8/30/04
Hi,

The Stock Market appears to be poised for a sharp rally should George Bush receive a bounce from the Republican Convention. This Presidential race is the most contentious I have ever seen. With all of the acrimony and hostility, nothing regarding candidate policies and ideas has leaked out. In Kerry's case, I guess by choice; in Bush's case we will have to see at the Convention. Should Bush use his acceptance speech to make specific future statements of a Bush administration, that would certainly be helpful.

I have done a survey (of sorts) amongst my clients as to what each candidate stands for - and most are aware of George Bush's basic positions - but in reference to John Kerry, most people just say Kerry is not George Bush. From what I have read of both candidates positions on Iraq and terrorism, they are seemingly close together, but on domestic issues there appears to be marked differences. My favorite Kerry position is to raise taxes on the upper 1% and raise dividend tax and capital gains back to pre-cut levels. This would raise $630 Billion or so over the next 10 years. Then Kerry attacks Bush for huge deficits (fair enough). Then he goes on to list his "modest spending plan" of $3 trillion over 10 years (in fairness, apparently Kerry says about $2.5 trillion and Bush people say $5 trillion). But either way, Kerry's deficits would be substantially higher than Bush's. Go figure!

I am off track here; so with a Bush government, the DJIA and NASDAQ should rise to their recent highs. I still believe that next year and beyond would not be pretty.

Interest rates will stay within 50 basis points (1/2%) until after the election, when rates should start to climb.

Gold has nicely been holding over $400 per ounce and rising. I do believe that new multi-year highs should occur in 2004 and next year (2005). We should easily see $550 an ounce or much much more.

The economy is weakening and the only question is whether or not we will have another recession - my guess is yes, starting in 2005 - but I am not ready to make it a full prediction at this time.

Real estate prices are falling in the high priced market segments. That means high priced for that respective area. As an example, in the San Francisco area, $2.5 million and above - in South Florida, $1.0 million and above. There clearly appears to be a coming real estate price deflation on either coast (West or East) where all of the pure inflation has taken place. The rises are truly unsubstantiated.

Copyright 2004 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Monday, August 30, 2004

 
8/2/04
Hi,

The stock market is weak, the Dow has broken through 10,000 and the NASDAQ has broken through 1900. Both indexes have a long way to go, though. If Bush appears to be in front, and winning (after the Republican convention), the market will have one last gasp up - the Dow closing in on recent highs and the same for the NASDAQ - then heading lower after the election (into 2005 & 2006). The market does not like Kerry-Edwards, essentially because Kerry wants to raise taxes on those earning over $200,000 per year and cancel the dividend tax of 15% and capital gains tax of 15%.

The economy continues to appear weak as well. In late May/early June, sales all over the US started tracking lower, collections substantially reduced and business health in general appears to have diminished. Not only have I seen this with my clients, but most public companies reporting, who have broken out sales by the month, indicate a slowness commencing in early June going forward.

Gold should be finished consolidating - if you haven't taken a position already, NEM, AU & BGO offer great value at reasonable prices.

Arnold

Copyright 2004 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Monday, August 02, 2004