1. Campbell Soup (owned): I read a brokerage report on CPB last night that had an interesting tidbit of information. The analyst claimed that China and Russia accounted for about 50% of the world's soup market. CPB entries into "test markets" in those companies have reportedly shown promise. Campbell recently signed Coca-Cola Hellenic Bottling Company , the largest distributor and seller of beverages in Russia, to distribute Campbell products within Russia, starting in the Moscow region and then expanding in August 2009 to 100 cities and 12 regions in Russia. Russia is the second largest soup market after China according to the WSJ.
2. 3 Month Libor (London interbank offered rate): Many of the synthetic floaters that I own pay the greater of a guarantee or some percentage over the 3 month Libor rate. Floaters: Links in One Post This rate, while generally higher than the 3 month treasury bill rate, closed yesterday at .49625%, the lowest level since the British Banker's Association launched this rate in 1986.
3. Narrowing of Corporate Bond Spreads: Under my dynamic asset allocation approach, the time to add investment grade corporate bonds to my portfolio was last Fall, when the spread between corporate and treasury bonds, as measured by a Merrill Lynch index, reached an all time high. In an article in the WSJ this morning, there is a chart that shows just how far the spread has narrowed since that time, with the spread between investment grade corporates and treasuries cut in half. Junk bonds reached a crescendo of a 21.3% spread over treasuries. My focus in the Fall was to buy Trust Certificates which contain bonds from a single issuer, which trade on the stock market primarily among individual investors, since they were frequently trading back then at significant discounts to the prices of the bonds. As I previously said, it was like buying something already on sale at a further discount. Trust Certificate Links in One Post
4. A Modest Proposal for the Democratic Party-Try A FAT TAX RATHER THAN A SURTAX: Jonathan Swift ran into some trouble a few moons ago by suggesting his modest proposal , something about a recommendation he made in 1729 titled: A Modest Proposal: For Preventing the Children of Poor People In Ireland from Being a Burden to their Parents or Country. Apparently some people can not comprehend satire.
My modest proposal to Charlie Rangel is to scrap all of these ideas about surtaxes and penalties. Instead, my modest proposal is something akin to a user fee.
There is a story on the front page of USATODAY that obesity is the key to the soaring cost of health care, costing an estimated 147 billion in health care costs in 2008. That rang a bell for RB who came up with the idea this morning. Why not tax fat? It is the only fair thing to do. The tax would only be paid by those who exceed the body mass index, with the IRS Centers around the country stocked with weighing machines. Unemployed persons could be hired to conduct the tax assessments on the spot, thus raising revenue while reducing the unemployment rate, a twofer. And the government has already defined obesity and has a table prepared upon which the tax could be based, the infamous "Body Mass Index Table"NHLBI, Obesity Guidelines-Executive Summary-BMI Chart Now, I am not being hypocritical, like Charlie Rangel, since I would be hit myself with this tax and would gladly pay it. It might even help me lose a few pounds, as I quite thinking about exercising and changing my diet and actually do something.
6. Charlie Rangel: The WSJ had an interesting expose of Charlie Rangel's tax evasion practices which seems like a routine matter for the House Ways and Means Chairman. The Journal gives several examples of how Charlie has had some moral failing in paying one tax or another. Hypocrisy is the mother's milk for politicians. Just say one thing and do another, smile and look sincere. The surtax of 5.4% to be paid by others is in Charlie's words "the moral thing to do". At times I may sound a tad cynical, but in this instance it is more due to a low tolerance for hypocrites, particularly of those from the GOP tribe who preach family values as a means to gain power for themselves and then are in reality poster children for the opposite.
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