We went to see The Blind Side, which I highly recommend.  The underlying story is of a well-off couple with two kids who take “Big Mike” (a teenage kid from the “other side of town” with only the clothes on his body) under their wing, buy him clothes, send them to school, and he ends up getting a scholarship to play football at Old Miss.

I’m not much of a movie critic, and the the previous paragraph doesn’t do the storyline justice.  I recommend seeing it for yourself.

A long time ago I wrote about how I paid good money (and a lot of it) for a bottle of water, when there was a water fountain right next to the concession counter.

Well, I failed in frugality once again.

Last night I paid $8 for a “large” bag of popcorn.  I admit it, guilty.

I can’t believe I did that, but popcorn sounded really good at the time, and I figured we’d split it, which we did.

There’s no way that bag of popcorn was worth $8.  But I paid for it anyway, and apparently by the looks of the line at the counter, other people did too.  I suppose a product is worth what people will pay for it, but for something as cheap and easy as popcorn, it strikes me that so many people are willing to pay for it.

I was only slightly vindicated by putting $4 worth of free fake butter and salt on the popcorn.  If I’m gonna overpay for popcorn, I’m gonna load it up with all the free stuff I can.  Arteries be damned.

With a kid romping around and daycare chewing up the extra cash, it will be much more difficult to fund all $10,000 for 2010, but I’m gonna try.

What bugs me now is that I’ve got money sitting on the sidelines.  It bugs me because I want it to be working for me, but I’m not sure where to put it to work.  I’m still overweight in a few stocks that I’m paring out of gradually, which is where a bulk of the idle money is coming from.

I’m still thinking interest rates are going to be on the rise, along with taxes…

Another subject I’d rather not think about now.

This is the beginning.

Readers of this space know that I feel interest rates will go up.  They have to.

You can’t spend money like our Government has been printing it and expect any semblance of balance to be maintained.

If the economy were going great gangbusters right now it would be a different story.  In general, debt is not necessarily bad.  But like many households in the last several years, our Country can no longer service it’s debt without taking on even more debt…

So interest rates (and I’m certain, taxes too) are going up so we can get some cash out of the economy.

“One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do. Most people always have to be playing; they always have to be doing something. They make a big play and say, “Boy, I am smart, I just tripled my money.” Then they rush out and have to do something else with that money. They just can`t just sit there and wait for something new to develop.”  -Jim Rogers

I’m up about 80% on CREE, and am about back to even on PVX. I’m rarely up 80% on anything (read my posts on Ford before you draw any conclusions on my trading style), and I’m overweight in PVX.

I’m sure there’s more room to run on both of these, but it’s time to score some of those gains.

My son just had his first birthday this last week, and I’ve reflected back on the last 12 months, and constantly wonder where the time has gone.

We spent 8 days in Costa Rica in early January, and took the kid and two sets of grandparents with us. Never in my life has a vacation been so… un-relaxing. Constantly chasing the boy, changing diapers, giving a bottle, shoveling Gerber jars.

And I’d do it all over in a heartbeat.

I’ve got hundreds of pictures of my son dipping his feet into the sand on the beach for the first time, his first trip to the pool, and even pictures chasing iguanas and monkeys.

To be sure, I need more than 24 hours in a day to get stuff done. But I’ll never trade in my time at the beach with my son.

This week, Diane Brady chats with Pay Czar Ken Feinberg on the TARP program and its effectiveness.

Naturally, Feinberg is elated that the big banks are in a proverbial race to pay back the TARP money they borrowed from the government to help keep them out of Chapter 11. To hold any contempt would come off as sinister and socialistic.

The article speculates that it was the pay cap of $500,000 that really persuaded companies to pay back the money at such a rapid pace.  Feinberg does a great job of trying to spin the results into a “yeah, we knew it would happen this way”.  He goes on to say that the Government has no business regulating pay for companies that haven’t, or don’t, take tax payer money.  While I hope he and his compatriots in Washington actually believe that, unfortunately, I’m not buying it.

Lately my mantra has become, as the late Bob Novak put it: “Always love your Country, but never trust your Government”.

I believe the Government never wanted the banks to repay the money, at least not this quickly.  The fact that they want to turn around and hand the returned TARP money out for a second round of stimulus should be evidence enough.

In the end, the Government will end up getting most of the TARP money back, but not because companies suddenly became healthy enough to do so.  They got the money back because the banks found out how terrible it is to sleep with the Government, and wanted out ASAP.

You’d expect jobless claims to decrease this time of year due to seasonal employment. How many seasonal jobs are there? No one knows, but hopefully this data will tide us over until the economy starts swinging to the upside.

It was the first time I’d been in a high school since I graduated well over a decade ago.  My how times have changed.

At first I was in awe.  There were electronic chalkboards in every room.  The teacher writes on the white board with a special pen, and a computer documents everything scribed during a session.

There are laptops abound, high-tech digital telephones in each room that connect to anyone, or any room at any time.  There are electronic forms to fill out when visiting the building, and electronic surveillance and security all over.

After soaking up all the technology, I asked my buddy who teaches the class what a new teacher makes these days.  I won’t give the exact figure, but if I told you it would (and should) piss you off.

Any increase in budget over the last 5 years or so has gone to improving the resources, upgrading the buildings, and adding technology at every corner.

Who missed out?  The most valuable and overlooked resource in the building.

The teachers themselves.

Fortunately, I didn’t have to go too far back in time to find out.  I did, however, have to go overseas.

The Greeks are in much the same boat we are in the States, although their ship has taken on a bit more water.

The Greek government has pushed social welfare programs that they can’t seem to find the funds for.  The budget deficit will be more than 12% of GDP this year, and the elected officials campaigned on extra spending, yet they now find themselves having to cut costs dramatically just to keep their head above water.

And to say the EU is a bit peeved is an understatement.

Since Greece is on the Euro, they really don’t have the ability to print money like the U.S. does.  The European Central Bank is suggesting that the Greeks, among other European countries, are on the verge losing their credibility, adding that it could stall the recovery process.

The rest of the countries on the Euro will be on the hook to bail out Greece or cut them loose from the currency all together (a rather unsettling proposition).  If the Germans, French and English will be forced to bail out Greece, you can bet it will be with some very unfavorable terms.  Screw me once, shame on you, screw me twice…

The total national debt in Greece is expected to increase from 99% of GDP to 135% by 2011 without significant cuts in spending. Compare this to a ratio of 90% for the U.S. and rising to over 101% by 2011.

The elected George Papandreou instituted a pay freeze for state workers earning more than  €2,000 a month which did nothing but cause an uproar within the Hellenic Socialists party.

The U.S. has some eerily similar financial stats as compared to Greece.  The one thing we can do that they can’t is print money and expect the general population to underwrite the transaction.

I suspect the underwriters of the U.S. national debt will not be happy.  Just ask the French… and Germans… and English…

Late Wednesday, Dubai World (the largest corporate entity) asked creditors for a six month reprieve on paying its $60 billion in debt.

You’ll remember that Dubai thrived during the last ten years due to the infusion of billions of dollars on financial infrastructure and tourist destinations like the indoor snow ski facility, the Palms and World man-made islands.

Since the current economic conditions don’t really facilitate a healthy tourism industry, and many financial firms are on the rails already, it’s not surprising that Dubai is struggling.

The news is having global impact on financial and equity markets.

In the U.S., the Dow was down more than 220 points today at the opening bell, the S&P 500 was down 2.3% and the Nasdaq declined 2.6%.

In Asia, the Hang Seng Index was down just under 5% and the Nikkei 225 was down just over 3%.  Combined, this made up the worst single-day percentage declines for those markets since March of this year.

The news out of Dubai suggests that we’re no where close to being out of the economic mess we’re in.

Arguably many of those are inter-related, and chances are, you were affected by at least one of them.

So where is the next bubble?

First, I’ve come to accept the fact that history will repeat itself.  We are all poor students of history, but deeper, no one can really understand all the forces at play to effectively stave off a repeat of a certain event.

With that, it’s realistic to assume there is another bubble brewing as we speak.

With all the government intervention in finances, and the U.S. Fed’s “as low as we can go” interest rate policy, I suspect the next bubble will be in interest rates.

If there is one thing that history tells us, and it seems those in power never seem to study enough, is that the Fed is notoriously late when it comes time to act on monetary policy.

Most recently, Fed Chairman Greenspan was slow to lower interest rates which kept borrowing at bay when borrowing was most needed.  To that tone, I suspect Fed Chairman Bernanke will be slow to raise interest rates in an effort to keep inflation at bay.

Since any sort of monetary policy is based on lagging economic data (by 3 months or so), it’s understandable why interest rate moves also suffer from the same lag.  Historically though, interest rate moves have been late to the game by as much as 8 and arguably 10 months.

In the end, I suspect Bernanke will delay raising interest rates until late next year, and he’ll be forced to raise them to levels he’d not anticipated to keep the wraps on inflation.

So what makes this the Mother Of All Bubbles?

In one word, China.

Unlike the past, the Chinese are taking a great interest in our monetary policy, primarily because they own so much of our debt and currency.  To say the Chinese aren’t really happy with how things are going would be an understatement.

The Fed wants to keep rates low for fears that increasing rates will hamper an economic recovery.  But the Chinese have more leverage in our debt than they do in our unemployment rate.  They’re really looking out for their own financial interests, and who can blame them.

The Chinese are worried that the current U.S. policy is creating insurmountable risks to the recovery of the global economy, and they’re worried we’ll bring them down with us.

Any freshman in a college history course knows that the Chinese will do just about anything to keep their economic freight train steaming down the tracks, and they’re not real happy about the prospect of U.S. monetary derailing that train.

They own a lot of U.S. debt, and they’re not afraid to use that debt to influence policy in the States.  Higher interest rates will appease them as it will increase the value in their holdings.  It’s only a matter of time before Bernanke will have to oblige.

Higher interest rates is what they’re looking for, and higher rates they will get.

I suspect that interest rates will be late to go up, and will go higher and stay higher for longer than they need to.   All in the name of keeping the Chinese at bay.

Perhaps it’s because no one really understands the problem.

We don’t need healthcare reform.  We do need health insurance reform.  The cost of simple procedures is completely out of control.

Recently I had to take a trip to the emergency room at 2am with my son for a condition that turned out to be no big deal really, but as a rookie parent we had to err on the safe side.

I received the bill for that 4 hour adventure a week or two later, totaling over $800.  Interestingly enough, we incurred a $400 charge just for signing in at the window!

How absurd.

So let’s cut to the chase.

Our government is setting out to provide affordable healthcare to everyone, and you can read my rant on the word affordable in a previous post.

Aside from the fact that not a single person in this country even has a right to heathcare, the government thinks everyone needs it anyway.  And quite frankly, the governments record isn’t all that stellar.  Medicare, medicaid, social security… the postal service…

Our representatives have no idea where their constituency stands on this position, as many of them refuse to even find out.

One of my representatives voted for the House version of the healthcare bill even though a majority in his district don’t want it.  On top of that, he didn’t even read the 2,000+ page bill before he voted on it.  Big surprise.

So why is this so hard?

If our government would get back to basics instead of trying to fix problems by baffling us with thousands of pages of bullshit, we’d probably all be better off.  Let’s remember what rights we do have as set forth in the constitution, and not try and level the playing field by asking people who can pay, to pay for people who can’t.

What does a MRI, X-ray, CT-scan really cost, and how can we lower those costs.  The Japanese figured out how to make a cheaper MRI machine and got the cost of a MRI down to less than $100, a $1,400 proposition here in the U.S.

Figure out how we can promote the reduction in costs.  Creating competition in the health sector will be a start, along with opening up health insurance across state lines.

Let the free market work, and quite artificially stimulating it!

AT&T has been growing fairly extensively over the last several years primarily due to the cult like popularity of the iPhone, which AT&T has had exclusive rights to from the initial iPhone release.

Verizon is on the verge of releasing the “Droid” Android phone which I hear is garnering great pre-release reviews.

As I’ve mentioned in my previous posts, wireless providers are running out of marketing gimmicks to attract new subscribers, at least as it pertains to phone costs.  Carriers are practically giving away high tech and very capable smart phones a la the Blackberry and make their money on the monthly plans.  So with the cost of the hardware already at zero, the only other front to wage war is on the plans themselves.

This is where Verizon, specifically, is starting to reveal it’s elitist mentality.

In an article over at The Wall Street Journal, Verizon CEO Ivan Seidenberg said that while T-Mobile rolled out new low cost plans over the last weekend, his company had no intentions of doing so.

Verizon does have great coverage, and for those who need to be connected anytime all the time, they may be willing to pay a premium for the service.  The average Joe I suspect, will still go with the low cost provider.  Coverage at the big carriers is so widespread and evolving so quickly that service and coverage are starting to come to parity.  With that in mind, the last competitive advantage is coming down to price.

And Verizon is losing.

To me, it seems a bit arrogant that Verizon doesn’t want to respond to T-Mobile’s new pricing plans.  They’re losing the market to AT&T through the iPhone popularity, and while the Droid may be great, it’s going to come at a hefty price.

And I don’t mean for the phone.

Revenue came in at $169.1 million for the quarter which translates into 30 cents per share in earnings, beating The Street’s expectations of 22 cents per share.

For Q2, the company is expecting 28 to 30 cents per share (excluding special items) on revenue of $180 to $190 million.

Aside for being a short term boon on my Cree shares, I think this quarterly report reaffirms my position that Cree’s LED products will continue to do well in the market and have yet to see widespread uptake, but the market is starting to evolve and companies, including major cities are starting to see the cost-benefit of LED technology.

I’m continuing to buy Cree shares on pull backs and my average cost is starting to creep up to around $29 per share.

I love these commercials from Mac, very witty…

Perhaps it’s now part of our culture that you get bonus points for making a good effort, kudos for just showing up, or a trophy at the end of the season not because you beat all the other teams but because someone, somewhere thought that kids need to be rewarded regardless of performance or they’ll feel like failures.

Our culture is so coddled and so sensitive to feelings that, in the end, we devalue success and achievement and prop up  the failures.

Everyone must be kept on a level playing field, you know.

There’s a bit of a misunderstanding going around on the Presidents new prize.

Sure, he was nominated for the award 12 days after taking the oath of office, but he didn’t win the award at that time.  And you can’t fault the man for being nominated alone, and you really can’t fault him for winning.  It’s not as though he threw his own name into the running.

What bothers me is that he was awarded an award for peace without really showing any accomplishment to justify the reward.

It’s as though we’ve received the grade card with straight A’s at the beginning of the year based on little Jimmy’s sincerity that he’s going to really try hard in school this year.

In my mind, you win these types of awards for achievement, not being able to talk a good game.

It all comes down to the fact that President Obama received the Nobel Peace Prize for talking the talk, and the unabated hope and change will leave us wondering if he can walk the walk.

Recently, coverage was initiated at JP Morgan with an Overweight rating and $45 price target.  Additionally, CREE will be adding more than 500 jobs over the next three years as it expands production of light-emitting diode chips at its Durham, NC plant.

I’ll be looking to add more shares in my Roth IRA account on the next pull back in the stock, and I think $50 per share is a reasonable expectation for this growing company.  LED’s are just now becoming main stream, and the market will be expanding over the next 10 years.

Well, I’m happy to say that I’ve completed half of that goal, and my Wife’s Roth IRA is maxed out for 2009, and I only have another $1,500 to go for my own account.

For the most part, the money has been sitting in the account waiting for action, and with this tumultuous market it’s tough to say where it should be put to work.  The first few trading days of October have me a bit miffed, and I’m wondering if the downward slide in the market will continue.

The next few days will be very telling.