The Fate of Fannie and Freddie

So what do you get when the Feds attempt to run a "private institution"? Fannie Mae and Freddie Mac, examples of government innovation and intervention.

While I do not want to turn this blog into a political one, politics and the markets are pretty much inseparable. And when the government tries to step in and create something that should be left to the private sector, it is almost a guarantee for failure.

Is the Real Bear yet to Come?

I'm starting to get the rhythm of it. The markets ebb and flow go in and come out, kinda like the tide of the oceans, in somewhat less predictable patterns. Oil goes up and so does the entire energy sector. Also, other industries that depend so much on the price of oil and it's byproducts go down.

But then there's something else. The big bad bear known as Russia that has been causing some little problems over in Europe. I've still been hearing things about it politically, but tonight when I clicked into MarketWatch.com, I saw an article that confirmed the sneaking suspicion that I've had that this could become more of an issue.

A major fault has opened up in relations between East and West that threatens not just global securities markets, but the economic health of Europe and the foreign policies of the major industrialized countries.

Fourteen days ago, relations with Russia were on nobody's short-list of major issues for the U.S. presidential candidates. Now they threaten to overshadow the political conventions in the next two weeks, and the rest of the campaign. They've breathed new life into the McCain camp, and vaulted foreign policy into much more than a discussion of how soon we can bring the Iraq troops home.

The story continues, but the author's point is that these concerns have not been alleviated much yet and Russia still poses a threat to world markets.

If Russia does continue as it has threatened to use "more that diplomacy" as it deals with it's European neighbors, how will our markets respond? There are of course different possibilities. Investors could move out of Europe as it destabilizes and put more investments here in the U.S.. That is very much positive thinking. I'd say that the strongest companies to invest in at this time would be those in the energy sector which stands to gain if there is another "cold war" stand-off between the U.S. and Russia. Of course defense spending would be influenced as well.

As David Callaway says, "for now, it's a war of words, blusters and veiled threats. If Russia decides to play its energy card, and threaten Europe's oil, it becomes much more."

Investors should prepare for the worst though as a "rude awakening" to a potentially huge conflict which like a festering wound only grows more infected when no action is taken. Things may not be looking so bullish after all.

Oil and the Airlines: Inverse Proportion

So I was interested in some airline companies (AAI and CAL respectively). So this is a lesson I learned the hard way. As oil found support at around 110/barrel, the airlines found resistance and could not overcome that barrier. An analyst said that under 110 the airlines could be profitable, but that looks like a pipe dream so airline stocks are now continuing to go lower and lower as oil begins to rise back up.

Researching Wabtec (NYSE:WAB)

I owned a few shares of Wabtec (NYSE:WAB) about a month ago and am thinking of going into it again. This stock has kept ticking right on up even when the rest of the market has been going down. Also, my research shows so far that there is a growing institutional interest in this stock which would definitly explain part of why it has defied the last two strong pulls towards the bottom in the last two days in which the Dow has given back almost 300 points from the gain that it made over the last couple of weeks. I'm developing some strong convictions on Wabtec and think it could really fit into the overall scheme of my portfolio.

Riding the Roller Coaster

Well, the last two days have been pretty crazy. Though I'm new to trading, it doesn't take a genius to know that double digit dives aren't things that happen every day in the market and that this is a very choppy market right now. I'm learning the importance of quickly distancing myself from lousy positions, as those are often the biggest losers. I'm also learning that strong trends tend to keep going for at least a while. This downward trend began last Friday when the market came to a "shoulder" and then turned over and started moving down.

AirTran set for Take-Off? (Stock symbol AAI)

This stock seems to be hovering right around the support level. The company seems to have good fundamentals and as a small company, I think this company can do well in a huge industry. So is AirTran poised for takeoff? Maybe so.

Apple's new gadget...

Apple's rumored to have a new gadget on the way! What could this new gadget be? Apple has a history of being extremely secretive and encouraging the rumor mill that so often springs up around their products that have an extremely loyal following.