Wednesday, August 31, 2011

Higher Taxes Coming?


The confidence that the American people have in Obama is falling fast & furious.  



Life, Liberty, & the Pursuit of Happiness

Tuesday, August 30, 2011

Businesses hire based on demand

MERRY MEDIOCRITY
By Charles Payne, CEO & Principal Analyst

8/30/2011 9:29:55 AM Eastern Time

"People who are unable to motivate themselves must be content with mediocrity."
-Andrew Carnegie

Well, there is one place where mediocrity can be the motivation, and that's the stock market. Of course, when the market has been flushed out of weak sisters and wobbly-kneed uncles, it is much easier to get the kind of session witnessed yesterday. What got the market going?

>; The Fed is still serving as a backstop that will try to jawbone stocks higher or resort to manipulation.
>; Consumers are back, albeit at the expense of savings, but who cares.
>; Valuations are dirt cheap and smart players tripped over each other for a piece of the action.
>; We faced down a once-in-century hurricane and earthquake so what is a little market risk.

There are many reasons for the market being higher because stocks were, and still are, oversold. The best reason, albeit somewhat disingenuous, is the expectations game. Expectations are so low that it means even if we miss on things like the ISM Manufacturing number or the jobs report, the downside will be limited. On the other hand, clearing those low hurdles could have an Olympian impact on the mood of the market and investors. I think the Fed will get in the game in several ways, and if there is a so-called Plunge Protection Team (White House operation to support the stock market) then it's going to get in gear, too. But, there is also another thing in favor of the market.

It's the only game in town to make money. Sure, gold has been amazing and is clearly a smart hedge even at these levels. But, Treasury bond yields are just too paltry in a world where so many people have to play catch up. I find it hard to imagine that a 65 year old person with less than $500,000 in liquid assets can settle for 2% for the next thirty years. But, there is enough fear to keep people in that foxhole a little longer. I will say with the appointment of Alan Krueger to head up the Council of Economic Advisers that scintilla of hope there could be even a slight altering of the grand game plan was dashed. This is another academic that believes in spending a lot of money, gained through a lot of taxes, to go to stuff like alterative energy.

The labor economist is something of a renaissance man, an expert on terrorism, taxes, and happiness, among other things. The problem is he is yet another guy with theories instead of dirty hands from doing the kind of work that America needs. I'm talking grassroots jobs that grow and along the way, enlarge the wealth of communities and the country.
I would have preferred someone that took risks, bet it all, and won. That person's victory and riches triggered a virtuous circle and he/she could bring that firsthand knowledge to the job. Instead, we are going to hear about the virtues of higher minimum wage and how great alternative energy is for the nation and economy. Don't get me wrong, there is a place for academics in searching for solutions.

Yesterday I had Dr. Burt Folsom from Hillsdale College on my 2PM Fox Business Show, and he made great points, many of them from his book: "The Myth of the Robber Barons." He pointed out that the first three railroads in this country were subsidized by the government, leading to massive waste and bankruptcy for all, while a fourth non-subsidized railroad survived. We looked at five alternative energy companies that have gotten millions of taxpayer dollars and visits from President Obama or Vice President Biden. The best performing name was down only 63% from its two-year high. Pull up a chart of these names and ask should they really get your hard earned money?

>; A123 (AONE)
>; Advanced Battery (ABAT)
>; Ener1 (HEV)
>; Evergreen Solar (ESLR)
>; Cree research (CREE)

As we get closer to the latest jobs speech more stuff is being leaked. It looks like the centerpiece of the program is renovating thousands of public schools and tax breaks for new hires. Who can say no to spending on public schools? The heartstrings and finger pointing are all wrapped in a neat bow. Of course, it would be something involving unions and government. I'd much prefer we renovate the insides of public schools beginning with curriculum, bogus tenure, and low expectations. As a sustained job creator this idea gets an F+. Sure, there will be a lot of money floating around and a big chunk will make it back into the Obama Victory Fund, but it's not going to trigger real economic growth.

On the topic of tax breaks for new hires, it's not going to work. Businesses hire based on demand, and save for a few more mall jobs to absorb those public school retrofitting checks no business is going to take the bait. With the new healthcare law kicking in and triggering devastating new taxes, businesses will be looking to save money not hire idle workers. (By the way, even the US Postal Service is getting wise to paying people not to work. While I can't vouch for the speed at the USPS, so far paying workers for "standby time" is down to $4.3 million in the first half of 2011 from $30.9 million in 2009. The story broke in the Washington Post, and it seems to me because of so many looming layoffs such largess, which was heavily abused, can no longer be tolerated or encouraged.)

Fox News is reporting the green jobs program in Seattle is being called a bust after 16 months and $20.0 million; it created just 14 jobs. The program was designed to weatherize homes, but has only been able to upgrade three homes so most of the jobs are administrative. Apparently this is the norm for the Department of Energy, which has allocated $508.0 million to 41 states for its Better Buildings Neighborhood Program. That investment has yielded 600 jobs created or retained, which means it cost taxpayers $846,666 per job.
One year into the program 9,000 homes have had energy audits and some type of upgrade. The goal is 150,000 homes by 2013 to save consumers $65.0 million annually

(Those supposed savings will go away when utilities are forced to close down coal plants...but that's another story.)

The Expectations Game- No Winners

I don't think the market is excited at all about the jobs speech, and that might be the best news because it's all about expectations and low hurdles.

Back to the market, I love the action in part because stuff that was stuck in the mud acted much better. US Steel (X) had a great session, banks rebounded, and retailers acted well, too. But, make no mistake, on weeks that lead up to the jobs report there is normally one big down session. In fact, a healthy pullback sometime between now and Friday will enhance low expectations, thereby building up any kind of beat on jobs.

This game of expectations goes beyond Wall Street and into so many parts of our everyday lives. Washington DC has made the shift from bold promises of sending a man to the moon and creating full employment to the point that a year from now our President will run for reelection on a platform that unemployment is only 8.5% as compared to "almost 10%", and that message will resonate with those that forgot how we used to demand more. I'm living through this game right now with my power company. Our power went out on Sunday and we were told it would take a week to get it back on.

Well, the power came back last night, and we were relieved. Then this morning the power went out again. I have a feeling they are actually rationing power, rotating it among different homes while they play the game of expectations. I'm supposed to be thrilled the company I pay money to each month is half-ass doing their job. With about a week's advance notice this shouldn't be a problem and no one in the modern world, let alone America, should be without electricity for a week, even intermittingly. But, it does remind us to be grateful and never relax or take anything for granted.

Today's Session

The market is going to give back gains at the open, and that's to be expected. The key now is to hold intraday lows from last week and build a new base of support. We sent out profit alerts on three ideas yesterday in part to this wild volatility and the need to be nimble and always have cash. At some point, I will ride out the gyrations for larger, longer term gains but am not sure the risk/reward dynamic has changed enough just yet.

Charles Evens, a voting member of the FOMC, said this morning he "would favor more accommodation" because we would be worse off without QEII. He says commodities are up on demand, not the Fed bludgeoning the dollar. His comments have sent gold soaring this morning but oddly added pressure on stocks. Maybe the sobering reality of the true state of the economy is mitigating the notion of more upward manipulation of the stock market...for the moment.


Life, Liberty, & the Pursuit of Happiness

Monday, August 29, 2011

TERM LIMITS


TERM LIMITS
Barney Frank is the poster child for term limits in Congress.
2000: Frank called the concerns about Fannie and Freddie “overblown” claiming there was no federal liability whatsoever.
2002: Frank said “I do not regard Fannie Mae and Freddie Mac as problems. I regard them as assets.”
2003: Frank opposed reforms saying he did not “regard Fannie and Freddie as problems.”
2004: With Fannie’s accounting scandal, Frank again insisted they were not in any crisis. “Even if the two went belly-up, he said, I think Wall Street will get over it.”
2008: Frank said the losses and foreclosures was the fault of Wall Street. “The private sector got us into this mess….the government has to get us out of it.”
2010: Frank is now supports abolishing Fannie and Freddie – a little late on seeing the problem.
Fresh eyes on a problem can usually see something that someone close to the problem overlook. Barney Frank obviously overlooked the problem year after year. If you feel this is an important issue please forward this email along with your own comments to your respective Representative/Senator and ask them for their opinion.
ABOLISH
I am also in favor of abolishing Fannie Mae and Freddie Mac along with the retirement of old worn out politicians.


Life, Liberty, & the Pursuit of Happiness

Personal Income & Spending

POST IRENE, THE WORLD LOOKS SUNNIER...FOR NOW
By Charles Payne, CEO & Principal Analyst

8/29/2011 9:51:09 AM Eastern Time





Personal Income and Spending

Personal income climbed 0.3% in July, which was in line with some estimates, and slightly below other consensus readings. On the other hand, personal spending surged by 0.8%, which is well above the 0.5% the Street expected. Spending came at the expense of savings, which tumbled to 5.0% from 5.5% month to month.


Friday sees the latest on employment, and it's one of those deals where the number could be miserable but also beat the Street. One thing for sure is our employment situation is dismal, especially among young adults and men of all ages. Only 48.8% of the youth (16 to 24) are employed, this is the lowest percentage ever, since this series has been kept. Back in 1969, more than 95% of men ages 24 to 55 worked; today, that number has plunged to 81.0%. So any kind of "positive" could move the market needle, although we need robust numbers to turn the country around.




Life, Liberty, & the Pursuit of Happiness

Monday, August 22, 2011

OBAMA Flyover





Life, Liberty, & the Pursuit of Happiness

What We All Know About Obama Now

What We All Know About Obama Now




Why Business sits on the Sidelines
Right now, American businesses are sitting on enormous cash reserves, estimated at $1.93 trillion as of last September.  The Obama team just can’t understand why business doesn’t want to get in the game. It would sure make their lives easier.
In February, EPA administrator Lisa Jackson complained that "even a portion of the $1.93 trillion invested in developing and installing new pollution control technology would result in good jobs right here for American workers.” Jackson made those remarks at a gathering of labor unions and environmental activists at something called the BlueGreen Alliance national conference in Washington, D.C. last February.
This is the same EPA that just finalized the Cross-State Air Pollution Rule that will cause power plants to close that generate up to 17% of America's most affordable energy and will result in soaring increases in energy costs for consumers and businesses. Worse, it will cost jobs at a time when we're supposed to be adding them.
In July, the New York Times trumpeted the good news while gushing that there would be "an additional cost to utilities of less than $1 billion a year"! Imagine that.
The usually reliable Obama ally Unions for Jobs and the Environment estimates that this will lead ro a loss of a quarter of a million jobs, while others estimate the total will be much steeper: up to 2.5 million lost jobs and as much as $7 trillion decline in economic output  by 2029.
By last week, even the lap dogs at the New York Times seem to have seen the light.  An article on Thursday headlined Number of Green Jobs Fails to Live Up to Promises reported that "Federal and state efforts to stimulate creation of green jobs have largely failed, government records show.
Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development."
Even Maxine Waters has come to the conclusion that the White House jobs policy is just "a lot of talk".
The worst part of it is that none of it matters. Even if the entire Western Hemisphere completely eliminated all carbon dioxide emissions, the effect on global emissions would be offset by increased emissions from China within ten years. So why are we doing it?

Get the Motor Running
Want those jobs back?  Get out of the way.
  • Work with Congress to quickly slash corporate tax rates to single digits or less, and make American companies want to be American companies again and not have to take jobs and profits  offshore.
  • Suspend onerous regulations (like those proposed by the EPA) for five years to ten at least, and quit trying to push socialism under the cover of green.
  • Encourage real energy jobs in the oil fields of the Northwest and let the natural gas industry fulfill its potential. Leave the green job fantasy to the hippies and radical leftists.
  • Quit trying to convince the voters that we need to spend more money on stimulus or raise taxes: they see through all that.
  • Perhaps most importantly, commit to a sensible program that ends uncertainty and lets the indomitable motor of American enterprise begin to pull us out of the ditch.
Mr. President, if you announced a program like this, the markets would jump, unemployment would start to drop significantly within 60 days, GDP would begin to grow again.  And it wouldn’t be “unexpected”
Best of all?  You and Michelle could stay at the Vineyard until January 2013, and then everyone would be happy.


Read more: http://www.businessinsider.com/what-we-all-know-about-obama-now-2011-8#ixzz1VlOzpDth

Read more: http://www.businessinsider.com/what-we-all-know-about-obama-now-2011-8#ixzz1VlOi5Qck


Life, Liberty, & the Pursuit of Happiness

Friday, August 19, 2011

Gallup Poll: Obama Approval

71% disapprove of Obama's handling of the economy

Life, Liberty, & the Pursuit of Happiness

Wednesday, August 17, 2011

Transforming America: How long will it take?

It is suggested that one should read Rich Lowry's article entitled "President Obama's Program In Shambles:  Economy slip-sliding away" published May 1, 2011 to gather some background and appreciation for the opinions expressed here.

--------------------------------------------------------------------------------


THE TRANSFORMATION OF AMERICA

In my opinion, President Obama has stayed true to his convictions he espoused during the 2008 presidential campaign:  He appears engaged and motivated to pursue the transformation of America into a vision of George Soros's New World Order.

Obama's transformation agenda for America is:
  1. to significantly reduce reliance on fossil fuels (by whatever means necessary)
  2. to significantly increase employee Union power and influence 
  3. to significantly redistribute wealth to the poor (by whatever means necessary)
  4. to reduce the long-term global influence of America financially, politically, and militarily.
What methods Obama intends to use to complete his agenda:
  • thru legislation (ObamaCare) (Dodd-Franks) (Cap-and-Trade)  - to increase entitlements - to put financial institutions under more federal control - to increase the cost of fossil fuels
  • thru EPA regulations (federal register) - to prevent oil and gas companies from drilling - to prevent utility companies use of fossil fules - to increase the price of gasoline 
  • thru Federal Reserve: - to weaken the dollar - to encourage asset inflation - 
  • thru NLRB - empower unions and curb corporate management's ability to control employees and costs
  • by demonizing Republicans (there is more to come if he is re-elected) to produce fear of any changes they suggest to social entitlements or financial controls of Wall Street - to produce class envy - to discredit any effort to alter his agenda as a racist attack
  • by taking advantage of any opportunity to promote his agenda by using stealth, andobfuscation (Middle East unrest) (lack of immigration reforms)   
  • President Obama took advantage of the financial crisis during the Great Recession to successfully put America on the path to hopefully complete his agenda
  • Increase income taxes on the most productive people 
Evidence of his intentions and motivations to complete agenda :
  • the credentials and ideological background of his czars (communists, radicals, liberation theology, etc.)
  • the credentials and ideological background of his political advisers and associates (communists, liberation theology, etc.) 
  • his public comments about redistribution-of-wealth during the last campaign
  • his public support of cap-and-trade legislation (raising the cost of fossil fuels)
  • his association with Bill Ayers and Van Jones and numerous other radicals  (he openly admits to seeking out radicals in college)
  • his acknowledged emotional support of SEIU and reliance upon their organizational support
  • his professorial arrogance (he knows and understands more than anyone else and thus he does not need to consult or listen to the peasants)
  • his apparent inattention to any racial issues - why does he not?
  • his willingness to blame America for the ills of the world - Cairo, Egypt speech
  • his indirect, yet continuous, inter-connectivity with George Sorros and/or George Sorros funded organizations
  • his apparent inattention and leadership of the consequences of the large federal debt and budget deficits
  • lawsuits filed against any state daring to interfere with his agenda
  • Obama has almost tripled the amount of our national debt and about doubled the amount being spent on entitlement programs since he was elected
  • he never offers a olive-branch to the other side to negotiate in-good-faith

Consequences to American citizens if this agenda is allowed to be fully implemented:
  • reduction of wealth and prosperity
  • reduction of America's global interests
  • less long-term investment  
  • employment stagnation
  • economic class warfare
  • reduction in the standard of living
  • ethnic polarization - the balkanization of America!
  • ally distrust
  • permanent increase in the cost of fossil fuels
  • more regulation of personal liberties, freedoms, and speech


Life, Liberty, & the Pursuit of Happiness

Friday, August 12, 2011