$GM burns US tax payer for Ten Billion. Just what did America get for this?

General Motors (NYSE:GM) will finally shed the US Federal Government as a shareholder. The market expects Uncle Sam will take a haircut of $10 Billion. Roughly the cost of a small cheap aircraft carrier.

Assuming a population of 230 million that’s $43,478 per man women and child within the public debt which needs to be repaid eventually.

God Bless America. But the devil controls the treasury.

George Gutowski writes from a caveat emptor perspective.

Freaked About Interest Rates? Freak on This $VIX, VXX, $USDCAD

Stock market will tumble when quantitative easing slows or stops. Obama may want to let the Republicans do it so they can screw the big money supporters. Well maybe. So stay away from interest sensitive investments like bonds. as rates rise bonds tank. easy right.

Stay in  US Dollars because other economies will be suspect. Right well mostly. take a look at the Canucks to the north. They are dangerously close to balancing the federal budget and starting a lot of personal tax cuts. they will probably increase their version of social security but have it funded properly. they have real healthcare without stupid web sites and pay for through general taxation.

The Canadian dollar will do remarkably well because Uncle Sam still needs to borrow and increasingly high interest rates will be needed.

So if you have a few bucks take a look at Canadian denominated assets or real estate or just cash for now. Then when the tables turn so do you.

George Gutowski writes from a Caveat Emptor Perspective.

War Soon. How to Profit When the Shooting Starts. $VXX $VIX $SPX $DJX

War with at least Syria is coming soon. You can hear the rattle of musketry. You could see this one coming a mile off. For some reason the market did not price it in and has sold-off. The sell-off makes no sense. If there is something to truly fear from Syria and their sponsors Iran than it’s a lot worse than a couple of percentage points drop in the general averages.

If you believe in America, modernity, the western world than you still believe in the stock market. Albeit with the usual caveats about selecting the right stock. To my way of thinking the market reminds me of a large bird of prey flapping its wings to scare smaller weaker minded animals; hoping the animal makes a run for it and can be easily picked off as it runs about.

What will they strike in Syria? They will try to cripple Assad’s ability to make war and his ability to use chemical weapons. Some of the rebels are as bad as the Assad forces so expect some two for one deals. Syria will try to engage Israel and will be unsuccessful. The Israelis have been waiting for this one for a long time. The Egyptian military will do whatever it takes to marginalize the Muslim Brotherhood and will not strike against the United States and Allies.

The conflict in Syria will be loud and hysterical but no commodities or trade patterns will be disrupted. Not to many on this planet have relied on Syria.

So because of unbridled fear the stock market will sell off offering some excellent bargains.

The world will still turn to the US Dollar and it will get stronger.

As foreign funds pour into the US Dollar they will be parked in US Debt. Therefore prices will appreciate and interest rates will stay down. This will help the Fed Reserve Taper as more buy Uncle Sam’s paper.

Gold and precious metals will of course strengthen. The rupee will stay screwed up. Oil of course will go up and up  and up regardless that any major producing fields will be relatively undamaged. Remember that Iraq has substantial internal strife and car bombs constantly. Yet the oil still flows relatively unimpeded.

The Pentagon will not spend that much because a ground conflict is to be avoided. The missiles have already been paid for and a few new ones will not incrementally cost that much more. The Syrian air force and helicopter capabilities will be destroyed early. Airports will cease functioning.

Syria will descend into a longer cycle of sectarian violence as the ruling Alawite lose their grip. Watch for members of the extended clan fleeing to safe havens around the world and more defections of top military brass. Some front line units will mutiny or disintegrate into roving rabble without effective command and control. They will prey on the population and eventually lose all legitimacy.

As time goes on the investing public will become inured to the Syrian Headlines and life will go on.

So strictly from a stock picking point of view. Keep your powder dry. The market has progressed some feel to far. The Syrian thing will be the pin that pops the balloon; which is exactly what you want.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti George Gutowski is bullish on America.

Top Ten Surprising Government Cutbacks Get Ready #debtceiling

Uncle sam no

Image via Wikipedia

So what does Uncle Sam stop spending money on when everything blows up this week. Here is a list of potential solutions.

  1. Stop paying all elected and appointed officials in Washington. That includes the expense accounts. We’re getting bad value for our money.
  2. Cut back on social security and food stamps. Big savings here. Grandma doesn’t need the money. She just spends it on the grandkids anyway.
  3. Cut all government programs in congressional districts represented by tea baggers. They do not want the money any way. Just listen to them.
  4. Release federal prisoners earlier. It is very expensive to keep someone in jail. Actually I think Obama might just release anyone imprisoned for minor drug charges. Mass Presidential pardon anyone.
  5. Stop all international aid or welfare depending on how you see it. We obviously cannot afford it.
  6. Stop secret bribes to foreign despots that go straight into secret Swiss Bank accounts. Swiss Banks just buy safe US Treasuries.
  7. Tell Seal Team Six on the next big op they have to use less bullets but we still want a big win.
  8. Turn the lights and air con off in all federal buildings. Save money and it is energy-efficient.
  9. Tell the IRS to stop chasing accounts under $100.00 it can’t be efficient.
  10. Put the entire US Postal service on furlough. Who wants to get bills anyway.