Market Stupidly puts its faith in stimulus. Reply

Good day people.  It’s time to warn against stupidity.  Usually this is a straight up political blog, but when I see something play out that is ridiculous, I feel it is my obligation to point it out.

We are nearing the end of the earning season for U.S. markets.  This is when all publicly traded companies disclose their earnings for the quarter.  Since 2008, this has been a rather volatile time.  Big swings go with the beats and the misses of the season.  This quarter has been nothing short of a bummer.  70% of the companies reporting are missing their previous forecasts and, or guiding down for the remainder of the year.  The crazy thing:  The market is up huge!  Both the DOW and S&P are at four-year highs.  What?  That doesn’t make sense right?

Well, we are rallying off of the promise of more bailouts.  Seriously.  The ECB is promising to bail out nations like Spain and Greece, and the Fed is promising that they will step in at any sign of GDP slowing.  Get this, the market is getting excited as GDP slows because they are counting on the FED stimulus.  Am I the only one who sees the crazy in this?

In addition to markets being at 4 year highs on the promise of ECB and FED stimulus we are heading towards the “fiscal cliff.”  This is the stupidity of our national government.  This time last year they couldn’t agree on a national budget and we got down graded by Moodys.  Is there any reason to believe that we will not do the same this year?  I think not.  Especially because both sides are digging in to make it a political issue for the upcoming Presidential election.  Matter of fact, it was supposed to be decided this month.  Instead, our government went on a five-week vacation and promised to fix it upon their return.  All I can say is that there is a fat chance of that happening.  Even when they appointed a small group of congress members to do this last year, neither side budged an inch.  Why would it be any different this time?

What I am most worried about is the fact that markets are becoming complacent.  What do I mean by this?  There is an indicator in the market called the VIX.  This is an instrument that measures the “fear factor” of the markets.  When people are hedging towards the down-side and buying puts to protect their long trades, it raises.  As of today, it is about 15.5.  The average for the past four years is 20.  It is a pretty good idea of people’s protection should the market start going backwards.  Let me repeat the above statement.  70% of our companies are reporting missed forecasts and, or guiding down for the rest of the year.  In all rational thought, this should elevate the VIX.

Bottom line, this worries me because big hedge funds are not protecting their clients retirement money.  Should we see any kind of market sell-off, people’s retirements will pay the ultimate price.

This is what our country has become: Barack vs. Romney, a fundraising competition. 2

I subscribe to both Obama and Romney’s campaign newsletters because I like to know what they are sending out to the masses.  I got this email from the Obama camp today.  All I can say is wow.  Remember that 94% of the time, the candidate with the most campaign money wins.  All sides of this should be ashamed.  Just sayin’.  This is not how democracy is supposed to work!

Also, I have to mention that the following mass email is mis-leading.  Not counting Super PAC’s, Barack has out raised Mitt in May $38 million to $22 million.  This is, indeed, a smaller margin of difference than in previous months, but still remains.  I also want to mention that I have received very similar emails from the Romney camp.  All I can say is that I miss Buddy Roemer!  Can anyone else hear our forefathers rolling over in their graves?

 

David —
I will be the first president in modern history to be outspent in his re-election campaign, if things continue as they have so far.
I’m not just talking about the super PACs and anonymous outside groups — I’m talking about the Romney campaign itself. Those outside groups just add even more to the underlying problem.
The Romney campaign raises more than we do, and the math isn’t hard to understand: Through the primaries, we raised almost three-quarters of our money from donors giving less than $1,000, while Mitt Romney’s campaign raised more than three-quarters of its money from individuals giving $1,000 or more.
And, again, that’s not including the massive outside spending by super PACs and front groups funneling up to an additional billion dollars into ads trashing me, you, and everything we believe in.
We can be outspent and still win — but we can’t be outspent 10 to 1 and still win.
More than 2.2 million Americans have already chipped in for us, and I’m so grateful for it. As we face this week’s fundraising deadline, can you make a donation of $3 or more today?
Every donation you make today automatically enters you to join Michelle and me for one of the last grassroots dinners of this campaign — today is your last chance to get your name in.
These dinners represent how we do things differently. My opponent spent this past weekend at a secretive retreat for the biggest donors to both his campaign and the super PACs that support him.
I’ve got other responsibilities I’m attending to.
Donate today to stand for our kind of politics:
https://donate.barackobama.com/June-Deadline
Thank you,
Barack

94% chance that Barack Obama will win election. Reply

94% of the time, the winner of presidential, congressional, or senate elections are won by the runner who has raised the most money for their respective election bids.  This is not a piece that discusses the merit of Obama being a two-term president.  This article is to discuss the absurdity of this fact.  Do we as a nation accept this?  Is it ok that the fate of our nation’s elected officials depends on their ability to raise campaign funding?  Also, are we ok with the fact that the money being raised has become so utterly ridiculous?  Barack is pushing $140million dollars in funds raised by his campaign as of the last reporting date.  Mitt Romney looks like he is on his way to securing the GOP nomination and is coming in second in fund-raising.  Weird how that works.  The leading candidate for the GOP has raised the most within that competition?   He is pushing $64million and starting to feel comfortable with his lead.  Now, it is obvious that as GOP candidates start dropping out of the running much of the money that has yet to be raised will funnel to that candidate or candidates still remaining.  They will push higher up the ladder, but if you look at combined totals for the entire GOP race, they still don’t come close to Obama’s totals.

As a nation we are becoming more and more frustrated with the fact that corporations are controlling legislation.  Companies are now considered people.  Super PAC’s allow for unlimited fund donations.  If there is only a 6% chance that your favorite candidate has if he is not the leading fundraiser, what would compel you to vote?  Consider a guy like Buddy Roemer for a second.  Those of you who do not know who he is, you are in the majority.  He has taken the road less traveled.  He only accepts donations of $100… no more.  He will not accept Super PAC’s in his name.  He is a former Governor of Louisiana and Congressman.  His qualifications are impressive yet he got absolutely no love from the GOP.  He was running as a Republican but couldn’t get in a single debate.  I’ll let you decide if it was a “conspiracy,” or not but you should know that he was beating both Michelle Bachmann and Rick Perry while they were still in the running and they were allowed in the debates.  Are we really saying that a guy who stands against Big Money contributions isn’t even allowed in the game?

It just further alienates the voting public.  The vast majority of America does not contribute to campaigns and they, sure as hell, are not going to donate the amount of money that makes a real difference in a $140 million campaign.   If you are a supporter of Obama, this should infuriate you just as much as the guy who supports a GOP candidate.  Why?  Obama ran in 2008 campaign on the platform that he would end Lobbyist influence in government.  To date, he is the leading beneficiary of Lobbyist bundling.  This means a lobbyist comes to him with a pile of donation checks in “bundles.” You may believe in his ability to change for what you want, but you cannot agree with the idea that this is good for our country.  In no way is it helpful that lobbyists gain more control of our politicians by encouraging this type of campaign funding.

Bottom line: If you are not voting for Obama, you have less than 6% chance of being happy.  Worse yet, if several of the GOP candidates hold on to the very end, you have less of a chance that the money will be funneled into your favorite’s campaign, ie. less chance of catching Obama in funds raised.  I am NOT anti Obama, Newt, Mitt, Rick, or Paul, but I am very against the idea of vast amounts of money deciding the election.  There is no other way to look at it, our country is very much for sale.  Good luck Republic.