The first Wall Street Journal/NBC News poll since Bush got re-elected finds that public opinion remains rather skeptical about any shifts in the 69-year-old Social Security program — which offers retirement and disability income to more than 47 million Americans — and is wary of rewriting the tax code.

The public, by 50% to 38%, is inclined to believe it’s "a bad idea" to let workers invest Social Security taxes in the stock market. Similarly, the poll found Americans somewhat more likely to advocate leaving the tax code as is rather than embracing some of the more sweeping changes that have been advanced.


I would be remiss if I failed to point out that private retirement accounts — such as IRAs and 401k — have existed for many years. Further, IRAs in particular tend to be not fully funded by people in the lower salaried employees — the bottom tax brackets — who would be most impacted by a decrease in Social Security benefits when they retire.

Playing to the Base: The Journal poll also found that while the president retains "overwhelming personal and ideological support among Republicans" he fares much more poorly amongst people who have not drunk the kool aid. Not surprisingly, President Bush generates poor ratings (personal and ideological) amongst Democrats, and produces "mixed feelings" among political independents. (duh).

How likely is the passage of a full revamp of Social Security or a overhaul of the Tax Code? Perhaps less likely than many presuppose:

"The upshot is that the president, to sell his legislative program, will have to repeat the winning formula for his 2004 campaign: add just enough middle-of-the-road support to his strong political base to form a narrow majority.

On contentious issues such as Social Security and tax overhaul, "that’s a difficult starting position," says Republican pollster Bill McInturff, who conducts the Journal/NBC survey with his Democratic counterpart Peter Hart. Yet as the November election proved, Mr. McInturff adds, "they have sustained their coalition with these numbers" so far."

For those who believe that a major shift in Social Security is likely to be an unmitigated disaster, that’s encouraging news.


As Bush Sells 2nd-Term Agenda, New Poll Shows Public’s Doubts
THE WALL STREET JOURNAL, December 16, 2004; Page A4,,SB110315110255701381,00.html

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Cold Caller Blues

Once again, guest poster Rob Fraim delivers some market related humor:

Back in the 19th century when I started in this business I had to go to the company home office for several weeks of training. On one of the final days all of the rookie brokers were required to make a presentation to the class – a speech regarding the business, goals, aspirations, motivation, blah, blah.


“Since so much of the new-guy training back at the firm where I started in the business was about sales stuff (rather than teaching us anything about investing) I wrote a song. I had my guitar with me and so instead of giving a yada-yada speech I sang my song.”


Cold Caller Blues lyrics:

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Category: Markets

Gold — I’m telling you, this idea is gold, Jerry



This may have gotten overlooked last week — if you follow currency, sentiment, or precious metals, its an interview worth reading.

Let me once again mention that the Online WSJ is well worth $40 a year — and it also includes access to Barron’s. 

Here’s an excerpt of the interview:

Gold prices have surged 50% since early 2002 to more than $450 an ounce, and some market watchers are brazenly slapping a $1,000 price target on the metal for the near future.

That crystal-ball forecast seems heady. But John Bridges, a senior gold analyst at J.P. Morgan Chase & Co. since 1995 and author of "The Golden Goose" newsletter, says gold has already hit that level — even passed it — when adjusted for inflation. But he still has "problems with gold as an investment."

And it’s not all about the flailing dollar. Other factors, some real (supply-and-demand) and some eccentric (Indian thoughts of the afterlife) are playing a role, says Joseph Foster, portfolio manager of the $290 million Van Eck International Investors Gold fund, the first of its kind in the U.S. that dates back to 1956. He calls gold "the ultimate form of currency."

Can gold keep shining? Is $1,000 an ounce a realistic target? And how does inflation factor in? Messrs. Bridges and Foster answer our questions.

* * *

The Wall Street Journal Online: Gold is up 14% since late 2003, but the Amex Gold Bug index (a basket of gold stocks) is down 11% from a year ago. Why hasn’t the price of gold filtered into the price of many gold-oriented stocks?

Mr. Bridges: We’re positive on gold as hedge against the weaker dollar. Even if the dollar does recover, the strain on the world’s economic system by these swings in currencies suggests having gold as insurance isn’t such a bad idea.

Gold producers are suffering quite significantly from higher energy prices. Diesel has become quite a big part of some mining operating costs — as much as 20%. Then you also have the strength of the resource currencies — the Australian and Canadian dollars and the South African rand. Even the Peruvian sol is appreciating against the dollar. A lot of these big diversified miners have operations in these countries, and that’s affecting their operations.

Mr. Foster: We went through a severe correction back in
April and May, for both gold and gold shares. They were down
substantially. If you look at the performance since then through the
end of November, the Philadelphia Gold and Silver index (XAU) is up
37%. Gold prices are up 20%. So you look over that longer time frame,
and the shares have done fairly well. They’ve significantly
outperformed gold.

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Category: Markets