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Sunday, January 10, 2010


Football Overload

I skipped virtually all of the bowl games, except Alabama v Texas, which turned into an outstanding game once Texas' freshman QB got over his jitters and gave the Longhorns a shot at a comeback that was a bit too little, too late. That was fine with me, a long time Alabama rooter, nice to be on top again even if it was an injury to the starting Texas QB that turned the Tide on. His replacement, the aforementioned freshman Mr. Gilbert, is going to be a very good one.

Even with skipping so many games, I'm a bit over footballed after watching all four wild card games this weekend. The first three reversed the NFL's pass bias by featuring great runners and defense, starting with the Jets continuing to improve by employing the hardnosed formula that used to guarantee playoff success. Then we had this evening's Cardinals/Packers classic, more like a regular season game where the air was filled with footballs and neither team could stop the other.

Next weekend promises more of the same, four playoff games and there are some intriguing matchups. In the NFC, those Cardinals head to New Orleans, for what promises to be another high scoring contest between two teams that feature speed, speed, and more speed. If the Saints can regain their earlier season form, I would expect them to win at home, but after a number of marginal (or worse) performances, they will have to find the restart button. Make the Saints four and a half point favorites, and God knows how high to set the over/under. Same is true for the Vikings, who are at least coming off a decent regular season finale, but the Cowboys are smoking hot right now, and I think they can pull off the road win. The line should be Vikes by a point or two, but I would take the 'Boys.

In the AFC, the Colts rested their starters for two weeks and showed, if nothing else, that they have no adequate backup for Peyton Manning. The Ravens' defense is aggressive enough to make any QB vulnerable, but I would give the Colts the edge in this one. They should be about a 7 point favorite. No one is improving faster than the Jets, and their simplified offensive scheme has made Mark Sanchez all but turnover proof. Still they have to fly across country, then take on the hottest team in football coming into the playoffs, San Diego's Chargers. The Chargers better take Gang Green seriously, and I expect they will. I will be rooting for my team, but make the Jets a 6 and a half point underdog all the same.

Topping off football mania, last night, I introduced my daughter to the movie North Dallas 40 starring Nick Nolte and Mac Davis, the raunchy, occasionally hilarious, but no holds barred look at professional football's exploitation of its athletes. Best football movie of them all, IMHO.

Two key Dem Senators gave up on their re-election bids last week, and that shows the inevitability of GOP pickups in 2010. Chris Dodd of CT had zero chance of being re-elected, not only because of the backlash against his far left philosophy, but mainly because of various improprieties, the most glaring of which was his sweetheart Countrywide mortgage. Dems initially cheered his exit since they can now run popular Attorney General Blumenthal, who has a better chance to hold the seat. Better, but not certain, I would say. It is still possible for Republicans to win statewide in Connecticut - witness recent governor races - and it should be fairly easy to make the case that Blumenthal might be to the left of Dodd.

The resignation that really hurt Dems was Senator Dorgan of North Dakota, a blue dog and the husband of ACLI lobbyist Kim Dorgan. The reasons this hurt was that the Senator is only 53, so hopes were that he could retain the seat for a long time, and there is virtually no possibility that the Dems can retain the seat without him. In fact, there was no way they could retain it with him either since he has been tied to Senator Reid's health bill and that is death right now in red states like North Dakota.

In fact, keep a close eye on the special election in Massachusetts January 19 to fill the Kennedy seat. Everyone assumes that the Dems can't lose that seat, and they probably could not if it was a Kennedy running. Otherwise, it is possible for a Republican to win statewide in Massachusetts, and my guess is that this election will be closer than anyone now expects. Folks in Massachusetts think Romneycare is working out OK, and they are suspicious about changes that might be dictated by Obamacare.

It would be some kick in the head if there was an upset on the 19th and the Dems lost their 60th vote before the final version of Obamacare emerges from "conference."

Two interesting statistics relative to these discussions passed my way in this past weekend's WSJ editions. One is that DC commercial rents are now higher than NYC's. To me this just shows that businesses fully comprehend the Federal power grab by this administration and Congress, and they want to be positioned to feed at the trough. Meanwhile, private sector investment is going nowhere.

Second, the UK budget deficit has reached an appalling 12.5% of GDP, a preview of the fiscal mess we are in for if we continue to march toward Euro style socialist solutions and can't get entitlements under control. For additional detail on our fiscal failings, I refer you to the prior 190 or so posts in the musings archives.

The Obama administration has taken a real beating on the Delta flight terror incident, which they deserve considering how the previous administration was blamed for everything, natural or otherwise, that went wrong including Hurricane Katrina. Somehow, Janet Napolitano is likely to retain her job, though she and the Treasury Secretary would have to lead the list of administration officials in any pool where the object would be to guess the first one gone. Obama took responsibility, which is to say no one was to blame except the system and we all know that the prior administration put that in place.

One bracing thing was that Obama finally got and delivered the message to all his fellow Libs with their heads in the sand that we are at war with Al Queda. I wasn't really surprised by the news. Wasn't it in all the papers?

The fact is that the vocabulary and the diplomacy employed by this administration is simply inviting terrorist activity, because it is so weak. In my view, Obama's only winning strategy would be to pivot to a JFK/LBJ type attitude toward our enemies around the world and adopt a more realistic foreign policy. The left would raise hell, but that might enable him to leverage his personal popularity again, which is still evident.

Otherwise, that popularity figures to keep deteriorating.


On word that is in constant usage today that rankles me a bit is "sustainable." Is the economic recovery sustainable? Can the Dems sustain their Congressional majorities? What about energy production, environmental gains, educational improvements, the stock market advance? Medicare and Medicaid? Sustainable?

Nothing is forever. Any trend line is almost sure to be broken. There are so many variables in every field of endeavor. Worrying about sustainability is a fool's errand. Just trying to handle today's problem correctly is enough challenge for most of us.

If you see the word "sustainable" in a story about...anything, you can be sure the author is asking the wrong question.

For the New year, we started with a buy transaction then moved to the sell side, taking some profits in the midst of a nice January effect rally. On Monday, we bought 400 shares of ADC Telecommunications (ADCT) at 6.27, a zero buy I would recommend you not try at home. This industry's overcapacity slump began in 2000, a downturn that has certainly proved to be "sustainable," I'm afraid. I was going to dump this stock from the buy/hold list, took a good look...and decided to hang on for while. We'll see. On Wednesday, we sold 700 shares of FSI International from the IRA, some at 3.21, some at 3.20. We have had a nice recovery in this stock after considerable averaging down. These shares were purchased 11/12/07 at 1.90.
On Friday, we sold 100 shares of old favorite Carmax (KMX), also from the IRA at 23.91. The purchase price was 13.60 on 7/28/08.

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