OTCPicks Penny Stock Blog

   Is one of the world's largest oil plays sitting right in the heart of Europe? Thanks to a light oil discovery only a few miles east of Europe's largest onshore oil field this is looking increasingly possible. Please call me at 1-800-404-8982 to hear about this amazing story....

It was a brutal 2008 and just about everything that could go wrong did. I think its fairly evident that the stock market has put in a bottom - not all that surprising considering that analytical greats (and the same people that actually made money during the collapse) such as Stephen Leuthold whose Grizzly Short Fund made 74 percent last year, are now predicting a major up move for US equities. In fact Mr. Leuthold warned earlier this month that those that did not buy would "regret it".

For more please visit: http://www.undiscoveredequities.com/5_20_09.htm

President Obama’s Health Care Plan has arguably stirred more controversy than any of his other proposals to date. We at OTCPicks.com thought we would examine more closely the argument for and against this proposal… and what stocks could be influenced by his agenda.
Those that are AGAINST Obama’s Healthcare plan cite three main concerns:

• The reform will lower prices of drugs through Medicare and Medicaid which will eat away at corporate profits;
• It will allow the re-importation of prescription drugs from outside the United States;
• It will accelerate the approval of generic drugs and alter the tax code to limit the ability of U.S. companies to prevent overseas profits from taxation.

How any of the proposals in Obama's 2010 budget actually affect the healthcare and biotech sector, if at all, are far from clear. And there are many reasons why biotech's niche of developing life-saving drugs for serious diseases with unmet treatment needs won't suffer significant price or profit erosion.  

In fact, there are some policies that proponents argue could actually benefit the healthcare and biotech industries. Those that FAVOR the plan cite:

• support of research and development and potentially  larger budgets for the National Institutes of Health, the Food and Drug Administration, and other science-related agencies that pump billions in grants into research institutions;
• The idea of tax credits for research;
• His support for embryonic stem cell research.

Despite the many healthcare and biotech companies that have extremely favorable fundamentals (i.e. high earnings visibility and stable cash flows), broad investor fears could lead to pressure on many of these otherwise great companies.

Below are eight small and mid-cap stocks members may wish to add to their radars. We, at OTCPicks.com, feel their stock prices could be heavily influenced by the Obama Plan:

Bearish:

Celgene (CELG): A majority of the company's Revlimid and Thalomid sales are derived from Medicare recipients, placing the company at the higher end of the risk spectrum if Obama's health care reform plans significantly pinch drug pricing.

Amgen (AMGN): The Company benefits today from a relatively low tax rate of about 20%, in part because much of its business is conducted overseas. Details of Obama's corporate tax reform plan are scant, but if the administration prevents U.S. companies from shielding international profits from higher taxation, Amgen's tax rate would increase and its profitability would suffer. Amgen is also the most vulnerable to biogeneric competition.

Bullish:

Gilead Sciences (GILD): Early indications are that the U.S. government will increase funding for HIV prevention, testing and treatment, all of which are positives for Gilead and its stable of market-leading HIV drugs.

StemCells, Inc. (STEM): The Company is engaged in the discovery and development of cell-based therapeutics to treat damage to, or degeneration of, major organ systems. As one of the leading stem-cell stocks, Obama’s support for embryonic stem-cell research could be a boon for this company.

Neutral:

Genzyme (GENZ): About half of Genzyme’s business is conducted overseas, according to JP Morgan, making the company vulnerable to changes in tax laws. However, Genzyme has a relatively light exposure to Medicare and Medicaid. A large portion of Genzyme's profits come from the sale of high-priced drugs to treat rare, genetic diseases, but the business is global and relies very little on U.S. government reimbursement, according to Morgan Stanley research.

Happy Trading
OTCPicks.com Publisher

The fear and pessimism that has accompanied oil's correction is a classic (and from a contrarian viewpoint it's a compelling) buy signal on its own.

One fear is that a slowdown in China might clobber oil consumption.  For insight into this possibility we defer to Goldman Sachs.  They predict a re-acceleration of China's growth.  Critically, China's Central bank just said it has switched its priorities from fighting inflation to ensuring China's 10+ percent economic growth continues.  With most countries we might be skeptical.  But China has both the need (a few 100 million poor that will not tolerate any postponement of economic growth) and the means (over a trillion dollars in surplus reserves.)   We take its statement as a buy signal.

This is just one example of the growing list of reasons for consumption to remain strong and oil prices to soon rebound.  But while many investors worry about falling oil prices the real story to watch is about falling oil supply.  And now the world's perennial supply optimists, the International Energy Administrations have finally started to come to grips with what is a dire situation.  They have recently increased the global depletion rate from 4% to 5.2%.  The translation is that nearly 4 million barrels per day of additional production must be developed per year just to keep oil supplies stable, never mind accommodate future consumption growth.

Consider that, according to the renowned McKinsey Global Institute, in the next 15 years China will have added more than 300 million people to its Urban population - that is car-driving, air conditioner-using energy consumers - that is more than the entire population of the United States.  Consider that currently America consumes more than 20 million barrels of oil per day.

If this is the case, as the world struggles to keep up with exploding energy demand, higher oil prices and a renewed spectacular oil stock bull market (especially high growth junior oil stocks), are in my estimation a near certainty.

With this thought, I invite you to read my investment letter and would like to bring to your attention Manas Petroleum Corp. our number one oil growth story.

For more information, please contact us at 1-800-404-8982.

It is important to note that Undiscovered Equities, Inc. has been paid by Manas Petroleum for I/R services.  For a full disclaimer please log on to http://www.undiscoveredequites.com.

We think the answer is YES! There are many reasons to get bullish on oil and, even more so, oil stocks. One is the fact that many indicators are beginning to suggest an economic recovery could be in the cards over the next several months. The three largest consumers of oil including the United States, the European Union and China should start to see things stabilize and by the Q3 or Q4 of this year their economies should start to recover. This recovery will bring the world's economic engine back to life and oil consumption should start to increase again.

But while the price of oil has risen from the $30s to $50, oil stocks have not really rallied much. Below we highlight the ratio of oil stocks (S&P 500 Oil & Gas index) to oil (the commodity). When the line is rising, oil stocks are outperforming oil, and vice versa for a declining line. As shown below, when oil spiked in early 2008, the ratio dropped to its lowest level in years. Then when oil tanked in late 2008, the ratio spiked to its highest level in years as oil stocks held up much better. Recently, however, oil has rallied and oil stocks have been stagnant, causing the ratio to come back down. At the moment, the ratio is resting just above the average since 1990.

We feel the breakout that occurred in early 2009, and the current stabilization just above the 20 year average suggest oil stocks may once again outperform the price of the commodity.

In interviews with more than a dozen small-, mid- and large-cap portfolio managers, most said they were taking the initial months of 2009 to increase their exposure to energy stocks. Largely thanks to the spending spree currently ongoing in Washington, these managers expect all that cash to create an inflationary environment for energy prices down the road.

Initially, they've been right. Even though prices have stabilized around $50 a barrel lately, crude oil is up nearly 50% in the past two months, giving a boost to shares of large oil companies on an absolute basis. For instance, shares of Valero Energy Corp. (VLO) are up 33% since the first week of March, while those of Marathon Oil Corp. (MRO) have gained 40%.

Lastly, Texas oil billionaire T. Boone Pickens recently reiterated his prediction that crude oil prices would hit $75 a barrel this year as producers scale back production. Pickens said about OPEC producers: "They told you they want $75 by the end of the year, I would count on that, I believe them."

OPEC has already begun to scale back output to help support crude prices, which have dropped from record highs over $147 a barrel in July to around $48 a barrel currently.

While we generally agree with T-Boon’s projection of $75 oil by the end f the year, the chart above suggests that the oil stocks may very well outperform the commodity on a relative basis.

Below are a few oil stocks that we feel members should research and put on their radars right away:

Adventure Energy (ADVE) is an independent oil and natural gas company engaged in exploration, development and production activities in the Appalachian Basin, particularly in Morgan County, Kentucky and Wayne County, West Virginia.

Transocean Ltd. (RIG) provides offshore contract drilling services for oil and gas wells worldwide. The company offers deepwater and harsh environment drilling, oil and gas drilling management, and drilling engineering and project management services, as well as explores, develops, and produces oil and gas resources

Valero Energy (VLO) operates as a crude oil refining and marketing company. The company operates through two segments, Refining and Retail

Marathon Oil Corp. (MRO) through its subsidiaries engages in the exploration, refining, marketing, and transportation of liquid hydrocarbons, natural gas, and other petroleum products worldwide. It operates in four segments: Exploration and Production; Oil Sands Mining; Refining, Marketing, and Transportation; and Integrated Gas

Endeavour Intl Corp. (END) is an independent oil and gas company, engages in the acquisition, exploration, and development of energy reserves in the United Kingdom and Norway sectors of the North Sea and the United States

RPC INC (RES) is an oil and gas services company that provides various oilfield services and equipment to the oil and gas companies. It operates in two segments, Technical Services and Support Services. The Technical Services segment offers pressure pumping, coiled tubing, snubbing, nitrogen pumping, well control consulting and firefighting, wire line, and fluid pumping services.

Chevron (CVX) This is one of the best consolidated oil companies out there that has solid refinery exposure. The company also has a strong balance sheet with a good dividend yield.

Whiting Petroleum Corporation (WLL) is an independent oil and gas company that acquires, exploits, develops and explores for crude oil, natural gas and natural gas liquids primarily in the Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast and Michigan regions of the United States.

BP Plc (BP) oil company is one of the highest dividend yield stocks around. When the market is down you can pick up the bp stock with dividend yeilds around 8%. That is one of the best dividend stocks around.

Exxon Mobil Corp (XOM) is the world's largest integrated oil company with perhaps the biggest divident yield.

Happy Trading
OTCPicks.com Publisher

Could be! Let's take a look. In the midst of the worst housing decline since the 1930s, new home sales are down more than 75 percent from their 2005 high. In fact, just last year homeowners lost $3.3 trillion in the value of their houses with national home prices dropping 11.6% compared to 2007.

Meanwhile, it should come as no surprise that all the major homebuilding stocks have also taken big hits in the last couple of years. But in the stock market, crisis creates opportunity. And we think the worst could be behind these beleaguered stocks? In light of the surprise merger on April 8th by homebuilders Pulte (PHM) and Centex (CTX), we think members should consider positioning themselves for further consolidation in the sector, and subsequent gains in stock prices.

And while being positioned to benefit from a consolidating industry is always exciting, the fundamentals for the homebuilders appear to be improving as well. In fact, an unexpected sales jump in February and a rise in mortgage applications in March may also signal the housing market is stabilizing. Even Pulte CEO Richard Dugas, explained, "We’re cautiously optimistic."

The third reason we think housing is bottoming is based on the price of copper. Copper is one of the principal components used in home construction and its surging price and multi-month high suggest that demand by home builders could be growing. China is starting to wake up and some of the rise in copper might be to demand in China, but we think that the US housing market might have something to do with that as well.

We can’t reiterate enough that the time to buy is when everybody hates a sector and when there is the proverbial “blood in the street.” At this point, we have yet to find anyone who is outright bullish on the homebuilders. There seems to be only degrees of bearishness.

But charts don’t lie. They illustrate not what investors are saying and feeling, but rather what they are doing. And with stocks leading the economy by 6 to 9 months, members should take notice that the “smart money” is betting that a housing recovery will be in full swing by early 2010. But don’t think you can wait until the media proclaims the bear market in housing over. Because if you do, you will likely miss the majority of the move higher in stock prices.

As you can see from our annotated chart, the stock market, in its infinite wisdom, is suggesting that the U.S. home building stocks likely hit an absolute bottom back in March and could be consolidating at current levels as they prepares to make another move higher.

Here are some industry stocks that you might want to put on your watchlists!

D.R. Horton (DHI) primarily markets its homes to first-time buyers, as well as first-move-up customers. DHI sees a majority of its revenues from Midwestern operations; this area was generally less prone to bubble-type market conditions compared to areas in the Southeast, Southwest, and West. http://www.otcpicks.com/quotes/DHI.php

KB Home (KBH) aims at targeting more entry-level homebuyers. We believe that KBH has been more conservative in terms of loading up on pricey land, and more aggressive in moving units; both positives. KBH also has exposure to the French market with operations in that country, which will provide much needed market diversity to help the company weather the current downturn. http://www.otcpicks.com/quotes/KBH.php

NVR (NVR) is the most conservative homebuilder in terms of how it handles investments in land. NVR exclusively uses options to purchase land and only takes possession when it is ready to develop. NVR is also unique in that it has more cash than debt. http://www.otcpicks.com/quotes/NVR.php

Ryland (RYL) looks to be one of the better prepared builders with low debt levels and low levels of land inventory. The company should also benefit from having negotiated most of its land and options in 2004 and prior. http://www.otcpicks.com/quotes/RYL.php

Toll Brothers (TOL) maintains the largest land bank in the residential construction industry by a wide margin, with estimates placing land reserves equal to six years of construction. TOL’s market position should allow it to expense more expensive land acquired in recent years over a period of time, allowing the company to maintain its normally high gross margins.-Because TOL focuses on the high-end segment of the housing market, the company should also prove to be more resilient to credit tightening or regulation, as its customers are less dependent on generous financing terms. http://www.otcpicks.com/quotes/TOL.php

Happy Trading
OTCPicks.com Publisher

We Think So! We at OTCPicks.com are quite intrigued with the low earnings multiples we are seeing in many Chinese stocks. In fact, many are as low, if not lower, than those seen during the 1998 “Asian Contagion.” And while we fear that corporate profits in the U.S. will be in a secular decline (if for no other reason than the aging baby-boomers moving out of their peak spending years), economic growth in China is likely to continue to be extremely robust. Why? It’s simple. After more than 25 years of economic growth driven by exports and fixed-asset investment, China is turning towards consumption to sustain the boom. And while the average age here in the United States is 55, it’s only 42 in China. This suggests that while the U.S. baby-boomers will be exiting their peak consumption years, the largest segment of the Chinese population will be entering their peak spending years.

In fact, the Chinese government recently announced a series of policies to raise private income, including scrapping agriculture tax, raising thresholds on income tax, increasing minimum wages and civil servants' salaries, and providing free basic education in rural areas, and some health care reform will likely boost Chinese pharmaceutical stocks.

We are already seeing signs of a recovery manifesting itself in the Chinese stock market—no doubt inspired by a cut in interest rates and the country’s own $580 billon dollar stimulus package. In fact, coal miners, metals suppliers and real estate developers have already begun rising on the hopes for an economic recovery by year-end. Within the last several trading days Chinese stocks have touched their 7 months highs which is a sign things are starting to turn around.

So while we expect the Chinese economy will likely start to bounce back in 2009 as the effects of easing monetary policy and the stimulus package take hold, we think longer-term traders should be building positions in Chinese stocks NOW. As we come back out of this financial mess, China's manufacturing will come back and commodities and raw resources will roar back.

We have included an annotated chart of the China Index (CZH) below that illustrates how the Chinese stock market appears to have made a “double bottom” with the second bottom slightly higher that the first one. And while the index has not yet broken out of its trading range, the MACD is, in fact, making higher-highs. This bullish divergence suggests that higher equity prices could be in store for the Chinese stock market in the near-term. For the greatest return with the least amount of risk, we suggest considering those stocks offering the greatest relative strength.

Some Chinese Stocks to Take a Look At

We have included a select group of some of our favorite Chinese stocks that members may wish to research further.

CTRIP.COM (CTRP) provides travel services for hotel accommodations, airline tickets, and packaged-tours.

China Mobile (CHL) provides mobile telecommunications and related services primarily in China and Hong Kong. It offers mobile voice services, such as local calls, domestic long distance calls, international long distance calls, intra-provincial roaming, inter-provincial roaming, and international roaming; and voice value-added services, including caller identity display, caller restrictions, call waiting, call forwarding, call holding, voice mail, conference calls, and others.

New Oriental Education & Technology Group (EDU) provides private educational services based on the number of program offerings, total student enrollments, and geographic presence in China

Netease (NTES) operates an online community in China. It operates in three segments: Online Game Services, Advertising Services, and Wireless Value-added Services and Others

Aluminum Corp. of China (ACH) engages in bauxite mining, alumina refining, and aluminum smelting businesses in China.

China Shenhua Energy Ltd. (CUAEF) the country's biggest coal producer

Jiangxi Copper Ltd. (HKSE) One of the country’s largest copper producers.

China Natural Gas, Inc., (CHNG) The first China-based natural gas company publicly traded in the US. It currently owns and operates a 120 kilometer long compressed natural gas pipeline in Xi’an, China, a fast growing Chinese city supported by a population of approximately eight million and is the “gateway” to the broad Western regions of China.

China America Holdings, Inc. (CAAH) A holding company which owns a 56% stake in Shanghai Aohong Chemical Co., Ltd. a distributor of assorted liquid coolants which are utilized in a variety of applications, primarily as refrigerants in air conditioning systems for automobiles, residential and commercial air conditioning systems, and a manufacturer of steel non-refillable cylinders.

Shanda Interactive Entertainment Ltd. (SNDA) China’s biggest online-games provider.

Happy Trading
OTCPicks.com Publisher

What is the uptick-rule? Simply put; it is a rule used to regulate short selling in the financial markets. Specifically, the rule limits the timing of short sales. It mandates, subject to certain exceptions, that, when sold, a listed security must either be sold short at a price above the price at which the immediately preceding sale was affected or at the last sale price if it is higher than the last different price. In 1938, the U.S. Securities and Exchange Commission (SEC) adopted the uptick-rule, more formally known as rule 10a-1, after conducting an inquiry into the effects of concentrated short selling during the market break of 1937.

The SEC eliminated the uptick-rule on July 6, 2007. The elimination of the rule was preceded by an SEC order, placed on July 28, 2004, to create a one-year pilot temporarily suspending the uptick rule on select securities. The purpose of the suspension was so that the commission could study the effectiveness of the rule. The SEC's Office of Economic Analysis and academic researchers provided the SEC with analysis of the data obtained during a six-month period starting May 2, 2005. The consensus was against the uptick rule, with the commission concluding that the uptick rule "modestly reduced liquidity but did not appear necessary to prevent manipulation.” However, the pilot test for one year did not test for a rogue wave thought to have partly caused the 1929 crash, and for which there was no known theory in money markets.

The rule was originally put in place to avoid the perpetration of a financial crime known as a bear raid. However, short sellers themselves viewed the rule as "largely symbolic" and having little actual effect on short selling.

On August 27, 2007, the New York Times published an article on Muriel Siebert, former state banking superintendent of New York, "Wall Street veteran and financial sage", and, in 1967, the first woman to become a member of the New York Stock Exchange. In this article she expressed severe concerns about market volatility: “We’ve never seen volatility like this. We’re watching history being made.” Siebert pointed to the uptick rule, saying, “The S.E.C. took away the short-sale rule and when the markets were falling, institutional investors just pounded stocks because they didn’t need an uptick."

But if the no uptick-rule was really the root cause of the market's declines and increased volatility, shouldn't the market have struggled much more than it did from mid-2005 to mid-2007 when the pilot was in place? The pilot consisted of 1,000 highly-liquid stocks that all had associated options. Below we highlight a chart of the Russell 3,000 from 2004 through Q1 of 2008. Had you looked at the chart in July 2007 right before the uptick rule was officially eliminated, one could make the argument that no upticks across the board could make the market go higher!

With 85% of NYSE members being in favor of reinstating the uptick rule with the dominant reason to "help instill market confidence", and FOMC Chairman, Ben Bernanke stating that he is in favor of the SEC examining the restoration of the uptick-rule, we may very well see it restored as early as next month. This past week, SEC Chairman Mary Schapiro said her agency could propose a reinstatement next month, with a public comment period to follow. That's not soon enough for some.

So will reinstating the uptick rule result in reduced volatility? Well…the jury is still out. Some empirical studies found no statistically significant link between the uptick rule and the rates of price decline. Others have asserted that the rule restricts short-selling execution even when prices trend upward, negatively affecting accurate price discovery. Still other studies have found no substantial differences between stocks subjected to the rule, and those that were not.
"Reinstating it will help smooth out the markets and reduce the speed of price drops. It will limit the ability of a small number of professional investors to trigger fast dramatic price drops that create panic among investors," Charles Schwab wrote in a Wall Street Journal opinion piece. But, "it may be too late for the restoration of the uptick rule to have much impact on where we are today and this recession."

Proponents and critics of the rule will more than likely continue to battle it out for years to come. Time will ultimately be the judge and jury, but it’s looking more and more like the uptick rule will be put back into play soon.

Happy Trading
OTCPicks.com Publisher

Earlier this week President Obama signed an executive order lifting the ban on federal funding for embryonic stem-cell research. In his speech made to the American people, he explained that scientific decisions must be “based on facts, not ideology.”

Back in 2001, President Bush moved to restrict federal funding for human embryonic stem cell research, making it the subject of his first prime-time televised speech from the White House. Now, Obama has flipped the tables with one swipe of the pen, a prospect that pleases many Democrats in the Congress. "Signing this executive order sends a clear signal around the world that our nation supports research based on science, not politics," said Rep. Jim Langevin of Rhode Island, a strong backer of stem cell research.

While the Left argue that stem-cell research offers hope for millions of people suffering with debilitating conditions, right-to-life groups hotly oppose this move by the President because they equate it to murder.

This is clearly a very controversial topic. But for the time being, President Obama’s reversal this week of President Bush’s anti-embryonic stem cell policy has turned to the side of science and medicine. And while there is considerable uncertainty as to the ultimate benefits from embryonic stem-cells, companies involved in this research are going to clearly reap the benefits of this change in leadership and policy for at least the next four years.

There are only a limited number of stocks which are pure plays or semi-pure plays in the stem cell industry. However, with the reversal of this ban, this could become a very huge industry. The following list includes stocks that investors should keep on their radars.

Aastrom Biosciences (ASTM) - Aastrom Biosciences is involved in the development of cell products for the regeneration or repair of human tissues, based on its proprietary Tissue Repair Cell [TRC] technology.

Advanced Cell Technology (ACTC) - ACTC is involved in the development and marketing of human stem cell technology in the area of regenerative medicine and stem cell therapy.

Alexion Pharmaceuticals (ALXN) - Alexion Pharmaceuticals is involved in the development of biologic therapeutic products for the treatment of hematologic and cardiovascular disorders, autoimmune diseases, and cancer.

ARIAD Pharmaceuticals (ARIA) - Ariad is involved in the development of medicines for the treatment of cancer by regulating cell signaling with small molecules. Their cancer products are used to treat sarcomas, hormone refractory prostate cancer, and endometrial cancer.

BioTime, Inc. (BTIM) - BioTime develops blood plasma volume expanders and blood replacement solutions for hypothermic (low temperature) surgery, and organ preservation solutions and technology for use in surgery, emergency trauma treatment, and other applications.

Celera Group (CRA) - This NYSE company, founded in 1937, is involved in the discovery and validation of new diagnostic markers, using proprietary genomics and proteomics discovery platforms and diagnostic products based on those markers.

Cellgene (CELG) - Cellgene is involved in the discovery, production, and marketing of therapies designed to treat cancer and immune-inflammatory-related diseases. Their primary product includes THALOMID, for the treatment of erythema nodosum leprosum. Last year, the company received patent on placental stem cell recovery.

Cord Blood America Inc. (CBAI) - CBAI provides private cord blood stem cell preservation services to families in the United States. The company also engages in the collection, testing, processing, and preservation of peripheral blood and adipose tissue stem cells, which allows individuals to privately preserve their stem cells for potential future use in stem cell therapy.

Dendreon Corporation (DNDN) - This company is involved in the discovery, development, and marketing of active immunotherapies, monoclonal antibodies, and small molecule product candidates to treat cancer. They manufacture the DACSÃ’SC stem cell enrichment device.
Geron (GERN) This Menlo Park, California company develops cell-based therapies derived from human embryonic stem cell platforms for treatment of various diseases.

Integra Lifesciences Holdings (IART) - Integra develops, manufactures, and sells medical devices, implants, biomaterials, and instruments to the neurosurgery, surgery, and soft tissue repair markets.

Invitrogen Corporation (IVGN) - Invitrogen sells products and services which support academic and government research institutions, pharmaceutical companies and biotechnology companies, including tools for gene acquisition, gene cloning, gene expression,

StemCells Inc. (STEM) - This Palo Alto company is involved in the discovery and development of adult stem cell therapeutics for treating damage to the central nervous system, liver, and pancreas.

Best Regards,
OTCPicks.com Publisher

Dear Mr. Pandit, Citigroup CEO

Last year kind of sucked for everyone with the financial industry meltdown, the housing industry slump, the steep nosedive the stock market took, the near bankruptcy of the auto industry, the worst unemployment seen in decades, and the trillions of dollars of debt that U.S. is piling up that will take probably a generation to repay. And who gets to foot the bill, "That's right, Me, Joe Taxpayer, is who!" As you might be able to possibly imagine, (sitting up in your ivory tower full of entitlements) it has been a pretty depressing time for us average citizen taxpayers.

With all the horrid news every day, it has started to wear on our family and I was hoping things would turn around a bit in 2009. Maybe if things get a little better we might be able to afford to get away for a few days and have a margarita somewhere warm and tropical.

We still have a few dollars squirreled away for a rejuvenating get away, but not a lot. Our 401K and other investments have taken a big beating, like millions of others, and will probably take at least 5 years to get back to where it was. So much for retiring on time!

So, I started looking at air fares for our presumed getaway. Seems that airline fares went up and up and up when oil went to $147 per barrel last July, then never came down. The $25 per bag add-on fees went into place at most airlines, then never came off when oil subsequently took a steep nose dive back down to $36 per barrel. What gives with that?

So the air fares to those tropical destinations I was hoping to visit, have doubled or tripled in the last year and there is no sign they will be abating any time soon. See, airlines have also cut routes and trip frequency to many destinations when the high oil prices hit, and those do not look to come back any time soon. Less routes and trip frequency means less competition, so airlines don't have to drop their rates to be competitive anymore. Thus, average citizens like me can't afford a vacation anyway because fares are getting goofy. Many taxpayers have already lost their jobs, or will. Others with perfectly good jobs have seen the value of their house plummet, and face an upside down mortgage now, or yet another prime or sub-prime loan default. Others have lost both their houses and jobs and face the prospect of living under a bridge somewhere. Seriously! Hope some of that new stimulus infrastructure money takes into consideration the improvement of bridges as living accommodations.

But, per our politicians, we must "Toughen up Cupcake!" and foot the bill for the "Heading-toward-a-trillion" TARP program, plus another $800B - $1T stimulus package that will be "ours-to-pay-for" come mid February. Oh, and we need to make sure we bail out the "auto" industry, and probably a few more industries that have yet to be named. It seems like all of corporate America is asking for a bailout these days. All I want to know is, "Where's my bailout?" Somehow, I don't think my Senators are going to ring me up anytime soon and offer me a piece of TARP.

So, here's my question,"Do you think we might catch a ride on "our" brand spanking new Citigroup (NYSE:C) $50 million corporate jet to whatever tropical destination you might be visiting this year?" I figure that since Citigroup received $45 billion from U.S. taxpayers it effectively is our plane anyway. I saw the PR you put out saying that "TARP funds would not be used to pay for it", but "Come On", you as a banker know that money is fungible so in reality taxpayers just bought you a brand freakin’ new cool corporate jet.

We would be very quiet and sit at the back of the plane, and not take up much room. We'll even bring our own peanuts. You will never even know we are there. We, obviously, would not be able to afford staying at the Ritz Carlton with you when we get to our tropical destination, but we bought one of those nicer popup dome camping tents during the "good times" and we'll find a KOA or other similar campground we can stay at near the beach. Besides, if things get worse it will be good practice for when we lose our jobs and our home and have to contemplate the "Living-Under-A-Bridge" thing ourselves.

Anyway, just wanted to drop you a note and check your travel schedule for the year. Let me know if there is anywhere warm and fun you are going and how we might be able to hitch a ride, cause us taxpayers need a break too!

Best Regards,
OTCPicks.com Publisher

Obama Stimulus Plan

Hitting the road to sell his economic-stimulus proposals to the public, President-elect Barack Obama cautioned Friday that the current downturn won't end soon if the government doesn't act. "With each passing day, families across America are watching their bills pile up and their savings disappear," Mr. Obama said. "If nothing is done, and we continue on our current path, this recession could linger for years -- and America could lose the competitive edge that has served as the foundation for our strength and standing in the world."

A package unveiled by House Democrats this week would create $825 billion in new government spending and tax cuts, plans Obama says would create or save 3 million to 4 million jobs.

More Bad News Ahead

Once the innaguration is over and the euphoria starts to wear off, there is a lot of work to be done by the new administration, congress, the Federal Reserve and Treasury. The major indexes are down for the year including a recent one-week slide. Indexes have rebounded a little in the last few trading days but there is a lot more bad news that is poised to come out in the coming weeks. Corporate earnings announcements will accelerate in the next few weeks and the results for Q4 for most corporations is expected to be bleak. Additionally new numbers have come out for unemployment numbers, and housing recently and the numbers are not good. Most economists and market analysts believe that weakness in these sectors and the financial sector will not likely turn around until after Q2, 2009.

So we are likely in for a somewhat long haul before a final bottom is found in the market and things turn around to a long term bullish trend. In the mean time investors can play the market swings. There is still a lot of volitility in the markets and the range of up and down trends will lend itself to playing the swings while all of us are waiting for the market fundamentals to solidify and things to turn around.

European Market Fall

Although U.S. markets are closed for the Martin Luther King holiday, foreign markets are open. And, unfortunately, most of them are dropping. That includes Brazil, Canada, and Europe. Stocks fell in all 18 western European markets. A catalyst for European weakness was a 67% plunge in the Royal Bank of Scotland. Britain took another shot at fixing its financial system by offering to buy toxic securities. British stocks fell nearly 1%. U.S. stock futures are down as well. Monday's weak foreign action appears to be continuing the trend seen over the last month. With the dollar rising, foreign shares are falling faster than those in the U.S. Commodity markets remain weak as money continues to flow into bonds.