A Tale of Two Fed Speeches – Will the Bernanke Bounce Last?

Aug 26, 2011, 5:09 pm EST

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 

Could Goldman Sachs’ CEO Do a ‘Perp Walk’?

Aug 25, 2011, 2:47 pm EST

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 

Can a GOP President Fix the Economy?

Aug 18, 2011, 12:01 am EST
Can a GOP President Fix the Economy?

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 

Why Investors Are Unfair on Obama

Aug 17, 2011, 12:01 am EST
Why Investors Are Unfair on Obama

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 

Breaking Down President Obama’s $37.1M White House Payroll

Aug 16, 2011, 9:00 am EST
Breaking Down President Obama’s $37.1M White House Payroll

Since 1995, every president has had to deliver a salary report of White House employees to Congress and the American people. And at a time when federal spending is front and center and government employees are getting laid off left and right, I thought it would be interesting to dig into the 2011 report from the Obama administration and see who’s who on the president’s payroll.

To be clear, I’m not trying to score political points here. While some of these salaries might seem plush, as a suburban D.C. resident myself, I can say this area is one pricey place. D.C.’s workers enjoy the highest salaries of any major U.S. city, with a median household income of $85,198. And some of these folks are highly qualified individuals in grueling jobs who could make a mint in the private sector based on their resumes.

We can quibble over their political slant, but someone like Gene Sperling who attended Yale Law School and attended biz school at Wharton probably has a resume worth a bit more than $45,000 per year, even if you pooh-pooh his government experience. Read 

Obama’s to Blame for the First-Ever U.S. Credit Downgrade

Aug 9, 2011, 1:38 pm EST

Standard & Poor’s has taken an unprecedented step in reflecting its opinion that the effectivness, stability and predictability of American policy making and political institutions have been weakened during a time of ongoing fiscal and economic challenges. Driving the nail in the fiscal coffin, S&P reports that the outlook on the long-term rating is negative and that S&P could lower its long-term rating within the next two years. It is S&P’s assessment that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with an ‘AAA’ rating.

The Obama administration demurs, responding that the S&P analysis contained ‘deep and fundamental flaws.’ As I have written often about the Obama administration’s fiscal responsibility, the horse has already left the barn. The only thing left behind is the stink. For the first downgrade of America’s credit rating in history, I blame in no special order the complete Obama administration, Harry Reid, Nancy Pelosi, Barney Frank and the Fed. The one group in Washington (and S&P knows this well, like the Tea Party or not) that is committed to doing the things S&P wants done is the Tea Party. In 2012, Americans will have a chance to bring in a new management team. America needs a leader with a long-proven record of fiscal responsibility, along with a long and proven record as a job creator. This, of course, is not brain surgery.

In recent months, you have been bombarded with editorials from the left and the right on the dire status of Uncle Sam’s finances and the prospects for an outright U.S. default. Much of what you have been exposed to is nothing more than posturing by politicians seeking to anger as few voters as possible and to maintain credibility for the 2012 election season. Rarely is what is best for America first on a politician’s mind. And now we have a first-in-history downgrade of America’s credit rating. Read 

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