But blogging is both personal and an art form. If mine is to improve, I need to hear the negatives. Success in any aspect of life is a matter of managing the weaknesses so that they don't become threats. That way, you allow your strengths to naturally seize the opportunities. And since we all have weaknesses, if we intend to deal with the public, we have to address those weaknesses.

Blogging is giving me the opportunity to reach multi thousands with a message that the owners of capital (i.e., the buy-side) need to take away ownership and control of the capital markets from the financial services industry (i.e., the sell-side). To do that we need our advisors to be strictly on the buy-side, where they can work independently and objectively to earn the fees we pay for their valuable advice.

That is an important message, and it needs to be enshrined in law. In fact, in the law, our rights to client-lawyer privilege are protected. Regretably, we, as a society, will never be really free unless and until the rights of client-advisor privilege are similarly legislated.

And for that to happen, we cannot have so-called advisors who are permitted to be principals in our transactions, and to trade their capital and the capital of other people against us, at the same time as they are "advising" us. And we cannot have these relationships and our transactions regulated (i.e., controlled) by these so-called advisors.

That is fundamentally wrong. You know it. I know it. The President of the United States and all the elected representatives in Congress know it. Every elected representative of people in the Free World knows it.

Yet it exists because there is not sufficient criticism by the owners of capital to overcome this fundamental weakness in the capital market system. Which brings me back to my first point, and that is I need you to constructively criticize this website and blog so that my message reaches more people.

So, please tell me what I could be doing better, and how I can get my (non-political, non-commercial) message of social equity out to people who can make a difference. Thank you.

Week #4 Report

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Bill's Portfolio:

The biggest equity market story of the week, and the year to date, is the announced takeover of Gillette (NYSE: G) by Procter & Gamble (NYSE: PG). I'd like to point out a couple things from the chart below.

This is "a stupid deal" for the shareholders of P&G and a phenomenal deal for the Gillette shareholders. The quotes are mine from my blog entry on Friday early in the morning before I even turned on Financial Entertainment Television. I did not know how the market would accept this deal, but I called it stupid then, and the market reaction confirms it.

I also noted in my blog that the dilution to PG shareholders would be so extreme that even management were embarrassed enough to announce they intended to buy in up to $22 billion in open market purchases of PG stock over the next 18 months. But, I asked, with maybe $3 billion excess cash in the combined treasuries, not required to support normal operations, where prey tell is the other $19 billion to come from?

Standard & Poor's credit reporting group also had the same concerns! So, watch for that story to unfold.

Next, I asked in my blog, why was I reading at 4am in the morning about interviews by Warren Buffett (Berkshire Hathaway), who is one of the world's wealthiest people, telling everyone that this is a fabulous deal?

He may be the owner of almost 100 million G shares, but he is a private shareholder -- not an officer, director, lawyer, investment banker, or anyone else involved in the intricate details of this deal.

I submit that Buffett must have been a principal in the deal, and must have had total knowledge of the positions on both sides for him to make such an all encompassing statement regarding a $57 billion deal, oh about five hours ahead of the time 99.99 percent of you awoke for the day.

But, Buffett was being portrayed in the media as just an "interested observer." Isn't that laughable?

Buffett was clearly being used as a sell-side clown to trumpet this deal, so why didn't the media ask him what legal role he was playing, and if he was just a private shareholder, how come he knew so much of the deal before it was announced? I'll tell you why: the media is a complicit actor with the sell-side.

Companies like General Electric, Procter & Gamble, Boeing, and others, own the media and advertise in the media, paying the salaries of these "investigative" reporters TO NOT ASK EMBARRASSING QUESTIONS.

So where does the SEC draw the line as to who can have knowledge and who cannot have knowledge of these deals?

Finally, with respect to this PIG of a deal, I'd like to ask the reader one final question, and it speaks to the issue of who should have insider knowledge of corporate mergers and acquisitions. Do you ever watch the trading amongst the parties leading up to a mega-deal like PIG?

You ought to, if you are an owner of capital seeking fairness in capital markets, because you will learn something important about equity markets, which is that the government's securities regulators are not in place to serve and protect your interests. They are there to protect the status quo of the financial services industry, which is your enemy.

To wit: Trading on Thursday in Gillette stock, a day ahead of the deal announcement to the public, reflects insider buying that scammed the public of tens of millions of dollars.

On Thursday, a day that traded down for most of it, and closed flat, this dog Gillette was up over two percent in a couple hours. In case you didn't catch my point, Gillette capitalization grew by a tidy $1 billion from about 10am when the extra activity started, and the market close. People had confidential deal information, and they were acting on it.

But do you think there is going to be an SEC investigation? Not bloody likely.

This isn't the $30,000 rip-off suffered (in total) by the public at the hands of Martha Stewart, sending her to prison. No, this illegal trading is among friends (or employees) of the sell-side.

That is precisely the reason I need to know matters of importance like whether Warren Buffett is a principal in this deal, or not. I need to know if he had confidential information that the rest of us did not.

I need to know who the insiders are who traded the G-string on Thursday, and how they came to know about a deal of this magnitude, and of matters that are supposed to be private, long before the rest of us.

And so do you.

G-STRING -- Pronunciation: 'jee`string
WordNet Dictionary -- Definition:
1. [n] a garment that provides covering for the loins
2. [n] minimal clothing worn by stripteasers; covering the pubic area.

I guess SEC's Donaldson and Berkshire's Buffett, along with their pals at CNBC, are all members of the club (if you catch my drift), and you and I are just getting their shaft.

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ETF:

These sector charts are for (1) sectors 10 (energy), 15 (basic materials), 20 (industrial) and 25 (consumer discretionary) (2) sectors 30 (consumer staple), 35 (healthcare), 40 (financial) and 55 (utilities), and (3) sectors 45 (diversified tech, software, semiconductor), and 50 (telecom).

You will note that (1) energy (because of high crude oil prices in the upper 40's) and (2) utilities (because of high bond prices for the longer maturities) are the strongest sectors.

In my view, the U.S. equity market remains under pressure here, which is providing a good long-term opportunity to accumulate good quality stocks that are priced relatively low in the healthcare sector 35, and in the telecom sector 50.

In addition, the semiconductor sub-industry group of the tech sector also looks like it might gain strength prior to the other sub-industry groups.

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Bonds:

Based on increasingly higher bond prices, the bond market continues to reflect an economic slowdown. Money continues to come out of short-term U.S. government debt (3-month T-Bills) and go into longer maturities.

Yields on the 5-year Treasury Notes have turned up though, reflecting the bond investor's enthusiasm for other maturities. Since the yields on the 10-year T-Notes have remained flat for a couple months, the bond people are clearly favoring the 30-year U.S. T-Bond, which has been a real boon for long-term mortgage finance.

The yield spread is down even further this week to just 228 basis points. The 30-year U.S. T-Bond is now yielding just 4.60. How low can the yield spread go before the equity market collapses under fears of recession?

Interestingly, there is now no discernable spread between yields on the 2-year AA corporate debt and the 2-year U.S. government debt. I wonder what that implies?

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Commodities:

Commodity prices are indexed by the Commodities Research Bureau.
Commodities prices this week were mixed, but I believe the trend will weaken in the weeks and months ahead, led by crude oil.

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Gold:

The gold bullion traded in a sideways pattern all week as traders sought indications of which direction the USD might go. The GLD bullion ETF that trades on the NYSE was basically flat.

Goldminer stocks were depressed this week. Most are now into my accumulation zone. And I would be a buyer of this list, especially via put writes. On downward price spikes, I would be a buyer of calls.

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Forex:

Last week, the USD basically side-tracked for the week, but it would appear to me that the longer-term weakness is about to set in now, which is confirmed from my analysis of trading in the goldminer stocks.

This chart of the USD clearly shows a short-term higher cycle low, followed by a higher cycle high. So, there is no question that the USD had been getting stronger. But, that appears to be transitioning to a weakening phase for the USD.

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International Equities:

As to the international stock markets this week, they all tracked sideways along with the U.S. equity market. It seems everybody is watching to see how the Iraq free elections are going to go before committing one way or another.

Here is an interactive chart link to the three groups (group 1) (group 2) (group 3) illustrated below.

It appears to me that the Japan Nikkei 225 index is the strongest. The U.K. and German bourses also appear to have a little more strength to them than some of the others, like Canada, Brazil and Australia, that are more commodity-price sensitive.

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U.S. Equities:

The U.S. market looked a little directionless this week as traders were watching the situation in Iraq closely with elections being held there this weekend.

But, while U.S. equities were side-tracking this week, and they may next week as well " at least until the U.S. international trade deficit numbers are published, and the outlook for post-election Iraq is better known, the trend is still down.

I don't think you want to chase this market down with shorts, and it's too early to buy. There are selective stocks in the healthcare and telecom sectors (35 and 50) that are worth accumulating through put write strategies.

Should the broad market encounter extreme weakness, there will be selected technology issues worthy of accumulating as well, particularly in semiconductors and software.

The Dow 30 performance leader for the week was Johnson & Johnson (NYSE: JNJ), up 4.5 percent. That's because the Healthcare sector 35 is under accumulation, and most traders are too scared to touch MRK or PFE.

Besides, CNBC's Jim Cramer looks like he's about to wet his pants when he goes on about this JNJ stock. But I can't figure out why anybody " at least anybody who is serious about their capital -- would follow the advice of a clown.

Anyway, after the close on Friday, there was Cramer jumping up and down in glee. Was he just happy his stock pick was up so much, or did he really want you and I to buy it higher?

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This has been a difficult week personally. I put in the time today, but didn't really enjoy the experience. I've been getting dizzy spells with vertigo. Woke up one morning at 4am with a bad gyroscope, so I got up just to right myself and I almost fell over. So I started to write about that PIG of a deal for a couple hours, when the dizziness returned, so I gave up for the day " or most of it.

Not even Josh Groban could raise me up, I'm afraid. I think maybe I need to slow down.

Retirement isn't supposed to be like this.

Well, today I'm off to a business meeting with a small web technology development company that may have what I've been looking for in advanced video. Then, with my new 5 megapixel digital camera (still in the box), I'm off to visit my parents (my Mom has been under heavy morphine and having a tough go of it) and then to the country house where, all by my lonesome I intend to figure out this new Kodak CX7530. Then I'll see my parents again on Sunday morning during my return trip to the big city.

I still have four major sections to complete for the top banner. It's about 50 percent finished. I hope to have it all done by Tuesday sometime.

BCara@BillCara.com