2/12/11…the enemy camp

(Before we start let’s discuss yesterday’s market which was bad  for bonds and other living things but spawned a stock market rally…heck, even Egyptian bonds rallied and gold closed lower. Yesterday’s volume was 880 million shares, lowest since 12/31’s 592 million share day (pre-holiday). The Dow was up 96 points at the high of 12,188 but had to settle for a 69 point gain. But what about Transports? Even as the Dow keeps putting in new rally highs, they are lagging (if the economy is roaring don’t we need to ship goods? Apparently not). They peaked on 1/18, plunged on 1/19 and have been in a narrow trading band ever since, and after plunging below the 40/50 day m/a‘s on 1/19 have not gotten back since. This is a very strong caution side as according to Dow Theory they MUST confirm the Industrials strength…if not we are due for a sharp correction…and that is what TB believes too…faux rally on faux facts.

More and more is coming to light on the weak payrolls data last week and how the reason for the decline in unemployment to 9%  (while the broader data including discouraged workers and part-timers surged to 17.6%). None of it is good, benchmark revisions, etc. Good luck! The brightest spot was college grads who have a 4.2% unemployment rate…but what jobs did they have to take? How many are working one or more part time jobs with no benefits??? TB

…last year when Obama chose West Point as the venue to give his speech on sending additional troops to Afghanistan, he was met with a chilling reception. In the on-air analysis afterwards, Chris Matthews said, “he may have chosen to deliver the speech in the enemy camp,” meaning that he has been disliked by most of the military…the Bush supporters who didn’t like him due to his stance on ‘don’t ask don’t tell’ and Gitmo from the get-go. The far right however chose to ignore the operative words “he may have chosen” and instead blasted the internet with saying he called West Point ‘the enemy camp.’ Such is the way the ‘news’ is delivered today.

Also from the get-go, the U.S. Chamber of Commerce has been hostile to Obama with caustic comments as they have a right to do. Sooo….yesterday, he went to them to give a speech on eliminating regulations which were bad for business and growth. It also received a ‘tepid’ reception. Meanwhile Representative Darryl Issa (R-CA) delivered a list of 1,000 complaints from businesses on regulations they want repealed. Interesting timing, that.

Yesterday, TB had lunch with an economist friend and we discussed this. First, how do these regulations come into being? Did some whiz in D.C. come up with hey, this is a good way to give them more paperwork and increase government employees to insure they are doing so? No, regulations come as a result of dangers created by businesses, but as Obama said, some go to far and are negative. The problem is that one does not bargain successfully from a position of weakness…and that is how it came out.

He tried to tell them that business and government need to work together for the common good to create jobs for Americans. You cannot tell CEO’s to create more American jobs when it costs the company earnings…never mind the obvious long-run implications as the CEO’s compensation is not based on forward planning but quarterly and annual results. THAT folks is precisely what is wrong. We have CEO’s making 500 or more times what the average worker in their company makes and they truly believe that without them things would not happen.

Second, if we can’t recall why Glass-Steagall and capital requirements were required by banks then we learned absolutely nothing from the crisis we just endured and the banks are setting up to happen again, or from the BP oil spill…they saw those regulations as needless…until disaster happened…then they tried to spin it that it was unavoidable.

How many times here has TB discussed the Koch brothers, who may be tied for the 28th wealthiest Americans, own Koch Industries, a conglomerate which operates oil refineries, owns Stainmaster carpets and makes Brawny paper towels among other things in what is the second largest privately-owned company in America, behind Cargill. They are staunch libertarians and for those of you who don’t know, funded the Tea Party (you should be able to see who you are rooting for…as they are not looking after your interests!). They believe in minimalist social programs, are the biggest polluters and have huge numbers of OSHA safety violations, preferring to pay the fines than fix the problems. To the Koch’s and many other billionaires, the right tax rate is zero…now think what would have happened without taxes less than three years ago. There would have been no Fed, the banking system would have collapsed taking the global financial system with it…but your taxes at work…not Dimon’s brain, or any of the other whiz kids who put us in harm’s way…saved us so we can sit over wine and argue whether they did the right thing. As for unemployment benefits, they would never have been extended…to which the tea baggers cite that people don’t look for jobs until their benefits expire…horse manure in an economy like this one! You won‘t hear this on FOX News. If you must rely on MSNBC or FOX, because one or the other mirrors you beliefs, try getting the story straight by listening to more than one source (and folks Al Jazeera is not the organization it used to be, it is more like the BBC…and even Huffington Post, now owned by AOL, is opinion – not news!). Democracy requires an informed electorate to thrive..and we are the most content-overloaded, yet brain dead people on the face of the earth…maybe TB should have written that on Facebook? It isn’t all about US…think about it.

Those who  also proclaim to know and understand the Constitution frequently don’t. Michelle Bachmann in her response to Obama’s SOTU said that Washington and Jefferson were against slavery, both owned slaves…nary a mention of her (GOP) party’s founder Lincoln, who was the stalwart opponent yet even he said that if keeping slavery would prevent civil war he would do that…of course it was too late at that point, the lines were drawn.

Back to those pesky regulations…funny how the NRA insists that you should be able to carry a bazooka if you like. Consider the time when the Constitution was written. We had no standing army, many were opposed to us having one and most saw no need for a navy. Could they have foreseen weapons with 30 or more shot clips? How many shots do you need to stop a burglar? Oddly though it takes just one from an unlocked gun to kill a child. When TB was in law enforcement he learned that the odds of a weapon killing by accident are much higher in inexperienced hands (and TB would argue most of the guns are), than by aiming it.  TB has no problem with owning guns…just in being trained in their use and storage.

They also had no idea about jet or even air travel when they decreed that anyone born in America is an American citizen…even if their parents are here illegally.

So the Constitution is an imperfect instrument…but it is perfect in it’s simplicity allowing times to change, but just as radical muslims oppose all modern changes, so do strict constructionists.

Two errors yesterday were pointed out by readers. First, in the title TB spelled Dimon ‘Diman’ which occurred due to thinking of Di Man, etc. The second and more important was that Maburak was worth $70 million…no, as two readers corrected him…that is BILLION…much of which came from required kickbacks to do business with Egypt…bet Lockheed Martin was one of them…a violation of yet another pesky regulation, right?

How can any man subject the majority of his people to poverty while building an empire of  $70 billion? Ask the Koch’s as they are worth much more.

One reader and friend said Mubarak should go immediately…which would be a good thing IF there was one true leader in the opposition…there is not and this could open the door for more ‘radical’ muslims to seize control…or a government where the people don’t even know the agenda…oh well, we never know the true agenda of our government leaders either, do we?

In the meantime, Mubarak’s government has managed to ‘isolate’ the opposition so that they are surrounded by tanks who are protecting them (?), but momentum is waning.

A parting comment: is Google making a big mistake being proud of an employee who takes credit for starting the uprising? Will this create problems for them in other countries…dare we say China?

Have a great day!

TB

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1 Comment »

  1. I agree with you that the disparity of salaries at the top and those in the middle and bottom has gotten HUGELY out of line. I’m not sure was the fix is (shareholders??) but government intervention/regulation is, for sure, not the solution. Less government is almost always the best answer.
    On another point, you may have hit on a good solution on how to eliminate the Fed — eliminate taxes. That almost a great idea.
    Hope you’re not freezing your butt off. It’s in the 80s in sunny southern California. Ron

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