Lessons from Omaha

Every year, The Oracle of Omaha, launch some stress on market watchers. This year, Warren Buffett main topic was "The 'investment income' account of our country—positive in every previous year since 1915—turned negative in 2006. Foreigners now earn more on their U.S. investments than we do on our investments abroad. In effect, we've used up our bank account and turned to our credit card".

The "twin deficits" is making America poorer, because America is living according to the credit card rules!

Two more issues from Berkshire Hathaway: 1) Buffett announced that Yahoo's chief financial officer, Susan Decker, will join Berkshire's board in May; 2) the U.S. dollar will continue its gradual weakening—and he continues to hold that position, basing his view on the country's large trade imbalances.

Alan comeback

When you read this: "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle". And you know that these words are from: Former U.S. Federal Reserve Chairman Alan Greenspan warned Monday that the American economy might slip into recession by year's end.

You need to be cautious. And, Alan made an additional warning: "The American budget deficit is clearly a very significant concern for all of us that are trying to evaluate both the American economy's immediate future and that of the rest of the world".

Nasdaq pattern seems a little bit exhausted!

Economy in good shape

Management books reveals that consumers are the main trend of the market.

The University of Michigan's American Customer Satisfaction Index (ACSI) increased to an overall 74.9 score out of 100 in the fourth quarter of 2006, its highest level since the survey first started in 1994.

The winners from this survey are: Home Depot, Costco, Best Buy, Wachovia, Wells Fargo, J.P. Morgan Chase, Amazon, Barnes and Noble, Charles Schwab.

Even with "twin deficits" Corporate America is in good shape.

Dollar: the way to the moon?

Dollar devaluation is a "no news" issue. Secretary Paulson is a Wall Street guy and possibly a good manager, but what about the strength of the greenback?

Dollar versus Euro is near 1,35, just a way long from the previous 0,85 from some years ago.

The renminbi will not explain everything.

Is it a way to export devaluation to the Asia? Or is it a "twin deficits" problem?

Because, we don't believe the reason is about the Iraq issue!