Thursday, February 5, 2009
(Cont'd from above)...

Jim (cont'd):    That is right… it feels to me like the Chinese stimulus package is having a much more of an impact in the United States than anything we are talking about or doing… and it makes sense… the Chinese stimulus it is all about saving lives… the lives of the people in power… they don’t want to get beheaded by angry workers… if unemployment gets too high… the Chinese leadership is afraid of a Mussolini like ending if their plan doesn’t work… and that makes for great stimulus… no… they want to give the people more meat… hence the big increases in grain the last week… you know why… why more meat… because they don’t want to end up on meat hooks in Tiananmen Square… to belabor the El Duche demise… but Obama and Pelosi… they aren’t afraid of anyone… despite Pelosi’s fire side chat with Bernanke the other day… shouldn’t that be Obama’s role… she is all about thinking small… so is Harry “Nevada” Reid… who is fiddling with aid for the Vegas airport while America burns… you know, I was surprised that he was not demanding that TARP banks hold their annual meetings at the Bellagio.

We all know that there is nothing bold in our stimulus plan… we were expecting $300 to $400 billion in infrastructure spending from this thing… which would spur a huge demand for the infra plays as well as steel, machinery, all the other industries that have been totally decimated by the downturn… but what did they give us $30 billion… not $300 billion… $30 billion in infrastructure spending… if the Chinese communists tried to pull something like that… we would see a long march right into the Yang Sea… and I bet they can’t swim like Cramer anti-fave Mal could… China may not be democratic… but their government is a whole lot more responsive than ours… see, today’s market… the rally… it is screaming that it is all China… we know from our all oil statistics for instance that it isn’t our demand that is driving crude higher… we have no real demand here… the demand is going down… the inventories are going up… the price though is being set internationally… again presumably by China… and oil stocks and drillers are saying that crude is going down with their mocking high rally… we now know from our ag use… at least, from the big consumers of grain… the poultry and beef producers in this country… the Tyson Foods, the Smithville’s… there is no real demand here… so there is no real demand for grains… yet Bunge, gigantic ag play said soy beans are getting stronger… talked about the whole ag complex going up… and fertilizer is getting stronger… seed, fertilizer, ag equipment… not US… that is China speaking.

We know that while Cisco was downbeat about the future last night… John Chambers, the company’s excellent and experienced CEO, made points twice during the conference call that he thought China would turn first… and there is plenty of evidence that the turn, the great leap forward… has already happened… China can spur the worlds tech… and is spending on $40 billion just on Telco infrastructure alone… vs. a measly $30 billion for our entire infrastructure… I mean it is ridiculous… no wonder Cisco can rally on a down beat outlook… and how about Qualcomm… that would be a gigantic part of Chinese Telco stimulus… it has now shrugged off Goldman Sachs’ downgrade the other day… and is approximately a little bit higher than where it was before mistakenly got polaxxed off the Goldman list… the Chinese mean business… we mean politics.

I know you need more evidence… because you don’t believe that another country can control the US market… let’s take them down… first the Baltic Freight index, has more than doubled since the beginning of the year from $660 to $1498... is was just up 13% last night… do you know what that index really is… I mean it sounds… Baltic… I mean Baltic, isn’t that Mediterranean… we only know it as Monopoly for heavens sake… no… it is a direct indicator of what is being shipped and the demand for shipping… and it is obviously that the shipping is going up to feed the veracious Chinese communist law… that index cratered when China wasn’t importing… now it is soaring… it sure ain’t because of our imports.

Second, the Chinese market is up 15% for the year… holy cow… that is huge… especially when you consider that every other market is down big… the Chinese stock market turned viciously horrible 6 months before the dramatic Chinese slow down… it predicted the downside perfectly… so how can we not believe that it has the power to predict the upside too.

Third, the Chinese have begun to order iron ore… after taking a huge vacation from that market… they have not been in it for months… that could be the tell for more minerals… and it could explain why copper might be bottoming… the other day the Chinese government put out stats showing that they have an incredible power shortage… could this presage a giant power plant build… no matter our coal stocks are soaring… no wonder our copper stocks are soaring… no wonder the steel stocks are soaring… they won’t quit… because China doesn’t have enough steel… it doesn’t have enough copper… and must import this stuff… including coal from the US… I think that China more than anything the Senator of the House is discussing is moving this market… sure we got some nice leadership today from the four horseman of tech… you know that is going to happen… you know that Amazon is doing fantastic… I told you that… you know that Google is breaking out because it is the only game in town… Apple had that dynamite quarter… totally shrugged off all the jobs thing… Research In Motion… hey what is with Nokia… what is with Motorola… they obviously don’t have the product… RIMM is the thing… hey about Wal-Mart… good to see back them on the case… I mean I bought a ton of Wal-Mart for my charitable trust… because it missed like a 3 week period… I mean come on it never should have sold off anyway… I would buy it aggressively.

Mastercard and Visa helped the cause… two huge hedge fund favorites… they are giving us some leadership… and let’s talk today about bank aid… today good… yesterday bad… Tuesday good… Monday bad… well anyway at least the short covers were scared off for a day… they had to come in and cover… in the end… my screen is filled with Chinese derivative winners… everything from Mosaic to Deere to Nucor to Schlumberger… as well as outreach Chinese buying thru the FXI… my favorite Chinese ETF… it still has a lot further to go… if I am right… and I have been buying that one too for AAP… I would much rather bank on the Chinese communist than what we have going on in our meager economy… where unemployment is still headed higher… and our stimulus plan won’t make up for a week’s worth of unemployment claims… China is the only decent game in town… or on earth for that matter.

Here is the bottom line…

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The Bottom Line!:     None of us proud Americans would ever want to admit this… but the action isn’t lying… President Pelosi… uh, President Obama hasn’t offered a stimulus plan that could pull us out of this morass.. but Beijing could… China is behind almost everything that is working in this market… so it is China that we should be focused on… not our leaders in Washington… who are putting together a stimulus plan that isn’t worth the name.. do you know what I say… pass the Moo-Shoo… it is Chinese port that is taking us higher… we are just a hoisen.

Washington’s Stimulus plan may not work, but China’s could - keep your eyes peeled...

I think everyone should take a ride not on the Redding… not on the Baltic… I mean like the B&O…. but they should take a ride on the Panda Express… focus on what is working in China… and I tell you what… I think in the end it is a Dim-Sun experience.


[verbatim recap]

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Jim went on after this segment to take questions from callers, and responded with his comments...

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Q:    I agree with you that China is coming back before the US, is it time to buy the FXI? What is the upside on it?

Jim:    You have missed two bucks… the upside could be huge… this thing was double last year at this time… this thing has room to run… kind of like Bruce Springsteen, I think it is born to run… how come we didn’t do Born to Run.. oh shoot… he did Born to Run, he didn’t do Born in the U.S.A… I believe point blank that China being up 15% this year… now everyone says, now wait a second… if January is bad in the U.S. I guess the rest of the year is going to be bad… let’s extrapolate that… let’s extrapolate that to soybeans in pods… cause that is all that my props department could come up with today… and say that if China is up 15%… who knows maybe it could be up 50... 50... wouldn’t shock me.

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Q:    My question is about the dry ships, the dry shippers there are 5 of the big 7 that have accidentally high yields over 20%, and Navios Maritime Holdings Inc. (NM) being 8% or so, and I was wanting to know is this a good time to get into these?

Jim:    No, I can’t recommend that… we have all seen DryShips, Inc. (DRYS)… by the way, isn’t it amazing that when you come in and watch the ticker, you see Dry Ships is fourth… every fourth symbol on the ticker is Dry Ships… here is the problem…the Baltic Freight Index is a really good measure of demand… of people shipping… but is not a measure of how many ships are coming on… and there happens to be a gigantic number of ships coming out of shipyards… they are going to depress the actual shipping stocks… they won’t be able to command it… right now you have got this Baltic Freight Index… it is a good measure of current orders.. I do not want to trade off of it… because, the reason why… the balance sheet of almost all the shippers is so bad that if they want to go buy the ships… they have to either take down a lot of debt or a lot of stock… so they themselves are not configured as a way to play the Baltic Freight Index… only China is… that is what this is about.

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Q:    My question is about Cisco (CSCO*)...  What does the quarter say about going forward on this stock?

Jim:    I have got to tell you something… I have been over that quarter like 19 different times, and believe me that is not easy because it was a 90 minute call… but John Chambers did, I mean I love Chambers… when he was on TV… he was a little prickly… I thought he was a little prickly with my friend Erin today… but I will say this… John Chambers is conservative… he got it down so he can under promise so that he can over deliver… I don’t believe his down beat nature… I think he is going to do fine… I stick with Chambers even when Chambers doesn’t stick with himself.

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[verbatim recap]

[end of segment]

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