PREPARE YOUR WALLET
Sunday, March 29, 2009
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- Prepare your wallets…..Gas prices are expected to go up. Substantially, as a matter of fact. Another plot by our OPEC friends…They have had to curb their lavish lifestyles for a few months, but will assuredly begin to beat the drum of oil shortages once the economy begins to pick up. Although the tourism industry is suffering, people will still travel more than last year…..and with summer coming, always expect the gas prices to increase. Undoubtedly, Mid-May will be crucial, as Memorial Day kicks off the US travel season. If you are in Forex, now is the time to buy oil.
- Expect pharmaceutical stocks to be under greater scrutiny this year. FDA commissioner is to be confirmed in the next couple months, and there should be a flurry of action before January 2010. The peanut scare brought them into light, and they will sharpening their pencils to write up 483s (the FDA speeding tickets). Working in pharma, we just completed a 7-day surprise FDA audit this past Friday, and buzz was that in nearly twenty years, we have never had such a difficult audit. So if you are placing all your bets on pharma phase II and III approvals, I would think twice.
- Like him, or despise him, President Obama is escalating our deficit to nearly 1 trillion dollars. We will have a tremendous debt to be managed and it’s likely that he will have to raise taxes on the middle class. He will have to wait on his second term (which will be likely since the GOP is currently in shambles) but expect it to happen. But we’ll be paying earlier anyway through the taxes on food and other needs. So prepare to have less money to spend. (Do you see a trend here?)
- Back on February 6th, Yahoo Reporter Rick Newman published a list of companies that may not survive 2009. We have already seen Circuit City, Linen N Things, Goody’s, and other retail outlets close. Potential candidates for closer may include Blockbuster, Sirius (many stock pick sites are hedging their bets here), and Krispy Kreme to name some from the list. Interesting read.
- Credit card companies are reeling in their credit. Kiplinger’s reports that companies are reducing available credit by 20%, which is virtually untapped credit today. Credit lines will be under greater scrutiny (finally). In my hummmmble opinion, Congress is attacking the banking faction as the reason for our bad economy, but I blame the credit card companies for their practices as well. They put this country on a foolish spending spree, and we, as a country, fell for it. Keeping up with the Jones’ is over, folks. Pay cash.
- Solar and wind stocks have lost a little luster since gas is currently more affordable, but Solar Botanic is developing an “energy” tree, one that looks like a tree and creates power with solar leaves and rustles with the wind. Twenty different varieties are scheduled to begin production in 2011. This is so cool. One tree can power a house for a year. Groves will power a village. Why can’t I come up with such great ideas like this??? Nevertheless, this is beyond cool.
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