As we are all aware of by now, the Republicans found themselves in control of the White House, The Senate and the House of Representatives. This is an incredible convergence of power for one party to have and is coming at a time of great geo-political turmoil as well as well documented economic difficulties. Can this GOP electorate do good things for your investments? True or False. False Thanks in part to the simple fact that the Democrats could not make a stand without testing the "Patriotism Principle", something enacted through rhetoric suggesting that any criticism of the President and his policies was tantamount to treason, allowed the Republicans to upstage the election without much of a battle. When they debated the resolution on attacking Iraq in the Congress, publicly aired on radio and C-span, the Democrats could see the handwriting on the blank check as something other than their own. But they voted for the sake of the nation and what they believed was the patriotically correct thing to do. What they did instead, was vote for the Republican platform of Presidential infallibility. This cost them dearly, and will cost you more than you realize. We will not delve into the war on Iraq, whether it is right or wrong, because that argument is not meant for this site. What we will do in the coming months is attempt to help you pick up the pieces of any ill-fated economic decisions that will fall-out as a result of war. Had the Democrats been elected, they would have subjected the country to tax cuts that would have had more impact on the worker, the folks who toil for the company and their shareholders. The belief that unemployment benefits keep the country humming along in times of economic stress would have been extended. This is a short term fix that would have helped give the unemployed, a seemingly fluid number, some little extended hope. Unemployment rarely states the fact that workers who enter the workforce are finding no work either. 150,000 folks enter this arena each month, optimistic about finding jobs that do not exist. Based on those numbers, you can expect to add 1.8 million more unemployed to any totals floated out there. And these folks have no benefits with which to support themselves or the consumer oriented economy.

The Democrats would have kept the dogs of regulation hungry and mean while making sure that S.E.C. was funded with enough money to chase each and every corporate wrongdoing as if it were akin to stealing little Timmy's crutches. The Republicans no longer need to address those "big government" issues. They can deregulate, giving corporations much more in the way of expansion and without anything but an underfunded team of watchdog accountants, companies will offer up only those who are dimwitted enough to get caught with their hand in the cookie jar. Expect this to go arm and arm with further tax cuts to those that the Republicans feel pay far too much. Taxes paid do not translate into party contributions. We will go to war and because of this, the spending currently allotted to defense will increase, taking crony capitalism to new levels. You will hear the words "torte reform" and when you do, you will need to know that your right as a customer of big business has limits to the liabilities for which you can litigate. In other words, you right to sue based on wrongdoing will be seriously curtailed. Bankruptcies will be reduced to a trickle, satisfying one of the largest campaign contributors immensely. Welcome to the Republican Winter. Your investments will do well because the friends of big business will insist on it. Profits over the next year will increase, especially compared to this year. Further deregulation, energy expansion, and tax favoritism will find their place on the corporate balance sheet. But you will have little reason to save or invest if you are finding yourself on the edge of consumerism because you are swimming in debt, unsure about your current state of employment, or face dismal chances of gaining future employment. For this party to do good things for your investments will depend on them mustering some concern for your plight, and that just isn't going to happen. For additional commentary

Pretend for a moment you are the economy. For the last three years you have watched your feeling of queasiness grow from simple a pain in the stomach to the makings of a long term peptic ulcer. One doctor of the economy says it isn't that bad; another tells you there are some serious problems on the horizon. Is it okay to ignore both and recover without their sage opinions? True or False. True There is a lot of thought being given to the state of things. Writers much like myself are struggling to find a glimmer of hope in these somewhat descending times. Note that I refrained from the word depressing or even recessive. These are only descending times even though we feel as though things are much worse. The economy is resembling one of those pantomime sketches with the man descending stairs behind a short wall. You know he's gone no where, yet we have been given the illusion that he has. There are definitely worrisome indicators out there. A press release says that jobs are being created. You will remember that this is an sum derived from the differences in jobs lost. For instance, if a thousand jobs were lost in a telecommunications company, one tenth of the number Lucent plans on jettisoning, and three thousand gas station attendants were hired because their unemployment ran out and their former jobs will not exist again, the difference is seen as an increase of two thousand jobs.

The comparisons between this other descending events is the lack of inflation and low interest rates. These are pointed to as good things until you really begin to look at what would happen should they get any lower. Lack of inflation could quickly become deflationary. This would be bad for business. The inability to set prices (look at some of the ads being run by your local grocer) because the customer has determined that if the price is that low, you can wait for lower, creates a real problem for business. Revenues fall. Businesses adjust by adjusting the payroll. Prices continue to fall as further attraction. These out of work workers can't afford your product at any price, and the cycle begins to feed on itself. Low interest rates are okay where they are, but creditors are starting to question lows at a far greater pace. Refinances for cash back are going to cost more, adding to the fees that these institutions are losing on already sold bad loans. Many bankers have insinuated that they would not find it profitable to lend if rates continue to fall. Adding to the ailing economic outlook are folks like me who suggest you carefully consider your next major purchase weighing its worth on a very finely tuned scale. By reconsidering that home theater or another big ticket toy, you have basically added to the woes and the possibility that this economy will get worse.

All indexes are the same? False Index funds all basically do the same thing. It is how they do it and which companies they track that can add to the confusion. First, how they work. Mutual funds buy indexes to give their investors a broad look at a certain part of the market. The index published by Standard and Poors is by far the most widely recognized and its index tracks the top 500 market capitalization companies. If a stock of a company falls below a certain level, or as recently happened, the S&P determines that it's index should be based on American companies only, the mutual fund that is tracking against that index needs to sell or buy to rebalance and further mimic the index. There are many other companies that provide similar services, Frank Russell, known mostly for his near total

market index, and the Wilshire, whose index tend to track mid and small cap companies, Morningstar, a newer player and Morgan Stanley, whose There are many other companies that provide similar services, Frank Russell, known mostly for his near total market index, and the Wilshire, whose index tend to track mid and small cap companies, Morningstar, a newer player and Morgan Stanley, whoseprevious indexes were more towards global tracking. But this last player has created a somewhat different animal among indexes. It has created a sort of red zone where companies whose values have dropped are not automatically excluded from the index. This red, or buffer zone can allow a stock in its index 300 to fall as far as 400 before it was sold. To be rebought into the index, the stock would need to reach 225 to be reinstated into the group. This will reduce turnover which can be costly but it will do little else. Some of these newer indexes are better suited for exchange traded funds or EFTs. And the Morgan Stanley index will charge funds who use it.

The only way to avoid all of the talk about war and terror, the economy, and the state of the stock market was to be living under a rock, or in a natural state of blissful (enviable) ignorance. But for those of us that are paying attention, is a double dip recession, as many economist are calling it likely? True or False. False There will be no double dip about it. This will be a full blown recession unlike the mild meandering through the muck that the previous, barely recognized recession took us through. In all reality, the market needed it's adjustments and the crooked CEOs needed to walk the perp walk. And the state of corporate America's over capacity needed to be brought into line and that is usually done at the expense of an expanded labor force. Which when expendable, is cut like so much weight at the end of a tenuous line. The question really lies in the historicalness of the recession. In '91, we came out of a good deep recession and recent memory, despite close proximity to this decade, is always easiest to draw upon. But time, it seems is the only relation that we have to that recession.

The differences are worth taking note. The debt of this nation has totally reversed itself in such a way, that a 180 degree turn doesn't accurately describe it. With the administration making it's case for a blank check to fight a boundless war on terror, this debt is only going to increase. Don't expect labor pools to increase any time soon. Businesses, without any pricing power, are writing plans for '03 that include even less employees on board, not more. In light of that and when it becomes widely known that the plan is reduced labor, spending will shrivel. If Fannie Mae, the nations largest re-mortgager (a company that purchases your mortgage and bundles it for sale ot investors) follows through on its plan to charge additional fees for cash back refinances, hold on to any growth. This has been the driving force behind what little growth there is. And if the Federal Reserve deems fit to lower interest rates yet again, banks will follow through on their threat to stop lending based on a no-profit scenario. Keep your debt well balanced and not too excessive and remember, the equity in your home can vanish as miraculously as it appeared if the buyers disappear.