MWM Recap for Investors Insights

Week of: March 19, 2010

The top three:

House Speaker Pelosi suggested that she might attempt to pass the health-care bill without having members vote on it. The tactic is known as a “self-executing rule” or a “deem and pass”.  This is a rule used only 20 times in 60 years.  Our observation is how deaf the House and Senate remains to popular objections to the plan.  What many are weighing is how this effects tenuous re election bids in November.  The key question being pondered is will the public remember?  Remember cash for clunkers?  You bought your neighbor a car. . .and may not remember that.  Our recommendation : Pink slips, 535 of them.

Interest Rates continue to rise globally (China, Russia, India, Australia) in key countries as Inflation is addressed before getting out of control.  The countries with Surpluses don’t object to seeing world liquidity as inherently inflationary, and taking preemptive action.  Those countries with Deficits ignore inflation on the horizon,  paralyzed by the potential economic effect of raising rates, and destroying the economy with higher interest payments on those large and growing deficits.

Trade tensions between China and the US are escalating, as ivory tower economists and politicians push for China to revalue their currency.  Is the Renminbi undervalued or the Dollar overvalued?  Blaming others for your own problems and scapegoating in the midst of crisis comes from the standard playbook every politician is handed upon election.