Congratulations to the New Orleans Saints and their first franchise Super Bowl victory!
We had a wonderful meeting! We had a very lively and at times heated conversation. We had a total of 3 attendees: (from left to right) VJ Arjan, Andrew Whatley, and Kevin Day.
The Loss of the Democratic Senate Seat in Massachusetts
Kevin Day expressed upon us the incredible feat performed by a virtually unknown Scott Brown, formerly member of the Massachusetts House of Representatives, and his ability to take over a “Kennedy seat” from the Senate. The equivalent of this occurring would be like Texas electing a Democratic senator. Kevin stated how this clearly shows the disillusionment of the independents who were swayed during the Presidential election campaign by President Obama and the lack of follow through on his promises. There is a threat that historically “blue” states could go “red” if there is more talk and less action.
State of the Union Address
We also talked about the inconsistencies and incredible promises being made by our President:
Fiscal Deficit. For starters, the President spoke about cutting the federal deficit drastically by cutting down the fiscal budget in 2011. As shown by the graph above, even if the government revenues remained the same, the Baby Boomers rapidly retiring are going to lead to increased spending over the next few decades in the areas of Medicaid, Medicare, and Social Security.
Education. Our President spoke about forgiving student loan debt for those who pursue a life in public office. For those who did so, their student loan debts would be forgiven completely after 10 years. On the same token, he asked colleges to lower their tuition costs, etc. How will colleges lower their costs with these types of policies? How will banks be willing to lend to students?
There were other points that were discussed but these were the principal issues. No doubt, it is true that our President inherited quite a slew of problems on the get-go, but he may need to change his economic advisors.
Rallies amidst the Sell-off
Kevin Day spoke about how amidst the recent sell offs there are ample signs that the “smart money” is buying. Above is the daily chart for this past Friday. In the last hour alone, the market rallied 140 points on the Dow.
Santa Fe Gold Corporation (SFEG)
Many of our readers may well recall that this stock has sold off drastically in the past week. Kevin Day explained why. In an effort to raise $10 million to get to production, chairman and CEO, Pierce Carson, sold a particular gold mine for $8 million of stock and $4 million of warrants. The receiver of stock decided to dump their equity holdings on the market, but have held onto their warrants. The fundamentals of the company have not changed. He reads that the technical levels of the stock indicate a potential bottom at $0.86.
North America Palladium (PAL)
The story for this stock is still intact. There are two palladium ETFs that will need to store physical palladium. The prices have pulled back to pre-rally levels and may be due for another rally upwards.
PIGS (Portugal, Ireland, Greece, and Spain)
There is some considerable alarm on the rate of deterioration of the balance sheets of these countries. Much depends on whether the European Central Banks will bail these economies out, or whether they will be allowed to fail. If this were to happen, an international disaster would ensue. It is, therefore, probable that they will receive funds to prop up their “zombie balance sheets.”
