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  • A Round Of Applause For The Do-Nothing Congress [Edit or Delete]1 comment
    Apr 17, 2012 1:18 PM

    The leftist chicken little 'small government' gloomers on various blogs like BusinessInsider, Zerohedge and Huffingtonpost that tried to front-run the latest imaginary 'global slowdown' have been taken aback by this huge rally. The blowout Alcoa earnings is a lot like the Citi earnings report back on March 9th 2009 when against all odds Citi turned a profit for the first two months of 2009. These earnings in one fell swoop it put to rest all the dire fears about crisis and global contagion. The DJIA rallied over 500 points that day, kicking off one of greatest bull markets ever - one still rages higher to this day. That's what's happening now with the DJIA up 350 points in just five trading days, all stemming from that Alcoa report.

    Kicking the can down the road is good policy and in retrospect these band-aid solutions have proven to be quite effective. Programs like TARP, TALF, EFSF, QE, 0% interest rates have exceeded the loftiest of expectations; TARP posted a profit in April 2011 and there's no evidence of capital shortfalls or banking relapse. The do-nothing congress deserves a round of applause for doing such a great job since 2008 promoting pro-growth policy while not capitulating to leftist whims of the blogs and dissent groups like OWS. Plunging congressional approval ratings is paradoxically a sign of effective policy. The bank bailouts were a runaway success, even though no one outside of Washington or Wall St. supported them.

    An example of congress putting the economy ahead of public sentiment is how the Buffett Rule, supported by 60% of Americans, died in the Senate. Or Obama being forced to extend the Bush tax cuts to extend unemployment benefits. Risk taking, bonusses and leverage returned with a vengence. The 2008 crisis may have been squandered, but no one Wall St. is losing sleep over 'hidden systemic risks', refusal to learn lessons, or pain at the pump. The public doesn't always know what's best for it. The public wants social safety nets, cheap gas, welfare, high taxes for the rich, and job creation. Policy makers want economic stability, low taxes, strong profits & earnings, homeland security, and a constantly rising stock market; the later helps the economy and creates wealth, the former doesn't. Things like job creation and affordable housing & rent will have to be postponed indefinitely while stocks and profit margins keep making new highs.

    The economy is fundamentally sound. We've had 14 consecutive quarters of blowout profits and earnings for all sectors. The S&P 500 has doubled since March 2009 and PE ratios as still just 13.

    We're going to have more wiretap, more TSA, more buy all dips, massive increases in healthcare, insurance, and tuition costs, pain at the pump 2 the extreme, huge inflation in food prices and pretty much anything that is indispensable. The streets will be riddled with potholes and debris form neglected infrastructure spending. There will be traffic jams as far as the eye can see. Huge lines for food stamps and unemployment benefits. Sporadic breakouts of unrest from the growing masses of the economically disenfranchised. The government will play an increasing role in the lives of Americans from heightened enforcement of tax compliance, increased police presence, prison proliferation, and surveillance.

    Even if the job market sucks the economy is doing great. We've become a nation of crybabies looking for handouts and wanting crisis and recession. Sometimes in a free market you need lower wages and more productivity, for the gains to privatized and the losses socialized because when the 1% does well, the gains sometimes trickle down to help everyone. The lesson to job seekers is to improve your skills, rather than complain about Washington, the Fed, or the rich. We need to learn to embrace structural unemployment, pain at the pump, and deficit spending.

    The 2012 target for Initial Jobless Claims is a retest of 400,000 and for unemployment to rise to 9%, just in time for the election. The DJIA will hit 14,000 and gas $4.30-$4.50 nationally and oil $120. Even a worsening housing market, perpetually bad labor market, surging oil & gas prices won't put a dent in the bull market provided that exports, productivity, consumerism, and profits and earnings keep doing great (which I know they will). The liberals predicted consumers would curb spending in responce to record high gas prices and there's zero signs that has happened, proving yet again that I was right.

    Romeny will win in a very narrow election due to sudden spike in unemployment, increased Iran tensions, massive rally in oil prices, and extreme pain at the pump and once in office won't be able to fix any of those things, except possibly declare preemptive war against Iran, in which case gas prices may eclipse $5/gallon where it will remain. All the hype about job creation incentives, energy independence or drilling will fail to make energy more affordable or put people to work. Companies won't hire until the cost analysis models deem it necessary, and rest assured that productivity constantly rising it means employers can steadily increase output without new hiring. The only way pain at the pump will abate is in the extremely unlikely event that the global economy falters and stocks fall. Crashes like in 2008 have proven to be exceeding rare, and five years from now the liberals will still be waiting for that next shoe to drop or for the consumer to finally be 'maxed out'.

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  • Now for the facts:
    President Obama promotes a European style nanny state. Where government spending and regulations are source for controlling economy. Silly them, it does not work for the Europeans and it will not work for United States.

    The economy is stagnant because President Obama and his Democratic controlled Congress shoved down the throat of citizens and the businesses that employ or once employed them, economy choking Dodd-Frank & Obamacare Regulations.

    Note that businesses and citizens are sitting on record amounts of cash, that they would love to put back into the economy as they always have when the government is not controlling how they will do so. This is not rocket science, it is human dignity of freedom and the brilliance of citizens.

    President Obama philosophically believes in BIG GOVERNMENT and little citizens. This country was built on the philosophy of BIG CITIZENS and little government!!

    You decide:
    Nanny Entitlement State or Empowered Citizen State
    1 Jun, 04:22 PM Reply Like
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