The Weekly Update

Fannie and Freddie lead the week with a fall to 18 year lows. Renewed concerns about their future are brewing considering they either own or guarantee $5,300 billion in U.S. mortgages. The shares are down from $70 last August to about $4 in today’s trading.

The U.S. dollar retreats from a six month high against the euro. The reasons for this could be from profit taking and from rising commodity prices which will hinder the current rally. In addition, the U.S. is going to need a whole lot of money printed in order to possibly bail out Fannie and Freddie.

Pervez Musharraf resigned as the president of Pakistan today in a TV address. His departure heightens the uncertainty of the country and who will control it. Radical Islam is an obvious problem in segments of the Pakistani population and this change of leadership places nuclear weapons in the hands of a new regime that has yet to reveal itself. We now have two serious situations - Iran is an Islamic country that may go nuclear and Pakistan is a nuclear country that may go Islamic. More instability in that part of the world is not what anyone needs right now.

Russia is still in the process of a all out war with Georgia. The United States refuses to show any support for Russia while the former Soviet Union says it will “crush attacks on citizens.” This could get ugly as the days progress.

Commodities are gearing up!

It seems to me that the long term commodity market is gearing up for another strong move north.  The commodity market has been ever so volatile the past several months with many factors affecting its market. Whether it is the value of the dollar, the slowdown in the U.S. economy or the global expansion and need for goods, it seems to swing violently.

Let’s do a quick review of the four charts below - Gold, silver, oil and a basket of commodities stocks called an ETF.

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Gold - This has had an extreme sell-off over the past few months.   Many speculated a little too much while others took irresistible profits with a bullish run in a short amount of time.  Gold now sits on a major support level and on a price it has not seen since Oct-Dec of 2007.  I would imagine investors will start to accumulate more Gold as uncertain financial times still lay around the corner.

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Silver- This commodity has been beaten up in recent months.  Just when the rookies got on the commodity band wagon that never seemed to end, the ETF got crushed with an enormous sell off.  Just like Gold, Silver is now sitting on a major support level not seen since the end of last year.  Look for major institutions and the public alike to start adding this commodity to their portfolios for the long term

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Oil - Oil remains to be the primary source of world energy.  This commodity seemed to only want to go higher until about 6 weeks ago but the steady rise seems to be slowing.  There was no major news to cause this other than the fact that the U.S. was in a slowdown.  I would argue that the oil price is going to come back down as it is not like the U.S. is the only country that uses Oil; demand is growing worldwide at a phenomenal rate.  As globalization intensifies and uncertain times (Georgia, Russia, Iran) linger, lets watch the USO for the long term!

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Commodity Basket - The DBC is the exchange traded fund “stock” that covers many different commodities including but not limited to oil and wheat.  This is a good mixture for those who want commodities in their profile but may not be sure which ones they want. This covers precious metals, food,  and commercial metals among others. The DBC is sitting on a 200 day EMA which acts as a support level on most indices and markets.

Speedo LZR Racer

You don’t become the winningest Olympian ever without a little help.  During his gold collecting campaign in Beijing, Michael Phelps is wearing a stars and stripes version of the Speedo LZR Racer ($550).  Designed with the help of NASA, the “world’s fastest swimsuit” is the product of extensive development and is made of several high-tech materials and technologies.  The LZR is constructed with the world’s lightest woven swim fabric, has full-length bonded seams ultrasonically welded together, something called Hydro Form Compression, and is cut from a three piece 3D pattern to fit a body more closely.  Checkout Speedo’s Team USA Collection.

Scary Inflation Numbers

We have talked about inflation several times here at GoToGuy.   Inflation is simply the the cost of living.   As values of currencies decline and costs of commodities such as oil and wheat rise, this pattern results in what we call inflation.

A recent article noted that inflation hit its highest annual pace since 1991.  This is not a good sign.

When the economy weakens, job availability declines, and consumer confidence drops, the result is what we called stagflation (high inflation, high unemployment.)  During a time of inflation, stagflation occurs when jobs become scarce.  Not to scare any of my readers but that is a predicament we face come 2009.

Take a look at some inflation rates that range from high to holy $h*#!

Year-Over-Year Inflation

As of June 2008

• Zimbabwe 1,000,000%
• U.A.E 12%
• Argentina 25 to 30%
• Turkey 11%
• Latvia 30%
• Costa Rica 11%
• Venezuela 29%
• South Africa 11%
• Vietnam 25%
• Philippines 10%
• Iran 25%
• Indonesia 10%
• Egypt 21%
• Guatemala 10%
• Pakistan 18%
• Saudi 10%
• Bolivia 15%
• China 9%
• Nicaragua 14%
• India 8%
• Russia 14%
• Chile 8%
• Qatar 14%
• Thailand 8%

Democrats Praise McCain

Financial Shorting - Let’s Play Ball

The rules for financial shorting have returned to their normal routine.

“Shorting” is when you borrow a stock from a brokerage firm and sell that borrowed stock to someone else. If the stock goes down, you make whatever percentage it fell.  It is a great tool to utilize instead of buying stock in a bear market.

A lot of people like Mutual Funds.  The problem with ALL mutual funds is they don’t short anything. It’s an even a bigger problem that a lot of people unaware of the financial system allow all their money to be in mutual funds. If you have mutual funds, please let me know only if you are happy with the returns.  I bet I don’t get any e-mails.

Today, the rules have changed.  A few weeks ago, I posted a blog about how the Federal Reserve is changing the rules in which large institutions are not allowed to “short”.  It was an unprecedented event.   Now that rule has expired and you will see financial markets go down once again.

From a technical stand point, the financial exchange traded fund (XLF) is ripe to go lower.  It is currently in a primary downtrend.  The secondary trend which went up for a few weeks is about to change direction.   The ETF could not break it’s high from July 23rd, showing signs of weakness.  All the lower indicators are showing convergence which tells GoToGuy we are headed lower!

Google is not the biggest

Beijing Olympics 2008

The Olympics is back and could be better than ever. The opening ceremony was impressive in the new “birds nest” stadium. So far, the U.S. is doing very well considering they are in second place with the medal count just slightly behind China. The total medals giving out are only about 10% of the total that will be awarded over the next few weeks. The counter below should keep you updated through out the Olympics of how the medals are being earned.

*UPDATE 8/16/2008* The U.S. is back in the lead!

*UPDATE 8/14/2008* The U.S. has dropped back one to China!

*UPDATE 8/12/2008* The U.S. is back in the lead!

Olympic Medal winners at NBC Olympics.com!

The World’s Second 7 Star Hotel

The Morgan Plaza is a super-luxury 7 star hotel that has just been completed in Beijing, China. The hotel was completed just in time for the Beijing Olympics. It is rumored according to some websites to be possibly more luxurious than the Burj Al Arab and has been considered to be the official landmark of China, still in competition with the Shanghai World Financial Center.

The plaza will contain two pavilions, a temple, the world’s best Japanese restaurant and a 600 meter long corridor. This plaza will also have the best views of the Olympic “Birds Nest”

source: http://www.trendyhere.com/archives/7-star-hotel

Access the VIP lounge

Ever fly and have a long layover or a flight that seems delayed longer than the actual flight itself? Well I have experience both of those and numerous times. I also have had baggage lost or mishandled as well. What I’m going to share with you below, may help you get access to the VIP lounge for free or atleast at a discount.

Don’t just settle for a voucher anymore. Try to get two vouchers, or one for $500 instead of $250. I have done it as recently as this past April and it worked. Negotiate with the airlines, you don’t just settle for a voucher anymore. Say you would like a day pass to the airline’s club as part of your compensation.

All airlines offer people traveling overseas in first or business class free access to their members’ club. Make sure to take full advantage of it. You would be surprised to see what some of them have inside!

Get a platinum card. Access to airline lounges is a common benefit for platinum card holders. The American Express Platinum card grants you entry to Continental, Delta and Northwest’s clubs, for example.

Visa Signature Platinum cardholders can take advantage of a network of more than 500 lounges owned by a variety of airlines all around the world..

Buy a day pass. Day passes are $25 to $50

Look on E-bay. Day passes often go unused and people are now turning to the online auction Web site to offload their extras.

Come back soon for more information on GoToGuy.com