Posted by
Mike Silverman on Tuesday, March 24, 2009 11:26:14 AM
As you recall, in recent months every time a spending program or bill was announced , the market dropped. Every time Obama or anyone in the senate or Treasury announced plans to prop up industries with TARP, the market went south. We need to very carefully examine what might be causing a fluctuation or rally, and realize also that consumer confidence is fickle to the point where the wrong words coming out of Obama's or Pelosi's or Reid's or Frank's mouths could send investors pulling back. Also, companies have plans to deal with drops in market value and plans for boosting sales. Let's not rule out the private sector's ability to take the initiative to turn numbers around. Recessions historically have rebounds and it would be unfortunate to assume that the governments attempts at socialistic take over of banks and over the top spending on things like universal health care and cap and trade and a litany of other things is what makes an economy sound and raises confidence. It's rather the opposite. It remains to be seen what becomes of any rally in the markets and what exactly is moving the consumer indexes. Government intervention tends to make investors frightened, and past moves by the administration and congress proves that wall street does not respond well to them. How, for example, does an investor know if or when AIG ( now AIU? ) is in the black because of sound business decisions or simply because of TARP funds covering thier debts? We may never, EVER, again have any reason to be confident in AIG. Look at what has happened to the poor shmucks working there. They have been savaged by personal attacks from the President on down to Barney Frank and have had death threats launched at employees. They have had a horrific media blitz that increased in savagery since they were propped up by TARP. The reputation of AIG has been burned at the stake like they used to burn witches in old England, by the very people who said it was too big to fail. This is very sick stuff. Do you think.. right now... that the people who owned and operated AIG are now wishing they had gone through chapter 11? I think they definitely would have been far, far better off and I think they all know it. I think there's a real question mark on the Obama administration now as to whether Obama et-al actually knows what they are doing or even cares what happens in the markets. Yes, we have to wonder. Does the behavior and approach of this administration really show that they have any concern about the market? Looked at realistically, the answer is no. The goal of the administration seems to be obtaining and holding the power to micromanage the country's economy regardless of who it crushes in the process so that IT can decide what is fair and who the winners and losers in our society should be. It is a totalitarian approach to central planning that has got to be making quite a few Obama voters scratch thier heads as they ask themselves, is this really what we voted for?
- Mike Silverman, Milford MA