Interesting Point of View

When beliefs arise from observations, it’s science. When observations arise from beliefs, it’s religion.

300 Breaks The Box Office

In Hollywood the motto is "Nobody knows anything." The wisdom of that motto was confirmed over last weekend when the new film, 300 was shown.

The film was razzed by critics as a comic book movie drowning in catsup-blood. But 300 (which cost about $7 million to make) took in an astounding $70 million over the weekend.

The movie is about 300 Spartans who held off 27,000 Persians (Iranians) in the historic battle of Thermopylae in 480BC. Poorly made pirated versions of 300 are being shown in Iran, but Iranian leaders are calling for a ban on the film. They claim that 300 shows Iranians as decadent, sexually flamboyant and basically evil.

Hollywood may "not know anything," but it knows box office statistics — 300 could even start a new trend in Hollywood, digital movies made inexpensively on a Hollywood lot.

-Richard Russell,
Dow Theory Letters

This spells success for movie studios! Lets see if this trend continues

Haliburton Moving Offshore

Oil services company Halliburton Co., which plans to move its chief executive to Dubai, said it will add more than 13,000 new employees in 2007.

In a memo sent to workers on Tuesday, Chief Operating Officer Andrew Lane wrote, "It is our expectation that our planned growth for 2007 to 2009 will mean that we will hire more than 13,000 new employees in 2007. This will include growth in our Houston employment numbers."

That growth pace is similar to 2006, when the company added more than 13,000 employees, Halliburton said.

-CNN Money

Don't like the government, or the ones thats next. Just move!

Greenspan Expects Subprime Mortgage Fallout to Spread

Former Federal Reserve Chairman Alan Greenspan said he expects the fallout from subprime-mortgage defaults to spread to other parts of the economy, especially if home prices decline.

``If prices go down, we will have problems -- problems in the sense of spillover to other areas,'' Greenspan said in remarks to the Futures Industry Association meeting in Boca Raton, Florida today. While he hasn't seen such spreading yet, ``I expect to.''

Subprime borrowers, or those with poor or limited credit histories, are increasingly defaulting after looser lending standards allowed them to take on more debt than they could afford. Last month, Greenspan told an audience in Toronto that ``disarray'' in the subprime mortgage market isn't likely to create greater financial instability in the rest of the economy.

``It is not a small issue,'' Greenspan said today. ``If we could wave a wand and prices go up 10 percent, the subprime mortgage problem would disappear.''

U.S. stocks pared gains after the remarks. The Standard & Poor's 500 index rose 3.54 to 1390.71 at 2:27 p.m. in New York after climbing as high as 1395.73.

Greenspan, who was Fed chairman for almost two decades until Ben S. Bernanke took over 13 months ago, has contrasted from his successor in his remarks on the economy. Greenspan said at least three times in the past month that a recession is possible. He didn't say one was likely. He said in an interview this month there's a ``one-third probability'' of a 2007 recession.

Bernanke's View

Bernanke said on March 2 that the central bank sees no ``spillover'' from the rising delinquencies in subprime mortgages. ``We're obviously going to watch it very carefully,'' he added. He told lawmakers Feb. 28 he expects the growth to accelerate. The Fed forecasts the economy will grow between 2.5 percent and 3 percent this year.

How can anyone expect there to not be a spillover effect? Housing was 40% of all job creation for the past 5 years.

Democracy At Work - The Begging Game

Unmentioned in the furor over global warming and declining oil production in the United States: Tariffs that prevent importing ethanol. Sen. Chuck Grassley (R-Iowa) is even working on a new tariff that would block ethanol imports from Trinidad (currently exempt) because entrepreneurs are building sugar-based ethanol refineries there. Even though it's far more energy efficient (and thus cheaper) to make ethanol from sugar instead of corn, our lawmakers want us to have less access to cheap, imported, sugar-based ethanol. Why? Because voters in Iowa grow corn for a living. That's democracy in action. That's your tax dollars at work.

Had dinner with some local business men today. One of them attended college to study political-science. He quit half way. He said politics is a begging game. You're either begging for money or voters. It never ends. The day after you win the election, it starts all over again!

I agree with him. Career politician or career beggar?

New Century Financial Goes Bust

Last week www.lenderimplode.com listed 28 subprime mortgage firms that were shut down or taken over. The count is now 34. Yesterday the third largest lender of subprime mortgages, New Century, stopped accepting new loan applications. The shares were once at $50. Now they are under $4 and falling. The Financial Times reports that they cannot meet their margin calls from their lenders.

Essentially, New Century has been shut out of the capital markets. They are being hit with a wave of lenders who are demanding they take back the mortgages they sold, and my guess is that they do not have the capital they need. Maybe they can sell assets and get them. Who would take their paper or their mortgages today, knowing the problems? The money available to subprime lenders is rapidly evaporating, and until the lending standards are tightened considerably, it will remain that way. Many of the buyers of the Mortgage Backed Securities are going to lose some money

.

This is just the tip of the ice-berg. All lenders and mortgage companies are going to be affected eventually and this will probably pull the country into a recession.

$19 Billion Gain

Mexican telecom Mogul Carlos Slim Helu added $19 billion to his fortune in 2006. His gain, placing him at No. 3 on the billionaire's list with $49 billion, was the largest one-year gain in a decade.

Thats a 38% annual increase in his networth in one year!

The Failing of Geniuses?

There was no place to hide last week, save for the U.S. Treasury-bond market, which rallied on expectations of a weakening economy and lower short-term rates. Not so global equity markets, which have become increasingly linked. The S&P 500 has a higher correlation than ever before with major overseas stock markets, including emerging markets, according to Morgan Stanley investment strategist Henry McVey, who speaks of a "Market of One."

Even gold, which historically moved inversely to stocks, dropped 5.9% last week to $642 an ounce.

-Barron's

Sounds like a correlation of non-correlated markets. Isn't that what brought down LTCM? I strongly recommend the book - "when genius failed".

Japanese Yen Surges

The yen surged to the highest level in almost three months against the dollar as Asian and European stocks extended a slump, prompting investors to unwind riskier investments funded by borrowing in Japan.

The yen reached its strongest since October against the pound and the most against the euro since November.
-Bloomberg

As the winding of the of carry trade continues, the Yen is the best place to be. You can take advantage of this by buying the Yen ETF - FXY

Iceland Gets The Flat Tax

Iceland has joined a growing list of nations that have sharply cut their corporate tax rates and adopted flat-rate individual income taxes. With the expiration of a surtax last year, individuals now pay a flat rate of 22.75 percent of their taxable income to the central government.

Iceland's most dramatic reforms are in corporate taxation. The corporate income tax rate is 18 percent, which is among the lowest in the industrial world. The corporate tax rate has been cut steadily from 50 percent in the late 1980s, to 33 percent by the mid-1990s, and to just 18 percent by 2002. The rate cuts have created a powerful increase in investment incentives and boosted economic growth.

-Cato Institute

Most countries enjoy higher tax revenues after initiating a flat tax. People are more willing to pay their fair share if they feel everyone's on an equal playing field.

Baseball's First Billionaire Player

Matt White, a journeyman pitcher trying to make the Los Angeles Dodgers, could become baseball's first billionaire player.

It has nothing to do with his arm. He owns a rock quarry in western Massachusetts.

White, who has appeared in seven big league games in nine professional seasons, paid $50,000 three years ago to buy 50 acres of land from an elderly aunt who needed the money to pay for a nursing home.

While clearing out a couple acres to build a home, he discovered stone ledges in the ground, prompting him to have the property surveyed.

A geologist estimated there were 24 million tons of the stone on his land. The stone is being sold for upward of $100 per ton, meaning there's well over $2 billion worth of material used for sidewalks, patios and the like.