Stocks

The Long term outlook call to NEUTRAL is way too premature. I got caught up in the excitement or hope behind the bailout package. Sorry. Let’s change it to CAUTIOUSLY BEARISH. (See below)

No one knows what the bailout package will look like. What we do have a good idea of is almost all the banks in the USA and across the world are basically frozen, and afraid to make loans to each other because they do not know how much toxic debt there is at the other bank. The world’s banking system is in danger of collapse if nothing is done in a timely fashion.

Is this a bailout just for banks and not homeowners?
Will regulations/regulators be put in place to stop the same thing from happening again?

Politics

Palin Plummets

One should never underestimate Sarah Palin.

However, the more people are finding out about Sarah Palin the less they are liking her. One poll taken right after the Republican convention had her at 67% favorability and about 4 days ago it had dropped to 49%. Here is a poll conducted by Research 2000 that shows her negatives now outweigh her positives and from 9/11 to 9/19 her favorability has fallen from 52% to 41% See Link

Reasons

1) Lack of experience – Hiding her from the press. Asking the few press interviewers that she has to be treated "deferentially." Will she hide from a crisis and will Putin be deferential to her?. Mistakes she has made (example – Bush doctrine.)
2) Introduced as the person who will stop pork spending and as the one who stopped "Bridge to Nowhere" Facts – Alaska gets 10 times the pork most other states do and congress not Palin stopped the bridge. She was for it, is still spending money on a road to it, now she is against it.
3) Her right wing religious views make Bush look like a Democrat. example – Her belief in creationism (world was created 10,000 years ago- what happened to the dinosaurs?)
4) Her troopergate scandal. She is getting caught daily in more and more fabrications. Her, her husband and staff refusing to even meet with investigators makes it look like she is hiding something

Out of bound stuff like Maureen Dowd in NYT helps Palin – her daughter who is -
"17 and pregnant and unmarried and the father was a teenager hoping to launch a rap career with “Thug Life” inked across his chest"

Palin makes McCain’s Health a major Issue

2032 Doctors have signed onto the following because they are so concerned about McCain Dying and Sarah Palin taking over.

This weekend, Brave New Films released a short video featuring doctors calling on McCain to make his health records public—so Americans can make an informed choice.

Please watch and pass this email to your friends (If you’re a doctor or nurse, there’s a special action you can take on the video page.) Example from Video – 40% of those who have melanoma (skin cancer) like McCain die within 10 years. McCain had his last cancer operation 8 years ago and is 72. Here’s the video:

If McCain got sick or died while in office, the leader of the free world would be Sarah Palin—someone with no foreign policy experience and a domestic agenda more extreme than George Bush’s. Voters deserve to know how likely that might be.

The good news so far is her favorability ratings have dropped from +17 to -1 in just a few weeks.

Long Term Outlook CAUTIOUSLY BEARISH

Technicals – New Rally – Will it Last?
Fundamentals – financial mortgage transparency problem is far far far far far bigger than anyone thought, looming global recession vs the shop till I drop US consumer and lower gas prices
(Caution – this “Outlook” is based on US equities and while US markets greatly influence other markets it is not necessarily the outlook for recommended sectors.)

The question for Wall Street is not whether there will be a recession or not, but how long will it last and when will it spread to the rest of the world People feel like we are in a recession, the actual strict definition – 2 quarters of negative GDP growth has not occurred.

Asset Allocation/Recommended Sectors (long term)

* 85% Cash

* 10% US Index Funds
UWM (2x what Russell 2000 does) & QLD (2X what the NASDQ does)

*5% Emerging Markets
EEM (emerging markets)

Chief Strategy – Buy the dips of trending sector

Changes to Bottom Line Section Bolded .
As Always Do Your Own Research Before Investing

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