Featured Trades:? (US ECONOMY), (BAC), (C), (MS),
(ANTI BUSINESS OBAMA)

3) The Hard Numbers About Obama's Anti Business Campaign. I'm a numbers guy, OK? Give me a set of hard data, and I'm happy to draw my own conclusion. Save the argument, the persuasion, and the spin for someone else. You may have heard from the media lately that President Obama hates business, is anti business, and is derailing the economic recovery with his anti business policies. So I set out on a hunt for the hard numbers to support these assertions, and found the chart below of S&P 500 earnings going back to 1935. When the diligent former junior Senator from Illinois took office in January, 2009, inflation adjusted earnings, at $7/share, were the lowest in 75 years. They have since rebounded 857% to $60 a share, and most analysts are pegging $75 a share for 2011, close to an all time high. This has been the most rapid recovery of corporate earnings in the history of the country. So, I thought, this can't be right. What about Obama's relentless attacks on greedy banksters and Wall Street fat cats? So I hurried to www.stockcharts.com to see how these pariah institutions have fared. Since inauguration day, Bank of America's (BAC) stock has rocketed by 220%, while my alma mater, Morgan Stanley, is up a healthy 32%. I thought the financial reform bill was supposed to drive these people out of business. What about GDP? It must be terrible. But when I check the data it showed that the economy has grown during the last 18 months, and that GDP is actually at an historic peak. No matter how hard I searched, the only data I could find showed that business has prospered mightily under Obama, with many, like Citigroup (C), up 102%, rescued from the edge of bankruptcy. Then I had my Eureka moment. There has been so much talk about jobs lately that maybe the Department of Labor would help. Aha! Sure enough, the unemployment rate has plunged, and I mean absolutely crashed, from 7.8% to 9.5% (click here for the link at http://www.bls.gov/ ) . That explains why jobs have emerged as the central issue in this year's congressional races, how Sarah Palin has suddenly become a labor economist, and how Fox News has morphed into the 'Where Are the Damn Jobs' channel. Wait a minute! Didn't the Bush administration create only 1 million jobs in eight years, compared to 23 million by President Clinton? Wait a minute! This must be some sort of statistical anomaly. What about the talking heads on TV? Isn't employment supposed to be a deep lagging indicator? I'm confused. Help me out here, guys. I think I'll go back to looking at my numbers.

Featured Trades: (FXE), (IRELAND)
Currency Shares Euro Trust

1) Ireland Points the Way for the Euro. When you bend over backwards to kiss the magical stone at Ireland's Blarney castle, you can't help but notice a sign assuring you that your won't catch AIDS in your effort to obtain the gift of persuasion. However, the ancient stone is completely covered with lipstick. Investors in Ireland national debt certainly must feel like they contracted the dreaded disease this morning after rating agency Moody's announced a downgrade of the country's debt from Aa2 to Aa1. Ireland saw a real estate boom even more frenzied than our own, at the eventual price of $32 billion in bank bail outs. That has driven the country's debt/GDP ratio from 25% to 64%, and Moody's thinks it will eventually get to 100%. The bigger question is what all of this means for the Euro (FXE), which has spent that last two months getting talked down from a suicide leap (click here for my piece). Suddenly, the European currency has gone from being the leper with the least fingers to the most, thanks to the sudden economic slow down in the US. Credit default spreads for the PIIGS have been narrowing, traders are willing to give the European Central Bank's rescue package some grace, triggering a speedy unwind of one of the largest short positions in history. The European bank stress tests are expected to deliver the same arbitrary seal of approval that the American ones did. Hedge fund managers are choosing to take extended vacations at the Hamptons, Cannes, and Newport Beach than re-establish their Euro shorts. All of this means that the Euro could remain muscular through the summer. We'll get the first hint tomorrow when the troubled Irish tap the market for ?1-1.5 billion in new debt, and we find out how powerful that Blarney Stone really is.

Featured Trades: (GS)

3) Way to Go, Goldman! I am somewhat annoyed with the SEC's settlement with Goldman Sachs (GS) last week, as I was within a hair's breadth of putting out a buy recommendation. The stock hit a low of $130, but being the tightwad that I am, was holding out for $125. The deal was clearly a win-win for both sides, the announcement causing the stock to pop an instant 15%.? The Obama administration can now rightly claim that they have punished the evil banksters, extracting $550 million, the largest settlement in history. The cost to GS came in at only 1% of the high end estimate that analysts were looking at, and they are now free to rape and pillage as they wish. Best of all, they ring fenced their civil liability, shattering the wistful dreams of countless class action attorneys. 'Kill all the lawyers', as Shakespeare wrote in King Henry VI! Who can argue with that? The 'fabulous' Fabrice Tourre was hung out to dry, which we all knew was going to happen. I still think GS is the preeminent powerhouse of the financial markets, and that their shares will outperform every measure. When the fox is still running the hen house, I'll bet on the fox any day of the week. Keep GS on your 'buy on meltdowns' list.

'The length and duration of every bear market is in direct proportion to the bull market that preceded it,' said Damon Vickers of hedge fund Nine Points Capital Management.

Featured Trades: (SOYB), (CORN), (WEAT)
Teucrium Agricultural Trust Corn Fund
Teucrium Agricultural Trust Soybean Fund
Teucrium Agricultural Trust Wheat Fund

2) The Grains Are On Fire. I bet I'm the only guy you know whose wedding was filmed by the KGB. My friend, the TASS correspondent, Yuri, shot the entire assembled foreign press at the event at The Foreign Correspondents Club of Japan in the seventies, undoubtedly for their files in Moscow. No wonder they lost the cold war.

We've stayed in touch through the years, through the collapse of the Soviet Union and the many wars, revolutions, booms, and busts that followed. He now advises a Russian hedge fund. What else? He called me the other day to tell me I was right on track with my recommendation to buy the grains (click here for 'Going Back Into the Ags' ), because the heat in Russia and the Ukraine this year was unbearable, and their crop was coming in at 20% below expectations. Yields were plummeting, and this would be good news not only for wheat, but corn and soybeans as well.

The country was once known as the bread basket of Europe, which is why it was invaded by Napoleon in 1812 and the Germans in 1942. They still have a sizeable impact on global prices. I have also gotten an assist from my trading partner in Canada, Mother Nature, whose torrential rains have wrecked much of the canola crop this year, helping to drag the prices of the other oil seeds northward.

Since my initial call on June 24, soybeans (SOYB) have risen by 10% to $3.00, while corn (CORN) has popped 13% to $4.10, and wheat (WEAT) has soared by a white hot 27% to $6.15. With profits like these, who needs the stock market, anyway? No doubt cash is pouring into the ags now because of the lack of attractive alternatives in stocks, bonds, currencies, commodities, and real estate. OK, my horse came in to show, but I'll take that over a loser any day. I've noticed over the decades that when one does the hard research and gets the fundamental call right, all of the accidents and surprises tend to happen in your favor. That seems to be happening here. As for my old spy friend, I advised him to fill up a bathtub with cold water and soak in it to deal with the heat. That always worked when I was starving in Tokyo and couldn't afford air conditioning, despite temperatures at 99 degrees with 99% humidity. At least it cooled me off for 15 minutes.