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Sunday, April 05, 2009

 

South Florida Musings

South Florida, like most of the places I have visited this recession (San Diego, Dallas, Washington, San Francisco), seemed no different, though people did talk about homes in foreclosure/bankruptcy proceedings. Stores and restaurants were suitably busy though, and the airports were bustling (and the line for the rent-a-car was torturous). So my conclusion continues to be, in spite of the gruesome unemployment numbers and housing statistics, that the recession is spotty and, I think, very close to bottoming out.

My guess is that the recovery is not going to be a boomer, though. I think people have gotten a good lesson in balance sheet discipline, and that goes for businesses too. So I am not looking for a big-time credit expansion. Also, I think everyone is terrified about looming inflation and tax increases, and that is going to keep a lid on optimism.

These things may be healthy - we could use some more economic discipline both in the public and private sectors. That bodes better for conservative Republicans a couple of years hence. As they say, things are always darkest before the dawn.

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Somehow, the final four was a bit of a letdown Saturday night. For 30 minutes, MSU - Connecticut was an exciting if not an artistic game, but then it became obvious that Michigan State was better that night. I thought they would be a very dangerous team. Frankly though, U-Conn lost the game on the foul line, shooting horribly from the stripe.

The other game, I feared, might be a mismatch, since the overachieving Villanova Wildcats didn't figure to be able to handle the bigger, more disciplined Tarheels. And that's what happened. It's not the first time that the highest achieving conference (the Big East this year) came up empty at the big dance. It used to happen to the ACC all the time.

On the girls' side, Louisville overcame a miserable first half to win a squeaker, and I expect Gene's U-Conn machine to do what the boys did not and make it to the final game by beating Stanford for an all Big East final. If that happens, I think U-Conn can win the final and achieve that rare undefeated season.

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Maybe we should thank the North Koreans for firing their missile, putting to rest the steady stream of demagoguery in Congress about CEO pay and other side issues that camouflage Congress' own culpability for the financial mess we are in. Of course, that doesn't stop the nonsense by the leftist media in blaming President Bush for everything that happened in "the last eight years." I had to laugh out loud at the ignoramus (ignoramae?) Adriana Huffington this morning on "This Week" when she said that it was a shame we had lost so much time getting to the 6 party negotiating table with the North Koreans during the Bush Administration. Funny thing is, my recollection is that it was the North Koreans who insisted on direct talks with us while the Bush administration held out for 6 party talks, which the NK's did not want. But Orwellian historical rewrites are the stock and trade of the partisan media. Maybe George should have gone to the table without the NK's for 5 party talks (about what, I don't know). Another knee slapper was George Stephanopolous disclaiming a possible conflict of interest by one of his producers, assuring us that the person in question did not participate in the conflicted segment. Meanwhile, where is the disclaimer concerning his daily dialogue with Rahm Emanuel? It's tough that ABC continues with the charade that Stephanopolous was ever a suitable replacement for the brilliant and unquestionably ethical and non-partisan David Brinkley.

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Well it was not only good law but very reasonable resource allocation for Eric Holder to drop the charges against former Senator Stevens of Alaska. The Justice Department had messed this up from the beginning, treating the Senator and his defense team with utter contempt by withholding documentation from them. This even occurred during the Bush Administration, but one wonders about the career justice officials in that supposedly non-politicized department. The result is the octogenarian is free to walk, but he lost his seat and the Dems now can build on an incumbent in what was once a pretty safe GOP seat. Damage done.

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Sirius has been one of my steadily losing stocks, having had a near-death (via bankruptcy) experience recently. Somehow, though, I don't think it is disappearing anytime soon. In Florida, I heard Sirius XM stations in restaurants, at the airport, etc. They are a mainstay in bars. One way or another, there will be satellite radio.

Naturally, the pop in Sun Microsystems stock was a finger in my eye, since I had sold the last of my shares in January. Weekly reductions in the price IBM might be willing to pay don't really ease the insult that much. I'm not sure this deal is really coming off. If I still owned any shares of Sun, I'd be selling them tomorrow.

I'm also getting a takeover of Limco Piedmont, but at a low price and in a stock for stock transaction. When it was announced last week, the market ignored the premium based on the acquirer's price, and actually took LIMC down some more. This is just sour grapes I think. Smart arbs will be buying LIMC and I will be happy to see the deal go through.

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April will be a good month for jazz in NYC so if you are in or near town, get a hold of Hot House and plan your visits accordingly. Among those appearing are the all star Blue Note 7, Eric Alexander, Joe Lovano, trumpeter Nicholas Peyton, legendary Hank Jones, John Pizzarelli, Tom Harrell, Arturo Sandoval, pianist Don Friedman, Grand Dame Marian McPartland, and Don Byron to name only a few. No recession in jazz, that's for sure.

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Last Monday, I bought 800 shares of Petroquest (PQ) at 2.68. Does anyone really believe we won't see energy prices higher somewhere along the line? On Thursday, I bought 300 shares of Bolt (BOLT) at 7.70. The recent rally has taken us about 60% of the way to my predicted target. We are only down about 6.8% now year-to-date.

Speaking of disclaimers, here's mine: neither redwavemusings nor its author are investment advisors and the stocks and securities mentioned here are not to be considered recommendations for readers or anyone else, since they may not be suitable (or even reasonable!).

Comments:
Debt seems high on PQ. Is the Redwaver deviating from the formula? While I agree that Oil & gas exploration firms could be a buy, is this move to PQ early?
Please elaborate.

As always,
Hail Freedonia!
Rufus T. Firefly
 
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