Within each of these articles I have also tried to investigate potential investment opportunities. My thought has been that if we can gain an understanding of the government's intentions within the markets, we may be able to make higher probability trades. Since I’ve taken so long to put this together, I want to discuss points four through nine of my original theory.

GDP = (A) Private Consumption + (B) Gross Investment + (C) Government Spending + ((D) Exports - Imports))

Now that the framework is in place, I want to touch in detail on each of the points in my original thesis. Today’s discussion will focus on points one and two of the ten step plan included in the original article. These points were:

Just Like Helium, Up-Up and Away

To refresh everyone, as of May 14^th this is what I had to say for prices through this time of year. Recall when reading my prior call that oil was trading just under $60 per barrel and was charging upward at a torrid pace. The run up at that time also had a gigantic tidal wave of bullish "green shoot" sentiment behind it. I said this:

What’s really important here though is not whether or not he meets that deadline. Hitting that deadline is actually quite irrelevant as the proposed options to fix the system won’t address the real problems in health care. Even worse yet it seems to me that the administration doesn’t care that the real problems won’t be addressed. Let’s take a look at the healthcare problem, analyze the facts, discuss the proposed solution, and identify what changes REALLY need to be made.

Question: I'm seeing at least two reports that said China consumption is up a second month, up much more than a year ago and at record levels. Platts recently reported that China consumed 33.23 million metric tons of oil in May, up 6% from a year earlier.

Citigroup is raising salaries companywide in an effort to retain employees and offset new restrictions on bonuses after the troubled bank accepted $45 billion of federal bailout money.

Question: What happened in the last month that prompted this increase in gas price -- and oil price for that matter?

Unemployment – Click Here for Full Government Report

Yesterday Bloomberg reported (JP Morgan, Morgan Stanley Among 10 Banks Repaying TARP Funds):

On Monday, General Motors Corporation (GMGMQ.PK) officially filed for Chapter 11 bankruptcy. This should have come as no surprise to the financial community as bankruptcy rumblings began as far back as 2005. Furthermore, on March 30^th, 2009, the announcement of a chapter 11 filing by the auto giant on June 1st became a near certainty. If you recall March 30^th, 2009 was the date that the Obama administration announced GM would have to submit an acceptable long term viability plan to the US government. At that time the administration indicated that if GM was to be eligible for more tax payer funds, the company would be required to submit an acceptable restructuring plan. This plan was to be turned in to the government within 60 days; now those days have come and gone and no acceptable plan was provided. Where does that leave us?

Can OPEC Afford Not To Cut?

Yesterday Forbes reported “The Real Estate Bubble Won’t Re-Inflate”:

This driving season, holiday travelers will have something to rejoice about; lower fuel prices. Average gas and diesel prices are significantly off their all time highs reached last year on July 17^th, 2008 at $4.114 and $4.845/gallon respectively. The fall in prices has been so pronounced in fact, that AAA has forecast that travel will be up 1.5% over the holiday weekend. A counterintuitive estimate, when one considers the US' staggering 8.9% unemployment rate. With average prices today around $2.26 for gas and $2.28 for diesel, off roughly 50% from last year, what should the average consumer expect for the summer? The next several months? Or even... the next several years?

Wells Fargo, deemed to need $13.7bn of capital by the US government’s stress test last week, claims to have the earning power to fill its capital deficit by November and apply to repay “as soon as practical” $25bn of government funds.

1.The stress test results

George Santayana said: "Those who cannot remember the past are condemned to repeat it." In trying to apply lessons from the bird flu outbreak to the recent swine flu outbreak we are dealing with materially similar details. In both scenarios we have similar mortality rates, incubation periods, and levels of global fear that a pandemic is upon us. So based on this, is it logical to assume that we will see similar results in the markets?