A Few Days and All Forgotten

It is amazing how quickly people forget what is really going on in the world. The stock market staged a remarkable rally this week. It is on its best run in the last few months. Many are speculating that the seeds of recovery are at hand.

Of course, they are forgetting that last week saw the market obliterated. The same financial institutions that are fueling this rally were the culprits then. What is the truth?

I, for one, do not believe that we suddenly solved the economic crisis in a week. There is a lot wrong with all that we are seeing. Unemployment is still going to head higher. The political scene is a mess with Obama spending like there is no tomorrow. At some point, hyperinflation is going to become a serious problem. The banks still have billions in toxic assets on their books. Confidence is still at a low. And, the housing market, the thing that started it all, is still in doldrums. Therefore, what really happened in a week.

The answer: nothing. A CEO came out and said his company was doing well (Citi). Of course, we should remember we heard this same mantra last year. Didn't everyone tell us how stable Frannie and Freddie were just before they were taken over? At the same time, the heads of all the banks we spewing optimism during the economic collapse. So, why are we to believe them now.

At present, I am betting that we are in for a quick and hard downturn. There is nothing to indicate that things are getting any better. A couple of harsh days in the market will remind everyone that the facts are terrible. The world economies are going downward.

America seems to have a short-term memory. We fail to remember the lessons of yesterday. The economic crisis is still weighing heavy upon us. Nothing the government is doing is going to solve this overnight (if at all). Personally, I believe we are in for a period where they only made things worse.

In closing, remember where we were only a week ago. Rome was not built in a day. At the same time, this recession will not turn until we suffer a whole lot more pain; regardless of what the powerful tell us.

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An Emphathic No

What does it tell you that the stock market has dropped roughly 25% since Obama took office? The stock market has a way of casting it vote each day on the different situations around the world. Unrest in the Middle East is met with an immediate increase in oil prices. When the situation reverses, the price goes in the opposite direction.

So, what does the market tell us about it's feelings about the Obama policies? I believe it is saying "they suck". That is the only way to read the situation. The Treasury Secretary half heartedly tells us what he is going to do and the market plunges 300 points. Obama gives his State of the Union, and the market suffers another down day. Naturally, the $3.5 trillion budget was met with the same results.

Larry Kudlow has an excellent article about this very subject. Read it here.

I think Kudlow is right (one of the few times). Obama has an all-out assault on the business. He believes that anything not in the control of the Federal Government is bad. Private investment is something that needs to be destroyed. If he cannot regulate it, he wants to tax it or nationalize it. This is the essence of his administration.

The sad truth is the government cannot solve any problems. They have zero problem solving skills. If you doubt it, look at education. We trusted the government to educate our children and we have a bunch of idiots. At the end of the day, waste and fraud prevail when the government is involved.

We are seeing the only semblance of intelligence voting each day on Wall Street. The American people voted overwhelmingly for Obama. However, most of them are like sheep. They will do anything NBC news tells them to do. The market is made up of people who have the financial risks exposed. They tell us who is wrong and who is right.

And, at the moment, Barack Obama is totally wrong.

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