PATRIOTIC BEAR

i need to get something off my chest. if you are reading this blog you are probably someone who i've been speaking to for the past few months about my views and opinions about well, everything. mostly, i express my strong opinions about the economy and the geo-political events going on around the world. and mostly those opinions are well, negative. and i'm not a negative person. in fact i grew up in a very positive home and my mom sold self improvement and motivational tapes! you know brian tracy's "be the best you can be", wayne dyers "you'll see it when you believe it", dale carnegies "how to win friends and influence people", zig ziglars "reach for the top", etc., etc., etc.

that doesnt mean i cant be "bearish" in my investment outlook. it also doesnt mean that i cant think something bad will happen. and just because i'm bearish and think bad things will happen doesnt mean i'm not patriotic and it doesnt mean i am not a postive person. i am very patriotic. and i am positive more bad things will happen. i love america. i hate saddam hussein and all he stands for. i think he should be burned at the stake on pay-per-view! i don't want to see our troops die in the desert of iraq or afganistan or any where else. i don't want our country to be devastated by another terrorist attack. and i believe that sometime in the future the risks and uncertainties of all that may change and will be reduced. but not now or anytime soon!!!!

my economic outlook has nothing to do with my patriotism or saddam hussein. i am just being realistic about the ramifications of the war on the economy and the potential uncertainties and risks it creates for the world going forward. i am not 'rooting' for bad things to happen, i am just certain that they will happen. so if and when they do happen, i believe the "shocks" will cause further emotional, economic and geo-political damage.

i think wall street strategists and our political leaders are way too optimistic about the level of risk that still remains in our economy and the world. when the current "war celebration" is over, revenues, earnings and JOBS will matter. unrest and violence around the world will also matter, and it will be much worse than any of us are used to. at least thats what i think. i could be wrong and that would be great. but i could also be right and that would not be so good.

even with the recent military successes, companies have shown no signs of turning up their production or hiring. and since capacity has been cut over the past 12-18 months, even if demand did pick up over the next few weeks or months, companies would have difficulty satisfying a surge in demand. in fact, they may not even believe that it could last so they would be hesitant to increase capacity right away. state and local government budgets have all been cut and will be cut further due to lower tax reciepts. the federal government hasnt cut its budget because it continues to pile on the debt, which will cause its own problems in the future. none of this can or will change when the war is "over", whatever "over" means. and therefore we should be prepared for further economic weakness.

so i'm not unpatriotic and i'm not 'rooting' for bad things to happen. i would love all this bad stuff to go away and revisit the carefree and heady days of the 1990's. unfortunately thats not in the cards right now. so in a way i can control, in an enviroment where i feel so out of control, i am investing for the worst and hoping for the best. i am "bearish patriot"...and thats not an oxymoron.

have a grateful day!

larry