Does Oh! Bama Know What He is Doing?
Research for Online Investors

by John Dalt

6/7/10

President Obama’s administration touted the jobs report last week.  Rule #1, don’t talk about what you don’t know.  Surly, even those that like the current occupant of the White House realize he doesn’t know what he is doing.  Or does he?

The investor class (read rich) and traders (read Wall Street) look for any sliver of good news to interpret that fits our bullish tendencies.  We parse every word we hear, looking for the edge to understand and predict what will happen.  We build a scenario in our mind of how events will play out.  We divine a plan to capitalize on the expected events.

Then we find out the underlying information was false.  We were given bad data by a (trusted?) source.  The losses mount and we are reduced to wishing for the comfort of a more predictable world.  Welcome to your information partner in Obamaland.  The full force and affect of the U.S. government will be used to mislead and confuse you.

You didn’t know it, but you have been targeted for oblivion. Just like the big banks that took TARP funds, the health care industry that passes along expensive health care costs to customers who demand more care, hospitals that consider profits their reason for being in business, and the GM and Chrysler bondholders who were so bold as to ask for their money back.

Step back and think, of course Oh! Bama was proud of the job numbers that were coming out Friday.  They showed more government employees.  The economy added 431,000 jobs in May.  Only 41,000 were in the private sector.  Wow, that is what I call a recovery.

I can just hear Helen Thomas asking if we can all work for the government.  How high would our taxes be?  Let’s see add 25% for government to skim off for waste, abuse and congressional travel.  I think this might be a zero sum game!  This basic economic situation is evidently above the reasoning taught at the Harvard Law School.

The same week Oh! Bama is touting the jobs report, the administration placed a six month moratorium on deep water drilling.  This is so an unnamed White House commission can investigate the causes of the Deep Water Horizon accident and recommend punishing restrictions and regulations on drilling.

We should know what happened so it doesn’t happen again.  Kind of like the Financial Crisis Inquiry Commission (FCIC) that is supposed to report on the causes of the credit crisis of 2008  Their report is due later this year.  So why is Chris Dodd pushing a financial reform bill through congress right now.  How do you fix something before you have the report to tell you what needs fixing?

It must have something to do with politics.  It is important to clamp down on the financial industry, now.  It is important to shut down the oil business, now.

Thirty-three exploratory drilling operations in the gulf are suspended for six months.  Lease sales and drilling in Virginia and the Arctic are cancelled or suspended.  According to the Louisiana Mid-Continent Oil and Gas Assoc. the impact from the moratorium in the gulf will be devastating.

$16,500,000 per day in rental for drilling rigs, with $1,000,000 per day in boat rental income lost to service the rigs, and $11,000,000 per day in lost wages for oil workers.

That totals $28.5 million per day in the gulf area alone.  Six months equals a little over $5 billion.  Small change to the U.S. government.   Rep. David Vitter, R-Louisiana said the drilling moratorium could cost his state 150,000 jobs.

How many more census workers can the government hire?

To the mailbag:
I bought SLV at 16.98 at the open. Good move so far! Let's hope it works out much better than XOM, which I'm still holding, unfortunately.--- paid up subscriber D.E.

John’s reply:  We bought AGQ at $55, up 10%.  All the big oil companies are being beaten up.  The natural gas companies like CHK and UPL are doing better.  XOM will be the largest U.S. natural gas producer with the purchase of XTO.  It makes no sense as they are a great company.  I think a lot of fear of government taxes and regulation affects us here.  I continue to believe XOM will reward us.  If we loved it at $69, what is not to like at $59.67?   Think of it as an underwear sale at Walmart, buy now on sale so we won’t need to buy later at a higher price.

Editors note:  We discovered last night on the MTV awards show that President Bush was responsible for Jesse James unfaithfulness.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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