2007 The Year of The Pig

In a recent poll produced by the Associated Press and AOL News, Americans are very bearish for 2007. Here are some of the poll results:

*Sixty percent believe that we will have a terrorist attack in 2007.

*Ninety percent beleive we are in store for higher gas prices.

*Seventy percent of those polled believe the United States will have a major natural disaster.

*Eighty percent of people believe that the minimum wage will be raised from $5.15 to a higher level. There has been no increase since 1997.

My thoughts on these poll results are that the risk of a terrorist attacks looms over the economy and another event like 9-11 would have a dramatic impact on the economy over the short term but we have proven the ability to withstand such a shock to the system. All portfolios should have some type of insurance to protect against the "black swan" type of event. Such insurance should cost a portfolio no more than 2% of the value of the portfolio and it should be able to return 5-10% should a major sell-off occur.

Gas prices are heading lower as too many people are bearish here. However, as a country we need to begin to develop concrete policies to handle the eventual fact that demand is rising worldwide and supply is finite. We will see $100 a barrel for West Texas Crude but not in 2007.

The minimum wage will become a reality in 2007 and Bush cannot cave into raising taxes in 2007 if he is going to enact this change. A combination of a higher minimum wages and new taxes would drive the U.S. economy into a recession. Instead President Shrub needs to focus on earmarks and entitlement spending cuts not seen since "The Gipper" was in office.

That's it for now. Hope everyone has a safe New Year's night and best of luck in 2007. My 2007 New Year's Resolution is to write more often, find interesting subjects to write on and focus on the big picture.