Made for TV President

This week it became very apparent that this administration is going to be like none before it. They were everywhere you looked and throughout it all they still didn't answer any of the key questions holding back our economy.
First, they have yet to answer on the banks. It is simply a matter of how much regulation is the administration going to try to impose. We think it is quite apparent to everyone involved that greater government regulation would lead to a returning of TARP funds en mass. This would then remove some $250 billion from an already restricted credit market.
Second, how are they going to get people to invest in these Public/Private partnerships before they announce their intentions in regards to the bill passed by the House. This new form of securitization will have a hard time getting off the ground without some iron clad guarantees that the government would indeed stay within the bounds of the constitution.
Lastly, how do they get some of their credibility back. They denounced the bankers for the amount of leverage they were using, but then propose a plan that is based on a 6 to 1 ratio. By allowing the participants to have most of their stake on margin, buying the riskiest of assets with borrowed money. Wait a minute though, because the government had to borrow the funds to lend to the participants. Finally why participate if the money you make is going to be given to the government through taxes?
Back to the original point, all that time on TV looked good but really failed to accomplish much of anything.

Are you kidding?

It looks as though we are getting exactly what we were asking for in our new administration. All sorts of rhetoric, political posturing and fantastic sound bites.
Two months in and our administration is yet to lay out any detail in their plan to stabilize the financial system. One way would be for them to stay quiet, as each time they speak, they appear a little less competent.
Does anyone remember the flack the automobile executives took when the first testified on "(The Hill?" The irony is, they were given a few weeks to come back with a detailed plan how they were going to survive. Anyone that operates successfully in business, knows you need to be able to access the situation, determine a viable solution and then execute. This is how business evolves. This is how innovation happens.
The issue with our administration is they apparently can't even read financials and understand them enough to identify a companies compensation, which is in plan english in the SEC filings. How most Americans with a television could have known about the bonuses, but the men in charge didn't, is baffling.
Finally, where was the "watchdog" Joe Biden? Wasn't he touted by our President as the man who would make sure there was no waste and or funny business? When you look at the failings with AIG, Fannie and Freddy and add it to all the special projects and pork in our "stimulus plan," one would have to wonder exactly where Mr. Biden has been looking and what has he been doing?

Doing a good job?

Yesterday, during his tour of California, President Obama stated the Tim Geithner was doing an outstanding job. What? This assessment would have to make anyone step back and wonder, "what is he talking about."
In most jobs around the country people are rewarded when the job they do results in an improvement in that organizations position. In this case, each move Mr. Geithner has made has had just the opposite affect.
Now maybe the President isn't talking about the same "good job'" the rest of us would think of? He may just be impressed that Mr, Geithner can keep a straight face when he talks, thus making it seem like the administration is serious about it's business.
Here's a question for business people out there. If you were a new public company looking for a leadership team, does this sound good to you? Chris Dodd, Tim Geithner, Joe Biden, Nancy Pelosi, Barnie Frank and Harry Reed? Exactly, at least you would have an inside track to government money.

AIG Surprise?

It was fascinating last night to see all the reports on the AIG bonuses. Has nobody been paying attention? Take a moment and think about who is involved, Senator Chris Dodd who accepted the most AIG money out of all the politicians in Washington. He is the Senator who coincidentally put the provision that protected the bonuses, into the "Bail out Money" restrictions. You have President Barack Obama, who accepted the second most. Finally look at Timothy Geithner.
There is no one else in America with such a poor record over the past 18 months. From the collapse of Lehman Brothers, the hasty combination of Bear Sterns and JP Morgan Chase. The complete bungling of the Government take overs of Fannie, Freddie and Indy Mac just to name a few. To know that the President is counting on Tim Geithner speaks volumes about his intentions. Can you imagine leaving your business in the hands of someone who doesn't even uncover the executive pay packages, which spelled out these bonuses, during his " due diligence. Can you imagine how fast someone like Sandy Weill would have found those? Probably as fast as they could get out the words, get rid of them."

No Talk is Good

The last week was very interesting in that it showed the less talk that came from the White House and Congress the more confident the rest of us became. Up until this point every time someone from the new administration has spoken, confidence has eroded. With a quiet administration this week, many of us had gains in our retirement plans, college funds and bank accounts. Here's hoping for another quiet week, which we hope will start today with uneventful Sunday morning politically theme shows.

Congress Shorting the Market?

It actually dawned on us the other day, that when we talk about transparency, we should also be talking about our congressmen and Senators, too. As they are crying out for the folks at Merrill, we think it would be prudent to be able to see the portfolios of our elected officials to see how many are "short" the market?

Until this point it has been obvious that Bernie and his crew are not fans of banks, well actually any financial company. This is most ironic when you consider most of the hypocrites have the same position now as they did when they were overseeing the creation of this mess. It would be interesting to see how many of them were long the market as they were encouraging the idea that every American should have a home and how many are now short the market. Old fashion market manipulation at it's finest.

We can all see clearly that the agenda now is not "fixing the economy," but rather leveraging it to gain on their personal agendas. Why else would the stimulus package be 1100 pages long and have passed before anyone could read it all. From what we have seen from Joe Biden, the man in charge of making sure there are no earmarks, it would most likely take half of his term just to read it and the other half to figure it our.

Well the good news is we are now spending $8 billion on a high speed train from Disney to Las Vegas, which is probably an obvious top priority for America. Good job Boys and girls...

What Power?

All eyes will be on Tim Geithner today, as he unveils the much awaited plan to handle Banks "toxic assets." What Power? To think that since taking office in January, every time a member of the Obama administration speaks, the market plunges and with it goes consumer confidence.
When are we going to see the confident, effective leader we were promised back in November. The irony is that raising taxes on the wealthy may actually take some of the luster off being a short term short. An unintended consequence of the error in policy could actually be a ignitor for long term value...