DRR: -0.62 to $38.31 (-1.59%, -5.13% overall)–bought at $40.38
EMLC: 0.24 to $27.50 (0.88%, -0.25% overall)–bought at $27.57
GPE_PA: -0.01 to $25.29 (-0.04%, -0.02% overall)–bought at $25.295
PFF: 0.02 to $40.09 (0.05%, 2.27% overall)–bought at $39.20
SPXU: -0.48 to $14.97 (-3.11%, -5.43% overall)–bought at $15.83
TMF: 0.24 to $38.14 (0.63%, 12.18% overall)–bought at $34.00
VGLT: 0.13 to $62.28 (0.21%, 1.73% overall)–bought at $61.22

OVERALL: -0.33%

I am just glad this wretched month is over, although I am NOT looking forward to doing my monthly portfolio summary tomorrow. It will be ugly, and I mean Clara Peller in a thong ugly…

Mark Twain is alleged to have once said, “The past does not repeat itself, but it rhymes.” While the United States may not suffer from Visigoths sacking Washington, the U.S. does seem to be following a similar economic path, which in Rome’s case left them vulnerable to those Visigoths.

The most obvious example of similarities between the two countries is the currency devaluation:

The chart above (from Thunder Road Report via Zero Hedge) shows both Ancient Roman inflation and U.S. inflation, both due primarily to currency devaluation.

In brief, Ancient Rome devalued it’s currency by using less and less precious metals in it, until the currency was nothing more than a fiat currency. The inherent problem with fiat currencies is governments tend to get seduced by the ease in which they can just print/coin more money for their spending. The difference between a dictator printing more money for his own selfish use, and an elected or appointed government body doing the same is moot, as the results inevitably end the same way: The people lose faith in the value of the currency.

In the U.S., something similar is happening, but as the chart above shows, it is not too late to stop the inevitable from occurring. But you only have to listen to the political discourse to recognize the American people are no different than a selfish Roman emperor, unacaring about the value of the currency in their own quest for “more”. So the sycophantic politicians will provide more to their constituents, or else lose their jobs.

By the way, if you think the “independent” Federal Reserve will not allow this to happen, consider what they have been buying with QE2: Federal debt (treasury bonds).

I bring this up as a reminder that the end of QE2 is mainly the time to prepare for QE3, which will be inevitable because the politicial elite will be unable to stop spending, making hyperinflation and the devaluation of the dollar just around the corner.

Who would have thought “Visigoth” rhymes with “Bernanke”?

1. Quote:

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis…Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”–Mark Mobius, chairman of Templeton Asset Management

2. The latest on Greece: It’s a mess, although the markets are optimistic. Now all they need is private holders of Greek debt to “voluntarily” extend their repayment schedule, and for the Greeks to accept more austerity measures. I put the odds on that working about the same as my winning lottery ticket…

3. The hits just keep coming for Japan: Rising unemployment and a potential debt rating downgrade. For some reason, I am picturing Lloyd Bridges playing the Japanese Prime Minister and saying something like, “I picked a bad day to quit amphetimines…”

4. Now HERE is an example of a bad investment: The California Public Employees’ Retirement System (Calpers) bought some land in Arizona back in 2006 for $400 million. The land was sold last week for $32.5 million. I can’t speak for any of you, but that definitely makes me feel better about every bad investment I ever made.

5. It is jobs week on the economic reporting front, capped off by Friday’s unemployment report for May.

6. What is it about bankers and New York hotel maids? This is starting to sound like a bad joke.

UPDATE 5/30/11: Just a reminder that the U.S. markets are closed on Monday, May 30th. I will resume posting on Tuesday.

My portfolio is down a tiny fraction right now, but I am going to call it an early weekend, since I don’t really have any plans to buy anything today. I actually would rather see what happens on Tuesday before deciding anything.

Happy Memorial Day weekend folks! Although it doesn’t have anything to do with Memorial Day, I thought for this weekend’s open thread (where you folks can discuss any topic you like, just keep it clean and civil), I would share one of my favorite Marx Brothers scenes, this one from the film A Day at the Races:

1. PayPal is suing Google for their new plan to allow for payments over smartphones, claiming that Google stole their idea. Of course, the fact that Google’s current “vice president of payments” spent 9 years with PayPal is just a coincidence…

In better news for Google, they have “doubled the number of video ads that it places on partner sites in the past year, a sign it’s making headway in a push to expand display advertising.”

2. Apple pc users now have access to something which Windows users have enjoyed for years: scareware, those nasty little programs which tell you your computer is infected with a virus, and if you pay them, they will get rid of it. Welcome to the 21st century Apple users…

3. Remember the budget President Obama submitted in February? The one which did NOT include debt payments? It died in the U.S. Senate, by a vote of 97-0. As Chico Marx once said, “It’s anonymous!”

4. “The global recovery is gaining strength and is becoming more self-sustained”. This is a statement from the G-8 meeting in France. (The G-8 includes leaders from the U.S., Russia, France, the U.K., Italy, Germany, and Canada.) But with statements like that, the G-8 is obviously being run by Baghdad Bob…

Of course, the world economy “gaining strength” must be why U.S. treasuries are doing so well…

5. As if there aren’t enough worries in the world now, let us add Chinese drought to them. Although good for crop prices in the U.S. and Europe, there is no guaranty the U.S. and Europe can provide enough food for China if the Chinese drought continues or gets worse this year. The tenuous political situation in China could get MUCH worse if they have food shortages. If we ever needed a reason to end our silly corn ethanol subsidies, this is a darned good one.

DRR: -0.32 to $39.80 (-0.80%, -1.44% overall)–bought at $40.38
EMLC: 0.12 to $27.15 (0.44%, -1.52% overall)–bought at $27.57
GPE_PA: -0.06 to $25.29 (-0.24%, -0.02% overall)–bought at $25.295
PFF: -0.03 to $40.01 (-0.07%, 2.07% overall)–bought at $39.20
SPXU: -0.22 to $15.63 (-1.39%, -1.26% overall)–bought at $15.83
TMF: 0.94 to $37.97 (2.54%, 11.68% overall)–bought at $34.00
VGLT: 0.42 to $62.09 (0.68%, 1.42% overall)–bought at $61.22

OVERALL: +0.29%

When you’ve had a double short for 9 days and it’s done nothing, it’s time to eject the dog. That is why I am selling PowerShares DB Crude Oil Double Short ETN (DTO) today. Details to come…

UPDATE: I sold it for $46.66. The final line:
DTO: +0.56 today, -1.89 overall to $46.66 (+1.21% today, -3.89% overall)–bought at $48.55

Over at The Big Picture, Barry Ritholtz has a great stock tip:

The S&P500 is one of the most widely held indices in the US. And yet, the Market Cap weighted version has a tendency to become dominated by a handful of big caps. This is especially likely towards the end of a major run, when a handful of megacaps dominate the trading action.

One possible solution? Replace, at least in part, the cap weighted index with an equal weight S&P: SPDR S&P 500 (SPY) with an equal weight ETF such as Rydex S&P 500 Equal Weight (RSP).

As Ritholtz shows in a chart, the S&P 500 has gone up 99.95% since the 3/6/2009 low through 5/20/2011. During the same time, the equal weighted RSP has gone up 156.5%. This is definitely something to consider if you are looking to hold an S&P index etf over a long period of time.

On a side note, I highly recommend Ritholtz’s blog. He is educational and interesting.

Today, I am adding three stocks to my watch list: Intel Corp. (INTC), Honda Motor Co. (HMC), and Ford Motor Co. (F). I have spoken at length on all of these before, so I won’t be going into as much detail in this post (feel free to search for either of them on this site’s search).

I will add this to my previous comments:

On Intel, they have increased their dividend while improving their chip technology. They are clearly making strides in the right direction, while looking out for their shareholders at the same time. Intel may be the perfect combination of growth (PEG of 0.9) and dividend payer (3.7% yield) around. Let the price come down a little more, and they will be a steal.

As for Honda, they are the “Apple” of the auto industry: A company known for their high quality products that has a loyal customer base. The announcement today that Honda expects to resume full production in their North American factories in August is a huge plus (they weren’t expecting to resume full production until the end of 2011). But let’s be honest here: Honda is still in rebuild mode after the Japanese disaster.

That is why I am also adding Ford to the list. I don’t want both Honda and Ford, so when one of them looks too cheap to pass up, that will be the buy. Surprisingly, Honda hasn’t dropped as much as I would have liked since the Japanese disaster, and it’s near-future prospects are murky. On the other hand, Ford’s disappointing earnings in the 4th quarter of 2010 managed to slow down what was a runaway powerhouse of a stock. Of Ford and Honda, Ford is the definably cheapest of the two stocks, with a PEG of 0.8 (you can’t look at any forward earnings projections on Honda seriously right now). In Honda, I have faith they can bounce back strongly, but in Ford, I know they will (economy willing for both).

Current Stockwatch List
1. Google, Inc. (GOOG)
2. Amtech Systems Inc. (ASYS)
3. Home Properties, Inc. (HME)
4. Tower Group Inc. (TWGP)
5. Intel Corp. (INTC)
6. Honda Motor Co. (HMC)
7. Ford Motor Co. (F)

1. I found CNBC’s coverage of Mark Haines’ death last night to be tasteful and appropriate. While CNBC gets a lot of criticism (rightfully so) for being a market cheerleader, there is a certain “family and friends” feeling which the network has amongst it’s on-air personalities. The death of Mark Haines really brought that out, and the many tributes they paid to him on air yesterday were sincere and heartfelt. Everyone at CNBC can be proud of how they handled this sad event. I am sure Haines would have been proud of them.

2. Disney vs. the U.S. Navy! Disney backs off from trying to copyright the name “SEAL Team 6” (the name of the Navy SEAL team that killed bin Laden) after the Navy filed it’s own trademark applications. While Disney likes to promote their wholesome family image, there are times their crass commercialism peaks out, and this was definitely one of them.

3. It’s good to be the king. Or “kings and queens”, as members and staff of the U.S. House of Representatives use their insider information to outperform average investors by approximately 6% a year. A previous study showed U.S. senators and their staffs outperformed average investors by over 9% a year. Ironically, Democrats in the House outperformed their Republican peers, although Democrats held the leadership positions in the House for the majority of the period studied. “Pond scum” is the kindest phrase I can think of to apply to our elected representatives…

4. South African gold mining companies may face liability damages for as much as $100 billion for occupational lung damage incurred by their workers for decades. It seems these companies knew about the risks, but didn’t provide proper mine ventilation nor masks. While I am not fond of gold mining companies, as they are good examples of some of the most poorly run companies in any sector, this makes a good example of what happens when companies sacrifice safety for quick profits, and shows that businesses never really escape the safety costs, they merely delay them. Just ask BP how sacrificing safety worked out for them…

5. Watch the U.S. GDP 1st Quarter revision coming out at 8:30 am EST this morning. Although I doubt it will effect the markets today, except at the open. The rest of the day, expect the markets to be up, just like yesterday. For you day traders out there, today is a good day to play. But get out before tomorrow: With a 3-day weekend coming up, a lot of investors will be pulling their chips off the table, just in case.