Justice Must Be Seen To Be Done

Now that Bernie Madoff has been incarcerated, it is thought that the market is reacting with approval as the market is going up. Some of his relatives and employees should be counting time.

This article by Vicky Ward about an upcoming article in Vanity Fair would appear to prove that the Noel family of Greenwich could be one of the biggest beneficiaries of Madoff's Ponzi scheme. They're still "living large and loving life".

It's interesting that many of Madoff's victims, seen on CNBC yesterday afternoon, are holding the SEC responsible for giving his firm the financial "seal of approval", rather as if they assumed his firm was "too big to fail" and solid because others trusted him with their money. Of course, he had pension and hedge money from many, like the pipefitters of Northern New York State, who had no idea that their money had been funneled off.

Makes sense that focusing on ways of being happy and at peace will take one's mind off the opposite. Doesn't it make you want to take up praying hard, if you don't already do a lot of it?

Four Big News Items

What a huge news day this morning!!!

1. Merck announced it is buying Schering-Plough for U.S.$41.1 billion.

2. President Susan Arnold of mighty Proctor & Gamble just stepped down effective immediately (when does that ever happen?) and

3. President Obama announced lifting of strict limits on stem cell research.

4. The introduction of possibly the only verifiable painting of William Shakespeare.

Any one of them is shocking, but to have all four in one morning is just mind-boggling. They'll take some time for the market to digest.

Monday Morning Market Action

Financials and international stocks are heading down this snowy (in the east) morning following AIG's second bailout. Warren Buffett's making gloomy predictions for the markets, saying "the economy will be in a shambles for this year and maybe longer". It can't be a surprise that the Dow is below the 7,000 point last seen in 1997.

The manufacturing number of "US factory activity contracted again in February, but at a less severe rate, while construction spending dropped in January to its lowest level in more than four years" according to Marketwatch.

The fact that my purse was snatched midday yesterday at my suburban grocery store's parking lot near Princeton, New Jersey ("a safe area") is keeping me busy "staying on an even keel" -- a metaphor for market trading now.

How will America change?

President Obama’s optimistic speech last night wasn't replete with the smugness we have come to expect from Presidents. He described a litany of problems the country is having and then outlined how he will be focusing on three major areas: energy, healthcare and education.

1. Energy: Infrastructure improvements will need to be made. Meanwhile, Republicans are worrying about how nuclear energy is going to be handled by the new administration.

2. Healthcare: Full reform of healthcare spending needs to be achieved. Pharmaceutical companies are looking at the government's healthcare initiatives and how that involvement could impact their businesses.

3. Education: clearly needs improvement. By the way, NPR is doing a great job of highlighting the differences in public educational facilities that has long been an issue in this country. I am convinced the problem is not usually with teachers, but with curriculum and facilities.

These are three key areas that will be the focus of business interest and government spending in new and innovative products and services. He also talked about housing and small business taxes. Since the President is looked on almost as a deity in this country, everyone has to pay attention.

Banking was highlighted as an area that needs reform, and even bankers should agree they are our servants, or else they're in the wrong profession. Banks might be boring, but the investing that is at their heart is wildly exciting.

Here is an article in Bloomberg News about Canada's banks to help explain why Canada isn't having the same problems as the U.S.

On Akamai and madoffsearch.com

This is a good article extolling the virtues of Akamai far more articulately than I can. It's a solid internet technology company that I do recommend highly.

There is a new website called

madoffsearch.com

where you can enter any name you like to search for victims of Madoff. Looking through the original list, alphabetized by first name, it is obvious that many investors gave money to CPA companies to invest. The rumor now is that hedge funds are looking at these investors, the kind of investors who want to give their money to others to invest.

Building up financial knowledge and investing some if not all your money yourself is the right thing to do.

But many big investment advisors, such as

Warren Buffett here on CNBC

and

Charles Nenner here on CNBC and Bloomberg

,are saying that now is exactly the time to invest for the long term while prices are so low.

Charles Nenner

Some market experts say the low is going to last half a year, and others say twenty years. No one knows for sure; they're all making (hopefully) educated guesses. So try to work on each moment being perfect, while keeping some money to use in the future.

"Don't invest what you can't afford to lose" is an old phrase. But then again, "invest for the long-term" is another.

Pending Home Sales Rise: Seen as "Huge News"

It's snowy here in the northeast today, a beautiful light snow. On the whole, the news is good, and encouraging.

Here's a late afternoon summer photograph of our ivy-covered pre-revolutionary spring house and a pine tree. Beyond is an old orchard, a new swimming pool and a cottage and a lot more. Beautiful, always.

Investment "Thought of the Day"

"We make ourselves rich by making our wants few."
-Henry David Thoreau


Is the reverse, we make ourselves "poor" by making our wants "many" true, as well?

This comment has to do with buying more than our means permit, a common occurrence in modern credit card society, long after it was written. It is human to want a rich and varied life, however much we may need to "make ourselves rich".

The more knowledgeable we are of what is out there to help us live and the more money we have to use as a tool to make our lives easier, the more complex and "rich" our desires are.

The late Hetty Green was a wealthy woman who made a virtue of frugality, except as far as buying securities is concerned, to the detriment of a full and varied life. "Frugality" works, but can appear to others as "poverty". This is a book about her.

Meanwhile, there are lots of stocks, purchases for the long term, definitely "wants" that are accelerating fast. Surely, Thoreau wasn't talking about stocks?

Bet This Pilot's Job is Secure

Have you ever heard of a plane landing on water and everyone getting out safely? Some passengers are walking on the wing afterward, looking like they are walking on water.

Courtesy CNN.com

My, were they lucky! Who said, "luck is what happens if you work really hard at something"? Whoever did was really onto something today. Everything aligned perfectly in the favor of passengers of the U.S. Airways flight to Charlotte, North Carolina today and a tragedy was averted.

Summary of Treasury Secretary Paulson's exit interview

This afternoon, outgoing Treasury Secretary Henry Paulson honored CNBC T.V.'s Maria Bartiromo with an exit interview.

His basic points are in italics.

- It takes a big crisis to make big changes that need to be made in the United States.
- To be successful in any job, it's better to be expansive than narrow, and to solve problems.
- Confidence and sincerity are key to moving the economy up out of the recession.
- Banks need to lend rather than hoard money. (Why not demand accountability retroactively?)
- He says he has learned a lot from his job as Treasury Secretary. (Just one of the benefits of a job that began May 30, 2006)
- He did not want Lehman Brothers to fail. He did not have TARP money then, so he could not save it.

It is not true then, as many say, that the government "wanted" Lehman Brothers to fail.

Wikipedia says: "In August 2007, Secretary Paulson explained that U.S. subprime mortgage fallout remained largely contained due to the strongest global economy in decades." In this interview, he says that he privately told President Bush as soon as he arrived in Washington that there would soon be a serious crisis of the financial system.

Also in Wikipedia: "On August 10, 2008, Secretary Paulson told NBC’s Meet the Press that he had no plans to inject any capital into Fannie Mae or Freddie Mac.[21] On September 7, 2008, both Fannie Mae and Freddie Mac went into conservatorship."

His future plans, after a rest, involve working for the environment. But "working for the environment" covers everything from home gardening to international oil and energy negotiations, doesn't it? Since it's likely he hasn't planted a pansy for awhile, it isn't hard to guess which way he'll be going.

Four bullish signs from Trader Talk

On CNBC, Bob Pisani talked about his four bullish signs, also on the link below:

1. Stocks are having multi-month breakouts, Halliburton, Alcoa, HP, and Morgan Stanley, and could be troughing now
2. Mortgage rates are going below 5%
3. Corporate bond issuance is up
4. Reflation signs: TIPS auction went well, rising commodity prices

I have also heard they will commodity prices will likely go lower in 2009 - more on that another time.
http://www.cnbc.com/id/2852547