Jul 07 2008
Week 22 2008
( Please see Kangaroo Money’s Disclaimer below. )
You will find our weekly comments here on this page with fuller opinions and reasons following after you hit the (click here to read more) highlights. ( Currently, we have turned this feature off so that one and all can get a feel for our openings and read all that is available. In the future, this feature will be turned on.) Anyone can tell you a one or two sentence blurb, but we like to back up our comments with our views so that you can understand where we are coming from.
Below the weeks’ stories, there is the U & C section, the KM Team will give you some of the latest information concerning some of the previous comments published here as well as compare the KM Team take on things to other counterparts. The U & C section will be a nice way to see if the KM Team is staying the true course in the ocean of Economy.
Down lower, you will find our Market Mover of the Week feature, highlighting the one person that the KM Team thought was most responsible for moving the USA markets and / or economy for the week past.
Then there is the Definitions of the Week. These are items that will be complied into a term dictionary at a later date but that will help you now as we explain some of the power phrases of the week just passed.
An additional feature has been added called International Impact Incident of the Week. The Triple I section will highlight an international situation either just passed or an upcoming event that the KM Team sees as a United States financial markets mover. Somewhat like the MMW feature, we will check to see how our forecast of the Triple I event turned out.
Most importantly, The KangarooMoney.Com disclaimer has moved to the bottom of the last post on the page. Please make sure to check the disclaimer out if you have any questions about how you should enjoy our writings here.
Because we are writing for everyone, don’t be afraid to let us know how we are doing. This is an ongoing work-in-progress where we hope to bring fresh changes, new site additions and page features as we go forward. As the days go by, we won’t forget to tell you we think we are doing — so don’t YOU forget to tell US how you think we are doing! For now, enjoy, learn and earn! R, S & D
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Part of understanding The Economy is trying to understand the Public that is the driving force behind the numbers. The overall Public tends to spend a great deal of time in a “herd mentality” depending upon what has been being bleated about on the national news channels. And what causes the “herd mentality” more than anything else? Poor Grade Schools. Period. (click here to read more) While a great deal of the Public send out huge outcries about Pre-School, Kindergarten and beginning grades, mostly concerning school supplied breakfast and lunch programs, ( this editorial is an example of both sides: http://unionleader.com/article.aspx?headline=Veggie+orders%3a+Eat+%27em%2c+Washington+says&articleId=28f9674b-e848-4f1d-9800-f57547b086de ) the lack of parental participation in the day to day life of a school has led to an educational system that “teaches to the test” or more simply, teaches down to the lowest level student in the section at that time. Course work and thus grades end up getting leveled out with the highs and the lows meeting closer to the middle all of the time due to the structuring of universal education plans set up to meet financial goals and needs instead of individual student needs. And where are the parents for this situation? They are not at the school board meetings nor at the PTA meetings nor at the parent-teacher conferences, all of which are called for and held on a regular basis. This has been going on for nearly 20 years now, so neither political party can be blamed for the situation. Instead, what has happened has been a whole generation has been taught to be middle of the road, even with everyone else and thus when one person decides to act in one way, say to complain about who might be getting too much profit on the Publics’ overuse of gasoline or say to opine that it is okay for manufacturers to move out of country and take their jobs with them, most everyone goes along to get along because that is how they were taught. As you watch the news of the Recession as it grows from a sub-prime mortgage issue to a credit crisis to a housing disaster to a, well, a what?, Stock sell off and innovation crunch?, remember that the United States of America was built on daring, innovation and intestinal fortitude. The Public, the Herd, while educated and content, will only be leading the Water-Cooler Downturn until the Head of the Class Students return to lead us forward again.
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In Week 18 2008, the 2008 US Farm Bill was dealt with in view of the pending discussions that were ongoing in the US Senate at the time. As we have seen, the Farm Bill was passed by the Senate, sent to the President who vetoed it, and the bill was returned to both houses of Congress for further review and a probable veto over ride. But wait. There’s more. (click here to read more) Turns out that there was a full 34 PAGES of the voted on bill that was completely MISSING from the document that was sent to the White House. This invalidated that particular document even though it had been vetoed by the President. Not to worry. Both houses of Congress quickly got the full bill put together, voted on it, sent it back to the President, who vetoed it ( again? well, not the same bill ), sent it back to the Congress who quickly overrode the veto, which put the bill into effect. So as KM discussed it all is well, correct? Not really in the opinion of the KM Partners. While money is allocated for multiple farming ideals, such as the Farmers Market Promotion Program, the Community Food Project government grant program and the Healthy Food Enterprise Development Center goal, the creation of a new agricultural research department National Institute of Food and Agriculture( NIFA ) as well as a multitude of biofuel development plans, the 2008 Farm Bill still trades very heavily on Farm Subsidies in defiance of current World Trade Organization ( WTO ) rules. The dependence of these Farm Subsidies not only leaves the United States open to billions of dollars of trade penalties with countries that we import food from ( think Brazil, other South American countries and Southeast Asian countries ) but it also encourages a “pay for not growing” attitude among some of the farming combines in the United States. As KangarooMoney previously stated, growing food is one of the great things that the United States can do here and teach around the world. The Dust Bowls of the the 1920’s and 1930’s as well as the overworked fields of the Southern States of the late 1800’s coupled with the technology of 1990’s and today have made food production in the United States equal to the oil production of the Middle East. This should be a valuable tool and founding block of the economy. Instead, we paying for nothing and now we are all paying very, very dearly for it. ( the full and indepth 2008 US Farm Bill can be explored here: http://www.usda.gov/wps/portal/farmbill2008?navid=FARMBILL2008 but you may want to explore more easily understood explanations through general news sites such as www.wsj.com or www.nytimes.com )
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One of the things that the KangarooMoney team has firmly believed in for many years is that the economy can be flying high or sinking low and there will still be an area of companies that will be doing well regardless. That would be the publicly held brewing companies. (click here to read more) The easiest way to view this opinion is to review the following statement: “If things are going well, people are having drinks and toasting their good fortune. If things are going bad, people are having drinks to drown their bad luck.” Over the past several years, there has been a consolidation among North American beer brewers in particular, starting with the Coors buyout of the Canadian company Molson, creating the Molson Coors Brewing Company ( TAP, traded on the NYSE ) the build up of the SABMiller Brewing Company, and of course the Anheuser Busch Company, ( BUD, traded on the NYSE, a stock owned by the KM Partners ) that has been buying the older regional US brewers for many years now. These are just a select few of the brewers in the United States, primarily known for their beer producing, but well known for their sporting sponsorships and ad campaigns in American media. Beer consumption has been steadily increasing over the years and this is one trend that the KM Team does not see decreasing any time soon. With the Miller-Coors companies to combine their US operations effective July 1, 2008 ( as agreed to in October 2007 ) there may be less brewers at the top level of the business ladders but there will be just as many mainstream brews still in the stores and the bars for us all to enjoy. Indeed, prices may edge up some as the rest of 2008 plays out ( Anheuser Busch has announced increases for October 2008 already ) but beer will still remain a good value, both at the bar and in the investment portfolios. Look for the KM Team to continue drinking to American brewers health.
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In Week 18 2008, it was pointed out that coal companies were an up and coming situation that merited watching. KangarooMoney touched on the fact that a fair amount of coal was indeed going overseas, especially to China, while also mentioning that mining coal has much improved as has the use and storing of the mined product. Some of you had questions. Mostly, just one question: So? (click here to read more) The importance of coal to the American Economy can not be understated nor underplayed. Not only is it the largest type of mining to take place in North America, above and below ground, adding a large amount of money into the economy across 20 different US states but, American coal is already impacting most all of our lives here in the United States on a daily basis without most people realizing it. Estimates are that up to 90% of the coal mined in the US is being used to produce an estimated 40% of the total electricity for the lower 48 states at coal fired generating plants. While the environmentalist groups cry foul over this situation, these are NOT the same coal burning situations that confronted our grandparents at the turn of the last century. It is however, an unfortunate situation in that coal is also a non-renewable energy source as well as being harder on the total environment than drilling for oil or plunking down wind turbines. Coal mining and coal burning, much like oil drilling and oil burning, is not going away any time soon, especially in the United States. Which is very good news for the 54 major coal mines in the United States along with the 20 states that are supported by coal. As a matter of interest, of the two companies that were mentioned in Week 18 2008: Arch Coal ( ACI, traded on the NYSE ) was trading at 59.25 per share that Friday close and was trading at 62.90 per share on May 23rd 2008; the other, Foundation Coal Holding ( FCL, traded on the NYSE ) was trading at 59.72 per share that Friday close and was trading at 62.89 per share on May 23rd 2008. While a $3.65 per share and a $3.17 per share increase might not seem like very much upward movement on a stock investment, KangarooMoney would have say that you would very, very hard pressed to see that type of value in a three week period in this current market. KangarooMoney believes that coal mining, and mining in general, in the United States will be a strong area throughout 2008 and into 2009.
Updates and Comparisons: Much more here doing WK32 — trust us!
Market Mover of the Week: Well, this would hardly seem fair now would it? See here WK32.
Market Mover for Week 22 2008: Well, this would hardly seem fair now would it? See here WK32.
International Impact Incident: Well, this would hardly seem fair now would it? See here WK32.
DEFINITIONS:
BOND : item that is issued for more than a year that promises to repay the initial principal paid for amount along with interest on a specific date; usually issued by the US Federal Government, one of the 50 US States, cities and towns, major corporations and other types of major institutions such as hospitals and museums; individual investors as well as group investments such as mutual funds, investment banks and banking groups usually purchase these items; a market price can be established for bonds based on the belief of the issuer to pay the total principal investment with interest back as stated, the belief of the completion of the project the bond was issued for and / or the amount of bond shares that have been issued
BREWER : a person or company that produces alcoholic drinks typically; a person or company that causes the fermentation process to occur in order to create beer and wine, but also can create sake, soy and mead; a person or company that creates and follows the recipes for the creating a fermented alcoholic drink
PTA : abbreviation for Parent-Teacher Association; a voluntary group consisting of teachers and the parents of the children that those teachers have under their supervision in a school setting; this combine group usually meets to help in a fund raising capacity or special project activity for the students of the school / school district
2008 FARM BILL : common term used to describe a 5 year agricultural policy as a Congressional bill that was debated by both houses of the US Congress during 2007 and 2008 before being passed and put into effect by an override of a Presidential veto in May 2008; this bill is actually a $280 Billion+ continuation of the 2002 bill / policy that was already in place
WTO : abbreviation for World Trade Organization; an independent group that governs rule of trade between all nations; the group negotiates and sees to the implementation of new trade agreements between member nations; the group is also in charge of policing the adherence of the member nations to the existing rules, agreements and policies; the WTO has existed since 1995 but is the successor to the group known as General Agreements on Tariffs and Trade ( GATT ) which had existed since 1947
The Kangaroo Money Team continues to experience difficult times as the summer unfolds for us here at Kangaroo Money due to the many impacts of our daily lives. We hope that you still enjoy and learn from the time we spend to write to you. All of us at KangarooMoney.Com and KM Partners send our hopes and prayers to our friend and team member as a difficult situation continues. In the meantime, Kangaroo Money is happy to see that we continue to expand our worldwide readership and that you, the readers, are taking the time to read and digest our writings. What better reason for us to keep doing what we enjoy doing? The KM Team continues to look for ways to help explain the economics shaping the world today. Please keep those comments coming in because we do appreciate hearing from you. As the days go by, we won’t forget to tell you what we think we are doing — so don’t YOU forget to tell US how you think we are doing! For now, enjoy, learn and earn. R, S & D…
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