The decling dollar, oil and Cindy Sheehan

First the speculator would like to state that his heart felt prayers and thoughts go out to the survivors and mourning families along the Mississippi coast and New Orleans. Precitably mass chaos has been thrown in the mix. The worst is over or is it? Both areas struck by the storm will have a negative economic impact that will be felt for at least 12 months. The businesses that cater to the tourism trade, the main driving force in this area, will shut down and many wont open back up. However prior to the storm New Orleans was experiencing a massive amount of capital investment. How to profit from this in the future, considering buying property in Big E or even along the Biloxi coast. These areas stand a chance to bounce back, they must and a buyer may be able to find a fire sale.

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Cindy Sheehan-well the Speculator has sat back as the mass media saturated the news with this woman's "plight". I say plight but let's be honest, this was an attempt by the far left to make one last stab and just as the result in the 2004 election results proved, it fell on deaf ears. Proof positive is that right now Michael Moore is advertising this woman "tour" on his site. So now the left has dubbed her their latest pitch woman for their cause, whatever that cause may be because the Speculator along with others cannot figure out their exact message. Oh yes it's "we hate Bush just for the sake of hating". Did the left ever consider when their favorite, no not Bill Clinton, but Al Gore sat back for eight years as an important part of an administration and did nothing as radical Islamic terrorists gained strength?

Whether the left can face the facts, a tall request mind you, but an area of the world (Iraq) had to be shaken up and cause a mutiny against these thugs. Guess what? It is working. Just as it took time for them to build their powerbase it will take the same amount of time to dismantle them.

By the way remember six months back that the US military was going to hell in a handbasket because of a lack of recruiting? The mass media jumped all over this bit of information. However recruitment and re-enlistment rates are high and the numbers were met. Strange how the press didn't run wild with this information? Also Cindy Sheehan's son Casey re-enlisted and thus knew he would be going into battle. Consider that the US's military force is all voluntary, unlike many other developed nations of Europe that American lefty types enjoy parading around as a nirvana of existence. Funny thing is Michael Moore or Robert Redford have yet to denounce their US citizenship in favor of life in Sweden. Any Swedish viewers don't take offense, the Speculator is currently reaping his investment in the nordic countries of Sweden, Finland and Norway.
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Okay whether Americans wish to admit it or not but inflation has taken a serious bite out of the dollar. People who pay to see a cinema can rightly attest to this fact if they considered movie ticket prices from say two years ago. The commodities are booming, a sure sign that value was found and now the speculation begins. Oil prices are in the news everyday. Now there has been little investment, practically none, in oil refinery. This, despite of a saturation in the oil supply, has resulted in the skyrocketing prices at the pump. It isn't just in oil, but with lead, copper, platinum, etc. As a result of these factors along with a tremendous amount of cheap US dollars, inflation has come home to roost.

How to assure your dollars gain value in these rather bleak conditions? I would implore the readers to consider investing in ETFs/I-shares that represent countries of promise. These would include the Nordic region, the Netherlands, Brazil, Canada, China and Japan. The Speculator is also interested in the Philippines but will reserve his comments until a later date. Also consider EverBank (everbank.com) where an investor can exchange US dollars for foreign denominations.

I must close for now, thanks for viewing-
infinite speculator

More EU Fodder

A short one, will post some originality the next few days. The source for below is the WSJ.com.
Infinite Speculator


By JOHN W. MILLER DOW JONES NEWSWIRESAugust 29, 2005
ATHENS -- In his regular job, Emmanuel Kondopirakis teaches math at an elite New York City engineering school. Now he is trying to teach tough accounting standards to a failing student -- the Greek government.

To Mr. Kondopirakis's supporters, his quest as secretary-general of Greece's National Statistical Service is a long-overdue cleanup of sloppy and sometimes misleading reporting that undermined Greece's credibility and shook the honor system that underpins the euro currency.

But to his critics, the campaign to overhaul the country's budgeting is a politically motivated effort to attack the previous government. Both sides have a point, says Platon Monokroussos, an economist at EFG Eurobank in Athens. Greece's conservative New Democracy party, which defeated the Panhellenic Socialist Movement party in 2004, "has tried to score political points," he says, but at the same time, the country's "statistical problems were very real."

At issue is Greece's embarrassing disclosure last year -- after Mr. Kondopirakis began overhauling government bookkeeping -- that it underestimated the country's budget deficit between 1997 and 2004 by some €25 billion, or $30.75 billion. The resulting eight years of revised figures raised questions about whether Greece fiddled with its budget numbers so it could meet a key European Union deficit limit that allowed the country to adopt the euro in 2001. The flap also fueled growing doubts about the accuracy of EU-government budget figures -- doubts that have threatened to delay adoption of the euro by the bloc's new member countries.

Mr. Kondopirakis, 58 years old, was tapped as Greece's statistics chief 17 months ago because of his reputation for integrity, according to George Alogoskoufis, finance minister for Greece's new government. "Nobody trusted us. That had to change," says Mr. Alogoskoufis, who describes Mr. Kondopirakis as "a very serious technocrat."

For Mr. Kondopirakis, it was a detour from a career in teaching in the U.S., where he emigrated to study at age 18 and started teaching math at Cooper Union's engineering school in 1979. At the downtown New York City institution, he was known as a particularly tough taskmaster. On a Web site devoted to reviewing professors, one Cooper Union student writes, "He will ruin you[r] life and your" grade-point average. Another writes, using the professor's nickname, "if you go through kondo's class, keep up. To pass, you'll know the material better than anyone else could ever expect to. Although he's terrifying the first time around."

The appointment also represented a return to Greece for Mr. Kondopirakis, whose only other sabbatical from teaching was to run the statistics agency from 1990 to 1993, the last time the conservatives held power. He describes that first term as routine. "There was no pressure then to submit low deficit figures."

Since 1997, EU members adopting the euro have been required to keep their public deficits at less than 3% of their country's gross domestic product. Governments were judged on how low their deficits were, creating an incentive for publishing false figures not only in Greece. Italy and Portugal have been criticized by the EU as overestimating pension revenues and income from the sale of state assets.

When he returned to Athens, Mr. Kondopirakis says he found "a shocking mess." During a recent interview, the statistics chief cited three main reasons behind the problem: a culture where estimates were often as good as hard facts, dubious accounting of defense spending and overly optimistic estimates of revenue.

It didn't help that Greece also was organizing the 2004 Summer Olympics, which the socialist government estimated would cost €3 billion. Now it looks like the games cost at least €10 billion.
After Mr. Kondopirakis and his team imposed new standards for some 2,000 Greek municipalities, public hospitals and other government agencies, the country had to change its deficit figures. In 1999, the year Greece won adoption of the euro, for example, the reported 1.8% deficit was revised to 3.4%. All told, Greece's budget revisions amounted to 18.4% of its GDP.

The revelation caused an uproar among European policy makers. European Central Bank President Jean-Claude Trichet called Greece's revisions "a real enormous problem" that could hurt the euro's credibility. The European Commission, the EU's executive arm, wrote new standards for statistical accuracy. While there is no mechanism under EU law for expelling a euro-zone member like Greece, policy makers warned the disclosure could delay the EU's 10 new members in getting the euro because many have deficits near or higher than 3% of GDP and their budget figures now are less likely to be trusted.

Mr. Kondopirakis says Greece made excessive use of what statisticians call the sampling method -- mathematical projections to estimate money spent and then projecting those numbers nationwide. It was a cheap, easy system, he says, that "also created a lot of potential for twisting the figures." Eurostat, the EU's statistics agency, was suspicious of Greece's numbers for years and published them with an asterisk to flag problems in the country's statistical methodology.
"How can you think a country is lying and do nothing about it but put up an asterisk?" asks Mr. Kondopirakis. Former Eurostat director Michel Vanden Abeele says he had no choice at the time. "The only thing binding was a gentlemen's agreement," he says. Under new rules approved by EU finance ministers this past spring, Eurostat will have the right to request more-detailed accounts from a country.

Mr. Kondopirakis's solution was to start counting every bean. He created a special task force of 40 to send questionnaires and guidelines to Greece's 1,000 municipalities, 134 public hospitals, 170 social-security offices and other government offices, each with its own budget. He declines to specify names, but he says most places didn't understand many principles of modern bookkeeping. Some municipalities didn't keep detailed books at all. "There were mountain villages without computers," he says. "They had no records for cash flows, income, stocks, bonds."

With defense spending, the problem was accounting methodology. In the late 1990s, the Greek government embarked on a military spending spree and didn't count much of the equipment in its budget, arguing that was necessary only when everything had been delivered, many years later. Mr. Kondopirakis required the defense ministry book all payments in the year they were made.

Mr. Kondopirakis says the previous government inflated tax revenue and EU aid money received to pay for everything from olive-tree subsidies to road construction. He advised the government to be more modest in its estimates.

So far, Mr. Kondopirakis has won plaudits from some quarters. Mr. Vanden Abeele, the former Eurostat director, praised him at a meeting of EU finance ministers late last year, according to people at the closed meeting.

Officials from Greece's former government have a very different view. "This is a predirected exercise in order to blacken the opposition," says Nikolaos Christodoulakis, Greece's finance minister from 2001 to 2004 and now a member of the country's parliament. Mr. Kondopirakis's moves have been counterproductive, he adds. "Now everybody thinks we're liars."
Mr. Kondopirakis responds, "That's nonsense. I'm a scientist, not a politician. People know that I'm tough and that I won't bow to political pressure."

The math professor has agreed to stay on until the next elections in 2008 or as long as Cooper Union extends his unpaid leave. After that, he wants to go back to teaching. "I love my kids," he says of his students. "I'm tough with them, but the ones who stick with me, I think they love me, too."

As for the government officials who practiced what he calls lax accounting: he says they are like students who may initially get a failing grade. "It could be that the kid just doesn't understand. It doesn't mean he isn't smart."
Write to John W. Miller at john.miller@dowjones.com

John Johnson: A Media Pioneer Passes

Today the newswires lit up with the death notice of John Johnson. When it comes to Black pioneers in the States, Johnson is not a recognizable name such as Martin Luther King or Rosa Parks. Somewhere along the lines in America's recent history standouts in the Black community have always been from the background of civil rights. Johnson, however, truly lived and personified the American dream. He was groundbreaking not only in Black achievement but in business as well.

Johnson was the creator and architect of the highly circulated Ebony magazine. Later he would begin the equally popular Jet magazine. Unlike so many circulations that live and die by consumer's preference, Johnson's publications established a consumer niche that stood the test of time.

Johnson grew up during the poverty conditions accompanied with the Great Depression. Now couple this with the segregation, there were no obvious hints to his future achievement. Following a relocation from Arkansas to Chicago, Johnson discovered his love for journalism when he became the editor for his high school newspaper and member of the yearbook staff. While giving a speech, Johnson came to the attention of Henry Pace, principal owner and president of Supreme Life Insurance Company of America. Supreme marketed their product to Black America and was itself a pioneer for the race's achievement. Pace was impressed by Johnson and gave him an office job. While working for Pace's company Johnson began attending Northwestern University part-time.

A journalism major, Johnson was given an idea and asked for his opinion. Pace questioned whether a journal devoted to Blacks regarding lifestyle trends, news and politics would be marketable. With a mailing list of 20,000 Supreme customers and receiving $2 from 3,000 customers for prepaid subscriptions, Johnson knew the interest was there for the product. However Johnson could not afford the publishing and postage for his new venture so with a $500 loan, secured by his mother's home furnishings, Negro Digest was launched on November 1, 1942. Besides the 3,000 he initially published, Johnson produced another 2,000 to sell and distribute locally.

Continually rebuffed by the Anglo dominated publishing industry, Johnson heard more than once that his type of magazine would never sell. Johnson, not deterred, enlisted friends and family to engage in a bit of product testing. These individuals would approach newstands and request Digest. Vendors and distributors took note and began ordering Digest directly from Johnson. However because the States were engaged in World War II, paper was limited and rationed. Johnson would maintain his position at Supreme until 1945 when he formed Johnson Publishing and relaunched Digest as Ebony Magazine. Johnson, who some have described a natural born salesman, approached Zenith Radio as his first nationwide advertiser. Impressed by Johnson's perseverance and determination, Zenith president Eugene McDonald became his first advertising customer.

In 1951 Johnson launched Jet Magazine with the same goal as Ebony: reach the Black audience and keep them interested for more. Jet would become just as popular Ebony in the decades to come, both making Johnson's empire a national force. In 1958 with his wife, Johnson began the Ebony Fashion Fair. An event that to date has raised more than $50 million for charities.

Another defining moment was when Johnson discovered that cosmetics devoted to White Americans would not advertise in his magazine. Sensing another niche market and an opportunity to profit, Johnson launched both Johnson Products Co. and Fashion Fair Cosmetics. Just as with his magazine, both product lines became sensational bestsellers to an eager and then ignored consumer group.

Throughout his publishing career, Johnson experienced many highs and few failures. Several additional magazines failed to capture an audience but both Jet and Ebony continued to be the driving force behind his publishing empire. Johnson also began to accumulate numerous radio stations and was said to be instrumental in molding the career of popular Tom Joyner, the popular morning radio host.

Johnson never backed away from controversy or confrontation. He was said to have lived lavishly, a testament to his hard work, often driving a Rolls Royce and on several occasions being mistaken as the driver. Once he wanted to purchase a piece of property but the White owner refused to sell to him based on the color of his skin. Realizing this situation, Johnson hired a White lawyer and Johnson himself donned on a maintenance worker's uniform on the disguise as a building inspector. Upon the negotiations and once the deal was closed, the lawyer and Johnson informed the seller who the true buyer was of the property. In the late 1960s such militant-political groups as the Black Panthers and the Nation Islam began to criticize Johnson's magazine for not reporting on the entire truth regarding bleak conditions experienced by Black Americans. Johnson turned the table and gave himself as the example of success and not the political rhetoric expressed by the organizations.

In due time he would accompany and become friendly with Presidents Kennedy, Johnson and Nixon on trips to the continent of Africa. He would serve on the boards of Dillard Department Stores, Chrysler, Conrail, 20th Century Fox, Zenith Electronics and become the principal shareholder of Supreme Life Insurance Company of America. In 1996 then President Bill Clinton awarded him the Presidential Medal of Freedom, the highest honor an American citizen can have bestowed upon them.

In 1963 Johnson was quoted as saying, "Dr. Martin Luther King Jr. can talk abstractly about goals for Negroes, but here they could see it." Never truer words have been spoken by someone who truly grasped their own potential. Forbes Magazine would later estimate Johnson's net worth to total $100 million. The Infinite Speculator shares Johnson's opinion that economic prosperity is the solution to poverty.

Obviously Johnson is a hero and role model for the Black community. However the Infinite Speculator believes that if he was asked, Johnson would proudly say he was the American dream personified and how far self-determination can move someone. Only in America Mr. Johnson, only in America.

Cheer for the 30 year

I was pleasantly surprised to see that the US Government, through the US Treasury, will reintroduce the 30 year Treasury (T) bond. Why was it ever discontinued? Well that was an event that was heralded during the administration of President Bill Clinton. With interest rates at all time historical lows and the various facets of the technology industry (everything from telecommunications to computer software development roaring), thus creating a greater amount of federal tax revenue, the 30 year T-bond was trading at lower amounts then T-notes (1-10 year ) or shorter- term T Bills (1 year or less). The Clinton administration had long pitched the idea of reducing the country's national defecit and buying back the 'lowest price' form of borrowing (The T Bond). However the flipside is when interest rates do rise as part of a natural reaction for fiscal policy relative to the current and projected economic state, the results can be disasterous when it comes to issuing bonds/notes for financing.

The longer the bond's maturity, the relationship to rate conditions and price of the bond can be tricky. When rates rise, the price of the bond will fall and this relationship is something that is literally set in stone. A 30 year T bond will take in consideration of the demand for the investor, in theory, to forego time horizon risk and add an additional return on the interest rate. However since the rates are locked in with a thirty year time horizon and given the current condition, the issuance of such tools should be adventitious for the issuer. This will cause the debt responsibility to be less of a burden for the federal government. Additionally large scale bondholders such as pensions and mutual funds, along with money markets, will have yet another means of diversification.

The idea that the federal government is defunct if it runs a debt is a preposterous spin of balderdash marketed by often the left in the arena of politics. This is the same group that has attempted to convince the American voter that a minimum wage is suffice to live off for a lifetime along with social security being a suitable retirement plan. It would be nice to see the federal government with a debt of zero and generating a surplus of tax funds. However this will only be accomplished by reduction of the government services, something the left will fight tooth and nail against or a higher tax burden. Currently this comes in the form of the income tax, which is outdated and inefficient. Someday the infinite speculator would be quite tickled if the government instituted a very low fixed income tax rate along with a national sales tax. Current data can tell anyone that Americans have no problem in spending, in fact spending too much given average credit card balances and loans carried by the American consumers, so it would only seem logical that a national sales tax would complement a consumer driven economy. Maybe someday but given the left's love of class warfare in their own political marketing, sadly it will be later rather than sooner.
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The big news for Wall Street in regards to equities is the announcement of the merger between Adidas and Reebok to compete as a rival against shoe giant Nike. The infinite speculator is going out on a limb and predicting the investor will see additional purchases of other sporting goods as these two entities seek to diversify while maintaining an edge in not only the athletic shoe business but complementing goods. One may wish to look into Quiksilver, don't let the lack of the letter C fool you and the ticker is ZQK.

Forgive the infinite speculator if I have touched on this subject before, but Wal Mart's recent fall from retailer giant status and the per share appreciation for Best Buy should be noted. For the past 12 months Best Buy (BBY) has appreciated over 60% while Wal Mart (WMT) has declined to -10%. This should tell the investor looking for a long term trade or a change in consumer preference has begun. The infinite speculator is not endorsing BBY but this is just something to consider.

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Predictably France is once again engaged in preventing Turkey to enter the EU on the basis of Cyprus. Why should France even care about the future of the EU given their vote to turn down the recent constitution? They certainly don't care about their own domestic economy given the government implemented controls such as tariffs, subsidies and various devices of manipulation that only offer a short-term solution. Turkey stands a better chance of foreign investment while France's stagnant economy will only whither on the vine.

That is all for now..
infinitespeculator.com