to people you do not know (in person) is a low risk way of venting and/or communicating, but the "real" component of friendship is left out.

This topic HAS been explored, especially in that many lonely people have been unable (for a variety of reasons) to make real friendships, especially those looking for love...  So, they make up for it by by having lots of virtual friendships (and even virtual sex...).

***

Left out of virtual friendship is the fellowship of BEING with one or more friends: just shooting the bull, hoisting a beer, going on a "field trip" (shooting our guns for me, taking day trips or going to the opera for my wife) or just hanging out...  "Just hanging out" was often the thing I did the most when I was younger, with my friends.

Also, the intangible (body language, meals or events together, hearing real laughter) things are missed in virtual friendships...

***

"Someone" has probably studied some of the social media and the phenomenon that many of us have seen at Facebook.  Some of my 55 or so "friends" (most of them real friends, including two of them from my childhood that I had LONG lost contact with) at Facebook have HUNDREDS of friends...

Once I did a quick & dirty calculation as to how many "friends" I had made in my entire life.  During this exercise, I counted as a "friend" anyone whom I had gotten their name and had a real conversation with.  A very loose definition of friendship!  But, I did this to see how people younger than me could have 600 or more "friends", just at Facebook...  My count of friends works out to about 350 - 450 people (remember, these are just people I had had a real conversation with).  Maybe I undercounted, maybe, say, I have had 500 "friends" in that sense.  That still pales by comparison to the 600 - 1000 I have seen in a couple of cases.  Of course, for those who have hundreds at Facebook, almost all would be virtual, and maybe not even that (just running up the count).

***

A topic which was crept through the door, and which in part prompted this post at my blog, is the idea of converting (or partially converting) virtual friends into real friends.

My favorite blogger has recently been interviewing some of his followers via video with Skype (and posting these to his blog), and so to an extant making his virtual friendships a little closer.   This is an idea that I had not run into before, but may be fascinating to follow.  He has so far interviewed (or "debriefed") four of his more knowledgeable and technically adept followers.  And his blog has had over 3,000,000 "hits" (single visits).  Those interested might take a look:

fofoa.blogspot.com

***

So, there are my thoughts on this topic I have pondered on a bit.  As with ALL of my friends, I welcome your thoughts and comments!

Review Of Barron's -- Dated 8 October 2012

This week Barron's had a number of their authors take a shot at Friday's job numbers and the unexpected drop to of the unemployment rate (U3 anyway) to 7.8%.  Many of those authors are skeptical, as have the authors and readers of Zero Hedge.  Barron's, being a weekly periodical, can only follow and perhaps analyze these figures, but there really is nothing new here.

The Cover Story ("Out of the Storm") is really about a mutual fund family that has been able to survive as its corporate parent (Lehman Brothers).  It must have been a slow week if a mutual fund family is the Cover Story.  I do not much follow mutual funds, so I only lightly, very lightly, skimmed the Special Section.

***

Alan Abelson rates the debates!  Of course Mitt won...  But not all of Mitt's "facts" were true, Obama DID inherit a $1 trillion deficit (last of W's, what the new President is stuck with his first year).  Abelson notes that had Romney NOT won the debate, the race would be over.  Yes.

He then goes on to write about how Jack Welch critiqued the jobs numbers, as is he himself were not guilty himself of massaging numbers when he was the Capo at GE...  But, one month statistical flukes DO HAPPEN on occasion, Abelson reminds us.  [ed. note: yes, but the timing is suspicious...]

Abelson then finishes with a short piece on how US oil production is up (to 6.52 million barrels / week), while demand is down a hair (18.3 million bbl), and yet the price of gasoline still goes up, especially in California which has at least one refinery with big production problems.  He then writes that the Middle East might be more relevant to higher US prices. [ed. note: WTIC is about $90 / barrel, much lower than during the last gasoline price spike in 2007 - 2008]

***

"Streetwise" author this week Steven M. Sears writes about stocks that have done well vs. those that have not.  Expect "window dressing" by mutual funds, an "October Surprise".  (The term I used as a comment at ZH last week)

Sears then goes on to write that he likes Wal-Mart (WMT) as well as Goldman Sachs (GS, recall that Goldman was talked up BIG as the Cover STory last week) and even JP Morgan put out a "Buy" on Bank of America (BAC).

***

"Review & Preview" had less interesting items to offer (me) this weekend.  Even "He Said" was nothing new, just Jack Welch's insinuation that the administration had rigged the jobs data.  That DOES remind me of Labor Secretary Hilda Solis protesting a bit much when CNBC threw her a relatively soft question about how, erm, politically convenient it was that U3 fell to 7.8%.

"Methinks the lady doth protest too much." -- Shakespeare

***

Leslie P. Norton wrote up a bullish piece on Viacom (VIAB), the the company producing a lot of cable TV fare.  It seems they are buying back stock, and so lowering the float.  Their shows may be improving, as they are trying, she writes, ta take back the No. 1 slot in children's programming from Disney.  Note that the biggest beneficiary of all has been Sumner Redstone himself controls the company with "A" shares...

***

David Englander writes a short piece on Brink's, the armored car company.  They move more cash around to banks and ATMs than any of their competitors, and they are trying to grow their markets in other countries while restructure here.

"Investors are still skeptical about the turnaround at Brink's, but as earnings improve, the stock earn a higher multiple.  At 14 times 2013 estimates, it would be worth $32.50."  The stock is around $26.00 now.

***

Lack of good places to find income has been a recurring theme here at my blog for over a year.  Jacqueline Doherty writes that various "Closed-End Funds" (remember those, we saw them fairly popular before ETFs came on strong).  She writes that high yielding closed-ends are both leveraged and have high premiums to asset value.

Beware!  Nice piece Ms. Doherty, real financial journalism.

***

Andrew Bary writes a piece on Exact Sciences (EXAS) which is testing a new & simpler procedure for testing for colon cancer, the No. 2 cancer killer in the US.

These small medical companies...  Ahh, appear to be risky...  It would be nice if they hit a home run, but...

***

Jack Hough writes a piece on how most companies will likely have lower earnings in 2013 than most of Wall Street thinks (and so believes earnings downgrades are coming).  He names four companies that have "tighter earnings estimates" (that is, more agreement among analysts), and he figures they will do OK:

Cisco Systems (CSCO)
CVS Caremark (CVS)
U.S. Bancorp (USB)
Wal-Mart (WMT)  <-- the second time Wal-Mart gets a favorable mention

***

Tiernan Ray ("Technology Week") is not taking the Apple (AAPL) nay-sayers seriously.  The iPhone 5 is selling very well and AAPL's P/E is a reasonable 9.9 (ex. cash).  He thinks those down on the company are wrong.  The iStuff and the Macs are doing just fine, thank you, and likely will continue to do so.

He then goes on to write about Hewlett-Packard (HPQ) and its continuing woes, I have followed this story for a while now, and it never seems to get any better for HPQ.

***

DC pro Jim McTague writes about the "taxpaying chatter" among the candidates over the past several years.  He has a nice big graphic showing what the candidates of the last four elections (includes this one) paid in taxes and what they gave away.  Mitt did pay a lower rate than anyone else ON THOSE GRAPHS, but he gave away a lot too.

McTague: "...  Think about it: rich people in general consume no more government resources than the rest of us.  In fact, they probably consume less.  Plus they employ other people who turn around and pay taxes."

Wow!  A capitalist!  While that sentiment warms my heart, there is ONE very important thing that the rich get from the government: security from the poor and criminal elements from stealing their wealth.  And let's not even go to the whole financial crimes mess...

***

Gene Epstein ("Economic Beat") also writes about the suspicious jobs numbers...  Seems like NO ONE believes our government...

***

IAC/InterActiveCorp's CEO (Greg Blatt)  is the man in this weekend's "CEO Spotlight".  Barry Diller picked him (in 2010) to run the internet-focused conglomerate, ticker IACI.

IAC has a whole slew of names (ask.com, match.com as well as a new focus on more local search sites).

And yet, for me, the story was not as compelling as some of these CEO stories are.  On the other hand, Blatt has been at the helm since the stock was under $30 in December 2010 and is now over $50...

***

Editor Thomas Donlan is back this week, and he is not real happy with the recent Debate nor the candidates themselves.

Both candidates were very week on policy points that Donlan believes need to be addressed.  I would agree.  Both candidates refused to offer up specifics.

Donlan's most entertaining point (for me, but what do you expect an automotive bearing guy to say?) was that of all those auto companies, it is the factories of Japanese, German and Korean car companies that are the most efficient here in the USA.  NOT the ones saved by the bailouts: GM, Fiat?Chrysler and Ford.

***

In the market section this week, Vito J. Racanelli starts us off by noting that stocks hit a new 52 week high, but earnings may not be very good soon...  Racanelli also took note of Jack Welch's remarks re the jobs numbers (that is at least the 4th time I see that in this weekend's edition).

Jonathan Buck ("European Trader") makes a good case for Deutsche Telecom (owner of T-Mobile which is buying MetroPCS).  The purchase will put T-Mobile into fourth place after Verizon, ATT, and Sprint Nextel.  Buck writes that things are looking a bit better (?) in Europe, maybe for telecom.  And he has shown that he likes Germany, the efficient engine of Europe.

Kopin Tan ("Asian Trader") writes that Chinese savers cannot get any income either.  Hmm, a worldwide problem it looks like.  Chinese investors are reluctant to get back into stocks because of very bad performance over the past few years.

Reshma Kapadia ("Emerging Markets") writes that malls are becoming very popular in lots of emerging markets.  She writes mostly of the scene in Brazil and SE Asian countries (malls are increasingly popular) and has some ideas for investing in the idea.  I can write this: that malls in Lima, Peru are becoming very popular as well, I have been to five of them myself, and my in-laws there tell me that regional cities in Peru even have a mall...

Michael Aneiro ("Current Yield") is not impressed either with jobs numbers...  LOL!  The jobs numbers have everyone over there at Barron's all worked up!  He notes that rates did not change much, I saw little to no significant changes at the nearby "Bond Center" tracker of various yields.

Ian Berry writes this week's "Commodities Corner" and the commodity in question is milk.  LOoks like milk prices are going up (perhaps to a record high) in early 2013.  The drought explains this: "Hot cows are unhappy cows, and don't make as much milk as they normally would."  Now you know...

William Doyle, CEO of Potash (POT) sold off some $43 million of stock.  Other than that, there were no really big insider sales.  I still note that AutoZone, Oracle and Darden are still having insiders selling off stock almost every week, maybe not that big each week, but in all three cases it adds up...

LifeLock (LOCK, I hear their ads on the radio a lot) just IPO'd.  Nothing big or interesting looking IPOs coming this week that I could see.

The Mighty Peruvian Sol once again pushed its way (slightly) higher than the US$, a 0.2% increase.  Geez, somebody ought to get on this story!

***

Verdict: This time Barron's was not as good as it typically is.  Hey, but can't win them all!

Ameru Bearing Sales In Peru

We were very lucky to have had our best month ever down in Peru in September.  Here are our monthly sales so far in 2012.  We will almost surely have our biggest year ever.

Month	Amount
01-Jan	$126,166.70
02-Feb	$42,748.30
03-Mar	$123,310.15
04-Apr	$65,222.28
05-May	$87,667.94
06-June	$106,563.17
07-July	$143,142.52
08-Aug	$63,859.25
09-Sept	$150,988.71

The above does not include our better profit margins from our Korean bearings (as well as MBS (our small supplier who is a Japanese specialty bearing manufacturer) and one of our Chinese brands).  We have mostly abandoned the overly-competitive Japanese bearing market there in Peru.

Our bearing import company there did this on their own.  I had little to do with this.  So, I pass along a big hat tip to my in-laws!  Thanks!