padres baseball

evening at petco park

Hey Tea Party, answer me this!

Today is Tax Day, and the Tea Party Express has commenced on Washington to protest our high taxes, bloated government, and record deficits.

Ok folks, if you were president, what would you do? Cut taxes and balance the budget, right?

Let's look at the budget for 2010 to see what to cut.

The military is out, we can't cut defense when there are terrorists lurking. Can't cut homeland security either.

We can't cut veteran's affairs, after what they've done for our country.

Social Security, Medicare and Medicaid? No, you can't pull the plug on Grandma, right? Our old folks need full benefits, so that's off the table.

And yes, we've run up huge deficits and we need to pay interest on our debt (think what would happen if the mighty US defaulted!). That's also not negotiable.

Our "must-have" expenditures? $2.4 trillion. Now, let's assume we don't cut taxes and we keep the money coming to the government the same...only $2.4 trillion. What about health care and housing for the poor, roads, education, energy, courts, our national parks? That's extra.

So you want to cut taxes and spending? Where?

Yes, we are in a world of record deficits. Damn that Obama for getting us here...right? Well, after record surpluses, it was actually the Bush administration that frittered away over a trillion dollars through tax cuts, two wars, and bloating Medicare via the presciption drug giveaway that erased the surplus and started record deficits.

Obama's not done anything yet to reverse this, but then again he would likely end up as popular as Herbert Hoover if he tried to cut spending while looking down the barrel of the Second Great Depression.

You can't handle the truth

Why is California a basket case? Why is the US mired in debt and runaway entitlements? It's YOU! The voters don't want the truth, they want their money for nothing.

Good quote from Newsweek:

"It is also true that liberal democracies are notoriously unable to demand sacrifice from their citizens, outside of time of war. But political leaders, and the experts who advise them, should contemplate that countries that destroy their economies will cease to be liberal democracies."

Caller I recently heard on PBS during an election campaign (I'm not making this up):

"My Medicare only covers 9 prescription drugs for me. Can you promise me that I can get better medical care?"

So this is what Cubs fans feel like?

Another playoff loss to the Jets, another choke on field goals by the near-perfect Nate Kaeding. Another Superbowl dream gone. Okay, it's not quite the 101-year drought of the Cubs, but it's starting to feel like it.

Obama's approval slipping, oh my!

The news headlines shout out that President Obama's approval numbers are at an all-time low, that he hasn't really done anything, and that he's dithering on Afghanistan. So he's not doing a good job as president, right?

I disagree.

Although the Republicans are whining about record deficits, Obama (and Bush before him) did what was needed to avoid a worldwide meltdown that would have lasted much much longer than the current recession. Greater than 10% unemployment doesn't win any president popularity, but with the economy limping back to life, this will change pretty soon.

In short, as this article states, he is in the process of preventing a depression, remaking America's global image, and championing universal health care. Not bad for a first year!

Investing in an inflating market

In a previous post I predicted that we would not be headed into another Great Depression, that there would be hopes for a recovery, and that the government would sacrifice the dollar to get out of this mess. It's looking like that prediction is coming true.

In another post I predicted that the market was at a bottom. I was a week early, but it was still a pretty decent prediction if I do say so myself.

I also put together a portfolio for this recovery that ended up returning 26.5% from Jan. 9 to today, while the S&P returned 20.3%. Again, not bad.

Will I quit my day job yet and become a Wall Street trader? Not quite yet. But I will make some new predictions.

I predict that with unemployment over 10%, Americans still struggling, and the shock of the financial crisis still on everyone's mind, the Fed will choose inflation over any threat of a recovery. All of the financial rags are predicting a resurgence of the dollar soon, but I predict over the next year a continuing decrease, and at some point the Fed will actually have to raise rates to keep inflation from getting crazy.

What does this mean for investing? Assets like commodities, gold, and energy should do well. Government bond prices should fall. All bonds will be under pressure from rising interest rates. Although Congress is looking at changing the health care industry, I still see this as a good long-term investment, as people are willing to spend more and more for their well-being. I also see a continued rebound in tech stocks and the NASDAQ.

At any rate, this is a good time to rebalance your portfolio. Here is my new BeeDub Index:

High-Yield Bonds (VWEHX): 5%

Intermediate-term Investment Grade Bonds (VFICX): 5%

2X Short Government Bonds (TBT): 5%

Emerging Markets (VEIEX): 5%

Health Care (VGHAX): 10%

S&P 500 Index (VFINX): 10%

NASDAQ 100 (QQQQ): 10%

International Stocks (VGTSX): 20%

US Small-Cap (NAESX): 10%

Gold (GLD): 5%

Energy (VGENX): 5%

Commodities (DBC): 5%

Real Estate (VGSIX): 5%

I'll keep these for the next 9-15 months before rebalancing. Let's see how this plays out!

Repudiation of Ayn Rand

This Slate article is the best counter to her philosophies (and what's becoming the philosophy of the far right) that I've seen.