Aug 31, 2011, 4:55 am EDT
One of the first moves of the Obama administration was a $787 billion government stimulus in early 2009 to prop up an ailing economy. Many conservatives these days are focused on reining in government spending — and this undoubtedly will be a talking point in the days to come as GOP candidates and the president hunker down for Election Day 2012.
Was the stimulus just one more Washington boondoggle — a handout to special interests that wasted taxpayer money when we already are up to our eyeballs in debt? Or was it a crucial intervention in a time of great need that helped prevent a recession from turning into a depression or worse?
The nonpartisan Congressional Budget Office has just come out with its report on the American Reinvestment and Recovery Act (referred to in the document as ARRA in typical beltway affection for acronyms and jargon). And its findings on the real impact of the stimulus package are worth noting: Read
Aug 29, 2011, 4:21 pm EDT
The good news is the Federal Reserve stands ready to help if the U.S. economy acts worse than expected. The bad news is the U.S. economy needs help.
Thus far, the Fed’s monetary trickery has helped to inflate U.S. stocks and U.S. Treasuries, but not much else. Fed Chairman Ben Bernanke actually went on record to say his private organization’s bond buying program could boost U.S. employment by about 700,000 over the next two years. Is he serious? If creating jobs by purchasing bonds is such a great panacea, why haven’t the 7.2 million pre-recession jobs suddenly returned?
If we were to choose a theme song for the Federal Reserve, the 1977 hit song “Three Little Birds” by Bob Marley would be it. The lyrics are immensely reassuring, not to mention repetitive. The song’s main chorus says, “Don’t worry ’bout a thing ’cause every little thing gonna be all right.” Unfortunately, everything is not all right. Read
Aug 26, 2011, 5:09 pm EDT
Hope is not an investment strategy. Yet, the stock market’s fate seems to be closely tied to Bernanke’s Jackson Hole comments and the hope of QE3.
Bernanke’s 2010 Jackson Hole comments on Friday breathed life into the markets (see chart below). But did his 2011 Jackson Hole pep talk on Friday deliver the needed hope or was it another nail in the coffin?
Below is a thorough analysis of Bernanke’s 2011 speech along with a comparison to the 2010 speech. More importantly, we will discuss what the market thinks the odds of higher prices are. Read
Aug 25, 2011, 2:47 pm EDT
Lloyd Blankfein, chief executive officer of Goldman Sachs (NYSE:GS), has hired high-profile criminal defense lawyer Reid Weingarten.
This is a game changer even if we don’t yet know where the fire is.
Blankfein has led the firm for six years and spent the past two dealing with allegations of conflicts of interest and fraud. A Senate report released in April said Goldman dumped subprime loan exposure onto unsuspecting clients during the mortgage meltdown, then in 2010 gave Congress misleading testimonials about the firm’s actions. Read
Aug 18, 2011, 12:01 am EDT
The early run-up to the Republican primary has shown the breadth of conservatives in America. But there are two things this disparate group of politicians can agree upon: George W. Bush did a bad job as steward of the American economy, and Obama is doing even worse.
Under Bush, taxes were slashed and expenses ran wild — causing our already ugly national debt to skyrocket. George W. Bush’s administration also presided over some of the lax regulations that led to the 2008 financial crisis and resulting recession.
Obama has failed to gain control of the mess, they continue. The unemployment rate is above 9%, consumer and investor confidence is flagging, especially after the August market mayhem. Disagreement over how to reduce the nation’s deficit has many worried that the United States will be up to its eyeballs in debt for generations. Read
Aug 17, 2011, 12:01 am EDT
Let’s make a crazy assumption and agree that investors are — at least in part — rational beings. Unless you exclusively worship the black magic of technical analysis, chances are your portfolio is built upon logical assumptions about the headlines and hard numbers like revenue, earnings and so on.
You know, facts.
If this is the case, then why are investors so quick to criticize Obama as bad for the market? Because the hard numbers show that the president has done a darn good job when it comes to the stock market. Yet in the face of the facts, many investors insist the president has done nothing but make their life difficult since taking office. Read