Gip...you might be interested in this discussion below about the cutting of interest rates in the next year....heck all of us should be!
I am reading on the yeah-boo board that TKO is paying out $75K per month for 'consultation fees'? as well as CEO webcast fees? plus shares? will copy over here in a minute...do need to confirm if I can find that in writing somewhere.
ANYHOW, here is the discussion on the interest rates:
Jim Grant predicts several rate cuts in07
Market Monitor"-James Grant, Editor of "Grant's Interest Rate Observer"Friday, August 31, 2007
PAUL KANGAS: My guest "market monitor" this week is James Grant, editor of the popular publication, "Grant's Interest Rate Observer." Welcome back to NIGHTLY BUSINESS REPORT, Jim.
JAMES GRANT, EDITOR, "GRANT'S INTEREST RATE OBSERVER": Thank you, Paul.
KANGAS: What kind of marks do you give Federal Reserve chief Bernanke on his speak today?
GRANT: I give him an "A." I thought he was terrific. He said that the Federal government would think long and hard before resuming its sadly accustomed role as first responder to the scene of a financial accident. That is, the Fed was not reflexively going to cut its funds rate just because somebody on Wall Street demanded it. As you know, in the old days, under Chairman Greenspan, the Fed was all too typically prone to cut its rate because of some financial crack-up. And knowledge that it would do that of course egged on people to take greater and greater risks with more and more debt. So I think Mr. Bernanke did a great service to the Fed and mostly to the country.
KANGAS: On a scale of one to 10 with 10 the best, what is your grade on his overall performance so far, other than the speech?
GRANT: He is OK.
KANGAS: You know this wouldn't last.
GRANT: He is in the price fixing business and he has not objected to that, as I hoped a keen intellectual would object to it. What he is doing is fixing an interest rate as if the Federal government had special knowledge to invent (ph) most effectively. The world over, markets are active and the discovery of prices and of course the sun never sets on open outcry markets. And yet the Fed persists in this business of setting its funds rate as if it knew. Well it doesn't know. I fully expect that the funds rate is going to be coming down because I think these debt troubles are much worse than the Fed is acknowledging.
KANGAS: It'll be cut, the Fed funds will be cut on the September 18th meeting?
GRANT: I believe it will. I believe it is going the way after (ph) that for what it's worth.
KANGAS: Really, several cuts before the year is over is what you're saying?
GRANT: I think so, yes.
KANGAS: Is that because the economy is in that bad a shape?
GRANT: I think the economy is weakening -- the growth in the economy is weakening. I think these debt troubles are not really a disturbance of Wall Street. They have to do with lending and borrowing in all departments, the credit (ph) markets and indeed, all over the world. This country's economy moves on debt just as the proverbial army does on its stomach.
KANGAS: Right.
GRANT: And it needs a lot of cheap debt to keep growing in its accustomed rate and its accustomed way and it is not going to get that debt at that price.
KANGAS: What investment strategy do you favor in the current volatile investment environment?
GRANT: Buying dollar bills at $0.50.
KANGAS: It would be nice.
GRANT: That works in most environments. Seriously, that is the very heart and soul of the so-called value approach, (INAUDIBLE) is to look for securities that trade at less than they're readily ascertainable net asset value and the search is more difficult the stronger the stock market, but there's always something to do.
KANGAS: During your last visit with us in late July of 2006, far too long ago, but you did have three buy recommendations. Let's see how they've done since then. We've seen the very conservative, the ishares, the Treasury ETF (SHY) actually up 1.7 percent. All the time you were collecting about 4.7 percent interest, then Sadia (SDA), the Brazilian chicken producer, up 70.6 percent. That is fantastic and then another chicken producer, Gold Kist (GKIS) was taken over by Pilgrim's Pride with a 51 percent gain. Those are not chicken gains, I'll tell you. They laid the golden egg. Those were wonderful.
GRANT: I thank my colleague, Ian McCulley (ph) at Grants, who was responsible for the two chicken longs. There were three chicken longs (INAUDIBLE).
KANGAS: Right. We just have a minute left, Jim, but do have any new recommendations?
GRANT: I do. I would like to suggest people take a look at three open-end mutual funds. These are not traded on the New York Stock Exchange, rather are accessible through a broker like Schwab. The first is a Wintergreen fund (Forum Wintergreen, (WGRNX) which is a global value fund run by a very fine value investor.
KANGAS: It's had a good run up.
GRANT: Yeah, it has, but I think that it will keep doing well. By the way, as full disclosure, I own a bit of that and a bit of the two others to come. The second name Paul is the Tocqueville Gold Fund (TGLDX) and this is an investment in the near certainty that money trading will continue fast and furious the world over. And the third is another esteemed value investor named Martin Whitman (ph) and Marty has a fund called Third Avenue value fund (TAVFX) which he has been running for years and years. And he, too, buys dollar bills for $0.50.
KANGAS: We can see all those symbols up in the right-hand corner (TAVFX) in this case in this one and you can just go to your broker with those symbols and find out what the fund is doing. Do you personally own any of these securities, Jim?
GRANT: Yes, I do, all of them.
KANGAS: All right, wonderful. It's always a pleasure to have you with us.
GRANT: Thank you, Paul, nice to be here.
KANGAS: My guest, Jim Grant of Grant's Interest Rate Observer
