Realty Check

Over the past few weeks, it seems as though the American people have started to rethink Team Obama. The excitement at the beginning of the year, with the talk of change and progress, has been subsiding and being replaced with skepticism. Just as we found out with the kid who promised more recess and a pool, while running for Student Council, we are finding Obama to be mostly promises with little substance.

The economy is showing signs of recovery and slow growth, even though only about ten percent of the $787 billion stimulus has actually been spent. The money that has been spent, really had nothing to do with job creation and more to do with "pet projects" that otherwise would not have been funded.

health care reform looks to be more of a test of political power than anything to do with the protection of the uninsured. The administration is looking to spend over one trillion dollars, we don't have, to create a bureaucratic nightmare. If you really wanted to lower the cost of health care you would look at limiting lawsuits being filed against doctors. The real reason doctor's order "unnecessary tests" is to cover their asses, not profit generation. This would be tough for the Democrats, however, as it would anger their attorney base.

Talk to any small business owner, who is already dealing with a recession, tougher credit, and increased taxes about the health care reform and they will tell you it is going to shrink their payroll. It doesn't matter how low the cost, it is still an added expense many can't afford.

Lastly, it appears we are all taken aback by the obvious attack on capitalism. The American dream to work hard and be prosperous, is being threatened. The administration is looking to limit profits on financial companies, oil companies, Health Care providers, pharmaceutical companies and the list goes on. Now if you limit how much I can make, then you limit the taxes I pay, thus limiting your own income, which actually needs to increase by the trillions to pay off all the spending. No wonder we are getting skid dish and approval ratings are nose diving. These are our thoughts we look forward to yours...

Stress Test??

There was a statement made over the past couple of days, as the administration continues to delay announcing the results, the economy has started to show signs of recovery. Last week the unemployment rolls decreased for new claims for the first time. More and more economists are talking about the economy showing some strengths, at the same time traders on Wall Street are using more and more positive language.
Popular opinion would say that the Banks should have gone down after the leak about Citi and Bank of America possibly needing to raise cash, but the gained on Friday. Over the weekend it was leaked that they both may need up to $10 billion in additional funds. Once again the stocks rallied on the news. When you take into account that unemployment is a lagging indicator and the rolls seem to be stabilizing, then it only makes sense that the Banks will be able to start putting away less in provisions. Every dollar that doesn't go to provisions, in turn is added directly to the bottom line. More money on the bottom line allows for greater capitol ratios and more money to lend. Provisions are paid forward, so when you. Think that the Banks will have six months to raise the funds, it would be possible for them to earn their way there through the little mentioned point for being in business, revenue.
When you look at the tardiness of the stress tests it is hard to make any argument that they will be at all relevant. Luckily for the networks the press release will make for good headlines and give the "experts" something to talk about.

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.

Nationalization

The scariest part of the last week, has been to see a team of leaders, who the American People are counting on, make misstep after misstep. The biggest one would have had to have been the waste of time congressional hearing with the eight CEOs from the most important financial institutions in our country.
The fact that the committee, who most obviously don't have more than a third grade understanding of business, thought the best use of this opportunity would be to have each member take five minutes to have an individual sound bite for their local news. If they understood anything about business or the economy, they could have had an old fashion business review. The same type managers and CEOs complete on a regularly basis, to their superiors. The stress test would be complete and the American People could go to bed at night, at least knowing the details of what we face in our economy.
The problem with this method is that what would they do with this information. Isn't this the same group of people who have spent decades trying to figure out Health Care, Social Security, Education,etc and so far flunked in each attempt?
Finally thank you Rick Santelli for throwing a bit of reality into the discussion. What is being lost and not talked about is that there are a good many of us who are better off now than a few years ago, who saw this coming and saved to have funds available to take advantage of the economic turn, but are hesitant to do anything, because if we go nationalizing banks and socializing our country, we will be moving to another free market country.

What is he Thinking

We have to marvel at what is going on in the first twenty days of the Obama administration. For a man who ran on the whole concept of change in Washington, the only thing that seems to have changed is his stance. For anyone that read his book, "Audacity of Hope," this is no surprise.
In his book he talked about the way to eliminate corruption in politics, was to make everyone take public finance, to limit the amount of money any candidate would have to use and everyone would be on the same plane. Of course he was the only national candidate to refuse public financing. Way to go. I guess than it should be of no surprise that his nominations for cabinet posts are people who cheat on their taxes and accept, gifts that may appear to be questionable. Well so the guy has a lack of judgment when it comes to who he associates with.
What seems to be of more concern is the fact that he is filling all off the positions with politicians and lawyers. Not one person from business, the cure for the economy for these folks is to fix the environment, spend money on projects that won't create a job for at least eighteen months, and really will do nothing for the housing crisis. This would be like a family on the verge of bankruptcy borrowing money to get a new lawnmower, some fertilizer and spending time to clean up the yard. Hell they could just go look for employment elsewhere.
Now the real kicker is that while these fine individuals are racking up debt for our children, the economy is showing signs of turning. Yes indeed very early signs, but signs none the less. By the time the new package creates a job, unemployment will probably be down and we will have trouble filling it. Well just a few things to think about.
Oh one more thing. How can people be surprised that the government spent $350 billion. Without any accountability attached? Has there ever been any accountability with any money our government has ever spent?

It’s the economy…

As I read through the news of the election and what is happening in both camps, today there seems to be a leaning toward Obama because of the economy. For me it is a lot simpler than most have made it seem. The election is going to comes down to whether you believe the “Free Market’ will fix the economy, or do we need the government to step in and create more regulation and exert more control. Voters will be balancing their wishes in regards to a their desired outcome in Iraq, with how they are being affected by the economy.

Believe it or not some people are better off now then they were a couple of years ago. They either work in a growing industry, live in a growing community, or are the best at what they do. Look at major league ballparks this summer. There doesn’t seem to be any drop off in attendance. These are the same folks, however, who may to be busy to actually be involved in any of the polls.

Something to think about…