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John Dalt
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John Dalt is a retired small business owner who is now operates galtstock.com for stock investors and traders.
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  • Government Forecasts
    Heathrow Airport in London has delayed flights due to a winter storm. Up to 200,000 passengers were stranded as the airport is operating at one-third capacity. London only got five inches of snow, but they are not equipped to de-ice planes or clear the runways.
    Heathrow Airport 12.21.10 (reuters)
    British officials say a few years (global warming) of mild weather have encouraged underinvestment in equipment and preparedness.  .  Actually, it hasn’t been that long…Feb. 2, 2009 London received six inches of snow.  Trains, buses and auto travel ground to a halt and yes there were airport closures then.  That is the trouble with bureaucrats, they have a short memory and don’t learn from past mistakes.  You can read about the “rare” storm in 2009 from the New York Times.
    You would think that citizens that put so much trust and responsibility in government would learn what a bankrupt system the government is and quit believing anything they say. But of course the storms are always a surprise.
    There is a weather forecaster in England that has a better record than the government weather forecasters. His name is Piers Corbyn and has a degree in astrophysics. In November when the British government weather office predicted a mild winter, with temperatures one to one and a half degrees warmer than normal. (There is that darn global warming again.) Corbyn said it would be the coldest winter in over 100 years! He was right.
    Corbyn predicted a cold December back in May. That was when the government forecasters said the summer would be a “barbecue summer.” He said it wouldn’t be that hot and was right. Corbyn forecasts the weather from publicly available information concerning the activity on the Sun’s surface. He studies air currents, then reviews past patterns for similar activity.
    What does Piers think of the future?  He is predicting a mini Ice Age starting over the next 25 years.  He believes it could be colder than at any time in the past 200 years!  He speculates that a genuine ice-age may settle in by 2035 as it is cyclically overdue.
    As you are enjoying Christmas with your family, some bad news from CNN.  One in seven Americans are now receiving food stamps.  The largest increases have been in Idaho, Nevada and New Jersey.  Are some people at risk?  Yes.  But much of this increase has to do with expansion of the program by raising the definition of the “poverty level.”  The benefit amount was also increased 13.6% as part of the Recovery Act.  Be careful what you believe from government, they can’t forecast the weather or give you the whole truth about their statistics.
    The markets are continuing to “melt up” with the lack of bad news.  The general consensus seems to be than things are getting better.  Sure the U.S., and world economy have problems…but what the heck we came to the party so why leave early?
    Happy Holidays
    Enjoy your holiday weekend with family and we will be back on Tuesday.  The markets are closed tomorrow and we are taking Monday off to spend with family and travel.
    To the mailbag:
    Speaking of books, have you read ‘The Worst of Hard Times’ by Timothy Egan?---subscriber C.H.
    John’s reply:  No I haven’t, but will look at it.
    Wouldn’t it be nice if our representatives and other legislators listened to him (Thomas Sowell)?--- subscriber J.W.
    John’s reply: I would point out many republicans never have listened to Hayek or Friedman in the past, and will not listen to Sowell today.
    Quote:
    Men occasionally stumble on truth, but most of them pick themselves up and hurry off as if nothing ever happened.”
    --- Sir Winston Churchill



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Dec 25 12:07 PM | Link | Comment!
  • Provocation for Compensation
    N. Korea is rattling their sword again, inviting a fight.  Actually, they are not inviting a fight, they are threatening one.  First a little background.  On the Tuesday before Thanksgiving, S. Korea was conducting live fire military exercises on Yeonpyeong Island.
    Yeonpyeong Island 11/23/10
    S. Korea fired a handful of artillery shells into the waters off the island.  This island is recognized by the U.N. as S. Korean territory.  N. Korea disputes S. Korea’s claim to Yeonpyeong as it is close to N. Korean shores.
    S. Korea fired the artillery shells into the ocean away from N. Korea, not towards their shore, according to military leaders.  The N. Koreans fired over 200 artillery shells, striking the island and killing two S. Korean marines and two civilians that lived on the island.
    The S. Korean military did not respond with a counter-attack.  The S. Korean public was outraged by the lack of response, and S. Korea’s Defense Minister resigned.  The President was apologetic.  A former defense minister, who is now a lawmaker, suggested any future aggression from N. Korea would be met with swift retaliation by jet fighters and “ruthless bombing.”  We covered the conflict on 11/24 in MarketToday’s article Korean Poker.
    S. Korea has scheduled another one day “live fire” military drill for Yeonpyeong Island to be conducted between tomorrow (12/18) through Tuesday (12/21).  The North is using this as a pretext to warn of the possibility of war.  The North’s rhetoric is always bombastic.  They threaten that any future conflict with S. Korea could go nuclear, and spread to surrounding countries.
    This is the North’s way of telling the world to pay attention to them.  They need economic aid, as their socialist regime cannot provide power and food to its citizens.  The U.S., China, S. Korea, Japan and Russia had conducted talks with N. Korea and promised aid, if they would abandon nuclear ambitions.  The six party talks broke off in April 2009.  N. Korea detonated a nuclear bomb a month later.
    Bill Richardson, governor of New Mexico and political gadfly is visiting N. Korea to try to ease tensions.  The U.S. is concerned about a “chain reaction” spiraling out of control.  With N. Korea, this is a valid concern.  N. Korean President Kim Jong il is trying to transfer power to his son.  The country has perfected provocation-for-compensation.  They act up like a bad child, and the U.S., S. Korea and Japan give them fuel oil, food and other concessions to buy their good behavior.
    The good behavior only lasts as long as the concessions, then the world must go through another round of provocations and the resulting diplomatic efforts to put a muzzle on the mad dog.
    S. Korea’s Defense Ministry said threats from N. Korea would not stop the military drills from taking place. A statement said the planned military drills are part of a “routine, justified” exercises and the South was prepared to respond to any N. Korean attack.
    The N. Korean’s time their provocations for maximum impact.  Next week is Christmas; next month is Kim Jong il’s son’s birthday on January 8.  In February Kim Jong il’s birthday is on the 16th.  Look for these dates for more provocations.
    If the world is quiet on Monday, it might be a good time to play the USO etf. Crude oil always responds to turmoil, and uncertainty. Sources for this article are MSNBC, Breitbart, Asia Times, and the China Post.
    Quote:
    If you don't know where you are going, any road will get you there.---Lewis Carroll, mathematician and author of Alice's Adventures in Wonderland



    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in USO over the next 72 hours.
    Dec 18 7:47 PM | Link | Comment!
  • Korean Poker
    A little over 48 hours ago, N. Korea fired approximately 200 artillery shells at Yeonpyeong Island, S. Korea. The island is recognized as part of S. Korea according to the U.N. The U.S. is sending the U.S.S. George Washington to participate in military exercises in Korean waters.  Is this a bluff, or is N. Korea playing from a strong hand?
    Yeonpyeon Island
    Two marines and two civilians are reported dead. The George Washington carries 75 warplanes and a crew of over 6,000. The aircraft carrier was at a naval base at Japan and will be off the coast of Korea for the ‘scheduled’ exercises Sunday through Wednesday.
    N. Korea accused the South of driving the peninsula closer to war by withholding humanitarian supplies and “reckless military provocation.”  S. Korean politicians grilled Defense Minister Kim Tae-young.  They were upset their military did not mount a quick and strong retaliation in response to the shelling.
    Reuters reports that Kim Jang-soo, a retired S. Korean defense minister and present lawmaker, told the public “I am sorry that the government has not carried out ruthless bombing through jet fighters during the North’s second round of shelling.”  He wants to call the North's bluff.
    S. Korea warned that any future attack would trigger “massive retaliation.”  The Global Times of China reports that N. Korea accuses the South of firing shells into the water about 90 minutes before the North returned fire.  S. Korea is conducting military exercises with 70,000 troops.  These exercises are scheduled to run through Sunday.  Chinese foreign ministry spokesman Hong Lei urged both sides to ‘do things conducive to peace and stability on the Korean Peninsula.’
    China holds the "hole cards."
    This weekend marks the 60th anniversary of 8,000 Marines fighting their way to safety after being surrounded by 120,000 Chinese troops at the Chosin Reservoir, N. Korea. They not only fought enemy troops but the coldest winter in over 100 years. Minus 54 degrees was recorded at one outpost! Survivors call themselves “The Frozen Chosin.” At your Thanksgiving dinner tomorrow, remember the Frozen Chosin, and others who have volunteered throughout our history.
    Chosin Soldier
    When asked what he wanted for Christmas, he replied “Give Me Tomorrow.”  Our wish, may your family have many peaceful tomorrows, because of men like the soldier pictured above.  Here is a short video about the Frozen Chosin.  One commander was asked if the Marines were retreating, he replied "No, we are attacking in a different direction."  You can read about the events of November 1950.
    We hope the present belligerence does not spiral out of control.  But, one should not minimize the possibilities.  It is best to be defensive in the market.



    Disclosure: No positions
    Nov 25 12:11 PM | Link | Comment!
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