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February 17, 2006

Does Uncle Sam Look Like GM?
by Charles Meek

Dow Jones Industrial Average   11,040
Value Line Arithmetic Index   2,019
30-Year Treasury Yield (TYX)   4.57%
20+ Year Treasury Bond Price (TLT)   90.18
Gold 1/10 Ounce (GLD)   $53.74

The Big Picture for Stocks
The 4-year cycle would predict a major bottom in 2006.

Technical Trendicator (1-4 month trend):
Stock Prices   Down
Bond Prices   Down
Gold Price   Down

General Motors and the United States of America I read a recent cover story about General Motors in Business Week magazine. The article points out that their problems are multi-fold. They cannot control their costs because of union pressure and under-funded retirement benefits (especially health benefits) to employees. And they face undaunting pressure from foreign manufacturers. The stock is selling at the same price as in the 1950's. And the possibility of a Chapter 11 filing is very real. In reading this story, I could not help but think about the United States government. If you consider the federal budget problems, it sounds an awfully lot like GM -- cannot control their costs, unfunded retirement promises, undaunting competition from abroad. Because of the politics of the situation, we cannot expect the federal government to get hold of their budgetary problems without a major crisis. Will the reputation of the United States fall into decline like the stock of General Motors? What does this suggest about the long term trend of the U.S. dollar?

Regards,

Charles Meek
MeekMarketModels.com

Mr. Meek is a Registered Investment Advisor and editor of MeekMarketModels.com.

MeekMarketModels does not guarantee the accuracy or completeness of this report, nor do they assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only . In making any investment decision, you will rely on your own review and examination of the facts and the records relating to such investments. Trading the market is extremely risky. Our suggestions are often very speculative and not suitable for many investors. Past results are not indicative of future returns. Meek Market Models, Inc.

Copyright © 2004-2006 Charles Meek

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