Markets and EconomyCALIFORNIA BONDS AT GRADE WHALE DOO DOO?

For the small investor: $5 to $25K

Below junk bond status we have Whale Doo Doo resting quietly at the bottom of the sea. That's where California Bonds may be priced eventually. See my commentary HERE but you need to know that the Democratic Party in California is partly a Marxist party, many in the party are opposed to free markets and free enterprise. They will not only default on the Bonds if it suits them, many may actually be planning to default; I refer to Berkeley and most San Francisco reps. This threat has more than a little to do with high long term rates right now, as well as good bond demand.

BLACKOUT REPRESENTS HUGE OPPORTUNITY: If you're looking for a "SHOT" look at companies that build transmission lines, power generating plants etc., there will be billions invested in new equipment. Pick a top company not some long shot dog. Copper will be helped, wire makers, etc. BUT remember the environmental movement is basically an anti-capitalist movement and they are very strong. The NIMBY people will fight tooth and nail against any power lines, the anti-nuclear lobby will fight too so you might not see such a fast return on investment here. Most opposition will be from people who want socialism and not capitalism to rule the power needs of this country. This is what the fight will be about. Demands for rate regulation will hamper any start ups. To top that off, the cheap electric power states, TVA (built by THE NATION'S taxpayers) doesn't want to share with the people who built the TVA, neither do the states in the Southeast which have power companies that will fight this. So it won't be a quick profit, you can afford to find the right comnpanies.

Lots of talk by financial types that Greenspan is showing his age in a major way. His handling of the interest rates over the past year has been without redeeming value. He caused much of the recession fighting an inflation that didn't exist, concentrated on a deflation that was more in his mind than on any balance sheet, and now is acting like he can control long term rates when any dropout from Econ 101 knows the Fed can only control the short term Fed Rates; the market controls all the other rates. He is mentally incapable of continuing his job and the markets are screaming at us that investors have completely lost confidence in him. This is a big deal, meaning that markets will largely ignore what he says other than a direct statement.

Hope you all watched William O'Neil of Investors Business Daily on Kudlow and Cramer; he is the best teacher of the stock market on the planet, as Jim Cramer commented. His view is that the market bottomed in March, is now a Bull, but as I've been saying it is a stock pickers market. His observation that past market leaders will not lead again is crucial. This data has been collected from over 55 years of charting every stock. Past leaders do not lead again. Period. A small investor needs to look at the New America Pages every day and keep track of those stocks because it is in that field you will find the stocks that will explode for 500% or better.

Oil prices are still the concern of the market. The Blackout is an example of the unexpected Major Surprise. It took place AFTER New York closed so Tokyo and Hong Kong experienced the immediate downturn. Markets almost always recover right away from this type of surprise so that by the time stocks opened in New York they opened higher.

Nothing has changed this week. The Jobs number at the end of August are major. Most people studying Europe and Asian stocks think the rallies are not confirmed there. A world recovery would be so dam bullish here as to look for a 12,000 Dow.

Stay the course. Do your homework.