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?