Archive for the ‘investing’ Category

Obama Doesn’t Understand What Many Americans Are Thinking

March 8, 2009

“First of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.”

Words from Barack Obama?  Hardly.  Those are words from Franklin Roosevelt’s first inaugural address.

See:
http://historymatters.gmu.e
du/d/5057/

I am disappointed in my president, our president.

He has changed some really great rhetoric like FDR’s “the only thing we have to fear is fear itself” into this:

“I don’t think that people should be fearful about our future.  I don’t think that people should suddenly mistrust all of our financial institutions.”

“I don’t think” indicates an Obama-centric view of the financial turmoil of Americans — not a “people centric” view.

And by guessing at what Americans really do fear, “financial institution,” Obama is saying it is these evil “financial institutions” that many of us do fear.

Well, maybe in Obama World and Obama’s White House, people fear financial institutions because they have no understanding of capitalism, business, the stock market and the American dream.

I am afraid that President Obama has no clue….That’s my fear.  And I resent Him telling me what I think.

I believe generally that “the only thing we have to fear is fear itself” and I also believe in JFK’s famous challenge: “Ask not, what your country can do for you.  Ask what you can do for your country.”

I also believe in Ronald Reagan’s exoration: “Government is not the solution.  Government is the problem.”

I am afraid now because President Obama, Nancy Pelosi, Harry Reid and a lot of other well meaning folks think the government is the solution.

America’s founders wrote down the Declaration of Independence, the Constitution and the other parts of our national fabric because they were living in fear of a far off all knowing and uncaring English Government.

And their spirit lives today in the saying, “I’m from the government and I’m here to help.”  Many of us fear such naive, ignorant hubris.

I am starting to fear Washington.  Obama’s Washington.  A far off, all knowing and uncaring government about five miles from my house, which is surrounded by other foreclosed houses.

I really do fear that Obama and many Democrat’s don’t get it.

Just last week, on Tuesday, President Obama, while speaking about the economy and the stock market, mentioned the “profit to earnings ratio.”

And I thought he went to Harvard.  There is no “profit earnings ratio.”  There is a “price to earnings ratio” or PE.  Investors care more about their return on the dollar, reflected in the price they paid and the earnings that resulted.

Tom Petruno wrote in the Los Angeles Times on March 7, “He didn’t get the lingo right, assuming he meant to say ‘price-to-earnings ratios,’ a measure of stock prices relative to earnings per share. That flub caused snickering among market pros.”

See:
Obama, Socialism, Fear, Lack of Confidence: Tanking Stocks, Skyrocketing Debt, Recovery Doomed This Year

I was even more disappointed when the president repeated this ignorant flub in a New York Times interview late in the week.  That meant to me that nobody in the White House was smart enough to straighten out the president by holding a little school call on him.  Or maybe they just don’t know; and don’t read.  They certainly don’t listen.

But they’re thinking about curing all my education and health care problems, undoutedly….

So Obama’s lack of stock market lingo doesn’t mean to me that he slept through high school: it means he has no idea what drives capitalism because he was reading socialist doctrine instead of paying attention to America, as he himself indicates in his books.  Maybe he never invested in anything but himself.

*****

What is wrong with America?  Everything, in Obama World:

“Look, I wish I had the luxury of just dealing with a modest recession or just dealing with health care or just dealing with energy or just dealing with Iraq or just dealing with Afghanistan,” Obama said. “I don’t have that luxury, and I don’t think the American people do, either.”

Related:
From CNN:
http://edition.cnn.com/2009/POLITIC
S/03/07/obama.interview/index.html

Related:
 NYT Interviews Obama; No Economic Recovery This Year
.
NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

Related:
Obama: Crisis is time of ‘great opportunity’

 President Pelosi?

 Obama, Socialism, Fear, Lack of Confidence: Tanking Stocks, Skyrocketing Debt, Recovery Doomed This Year
.
Can Democracy Fail With Obama’s Socialist Help?

*****

It seems to us that the attacks on Rush Limbaugh fromTeam Obama are an effort to tell Americans what to think and what not to think.  This kind of arrogance often manifests itself in unusal ways: Limbaugh’s radio show ratings doubled.

So I really do fear that President Obama and his guys don’t get it….

Democratic Attacks On Limbaugh Boost His Ratings — But He’s Not The Problem

********

I fear that the president doesn’t understand that many of us don’t want to pay more taxes, however they are hidden or veiled and whatever thay are for, many of us DO MIND paying for por, even though Chick Schumer thinks we don’t, and many of DO want to further understanding of the good news/bad news behind such huge spending on health care and other Obama projects.  And I certainly DO WANT to understand how all this government debt will degrade American growth and quality of life in the future.  I don’t like sending money for oil to Saudi Arabia and I don’t like sending debt/interst payments to China eaither….

****************

WASHINGTON (AP) — President Barack Obama offered his domestic-policy proposals as a “break from a troubled past.” But the economic outlook now is more troubled than it was even in January, despite Obama’s bold rhetoric and commitment of more trillions of dollars.

And while his personal popularity remains high, some economists and lawmakers are beginning to question whether Obama’s agenda of increased government activism is helping, or hurting, by sowing uncertainty among businesses, investors and consumers that could prolong the recession.

Although the administration likes to say it “inherited” the recession and trillion-dollar deficits, the economic wreckage has worsened on Obama’s still-young watch.

Every day, the economy is becoming more and more an Obama economy.

More than 4 million jobs have been lost since the recession began in December 2007 — roughly half in the past three months.

Stocks have tumbled to levels not seen since 1997. They are down more than 50 percent from their 2007 highs and 20 percent since Obama’s inauguration.

The president’s suggestion that it was a good time for investors with “a long-term perspective” to buy stocks may have been intended to help lift battered markets. But a big sell-off followed.

Presidents usually don’t talk about the stock market. But the dynamics are different now.

A higher percentage of people have more direct exposure to stocks — including through 401(k) and other retirement plans — than ever.

So a tumbling stock market is adding to the national angst as households see the value of their investments and homes plunge as job losses keep rising.

Some once mighty companies such as General Motors and Citigroup are little more than penny stocks.

Many health care stocks are down because of fears of new government restrictions and mandates as part a health care overhaul. Private student loan providers were pounded because of the increased government lending role proposed by Obama. Industries that use oil and other carbon-based fuels are being shunned, apparently in part because of Obama’s proposal for fees on greenhouse-gas polluters.

Makers of heavy road-building and other construction equipment have taken a hit, partly because of expectations of fewer public works jobs here and globally than first anticipated.

“We’ve got a lot of scared investors and business people. I think the uncertainty is a real killer here,” said Chris Edwards, director of fiscal policy for the libertarian Cato Institute.

Some Democrats, worried over where Obama is headed, are suggesting he has yet to match his call for “bold action and big ideas” with deeds.

In particular, they point to bumpy efforts to fix the financial system under Treasury Secretary Timothy Geithner.

Obama may have contributed to the national anxiety by first warning of “catastrophe” if his stimulus plan was not passed and in setting high expectations for Geithner. Instead, Geithner’s public performance has been halting and he’s been challenged by lawmakers of both parties.

Republicans and even some top Democrats, including Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, have questioned the wisdom of Obama’s proposal to limit tax deductions for higher-income people on mortgage interest and charitable contributions.

Charities have strongly protested, saying times already are tough enough for them. The administration suggests it might back off that one.

Even White House claims that its policies will “create” or “save” 3.5 million jobs have been questioned by Democratic supporters.

“You created a situation where you cannot be wrong,” the chairman of the Senate Finance Committee, Montana Democrat Max Baucus, told Geithner last week.

“If the economy loses 2 million jobs over the next few years, you can say yes, but it would’ve lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs,” Baucus said. “You’ve given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct.”

Republicans assert that Obama’s proposals, including the “cap and trade” fees on polluters to combat global warming, would raise taxes during a recession that could touch everyone. “Herbert Hoover tried it, and we all know where that led,” says House Republican leader John Boehner of Ohio.

The administration argues its tax increases for the households earning over $250,000 a year and fees on carbon polluters contained in its budget won’t kick in until 2011-2012, when it forecasts the economy will have fully recovered.

But even those assumptions are challenged as too rosy by many private forecasters and some Democratic lawmakers.

Many deficit hawks also worry that the trillions of federal dollars being doled out by the administration, Congress and the Federal Reserve could sow the seeds of inflation down the road, whether the measures succeed in taming the recession or not. The money includes Obama’s $3.6 trillion budget and the $837 billion stimulus package he signed last month.

Polls show that Obama’s personal approval ratings, generally holding in the high 60s, remain greater than support for his specific policies.

“He still has a fair amount of political capital, so the public is willing to cut him some slack and go along with him for a while,” said pollster Andrew Kohut, director of the Pew Research Center. “But the public will have to get some sense that the kinds of things he’s proposing are going to work, or are showing some signs that they are working.”

Allan Sinai, chief global economist for Decision Economics, a Boston-area consulting firm, said the complexity and enormity of the crisis make it hard to solve.

“There’s no way to get it all right, regardless of which president is making policy,” Sinai said. “The problem is the sickness got too far. The actions taken, medicine applied, were mainly the wrong actions. So it’s just worse, and it gets harder to deal with. At this stage, there is no easy answer, no easy way out. It’s a question of how we fumble through.”

http://michellemalkin.com/2009/03/07/tea-part
y-on-taxpayer-revolts-in-green-bay-lafayette-olat
he-and-harrisburg/

Stock Markets: When Will the Bull Return?

March 6, 2009

The stock market is crashing — slowly, and in plain view of the people who count on it most. The 53% plunge in the Dow Jones industrials since October 2007 has wrecked the college- and retirement-savings plans of millions of investors. It has permanently lowered the long-term investment projections of private endowments and pension funds. It has sent corporate compensation experts scrambling to figure out how to reward top employees. All told, more than $10 trillion of stock market wealth has vanished, and with it the confidence that springs from financial security.

By David Henry
Business Week
.
While 17 months may feel like an eternity, it could turn out merely to be a prequel. The questions on the minds of investors, money managers, and corporate executives are threefold: How much longer will the bear market last? How low will the averages go? And when might investors get their money back?

As Warren E. Buffett has said: “Beware of geeks bearing formulas.” It’s especially difficult to predict the direction of the markets these days because the most popular gauges, from price-earnings ratios to measures of investor “capitulation,” have stopped working. The peculiar nature of this bear market limits the kit of useful tools to just a handful of bond market and business confidence indicators.

Those signals, along with interviews with financial historians, market strategists, and economists, point mostly to painful scenarios. Stocks don’t seem likely to fall much more from here — but market turmoil could continue for months or even years. Worse, by the time the market revisits its highs, so many years are likely to have passed that many older people will have gotten out of stocks, missing out on the rebound. The flip side is that new money put into the stock market now will likely do comparatively well over the long term. That’s welcome news for twentysomethings and executive compensation consultants, but perhaps not for soon-to-be retirees.

Read the rest:
http://news.yahoo.com/s/bw/200
90306/bs_bw/0911b4123026586146

Related:
http://throwingstones.wordpress.com/2009/0
3/05/moderates-uneasy-with-obama-plan-ma
nu-raju-politicocom/

Geithner Announces Bank Moves; Wall Street Sells Off

February 10, 2009

Wall Street considers this a sell out.  So they are selling off.

Treasury Secretary Timothy Geithner says the new administration will wage an aggressive two-front battle against the worst financial crisis in seven decades, while the Federal Reserve expands a key lending program to up to $1 trillion.

“Instead of catalyzing recovery, the financial system is working against recovery, and that’s the dangerous dynamic we need to change,” The Treasury Secretary said today.

The TARP will be renamed but all the details are sketchy.

But sketchy is good enough for a very wary Wall Street…..

Stocks are down as we approach 1 PM.

“Our challenge is much greater today because the American people have lost faith in the leaders of our financial institutions, and are skeptical that their government has — to this point — used taxpayers’ money in ways that will benefit them,” Geithner said.

From CNBC:

US stocks fell sharply Tuesday in a broad-based decline as the government announced details of its latest bailout plan.

The Dow Jones Industrial Average was down about 70 points, then lost another 100 in a matter of minutes — before even any official government announcement.

Stocks continued to slide as Treasury Secretary Tim Geither revealed details of the bank-bailout plan, after a one-day delay. CNBC will interview Geithner after his speech, at noon. Then he’s on to Capitol Hill, where he will testify before a House panel.

The “Financial Stability Plan,” as it’s now called, consists of four main components:

1) It will set up a public-private fund to mop up $500 billion of spoiled bank assets.

2) It will set up a consumer-lending facility that will “leverage up to $1 trillion.”

3) It will devote $50 billion to stem home foreclosures.

4) It will provide new funding to banks after a stress test to determine if the bank is healthy.

Some market watchers remain skeptical over the benefits of the plan and legendary investor Jim Rogers told CNBC it could even make things worse. The bailout will plunge the US further into debt and it is designed by the same people who failed to forecast the crisis in the first place, Rogers said.

CNBC:
http://www.cnbc.com/id/29119665

********************************

Geithnner Speech Highlights

WASHINGTON (Reuters) – The following are excerpts from a speech U.S. Treasury Secretary Timothy Geithner will deliver on financial stability at 11 a.m. EST.

“As President Obama said in his inaugural address, our economic strength is derived from ‘the doers, the makers of things.’

“The innovators who create and expand enterprises.

“The workers who provide life to companies and, with their earnings, support families and invest in their future… This is what drives economic growth.

“The financial system is central to this process, transforming the earnings and savings of American workers into the loans that finance a first home, a new car or a college education, the credit necessary to build a company around a new idea.

“Without credit, economies cannot grow, and right now, critical parts of our financial system are damaged.

…..

“Instead of catalyzing recovery, the financial system is working against recovery, and that’s the dangerous dynamic we need to change.

“It is essential for every American to understand that the battle for economic recovery must be fought on two fronts. We have to both jump-start job creation and private investment, and we must get credit flowing again to businesses and families.

Raed the rest:
http://www.reuters.com/article/ou
siv/idUSTRE5194C920090210?sp=true

Related:

Federal Government Takes Over American Life

http://michellemalkin.com/2009/02/10/b
ohica-here-comes-2-trillion-tarp-ii/

Timothy Geithner
Photo: AP

In Shift, Chinese Move More Money Overseas

February 3, 2009

Some Chinese are so eager to turn their yuan into other assets that when an online real estate brokerage organized a tour of foreclosure auctions in the United States, it received so many applications that it had to turn away nearly 400 people.

By By Keith Bradsher
The New York Times

 

Shoppers at the Chow Tai Fook jewelry store in Hong Kong. The jewelry retailers are reporting more mainland Chinese coming to buy expensive pieces.  Photo: Christie Johnston for The New York Times

In Shanghai, cash-rich Chinese companies are buying high-yield bonds issued by distressed American companies at a time when many Western investors are steering clear of bonds even from solid companies.

All over the world, Chinese companies are sending home fewer of the billions of dollars they earn from exports, parking them in overseas bank and brokerage accounts instead.

And in Hong Kong, wealthy mainlanders are turning up at jewelry stores in growing numbers seeking diamonds, big ones.

“They’re looking for five-carat diamond rings and six-carat diamond earrings — three carats for each ear,” said Yollanda Lam, the marketing manager for the King Fook jewelry store chain here.

Together, these trends represent a potentially tectonic shift. As Chinese citizens are starting to send more money out of the country, foreign investors are pulling money out too, and slowing the pace of new investment.

“There is a recognition for sure that China is slowing down, so why keep your money there?” said Henry Lee, a Hong Kong fund manager.

Read the rest:
http://www.nytimes.com/2009/02/03/
business/worldbusiness/03yuan.htm
l?_r=1&hp

Worst U.S. Stocks Slide in Inauguration Day History

January 21, 2009

U.S. stocks sank, sending the Dow Jones Industrial Average to its worst Inauguration Day decline, as speculation banks must raise more capital sent financial shares to an almost 14-year low.

State Street Corp., the largest money manager for institutions, tumbled 59 percent after unrealized bond losses almost doubled. Wells Fargo & Co. and Bank of America Corp. slumped more than 23 percent on an analyst’s prediction that they’ll need to take steps to shore up their balance sheets. The Dow’s 4 percent slide was the most on an Inauguration Day in the measure’s 112-year history, according to data compiled by Bloomberg and the Stock Trader’s Almanac.

“All the banks are going to have to recapitalize,” said Greg Woodard, portfolio strategist at Manning & Napier Advisors Inc., which manages $16 billion in Fairport, New York. “That’s not done. That’s in front of them, and we don’t want to try to get in front of that trade.”

The S&P 500 plunged 5.3 percent to 805.22. The S&P 500 Financials Index fell 17 percent to below its lowest closing level since March 1995 as concern European banks need more capital also weighed on the group. The Dow average slid 332.13 points to 7,949.09. Both the Dow and S&P 500 retreated to two- month lows.

The S&P 500 is off to its worst start to a year, shattering the biggest rally since World War II, as analysts cut earnings estimates by a record 83 percentage points and companies signal worse to come.

Bloomberg

A paedestrian passes before a share prices board which has news ... 
A paedestrian passes before a share prices board which has news pictures of new US President Barack Obama in Tokyo on January 21. Asian stocks fell Wednesday after a plunge on Wall Street, where financial fears eclipsed hope that US President Barack Obama will move quickly to resuscitate the stricken economy.(AFP/Yoshikazu Tsuno)

The S&P 500 is down 11 percent in the first 12 trading days of 2009, exceeding last year’s 9.2 percent drop, according to data compiled by Bloomberg going back to 1928. The decline helped erase more than two-thirds of a 24 percent rally since Nov. 20 as optimism that government spending would revive the economy evaporated.

‘Effectively Insolvent’

U.S. financial losses from the credit crisis may reach $3.6 trillion, according to New York University Professor Nouriel Roubini, who predicted last year’s economic and stock-market meltdowns.

“If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion,” Roubini said at a conference in Dubai today. “This is a systemic banking crisis.”

Europe’s Dow Jones Stoxx 600 Index retreated 2.1 percent today, led by banks and technology companies. It fell almost 2 percent yesterday after Royal Bank of Scotland Group Plc forecast the biggest-ever loss by a U.K. company. The MSCI Asia Pacific Index retreated 2.1 percent today.

Obama Sworn In

Barack Obama became the 44th U.S. president today, inheriting the most severe economic crisis since Franklin D. Roosevelt was sworn in 76 years ago. The turmoil has dragged the world’s largest economies into recession, caused more than $1 trillion of losses at financial institutions and prompted a sell-off in global stock markets.

Treasuries fell for a second day on speculation Obama will sell record amounts of debt to battle the recession. The dollar strengthened for a second day against the euro.

State Street lost $21.46 to $14.89 for the biggest drop in the S&P 500 and the stock’s steepest tumble since at least 1984. Unrealized losses on fixed-income investments rose to $6.3 billion at Dec. 31 from $3.3 billion at Sept. 30, the company said. Unrealized losses on assets held in conduits increased to $3.6 billion from $2.2 billion.

Bank of New York Mellon Corp., the world’s largest custodian of financial assets, fell 17 percent to $19, its lowest closing price since 1997.

Financials Tumble

Financial companies posted the biggest drop among the S&P 500’s 10 main industry groups as all 81 shares fell.

Wells Fargo, the largest bank on the U.S. West Coast, slid 24 percent to $14.23. Friedman Billings Ramsey Group Inc. analyst Paul Miller lowered his earnings estimates and price target, in addition to predicting a dividend cut.

Bank of America, the biggest U.S. lender by assets, fell the most in the Dow average, sliding 29 percent to $5.10. FBR’s Miller estimated Bank of America needs at least $80 billion of additional capital.

Read the rest from Bloomberg:
http://www.bloomberg.com/apps/news?
pid=20601087&sid=aOYw.awwsNSg&r
efer=worldwide

The Bank of America building in Washington, The bank will receive ... 
The Bank of America building in Washington, The bank will receive 20 billion dollars in fresh capital to help shore it up after acquiring Merrill Lynch, the US Treasury Department announced(AFP/File/Karen Bleier)

Weak Dollar Fuels China’s Buying Spree Of U.S. Firms

December 13, 2008

his posh office in a coastal city in eastern China, millionaire Zhou Jiaru oversees more than 100 workers at an auto parts refurbishing factory he purchased in a struggling manufacturing town on the other side of the world.

Zhou’s new company is in Spartanburg, S.C.

The Chinese entrepreneur bought it from Richard Lovely, a 56-year-old industrial engineer and mechanic who says his business was in dire straits because of competition from abroad.

 

By Ariana Eunjung Cha
Washington Post Foreign Service
Monday, January 28, 2008; Page A01 

Zhou’s 85 percent stake in the company now known as GSP North America is one example of how the weak dollar and weakening U.S. economy have made the United States a bargain for overseas companies shopping for investments.

In 2007, acquisitions in the United States by foreign ventures hit $407 billion, up 93 percent from the previous year, according to Thomson Financial. The top countries investing were Canada, Britain and Germany; the Middle East and Asia — especially China — are quickly catching up.

The biggest deals in recent months have involved Wall Street firms hit by losses from exposure to mortgage-related investment vehicles.

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/article/2008
/01/27/AR2008012702380.html?wprss=rss_world%2Fnorthamerica