Diary Archives

November 11, 2008

Global Market Comments for November 11, 2008
Highlighted stocks: (WPPGY), (FNM), (JPM), (GM)

1) Once again, buying the dips and selling the rips works. If you sold the S&P mini 830 puts on Friday at $20 and bought them back yesterday at $5, you could then resell them again today for $20. This time they only have seven trading days to expiration. Not that I want to do this, now that the S&P has broken its support at 900. But it does show you the opportunity out there. It seems that the maximum reward/ risk trades out there are to add risk on Friday and take it off on Monday because all the disasters are happening on weekends.

2) Martin Sorrell, CEO of WPP Group (WPPGY), the world's largest advertising agency, sees 2009 as a tough year. Internet advertising will have a growth recession much like China has growth recession, increasingly only 10%. Cable TV will be up small, magazines will be flat, and TV networks and print newspapers will be down big. The profit margin of the newspaper industry has dropped from 30% to 15% in the last ten years and may turn negative this year. More evidence of the migration of traditional business to online.

3) Ultra bear Professor Nouriel Roubini of New York University, who has been dead on right about this year's economic collapse, sees the recession lasting until early 2010. He sees the maximum drop in GDP of only 5%. Now you have a bottom to trade against. He represents the worst case scenario. By the way, he also sees crude going to $200 in the next up cycle.

4) Fannie Mae (FNM) announced that the temporary increase in their conforming loan limits to $729,000 will expire at the end of the year and the new limit in 2009 will fall back to only $625,000. This will hit the housing markets in California and Florida hard, which were heavily dependent of government financing at the higher limits to move excess inventories. There is a chance that the next stimulus package could bump the FNM loan limit back up again. After all, the four states worst hit by the housing crisis all went for Obama: California, Nevada, Florida, and New York, which together chipped in 118 of the 270 electoral votes he needed to win.

5) I spoke to JP Morgan Chase (JPM) today who says that contrary to press accounts the loan business is booming. Banks do better lending on double the volume of houses at half the 2005 price. JPM is also very active in lending to buyers at foreclosure auctions. This does not apply to jumbo loans over $625,000 where borrowers have to pay interest rates 2.5% over conforming loans. Jumbo rates these days are around 8.5%. You can get an FHA 30 fixed conforming loan today for $729,000 at 6.5% with only 3% down, a FICO score of 580, and a debt service/income ratio of 50%. An annual income of $95,000 would support this.

6) General Motors (GM) fell under $3 today, the lowest since 1943, and taking the market cap down to only $1.7 billion. The market has already reached a verdict on what is going to happen to this company. Watch out for the second derivative effects.

November 11, 2008/by DougD

November 11, 2008

Diary

Global Market Comments for November 11, 2008
Highlighted stocks: (WPPGY), (FNM), (JPM), (GM)

1) Once again, buying the dips and selling the rips works. If you sold the S&P mini 830 puts on Friday at $20 and bought them back yesterday at $5, you could then resell them again today for $20. This time they only have seven trading days to expiration. Not that I want to do this, now that the S&P has broken its support at 900. But it does show you the opportunity out there. It seems that the maximum reward/ risk trades out there are to add risk on Friday and take it off on Monday because all the disasters are happening on weekends.

2) Martin Sorrell, CEO of WPP Group (WPPGY), the world's largest advertising agency, sees 2009 as a tough year. Internet advertising will have a growth recession much like China has growth recession, increasingly only 10%. Cable TV will be up small, magazines will be flat, and TV networks and print newspapers will be down big. The profit margin of the newspaper industry has dropped from 30% to 15% in the last ten years and may turn negative this year. More evidence of the migration of traditional business to online.

3) Ultra bear Professor Nouriel Roubini of New York University, who has been dead on right about this year's economic collapse, sees the recession lasting until early 2010. He sees the maximum drop in GDP of only 5%. Now you have a bottom to trade against. He represents the worst case scenario. By the way, he also sees crude going to $200 in the next up cycle.

4) Fannie Mae (FNM) announced that the temporary increase in their conforming loan limits to $729,000 will expire at the end of the year and the new limit in 2009 will fall back to only $625,000. This will hit the housing markets in California and Florida hard, which were heavily dependent of government financing at the higher limits to move excess inventories. There is a chance that the next stimulus package could bump the FNM loan limit back up again. After all, the four states worst hit by the housing crisis all went for Obama: California, Nevada, Florida, and New York, which together chipped in 118 of the 270 electoral votes he needed to win.

5) I spoke to JP Morgan Chase (JPM) today who says that contrary to press accounts the loan business is booming. Banks do better lending on double the volume of houses at half the 2005 price. JPM is also very active in lending to buyers at foreclosure auctions. This does not apply to jumbo loans over $625,000 where borrowers have to pay interest rates 2.5% over conforming loans. Jumbo rates these days are around 8.5%. You can get an FHA 30 fixed conforming loan today for $729,000 at 6.5% with only 3% down, a FICO score of 580, and a debt service/income ratio of 50%. An annual income of $95,000 would support this.

6) General Motors (GM) fell under $3 today, the lowest since 1943, and taking the market cap down to only $1.7 billion. The market has already reached a verdict on what is going to happen to this company. Watch out for the second derivative effects.

November 11, 2008/by DougD

November 10, 2008

Diary

Global Market Comments for November 10, 2008

1) Today it was all about China, which announced a massive $586 billion stimulus package. On a GDP adjusted basis, this is like the US spending $3.3 trillion. The scary thing is that China believes that it has to stimulate an economy with an official growth rate of 8%. Asian stock markets soared, and there was a huge move up in commodity prices and shares of producers worldwide. Gold was up $30 and crude made it all the way back up to $66. With $1.6 trillion in foreign currency reserves China can afford this while the US can't. There is no doubt this will shorten the global recession.

2) Today President elect Obama meets President Bush for the first time in the oval office. I would love to be a fly on the wall in that room. What is in Area 52? Who really killed John Kennedy? Where are the missing 18 minutes of the Nixon tapes? Were we visited by aliens in Roswell, New Mexico? Does Osama bin Laden really exist? The possibilities boggle the mind.

3) MacDonald's (MCD) knocked the cover off the ball again with a continuing sales surge overseas, led by Asia, up 10%. If the economy doesn't improve soon we will all not only be eating at Mickie D's, we will be working there too. The stock was up nearly 10% to $58.

4) On the other hand, Circuit City (CC) filed for Chapter 11 bankruptcy. This was a long time in coming. Great for Best Buy (BBY). DHL is shutting down its US operations, laying off 9,500.

5) Deutsche Bank downgraded General Motors (GM) with a share price target of zero. Clever. The stock fell 30% to new low of $3.00, the lowest since 1946.

PROFIT OF THE DAY

The November S&P mini $830 puts I recommended you short on Friday at $20 you could buy back this morning at $5. You caught a double play. Not only did the S&P 500 move up 50 points in your favor, the VIX came in from 64% to 56%. Take the three day profit of $75,000 on 100 contracts. There are several lessons to be learned here. Investors these days are not only risk averse, they are risk intolerant. Those few brave souls who are willing are willing to commit capital are being paid extortionate amounts of money to do so. A 2.5% profit for holding a non leveraged position for just a weekend is pretty good. This is a trading market, so when it gives you a gift like this you take it. Make the volatility work for you. The market will always give you another chance to get back in. Also, use the volatility to keep positions small. Remember, pigs get slaughtered. Leave the last 10% of a trade for the next guy. Enough homilies?

TRADE IDEA

Google, last year's darling of the market, has more than halved in four months. With a 70% market share in internet search, the company has basically become the toll taker for the internet. At $315 GOOG is now selling at a multiple well under 20 times while it is one of the few companies to continuously increase earnings this year. The company is a cash machine also most as efficient at the US Treasury, and has almost as many reserves as Fort Knox. Even though economic conditions are dire, it is still increasing sales as advertisers accelerate their epochal shift away from traditional print and broadcast media to the internet. Its only potential competitor is Microsoft (MSFT), which first ignored the internet, then was hobbled by the Justice Department, then finally stumbled over its own big feet with a series of small and meaningless acquisitions. Its latest attempt to break the Google monopoly with a takeover of Yahoo (YHOO) came to naught. Although Google is excessively wasteful on things outside its core business, like space travel, its still offers a rare chance to get into a best of breed company on the cheap.

OBITUARY OF THE DAY

Marjorie Deane, one of my early mentors at The Economist, passed away last week at 94. She was one of the first female financial journalists, joining the magazine as a statistician in 1947, and was eventually awarded and MBE by the Queen. Despite her fame, when she was only 62, she graciously invested her time and energy to nurture a scraggly, young, and nearly starving writer in Tokyo. When I worked in her office during the summers I noticed that her bottom desk drawer was always well stocked with gin, vodka, and white wine, even though she was a teetotaler. It was 'to keep my writers out of the pubs', she said. The writers said it was how she kept her sources loose lipped. The wine was always the perfect temperature because The Economist never bothered to heat its offices at 25 St. James's Street. Her estate went to a foundation to help young financial journalists. A giant of financial journalism passes.

November 10, 2008/by DougD

November 10, 2008

Diary

Global Market Comments for November 10, 2008

1) Today it was all about China, which announced a massive $586 billion stimulus package. On a GDP adjusted basis, this is like the US spending $3.3 trillion. The scary thing is that China believes that it has to stimulate an economy with an official growth rate of 8%. Asian stock markets soared, and there was a huge move up in commodity prices and shares of producers worldwide. Gold was up $30 and crude made it all the way back up to $66. With $1.6 trillion in foreign currency reserves China can afford this while the US can't. There is no doubt this will shorten the global recession.

2) Today President elect Obama meets President Bush for the first time in the oval office. I would love to be a fly on the wall in that room. What is in Area 52? Who really killed John Kennedy? Where are the missing 18 minutes of the Nixon tapes? Were we visited by aliens in Roswell, New Mexico? Does Osama bin Laden really exist? The possibilities boggle the mind.

3) MacDonald's (MCD) knocked the cover off the ball again with a continuing sales surge overseas, led by Asia, up 10%. If the economy doesn't improve soon we will all not only be eating at Mickie D's, we will be working there too. The stock was up nearly 10% to $58.

4) On the other hand, Circuit City (CC) filed for Chapter 11 bankruptcy. This was a long time in coming. Great for Best Buy (BBY). DHL is shutting down its US operations, laying off 9,500.

5) Deutsche Bank downgraded General Motors (GM) with a share price target of zero. Clever. The stock fell 30% to new low of $3.00, the lowest since 1946.

PROFIT OF THE DAY

The November S&P mini $830 puts I recommended you short on Friday at $20 you could buy back this morning at $5. You caught a double play. Not only did the S&P 500 move up 50 points in your favor, the VIX came in from 64% to 56%. Take the three day profit of $75,000 on 100 contracts. There are several lessons to be learned here. Investors these days are not only risk averse, they are risk intolerant. Those few brave souls who are willing are willing to commit capital are being paid extortionate amounts of money to do so. A 2.5% profit for holding a non leveraged position for just a weekend is pretty good. This is a trading market, so when it gives you a gift like this you take it. Make the volatility work for you. The market will always give you another chance to get back in. Also, use the volatility to keep positions small. Remember, pigs get slaughtered. Leave the last 10% of a trade for the next guy. Enough homilies?

TRADE IDEA

Google, last year's darling of the market, has more than halved in four months. With a 70% market share in internet search, the company has basically become the toll taker for the internet. At $315 GOOG is now selling at a multiple well under 20 times while it is one of the few companies to continuously increase earnings this year. The company is a cash machine also most as efficient at the US Treasury, and has almost as many reserves as Fort Knox. Even though economic conditions are dire, it is still increasing sales as advertisers accelerate their epochal shift away from traditional print and broadcast media to the internet. Its only potential competitor is Microsoft (MSFT), which first ignored the internet, then was hobbled by the Justice Department, then finally stumbled over its own big feet with a series of small and meaningless acquisitions. Its latest attempt to break the Google monopoly with a takeover of Yahoo (YHOO) came to naught. Although Google is excessively wasteful on things outside its core business, like space travel, its still offers a rare chance to get into a best of breed company on the cheap.

OBITUARY OF THE DAY

Marjorie Deane, one of my early mentors at The Economist, passed away last week at 94. She was one of the first female financial journalists, joining the magazine as a statistician in 1947, and was eventually awarded and MBE by the Queen. Despite her fame, when she was only 62, she graciously invested her time and energy to nurture a scraggly, young, and nearly starving writer in Tokyo. When I worked in her office during the summers I noticed that her bottom desk drawer was always well stocked with gin, vodka, and white wine, even though she was a teetotaler. It was 'to keep my writers out of the pubs', she said. The writers said it was how she kept her sources loose lipped. The wine was always the perfect temperature because The Economist never bothered to heat its offices at 25 St. James's Street. Her estate went to a foundation to help young financial journalists. A giant of financial journalism passes.

November 10, 2008/by DougD

November 7, 2008

Diary

Global Market Comments for November 7, 2008

1) The dreaded October non farm payroll came in at minus -240,000, much worse than expected. The unemployment rate soared from 6.1% to 6.5%, a 14 year high. These figures included the Boeing strike and the full brunt of the credit freeze. We have lost 1.2 million jobs in the first ten months of this year. Despite this depressing news the market managed a 248 rally, a classic case of buy the rumor and sell the news. This renders the Q3 GDP figure of -0.3% meaningless. It was probably more like -3.0%.?? I believe that we are currently enduring two extremely sharp down back to back quarters of?? minus 7-8%?? GDP combined, which is getting us uncomfortably close to the legal definition of a depression of -10%. I believe we will see a gradual recovery next year. There is so much liquidity flooding the system I can't see otherwise.

2) More fascinating data about the car industry. Car production peaked at 17 million units/year two years ago. It is now at a run rate of 11 million units/year. This is the lowest absolute rate since 1980, and the lowest population adjusted rate since 1945 when the government lifted its wartime ban on civilian auto production.

3) General Motors (GM) announced a Q3 loss of $4.2 billion. The cash burn was $6.9 billion, or $2.3 billion/month, more than double the worst case scenario. The company called off its merger with Chrysler. Fasten your seat belt. November car sales could be as bad or worse than the cataclysmic October numbers.

4) I saw an interesting interview with Kenneth Lewis, CEO of Charlotte, North Carolina based Bank of America (BAC), which after the purchase of US Trust, MBNA, Countrywide Financial, and Merrill Lynch, is now the largest bank in the country, with nearly $3 trillion is assets. The current holding company is descended from the North Carolina National bank and Nationsbank. One out of every two Americans is now a BAC customer in some way of another. The company pulled out of sup prime lending in 2001 because it didn't like the risks, and shut down its in house hedge fund at the end of 2007. It just received a $25 billion capital injection from the Treasury which it didn't need which will expand its lending capacity by $250 billion. It will lend this money, not use it for more acquisitions, because new lending is now extremely profitable, and because of moral suasion from the government.

TRADE IDEA

The 1,100 point sell off in the Dow over the last two days, the worst since 1987, has taken the VIX back up from 54% to 64%. As long as the sun doesn't explode and incinerate the solar system I don't believe the market is going to a new low before the next options expiration on November 21. Use volatility spikes to go short the November S&P mini 830 puts for $20, taking in $100,000 in premium on 100 contracts.

QUOTE OF THE DAY

When asked what kind of dog he was going to get president elect Obama said 'I might get a shelter dog, and as you know, most shelter dogs are mutts, like me.'

November 7, 2008/by DougD

November 7, 2008

Diary

Global Market Comments for November 7, 2008

1) The dreaded October non farm payroll came in at minus -240,000, much worse than expected. The unemployment rate soared from 6.1% to 6.5%, a 14 year high. These figures included the Boeing strike and the full brunt of the credit freeze. We have lost 1.2 million jobs in the first ten months of this year. Despite this depressing news the market managed a 248 rally, a classic case of buy the rumor and sell the news. This renders the Q3 GDP figure of -0.3% meaningless. It was probably more like -3.0%.?? I believe that we are currently enduring two extremely sharp down back to back quarters of?? minus 7-8%?? GDP combined, which is getting us uncomfortably close to the legal definition of a depression of -10%. I believe we will see a gradual recovery next year. There is so much liquidity flooding the system I can't see otherwise.

2) More fascinating data about the car industry. Car production peaked at 17 million units/year two years ago. It is now at a run rate of 11 million units/year. This is the lowest absolute rate since 1980, and the lowest population adjusted rate since 1945 when the government lifted its wartime ban on civilian auto production.

3) General Motors (GM) announced a Q3 loss of $4.2 billion. The cash burn was $6.9 billion, or $2.3 billion/month, more than double the worst case scenario. The company called off its merger with Chrysler. Fasten your seat belt. November car sales could be as bad or worse than the cataclysmic October numbers.

4) I saw an interesting interview with Kenneth Lewis, CEO of Charlotte, North Carolina based Bank of America (BAC), which after the purchase of US Trust, MBNA, Countrywide Financial, and Merrill Lynch, is now the largest bank in the country, with nearly $3 trillion is assets. The current holding company is descended from the North Carolina National bank and Nationsbank. One out of every two Americans is now a BAC customer in some way of another. The company pulled out of sup prime lending in 2001 because it didn't like the risks, and shut down its in house hedge fund at the end of 2007. It just received a $25 billion capital injection from the Treasury which it didn't need which will expand its lending capacity by $250 billion. It will lend this money, not use it for more acquisitions, because new lending is now extremely profitable, and because of moral suasion from the government.

TRADE IDEA

The 1,100 point sell off in the Dow over the last two days, the worst since 1987, has taken the VIX back up from 54% to 64%. As long as the sun doesn't explode and incinerate the solar system I don't believe the market is going to a new low before the next options expiration on November 21. Use volatility spikes to go short the November S&P mini 830 puts for $20, taking in $100,000 in premium on 100 contracts.

QUOTE OF THE DAY

When asked what kind of dog he was going to get president elect Obama said 'I might get a shelter dog, and as you know, most shelter dogs are mutts, like me.'

November 7, 2008/by DougD

November 6, 2008

Diary

Global Market Comments for November 6, 2008

1) The Obama hangover hits. Any doubts we are stuck in an 8,000-10,000 range for the Dow for the foreseeable future were washed away with the 1,000 point sell off in the Dow from yesterday's high. Reality is such a bitch! It didn't help that Cisco's John Chambers said that conditions were the worst that he had seen in his career. When the head cheerleader for the tech industry slashes his wrists on national TV you don't want to own stocks.

2) The Bank of England slashed rates a record 1.5% to 3.0%, the most since 1955, and is clearly aiming for a Japanese style zero interest rate policy. The ECB is still behind the curve, announcing only a 0.5% rate cut. The ECB's Trichet says the outlook for price stability has improved. Well duhhh! With all commodities having halved in four months, inflation disappearing down a rat hole is more like it. Best of all, Trichet said there is no credit crunch. What planet is he living on?

3) Another day of General Motors (GM) bankruptcy jitters, which appears to be burning cash faster than the $1 billion a month it indicated earlier. The company has an application in to become a bank holding company so it can qualify for federal bail out money. The government is trying to engineer a merger with Chrysler. But a merger of two zeros is tough to pull of. In the meantime GM is suspending development of all new models. GM has lost $50 billion in the last three years. Will someone please put a bullet through the head of this company?

4) Weekly jobless figures came in at 481.000. Most expect worse in coming weeks and are bracing for a terrible non farm payroll report tomorrow.

November 6, 2008/by DougD

November 6, 2008

Diary

Global Market Comments for November 6, 2008

1) The Obama hangover hits. Any doubts we are stuck in an 8,000-10,000 range for the Dow for the foreseeable future were washed away with the 1,000 point sell off in the Dow from yesterday's high. Reality is such a bitch! It didn't help that Cisco's John Chambers said that conditions were the worst that he had seen in his career. When the head cheerleader for the tech industry slashes his wrists on national TV you don't want to own stocks.

2) The Bank of England slashed rates a record 1.5% to 3.0%, the most since 1955, and is clearly aiming for a Japanese style zero interest rate policy. The ECB is still behind the curve, announcing only a 0.5% rate cut. The ECB's Trichet says the outlook for price stability has improved. Well duhhh! With all commodities having halved in four months, inflation disappearing down a rat hole is more like it. Best of all, Trichet said there is no credit crunch. What planet is he living on?

3) Another day of General Motors (GM) bankruptcy jitters, which appears to be burning cash faster than the $1 billion a month it indicated earlier. The company has an application in to become a bank holding company so it can qualify for federal bail out money. The government is trying to engineer a merger with Chrysler. But a merger of two zeros is tough to pull of. In the meantime GM is suspending development of all new models. GM has lost $50 billion in the last three years. Will someone please put a bullet through the head of this company?

4) Weekly jobless figures came in at 481.000. Most expect worse in coming weeks and are bracing for a terrible non farm payroll report tomorrow.

November 6, 2008/by DougD

November 5, 2008

Diary

Global Market Comments for November 5, 2008
Special Gold Issue
Featured Trades: ($GOLD)

1) Last year, South Africa suffered its steepest decline in gold production since 1901, falling 14%, to a mere 232 tons. It now ranks only third in global production of the yellow metal, after China and the US. Severe electricity rationing, a shortage of skilled workers, and more stringent mine safety regulations have been blamed. Choked off credit has frozen the development of new capital intensive deep mines, as it has for everybody else. Rising production costs have driven the global break even cost of new gold production up to $500 an ounce. In the meantime, the financial crisis has driven flight to safety demand for gold bars and coins to all time highs. Last year, the US Treasury ran out of one ounce $50 American Gold Eagle coins, now worth about $850. Competitive devaluations by almost every central bank, except Japan, mean that currencies are not performing as the hedge that many had hoped. It all has the makings of a serious gold shortage for the future. Could the downturn we have seen over the past ten months be just a blip in the eight year bull market? When the last hedge fund is forced to sell its last leveraged long position, watch out above!

2) If the share prices of the top five listed banks went to zero, it would take only 331 points off of the Dow, because it is a price averaged index. There is nothing left for hedge funds to short. Oh, how the mighty have fallen!

3) Philipp Hildebrand, vice chairman of the Swiss National Bank, indicated that Switzerland will pursue a Fed style zero interest rate policy to head off a depression. It plans to flood the Swiss monetary system with liquidity, and even buy corporate bonds to this end. The Swiss franc went into free fall. Long time Swiss economic observers were stunned.

4) Car theft has fallen nationally because the thieves can't sell their hot vehicles. Go short chop shops.

6) The official US government poverty level was set at three times the annual cost of food in 1963 during the Kennedy administration, where it has remained ever since. Today that works out to $21,200 for a family of four. Expect this figure to rise during the new administration.

QUOTE OF THE DAY

'The euro won't survive its first recession,' said Milton Friedman, when the currency was created a decade ago.

INTERESTING FACT OF THE DAY

Almost all of the gold ever mined in history is still in circulation, and would fill about two Olympic sized swimming pools. That includes ores found by the ancient Egyptians, the coins traded in Solomon's temple, those minted by the original King Croesus, and all those bars of Nazi gold stamped with German eagles I used to see in the vaults at Swiss Banks Corp. Only gold shipwrecked at the bottom of the ocean in Spanish galleons, or gold rush era steamers, or gold vaporized by atomic bomb blasts is no longer available.

November 5, 2008/by DougD

November 5, 2008

Diary

Global Market Comments for November 5, 2008
Special Gold Issue
Featured Trades: ($GOLD)

1) Last year, South Africa suffered its steepest decline in gold production since 1901, falling 14%, to a mere 232 tons. It now ranks only third in global production of the yellow metal, after China and the US. Severe electricity rationing, a shortage of skilled workers, and more stringent mine safety regulations have been blamed. Choked off credit has frozen the development of new capital intensive deep mines, as it has for everybody else. Rising production costs have driven the global break even cost of new gold production up to $500 an ounce. In the meantime, the financial crisis has driven flight to safety demand for gold bars and coins to all time highs. Last year, the US Treasury ran out of one ounce $50 American Gold Eagle coins, now worth about $850. Competitive devaluations by almost every central bank, except Japan, mean that currencies are not performing as the hedge that many had hoped. It all has the makings of a serious gold shortage for the future. Could the downturn we have seen over the past ten months be just a blip in the eight year bull market? When the last hedge fund is forced to sell its last leveraged long position, watch out above!

2) If the share prices of the top five listed banks went to zero, it would take only 331 points off of the Dow, because it is a price averaged index. There is nothing left for hedge funds to short. Oh, how the mighty have fallen!

3) Philipp Hildebrand, vice chairman of the Swiss National Bank, indicated that Switzerland will pursue a Fed style zero interest rate policy to head off a depression. It plans to flood the Swiss monetary system with liquidity, and even buy corporate bonds to this end. The Swiss franc went into free fall. Long time Swiss economic observers were stunned.

4) Car theft has fallen nationally because the thieves can't sell their hot vehicles. Go short chop shops.

6) The official US government poverty level was set at three times the annual cost of food in 1963 during the Kennedy administration, where it has remained ever since. Today that works out to $21,200 for a family of four. Expect this figure to rise during the new administration.

QUOTE OF THE DAY

'The euro won't survive its first recession,' said Milton Friedman, when the currency was created a decade ago.

INTERESTING FACT OF THE DAY

Almost all of the gold ever mined in history is still in circulation, and would fill about two Olympic sized swimming pools. That includes ores found by the ancient Egyptians, the coins traded in Solomon's temple, those minted by the original King Croesus, and all those bars of Nazi gold stamped with German eagles I used to see in the vaults at Swiss Banks Corp. Only gold shipwrecked at the bottom of the ocean in Spanish galleons, or gold rush era steamers, or gold vaporized by atomic bomb blasts is no longer available.

November 5, 2008/by DougD

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