There’s something that just ain’t right going on in America’s financial markets. Worse, as folks are figuring that out, the key to maintaining markets and turning our economy around is being driven off – confidence.
Yesterday the President either betrayed his economic ignorance or furthered his economic agenda by comparing the stock market to flash polls.
"What I'm looking for is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing," Obama said after meeting in the Oval Office with British Prime Minister Gordon Brown. “And, you know, the stock market is sort of like a tracking poll in politics. It bobs up and down day to day, and if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong."
Oh, my…bobbing up and down is one thing, but there appears to be a market trend established, Mr. President, and it’s clearly downward. Had your polling looked like this, you would not be ignoring it. The Dow Jones Industrial Average has fallen through every floor predicted by the “experts,” 8000, 7000, and now closing in on 6000…from a high of 14,000 with the past 52-weeks, no less. Half the stock market’s previous value, all private wealth, has mostly dissipated. Four trillion dollars of American private wealth has been drained since September from private holdings, including home equity, retirement accounts, education accounts, and charitable foundations.
What strikes me as a watch dog not barking is that while government is busy throwing money it doesn’t have to look reactive to this “crisis,” no one seems much interested in looking behind the “conventional wisdom” that this is all caused by a collapsing housing loan market.
I don’t know much about tranches or credit default swaps, but I do know this: Something isn’t honest in a system that collapses around collateralized debt like this one did. Someone is making money on this mess, because someone always makes money in these panics while the saps, generally the public ignorantly hold the bag as they’re being stuffed into it.
In my view, this has been bi-partisan arson, starting in the Clinton administration. Bill learned from his victory over an incumbent president that even a minor economic downturn, a recession, had huge political impact. And the lesson wasn’t lost on the Bush43 administration, during which the Federal Reserve lowered interest rates to near zero in order to keep the good times rolling. Consumers couldn’t contain themselves as money grew on trees for nearly 16 years, with ever more valuable homes used as ATMs through home equity lines to finance the orgy of buying stuff. The U.S. economy never had a chance to resolve itself or its growing excesses, even in the aftermath of 9/11, when President Bush prescribed shopping and vacationing as an American duty. It became ludicrous as the Bush White House later fell back on technical, backward-looking definitions to deny that a recession was building...the same one we're in right now!
On top of all that was another odd occurrence that remains unexplained behind its conventional wisdom: The sudden rise of oil prices to many multiples of its price. From $20 per barrel in 2000 to $80 in 2007, to its high of $147 on July 11, 2008. If the price of oil, as economists suggest, is subject to major swings particularly tied to the overall business cycle, it seems odd that the price would rise radically into a recession which began in January 2007 if driven by speculators.
What U.S. and British government investigators claim to have found is this: That the market responded to supply-and-demand market forces, not speculation. Huh? Yup, the market price apparently lagged the growing demand amid shrinking supplies. As a result of this market imbalance and low price elasticity, huge price increases resulted as the market explosively attempted to balance itself. Low price elasticity? In a (growing) shortage market? With nearly a doubling of price in months while in a recession? What nonsense is this?
The oddest thing is that, except for briefly selling hybrids at MSRP, the alternative energy community couldn’t sell its claptrap solutions in the most favorable market ever. Even as the Global Warming alarmists, er, Climate Change alarmists were most alarming. In cases such as ethanol, the 21st century perpetual motion hoax was exposed for what it was – as food prices skyrocketed behind government subsidies and the truth about the excessive energy and water inputs to create the energy-deficient stuff became more generally known. Well, several ethanol plants quickly shut down, and others never opened.
Even today, the Obama administration is trying hard to shove this “green agenda” down throats of unwilling-to-buy consumers. Let’s ignore that most are broke, and not in the market for expensive automotive change. But, I digress…
The financial markets seem to have become a con game. One of the first lessons one learns as an investor is to never plow money into things you don’t understand. The ones exposed violating this were the financial geniuses themselves. From AIG to Citi Bank, toss in Bernie Madhoff and a growing list of schemers…plus, the free-market sacrificing Presidents Bush and Obama, and a “stimulating” Congress, and one needn’t wonder why confidence in the honesty of the market – even the value of our currency - is waning, if not drained.
Wednesday, March 4, 2009
Tuesday, March 3, 2009
Michael Steele: Hip-Hop This!
In the words of Vince Lombardi: “What the hell’s going on out there?”
The recent dust-up between RNC Chairman Michael Steele and Rush Limbaugh illustrates the dichotomy tearing away at the credibility of the Republican Party. On the one hand, to be a viable political party, the GOP must present a significantly different point of view than its opponent, the Dems. OTOH, it must be trustworthy and reliable in its principled opposition, "truthy" to its supporters when the chips are down. It is currently doing neither.
What’s going on is that the gap between the political Republican party and its voters/supporters is on full display. The political arm, trying to win elections in an increasingly liberal world, is trying to become inoffensive as it hopes to draw “moderates” to their voting columns to sustain a majority. The problem, as Rush Limbaugh often points out, is that moderates have no views – they're less thoughtful than merely incapable. They swing between political viewpoints because they essentially eschew politics and its conflict-laden environment. They want “bi-partisanship”, an unattainable political view when deciding who gets what, when and how. And the political Republican party is willing to give them this comity to gain votes, they think.
The supporting Republican masses are more ideological, mostly centered around smaller, less expensive government, personal liberty, and a strong national defense. They see a collapse of traditional American values, in many cases aided and abetted by Republicans. They simply don’t trust the political Republicans anymore in key or landmark battles.
In the midst of this Michael Steele became Chairman of the RNC, whose job it is to elect Republicans to office. That means raising funds and doling them out. The biggest challenge is bringing both sides together. The pols need money, and the base increasingly won’t pay for uncertain political loyalty.
Steele’s D.L. Hughley appearance on CNN was an “outreach” attempt to the urban hip-hop electorate. Steele apparently has this idea that the streetwise, poorly educated, and ill-informed are a better bet for conversion to Republicanism than the Historically Black College crowd that tossed Oreo cookies his way a few years ago.
Actually, it is clear he is trying to by-pass the entrenched Black Dems and try to talk empowerment to a younger generation that is living the failure of Dem run cities like Baltimore, Detroit and others. And, so, former Fox News pundit turned political conduit to urban youth Steele settled into a televised, true barber shop conversation with the host and another guest, rapper "Chuck D", and got himself jammed when the inter-bro convo turned to Republicans = Nazis - with Steele saying to Hughley, "And you're right." Whaaat??
Whoops…trying to become instructive to the misinformed young bloods, seizing the opportunity to dialogue earnestly about these false perceptions and demonstrate how Republicanism actually mirrors many of the values of the African-American community, providing a Black history Month lesson on the community’s links to the party, Steele first dropped cred by stereotyping the legendary "Public Enemy" as a product of the projects. Then he inexplicably agreed with Hughley's premise that Limbaugh was a purveyor of incendiary rhetoric.
After asserting he was the leader of the Republican Perty, Steele “inartfully” put Limbaugh into context, saying, "Rush Limbaugh is an entertainer. Rush Limbaugh, his whole thing is entertainment. Yes, he's incendiary. Yes, it's ugly."
Chuck D: "He would say anything."
Hughley: "You're the first Republican, and I've talked to a lot, who's said he's not the leader of the party. I've never heard anybody say that on anybody's show. We get past a lot of things when three men, all from different kinds of backgrounds, all have different ideological views, look, I can respect that in you. You know what? I don't have any preconceived notions. I thought you were a bright guy then, and I think you're even brighter than I did before. But, but I just think that the brand you're selling ain't for us, it's just not! "
Steele: "What I'm saying is, the brand needs help. The brand needs work. There's no doubt about that. I'm not trying to sell it. What I'm trying to do is make it as valuable, and something that people can look at and consider. And I do think we have something to say on some very serious issues that touch a lot of people on empowerment, ownership and opportunity. And I'm going to make sure we say it."
Steele plainly failed a simple leadership test, and it wasn’t even prime time questioning, nor the product of vicious false context editing.
Be real, be true...and, sorry to say, it’s approaching time to say goodnight, Michael – Once more and you’re fired!
The recent dust-up between RNC Chairman Michael Steele and Rush Limbaugh illustrates the dichotomy tearing away at the credibility of the Republican Party. On the one hand, to be a viable political party, the GOP must present a significantly different point of view than its opponent, the Dems. OTOH, it must be trustworthy and reliable in its principled opposition, "truthy" to its supporters when the chips are down. It is currently doing neither.
What’s going on is that the gap between the political Republican party and its voters/supporters is on full display. The political arm, trying to win elections in an increasingly liberal world, is trying to become inoffensive as it hopes to draw “moderates” to their voting columns to sustain a majority. The problem, as Rush Limbaugh often points out, is that moderates have no views – they're less thoughtful than merely incapable. They swing between political viewpoints because they essentially eschew politics and its conflict-laden environment. They want “bi-partisanship”, an unattainable political view when deciding who gets what, when and how. And the political Republican party is willing to give them this comity to gain votes, they think.
The supporting Republican masses are more ideological, mostly centered around smaller, less expensive government, personal liberty, and a strong national defense. They see a collapse of traditional American values, in many cases aided and abetted by Republicans. They simply don’t trust the political Republicans anymore in key or landmark battles.
In the midst of this Michael Steele became Chairman of the RNC, whose job it is to elect Republicans to office. That means raising funds and doling them out. The biggest challenge is bringing both sides together. The pols need money, and the base increasingly won’t pay for uncertain political loyalty.
Steele’s D.L. Hughley appearance on CNN was an “outreach” attempt to the urban hip-hop electorate. Steele apparently has this idea that the streetwise, poorly educated, and ill-informed are a better bet for conversion to Republicanism than the Historically Black College crowd that tossed Oreo cookies his way a few years ago.
Actually, it is clear he is trying to by-pass the entrenched Black Dems and try to talk empowerment to a younger generation that is living the failure of Dem run cities like Baltimore, Detroit and others. And, so, former Fox News pundit turned political conduit to urban youth Steele settled into a televised, true barber shop conversation with the host and another guest, rapper "Chuck D", and got himself jammed when the inter-bro convo turned to Republicans = Nazis - with Steele saying to Hughley, "And you're right." Whaaat??
Whoops…trying to become instructive to the misinformed young bloods, seizing the opportunity to dialogue earnestly about these false perceptions and demonstrate how Republicanism actually mirrors many of the values of the African-American community, providing a Black history Month lesson on the community’s links to the party, Steele first dropped cred by stereotyping the legendary "Public Enemy" as a product of the projects. Then he inexplicably agreed with Hughley's premise that Limbaugh was a purveyor of incendiary rhetoric.
After asserting he was the leader of the Republican Perty, Steele “inartfully” put Limbaugh into context, saying, "Rush Limbaugh is an entertainer. Rush Limbaugh, his whole thing is entertainment. Yes, he's incendiary. Yes, it's ugly."
Chuck D: "He would say anything."
Hughley: "You're the first Republican, and I've talked to a lot, who's said he's not the leader of the party. I've never heard anybody say that on anybody's show. We get past a lot of things when three men, all from different kinds of backgrounds, all have different ideological views, look, I can respect that in you. You know what? I don't have any preconceived notions. I thought you were a bright guy then, and I think you're even brighter than I did before. But, but I just think that the brand you're selling ain't for us, it's just not! "
Steele: "What I'm saying is, the brand needs help. The brand needs work. There's no doubt about that. I'm not trying to sell it. What I'm trying to do is make it as valuable, and something that people can look at and consider. And I do think we have something to say on some very serious issues that touch a lot of people on empowerment, ownership and opportunity. And I'm going to make sure we say it."
Steele plainly failed a simple leadership test, and it wasn’t even prime time questioning, nor the product of vicious false context editing.
Be real, be true...and, sorry to say, it’s approaching time to say goodnight, Michael – Once more and you’re fired!
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