Even the WSJ thinks Obama is running out of people to blame

Check out this article from yesterday:

Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it’s become clear that Mr. Obama’s policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence — and thus a longer period of recession or subpar growth.

Yes, folks, we were ahead of the curve on that one. Could it be the rest of the world is noticing?

It seems very reasonable to me that America recognized a Democrat would be elected early into the campaign season. When he closed in on the Democratic nomination, those who trade started to walk away. That profit taking created market capitalization holes in balance sheets causing asset write downs. The whole decline quickly spiraled out of control.

I wonder if that’s how history will see it someday.

Comments

  1. …and today the market was almost 50% lower from its May 20, 2008 level of 12,828!

    Not the change I hoped for. How much longer until 2012?

  2. J. Strupp says:

    That seems reasonable to you Cindy?

    Give me a break.

  3. Kathryn says:

    Has anyone considered that with the vast market holdings of union pension funds, 401ks, and employee stock purchise plans we may already have achieved worker capitalism in this country? In which case, those who trade would be pretty much everybody.

  4. Indeed. One of the unintended consequences of waging war against Wall Street is that you’re punishing most of America’s taxpayers.

    He’ll figure that out sooner or later.

  5. Kathryn says:

    Could also be the reason he isn’t nationalizing a la Strupp AND isn’t letting them collapse in a free fall. We may be running away from them in droves, but we’re still going to need them. Populist opinion would have us out of the fire and into the frying pan.

    Barring complete social collapse and the return of the dark ages, it does look like a good time to buy GE. 🙂

  6. It is very tempting out there, isn’t it?

  7. J. Strupp says:

    Ah geez good idea. Jump all over it.

    Just let me know how that $6.67/share looks when GE Capital is looking to Uncle Sam for capital injections sometime in the next few months. Even if their position is as good as Immelt says, (which it isn’t) you don’t think Wall Street is gonna keep beating on GE like a “financial” until they know damn well their Capital div. is on the up and up?

    Hey like I said go ahead and jump in. What do I know.

  8. J. Strupp says:

    If you don’t fix your banking system, you have no chance of recovery. This has been proven over and over and over again. There’s no point in looking at low P/E’s until the financial system is properly repaired because future earnings growth will be seriously impaired throughout the economy.

    Until that happens, stock picking based on corporate data is a waste of time.

  9. Cindy –

    “One of the unintended consequences of waging war against Wall Street is that you’re punishing most of America’s taxpayers.”

    The total amount of Americans paying taxes has been going down. That’s a big problem because we now have a large group of people that doesn’t pay, doesn’t care, and won’t be complaining. One of the things I come to understand during the election campaign and aftermath is the alarming amount of persons that have no basic understanding of civics, economics, the amount of taxes they pay or don’t pay, entitlements and their cost and effect on their personal income. We truly live in a time when it is possible to fool the majority of people all of the time.

  10. J.–agreed on fixing the banking system. From my perspective, lacking any of your education on the topic, everyone seems to agree that we have to fix the banking system. What’s lacking is agreement on how best to do that. Why DOES Obama say our system is different from Sweden’s?

    As for GE, a share costs about as much as a fast food lunch. You don’t have to bet the farm on it. They are claiming capital to back up 70 percent of their long term debt. They have some good products, including a medical imaging system that leaves the competition in the dust (ok home town plug there.) If you can afford to wait it out, what’s not to like?

  11. Part of me thinks a depression would be exactly what this country needs. Those who have positioned themselves to “survive” it will do just that. Those people are educated, hard working, and contribute to society. The people who will be hardest hit will be those who are leeching from the system. Perhaps a sharper downturn in this country will ‘knock some sense into those people.’ After the dust settles, traditional American resolve will be present, the hardworking contributors to society will be down, but not out. Check out what this ancient book has to say, I think at one time it was a best seller:

    Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house; YET IT DID NOT FALL, because it had its FOUNDATION on the rock. But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.

    (My emphasis put on a book more people need to be reading! That’s the Bible folks – Matt 7:24-27)

  12. Oh, Dan. Read the rest of it. We are responsible for one another.

  13. J. Strupp says:

    Kathryn:

    If you can wait this out, I can agree with you. But in the long run………. 🙂

    Dan:

    I think that there might be something in that same book about the virtues of helping your fellow man in times of need. Not sure though 🙂

    I don’t want to generalize too much, but your opinion that we should force depression on society in order to let nature run it’s course is slowly becoming the new doctrine of the Republican Party I fear. This premise assumes that letting our economy collapse (and therefor the world economy to collapse) is somehow a more healthy alternative than using the resource of government to provide a more orderly correction during the necessary restructuring process. To be sure, I’m not in the camp that believes recessions can be avoided (cyclical recessions) but I strongly believe that structural economic shocks, like the one are currently facing, can be moderated by a sound combination of economic stimulus and financial restructuring. If we can get this thing right, I think the global economy can find it’s footing and begin the slow process of recovery….productive recovery. If not, one only has to look at the pain and suffering Japan endured for the better part of the 1990’s (and is enduring once more) to see what we could face in the future if we don’t get this thing right. We most certainly won’t experience the pain of the 1930’s, but would 10 years of lackluster growth, double digit unemployment and steadily falling wages feel much better? To be sure, our economy will recover in the long run, regardless of what we do as a nation. But why take the long road in order to,”knock some sense into those people”. I’m not willing to pay that kind of price especially when we CAN do something to prevent this worst case scenario from becoming reality.

  14. J. Strupp says:

    Kathryn:

    Regarding Sweden. I’m not sure what Obama is talking about either. He says that the Swedish crisis is not like ours because the Swedes had to only nationalize a few banks compared to our thousands of banks. Last I checked, the vast majority of the toxic assets (over 65% depending on what reference you use) are possessed by the 4 largest banks in this country. So doesn’t that mean that we only have to…..um…..nationalize a few banks too?

    Bottom line: The Obama Administration is scared to death of temporary nationalization. Every Jim Cramer in the world will be falling to their collective knees screaming socialism.

    I say so what. It’s the right thing to do. And when those same Jim Cramers start seeing improvements in the equity and financial markets (long run), they’ll finally understand that short term nationalization was a long-term solution for the taxpayer, equity markets and the global economy as a whole. Rather than the the corporate welfare garbage we are currently using to prop up bankrupt banking insitutions and the subsidized equity holders that supposedly “own” them.

    You’ll see. We’re going to be forced take this step sooner or later. Let’s hope sooner.

  15. Why does the Bible draw such a clear distinction between Wise and Foolish then? If people out there are living beyond their means, that is foolish. I’m living within my means and saving money, that is wise. So because Im wise, I should make a point to further the fool’s agenda? I agree I can care for that man, but I doubt the Bible means that we should enable the foolish.

  16. Kathryn says:

    I can’t disagree with what you’ve said there, Dan. We aren’t called to enable the foolish or the slacker. We are still called to give him a hand up. Scripture is full of paradoxes. Sometimes the foolish man is the one who has made reasonable preparations for his present security, while the least and the last are invited to the banquet.

  17. J. Strupp says:

    Tom Hoenig, CEO of the Federal Reserve Bank of Kansas City. The single most compelling case for what needs to be done to fix our financial system (and lay the foundation for economic recovery).

    President Obama should be hanging on every word:

    http://www.kc.frb.org/speechbio/hoenigPDF/Omaha.03.06.09.pdf

  18. Obama (heretofore referred to as “TCO” or “The Chosen One”) doesn’t listen to guys like Hoenig. This destruction of wealth, I believe is intentional. The rapid slide into Socialism we have seen in the last six weeks and the increasing numbers of unemployed who now go on the dole point to a concerted effort on the part of the administration to destroy wealth to restore “fairness”. The Left has, thus far been successful at making this another, “it’s Bush’s fault”. The MSM proclaims how wonderful TCO is, but barely a word on his relationship to the stock slide. I believe thorough investigation will prove the intent here. I jsut don’t know that anyone will do it.

    But what do I know?

  19. Steve –
    -The Chosen One
    -“The destruction of wealth”
    -socialism
    -destroy wealth to restore ‘fairness’
    -The Left
    -The MSM

    Are you sure you are not Sean Hannity?

    I don’t think the solution to the problem is using buzz words from Fox. I’m a conservative too, but 4 years of name-calling (even though it worked for the Democrats) isn’t going to help us out in the long run.

    Like EVERYONE’s mom said:
    If you can’t say anything nice, don’t say anything at all.

    Cheers.

  20. Tinkerbell says:

    Strupp, Thank you for comment 17, the link to Hoenigs’ financial-fix recipe. I personally believe that Obama does NOT want to fix the economy. I personally believe he wants to encite chaos, disorder, and panic. I personally believe he wants to do this to gain control.

    I see local financial institutions refusing to take a share of our future generations’ money to shore themselves up now. I will be opening an account at Johnson Bank to thank them for their integrity in this matter. We each need to look for things we each can do, in addition to blogging as a reality check. Plan a veggie garden. Buy a bike. Learn some self-sufficiency skill. Teach others. There are local charities and non-profits accepting volunteers. If enough of us help people in these ways, the government will not need to step in. Plus we learn something from each person we meet.

    My question of the week revolves around Obama’s love of his blackberry. Who is he communicationg with? Who can make his communications public under open records law?

  21. Dan: Since I don’t watch Fox or listen to Hannity, I guess you don’t know what you are talking about. I’m not making an ad-hominem attack (remember Bush=Hitler?). I’m calling it like I see it. The trend is there. TCO’s words are there. It walks and quacks. I’m calling, “duck”.

  22. That’s nice you are calling it like you see it, but articulate without using “right wing talking points” and I think your argument goes a lot further… Oh and just because you are comparing Barack to someone nice, “TCO,” (read: Messiah, Savior, Jesus) doesn’t mean its not an ad hominem attack. Is ‘the left’ calling Bush “Hitler” that much different from you trying to discredit Obama by calling him “The Chosen One” sarcastically. Wrap your brain around that. Im going to go study the brain. Peace out.

  23. J. Strupp says:

    Steve:

    I agree that Obama is not listening to guys like Hoenig. However, I have no doubt that the vast majority of GOP leaders would think Hoenig is nothing more than a socialist trying to repossess the American financial system (even after you tell them what his job title is).

    With all due respect, whether the topic is the financial crisis or it’s the stimulus package, the GOP is a nothing more than the party of “no”. Somehow, they have suddenly adopted the idea of fiscal restraint into the teeth of a major recession and can offer nothing more than excerpts from “Atlas Shrugged” as justification for opposing much needed government stimulus. This insane economic policy appears to be some sort of quasi-Hooverism as this nation (and the world) attempts to deal with the same debt deflationary conditions we experienced during the 1930’s. If anyone has some insight into what the Republican Party is bringing to the table these days (without regurgitating some passage from a fictional book that is) I’m all ears. I’m serious on that.

    There is no doubt that Obama has made some big mistakes. But I do feel comfortable in saying that at least the guy has some resemblance of a rational response (in the form of government stimulus) to the current crisis. Hopefully the President learns from his recent mistakes and finds a way to get the ball rolling again but that’s going to be pretty difficult when the other side of the aisle appears to be completely void of any real substantive dialog on this issue.

    Please…..someone articulate the Republican policy in dealing with periods of systemic financial crisis, coupled with severe global economic deterioration.

  24. Mr. Strupp, it is obvious that you have NOT read Rep. Ryan’s plan document, which DOES include ‘stimulus’ dollars (far fewer, and much more effective.)

    There is no Conservative, nor any Republican, which “wishes for the country to collapse,” and that line from you tells me that you aren’t interested in being a player in the solution.

    As to nat/no-nat the Banks; FDIC has been liquidating failed banks for a long, long time. They can do it again with Citi. Too bad for the shareholders–but the damn thing is a Zombie. Best to put it down.

  25. That the Republicans are “the party of no” is a good thing IMHO. There’s nothing wrong with opposing bad policy and throwing trillions of dollars at mostly government make-work is bad policy. Throwing trillions of dollars at businesses that are going to fail inspite of that cash infusion is bad policy. I’m glad to see the Republicans have found religion. Now if they’d find some “stones”.

    Dan H: I’m laughing at you. You are a very funny guy.

  26. Im glad you think I’m funny. So when you can’t respond intelligently you just say “I’m laughing at you”…. ?

  27. I’m not sure why you’re going at this. You’re on the same page for most things. Maybe you both got off to a bad start?

    This is my nice way of saying cool it. No one is really interested in watching.

  28. Randy in Richmond says:

    If I choose not to go to work, am I making a decision?

    If I choose to vote no on a referendum, am I accomplishing anything?

    In a free enterprise system, is allowing badly run businsses to fail doing something?

  29. I’m on the same page Steve, yes, but I think its stupid to polarize the situation even more by name calling.

  30. J. Strupp says:

    Dad29:

    I have read Rep. Ryan’s plan document. Can I assume that he is the current spokesman for GOP economic policy? If so, then I have my answer. I still find it troubling that Ryan has been the only GOP leader to approach this problem constructively (with the exception of Lindsey Graham possibly).

    Saying that “no Republican wishes for the economy to collapse” runs quite contrary to the dialog coming out of the GOP these days (minus Ryan). So far, it appears that the GOP is interested in openly panning any sort of government stimulus (minus tax cuts) while labeling any and all government stimulus enacted as “pork”.

    Regarding the financial crisis, consider the outrage that Lindsey Graham encountered when he simply left open the possibility of temporary nationalization of certain banks.

    Frankly, I’m very interested in being a player in the solution. I just wish the vast majority of Republican leaders would be interested in being a player as well because playing the socialism card over and over is not going to get this nation back on track.

    P.S. I’m glad we agree on temporary nationalization (your FDIC comment) for certain major banks. I agree the FDIC has been successfully liquidating or selling off failed small banks since the 30’s. No objection here.

    Now if we can find a way for the FDIC to provide a workable plan for liquidating the dozens (if not hundreds) of small bank failures in the near future while, at the same time, cleaning up a major bank like Citi, then I’d say great. That being said, I think a RTC solution to restructuring the major banks would be a much more workable solution since price discovery of most of these toxic assets will take years to unwind. The FDIC is more of “seize now, sell tomorrow” entity. I wish it was going to be that quick and easy in the case of Citi…..or B of A…..or Wells Fargo.

  31. Randy in Richmond says:

    Remember when an 80 point drop in the Dow like today was about an 1/2 percent fall. Today it is an 1.22 percent drop. Today’s NASDAQ fell 1.97 percent. Ah, the good ole days.

  32. Randy in Richmond says:

    Remember the guy who illegally hacked into Sarah Palin’s email account last September? Here’s the latest on him.

    Three more federal charges have been filed against a University of Tennessee student charged with hacking into the personal e-mail account of Sarah Palin, the Alaska governor and former Republican vice presidential nominee.
    David Kernell, the son of a Democratic Tennessee legislator, pleaded not guilty to all charges Monday, and a magistrate agreed to push back his trial from May to October.
    Kernell allegedly gained access to Palin’s account in September by correctly answering a series of personal security questions.
    The new counts are fraud, unlawful electronic transmission of material outside Tennessee and attempts to conceal records to impede an FBI investigation.

    As he’s already a Democrat he is developing the exact qualifications to be nominated to be on the Obama cabinet.

    http://www.breitbart.com/article.php?id=D96QLETG1&show_article=1

  33. Just goes to show you need to lie on your own security questions so no one could ever guess them based off of how well they know you!

  34. I remember reading how he picked up on the security questions. It does make you think!

  35. I have to say first that I was getting worried about Randy, 28 comments before we hear from him! Good to see you’re back.

    Cindy – WRT to the Ryan document that Dad mentioned and J. Strupp called “constructive”, have you read it? I am curious as to your take.

    The reading that I have done on it has been interesting to say the least. I realize this is no “tingle up the leg” but hey, I’m no Chris Matthews.

  36. The Lorax says:

    The Republican Party is doomed. No one can be the leader of a ragtag group that has been deserted by all but the most hardcore members.

    Limbaugh? Steele? Ryan? Elmer Fudd?

    Guess it’s just time to spend a decade in the woods and come out swinging like the Dems did.

  37. J. Strupp says:

    I wouldn’t say they are doomed. They’ll figure it out eventually.

  38. Lorax – you are usually an independent mind, so why did you choose to follow the MSNBC/CNN argument that Limbaugh is the leader of the republican party? Come on, you are better than that.

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