MARKETS MUSTER A SIGNIFICANT RALLY ON TREASURY, HOME SALES

*RALLY BRINGS MARCH DECISEVELY IN THE GREEN AFTER INITIAL TUMBLE
Astoria, New York
A rally that ignited investors around the globe was sparked by the unveiling of the Treasury Plan to soak up bad toxic assets. The real economist believes that such a plan, as predicted earlier, would try to maintain real estate value from sinking lower. This would lead to more money printing and easily higher inflation down the road. Also, credit would flow back into the system to stimulate the sagging economy. The real economist predicted a positive month in an earlier post. We are seeing some spring action after a long and disastrous winter. The rally is decisevely in the larger stocks, but rotation should set in and we could witness one of the largest spring small cap and microcap rally since 1996. That rally commenced in April and ended in June. For additional info visit www.microcapstock.blogspot.com. The rally was also fueled by an increase of 5.1 pct in real estate sales for February.

BREAKING NEWS<> FAT CATS SLAMMED OUT OF CITI, GOVERNMENT TAKES BIGGER STAKE

*CITIBANK'S CITICORP SHARES PLUMMET IN PRE-MARKETS TO NEW LOWS, CAUSING FUTURES TO SINK DEEPER
*GOVERNMENT TO REVAMP CITI BOARD, TAKES LARGER STAKE BY CONVERSION OF PREFERREDS
*MOVE SEEN AS THWARTING A RUN ON THE BANK
FEBRUARY'S POINT DECLINE FOR DOW, WORST ON RECORD. DOW NOW STANDS AT 50 PERCENT LOSS FROM ALL TIME HIGH. THE REAL ECONOMIST OF ASTORIA, OFFICIALLY DECLARES THE WINTER AD 2008 TO AD 2009 AS THE WORST IN THE LAST FEW DECADES.
ASTORIA, NEW YORK
Another friday, another down day for the Dow. February closes with the Dow just above the 7000 area. The major culprit was Citicorp (C). It was forced to go back to the government and make another deal. The latest one will bring the government's stake in Citi's common to 36 percent. The move will dilute further existing shareholders. This week has seen other bad news including an increase in first time unemployment applications, a decrease in existing home sales and a 5.2 pct decrease of durable orders for January. The real economist believes that March could be a wild one for the markets. "After a dip below the 7000 level, it is possible to see a slim gain for the month if not better. We need to see spring soon ".

MARKETS EXPECTED TO RISE A BIT AFTER LAST WEEK'S NEW CLOSING LOWS

Astoria, New York
With banks ,such as Citibank (C) and Bank of America (BAC) , getting ripped apart and causing the markets (and the Dow) to sink towards Dow 7,000 , the real economist sees some relief rally in the upcoming week. The implementing of the new stimulus and the effects of it, in the midst of a deteriorating economy, are still puzzling investors across the globe. On a technicality, markets should jump early but then turn cautious awaiting economic news by mid to end of week.
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http://www.economyincrisis.org/?gclid=CL_TocD78ZgCFQwNGgodN3NB1Q
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OBAMA GETS VOTES TO PASS STIMULUS PLAN; WILL SIGN BILL IN NEXT 48 HOURS

THE 787 BILLION STIMULUS PLAN IS MAJOR MILESTONE FOR OBAMA
RESULTS OF OUR RECENT POLL INDICATES STIMULUS WOULD HELP A LITTLE THIS ECONOMY
Astoria, New York
President Obama says that this is not the end of the deep recession but the beginning of the end of it. After debates, some alteration and major opposition from Repubblicans, the new Stimulus Plan has squeaked by the Senate earlier last week, and was passed finally by Congess on Friday. Obama wants to put Americans back to work with a massive infrastructure plan. He also wants to boost new green technologies to alleviate and eventually eliminate dependence on foreign oil. A stimulus break for $400.00 per person and $800.00 per couple is expected to affect 95 percent of Americans. As most top economists say, the Obama Stimulus would only help a little this economy and much more may be needed to bring it back to normal. Therealeconomist ( THE REAL ECONOMIST ) believes that in order to protect property values, governments may need to print more money leading to longer term inflation and the amount of stimuli needed in the U.S. for the next four years, would amount to between 2 to 5 trillions.
(( Top economist LARRY KUDLOW at CNBC believed that the damage was only between 10 to 20 billions (MAY 2008 at the TAGLICH CONFERENCE ))

MINI DEPRESSION VERSUS (GREAT) DEPRESSION

Astoria, New York
Last winter, I had tossed the idea of a possibility of a mini depression looming ahead. During the summer, I was convinced that we were heading towards one. What is the difference between mini and GREAT? A lot. In a Great Depression, people will be struggling to put food on the table. Most banks will be going bankrupt, and urban areas could become vacant lots because there are no jobs available. That doesn't sound nice. It did happen in the Great Depression of the late 20's and early 30's. The inaction of the government as well food shortages and calamaties could create another one. In a mini depression, instead, the government is more efficient in allocating its resources quickly and swiftly to deal with any rising problem. Food is available as well as housing. Credit becomes scarce and unemployment rises due to cost efficiency programs implemented by companies. Today, we have resources that can help us thwart another Great Depression. These resources were not available back then. We have computers that could give us information instantly. We have better technology and communication across agencies. We have security. We have food and transportation availability. We have medical resources availability. We have cooperation among foreign governments. And we have the spirit of moving forward. So, you may ask: " Can we head towards another Great Depression ?" And I would reply: " YES, WE CAN".
But we won't , if we can stick together and we tell the powerful fat cats to do the right thing. Government bailout money to bonuses for the fat cats??? That is a no no. I don't want to think about the idea of those fat cats living 2000 years ago in Rome if they were able to get away with it, if caught.
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ALERT<> SENATE TEST VOTE IN FAVOR OF STIMILUS
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THE NEXT BLOG > MICRO CAPS HUNTING (Part 2 )

JANUARY 2009, WORST JANUARY PERFORMANCE ON RECORD, IN MIDST OF MORE SCANDALS

Markets tumbled in January in the midst of the biggest scandals in the financial markets that I have ever read. After Bernie Madoff's 50 billion dollar ponzi scheme discovered last month by the Feds, another smaller version has been found in the past week. Nicholas Cosmo, from Agape World, has been accused of running a similar version of the investment scheme. This comes as the markets have been pummeled in 2008 in the worst financial crisis since the Great Depression that has been taking place in the U.S. It has been unfortunate that these events which can cause catasthrophic repercussions on investors, have taken so long to identify while "nickle and dime" small and insignificant cases are discovered faster. More regulation involving legal and compliance means may be required going forward.
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www.foxbusiness.com/story/stocks-end-worst-january-record-losses/

www.nydailynews.com/money/2009/01/29/2009-01-29_judge_minimadoff_nicholas_cosmo_must_fin.html

IN MEMORY OF MARCUS TULLIUS CICERO

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BECAUSE OF AMERICAN FAT CATS GREED AND AMERICAN POLITICIAN INJUSTICES, ALL OF OUR STATES ARE NOW SUFFERING, ALL OUR FREE COMMUNITIES ON MAIN STREET ARE COMPLAINING, AND EVEN FOREIGN GOVERNMENTS AND PEOPLE ARE PROTESTING. AS FAR AS THE BOUNDS OF
THIS UNIVERSE, THERE IS NO SPOT NOW SO DISTANT OR SO OBSCURE THAT THE WANTON AND UNSCRUPOLOUS DEEDS OF THE AMERICAN FAT CATS HAVE NOT PENETRATED THITHER.
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Dear Larry,
I appreciate listening to some of your speeches. I have learnt more about what and who you are but I believe that this is a conference directed for the small stock investors. It should have a speaker who can understand and discuss the issues that the listener needs to know before he considers investing in these micro companies. Politics is an essential part of macro economics and micro economics. But politics cannot and should not persuade an economist to alter his opinion for the benefit of his fellow politicians. A media economist must remain independent at all times so he can favor what he truly believes in, and that is a fair economy and true economic growth.
Real estate as you may have learnt lately is an essential part of this economy and other economies worldwide. It is a multi trillion dollar business which affects banks, insurance companies, and any other industry that you can think of. A question came to your plate 3 years ago at this conference. It asked you if Americans had borrowed too much and if the true worth of real estate prices had been compromised. You argued that Americans had borrowed the same percentage to equity as usual and that prices were backed by the strength of the money supply of this economy. You were wrong. Freddie and Fannie were giving out or buying out loans with zero equity. When real estate gets manipulated by the politicians and by the greedy fat cats, it could overshoot causing a manic period in prices, just like small stock prices tend to soar on particular times on Wall Street. But there is a difference. Real estate affects everyone anywhere while stock prices in small stocks only affect a few. And the sad thing is that they have more regulation on small companies instead of having it on the real estate industry. You argued in the past against European policies and against its currency. You were wrong. The euro soared to 1.60. But the Europeans followed the greedy fat cats and they also fell in that fat cat trap of this global economy. Somehow, the greed of the fat cats is contagious and persuasive enough to convince people, from economies with more regulations, to indulge into an easy way out of their debt. But now change has opened its doors in America. The president elect has promised to change the way Wall Street operates. His hands are full as he inherits this financial mess. Bailouts and cry-outs are distrusting and disgusting for capitalism but not for the welfare and protection of the economy. The greedy American fat cats and those with unlimited executive compensation who don't know how or are too greedy to protect their companies on a rainy day, now will lose weight and they will feel the pain of change. Capitalism will survive in one shape or the other but it will be played on a different playground.
Taxation and regulation as well as caps on executive compensation for those public companies that are owned by private shareholders will be needed to be implemented in a fair and consistent way. This will be essential in Monitoring against excessive economic spurs that could affect anyone anywhere anytime.
For me, it was Marcus T Cicero who inspired me in writing this letter to you. Even though,
we are more than two thousand years apart, we live in a period of time that could be similar economically and politically to that of the roman senator. History usually repeats itself.
This is serious stuff. This is not what you thought just a few months ago at another stock conference. The amount of money in question here is really huge.
Sincerely, a fellow
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( written in early November 2008, ahead of the Westergaard Paulson Small Cap Conference at the Waldfoorf Astoria, NY )
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OBAMA IN FIRST RADIO ADDRESS

• In his first radio address to the nation, President Obama has outlined his proposed stimulas plan. He wants to promote education, green renewable energy, health care and security. So far, the economy has continued to deteriorate with unemployment insurance claims rising to new highs and housing starts falling again. With the Dow Jones declining almost 8 percent in 2009 and banks under serious pressure, another stimulus plan looks likely to be passed in the next few weeks. Obama also said that he wants accountability for the spending and has initiated a new website for taxpayers who wanted to know how the money is spent at http://www.recovery.gov/.
  PROPOSED STIMULAS PLAN
  SECURITY
• <>BOOST SECURITY AT 90 PORTS
  <>BETTER COMMUNICATION BETWEEN LAW ENFORCEMENT AND PUBLIC OFFICIALS IN CASE OF AN EMERGENCY
  EDUCATION
• <> MODERNIZE 10,000 SCHOOLS
  <> PROVIDE HIGHER EDUCATION TAX CREDITS TO 4
  MILLION STUDENTS
  HEALTH CARE
• <>NEW TAX CREDIT FOR PEOPLE LOOSING THEIR JOBS
  <>INCREASE MEDICAID BENEFITS
  <> EXPANSION OF CHILD TAX CREDIT
  ENERGY
• <> 3000 MILES OF NEW TRANSMISSION LINES TO CONVEY
  ENERGY FROM COAST TO COAST
• <>BUILD UP CLEAN ENERGY INDUSTRIES

PAX OBAMA vs PAX ROMANA

The economy in Roman times had its ups and downs, from times of civil war to times of peace, from times of political corruption to times of political stability. Take for example Augustus (Octavius) or Vespasian. These were two candidates who would never have been emperors but they got their lucky breaks. Octavius' lucky breaks were the death of Caesar who was his uncle and adoptive father by will, and the grain shortage that led to the civil war with Mark Anthony. Vespasian's lucky breaks were his skills as a siege general that made him famous among the legions, and the civil war that erupted after Nero's death. (We know of Obama's lucky breaks) Both emperors believed in rebuilding the infrastructure after it was damaged by civil wars. Both believed in creating an atmosphere of peace called the PAX ROMANA. Complete peace in the roman world never existed but the people in the italic peninsula felt a peaceful period after the torment of civil wars. Both emperors were not concerned too much with enriching themselves. They were humble people who instead were concerned in creating a better economy by building a better infrastructure. Augustus known for building new roads and the water acqueducts, Vespasian was known for his stadium called Colloseum, a gift he made to the people. And now Obama finds himself in a similar position. The United States has suffered from financial mishaps and financial scandals of dynamic proportions. Can we find a better way to appease the people? The infrastructure program will need lots of capital. Minimal distraction from wars is necessary to better implement the program. In order for Obama to be successful, he needs to be humble and he needs also to create a feeling of peace, perhaps a PAX OBAMA. This will make it easier for him to face today's financial challenges. Even though the US will probably be distracted by Iraq, Afghanistan, the Middle East and other war events, minimizing the effects of these events will be crucial for this administration.

MALL STREET vs WALL STREET

As President elect Obama said, Wall Street should not thrive while Main Street suffers. Any person with a small degree of education understands this. Wall Street has been the Wild West Wicked Street for a very long time and somehow, there was an ongoing chain of balancing that was put in place to keep superior Wall Street in better shape than Main Street but at the same time, keeping inferior Main Street happy about the overall situation. A run-on sentence indeed. The relationship between Wall Street and Main Street was a run-on, a peaceful coexistence that kept the overall steam engine of an economy running at all times. When Wall Street cried the Fed monetary policy would kick in, and when Main Street cried, the Fed fiscal policy would trickle in. I would like to create a graph here. Any thoughts? Okay let me just say that this (year end-beginning of year) rally has been a significant relief rally where investors are looking for cheap valuations after a damaging disaster of 2008. My question is " Can this continue while Obama has just said that things are bad and are likely to get worse? " Well, we know Wall Street is looking at 6 months down the road and perhaps we will find a bottom in this new 4 year administration, but many variables can change this picture around.