Friday, February 27, 2009

American Business Ought to Shun Obama's America

Kudlow nails it - Obama is waging war on American business. The answer is very simple, wage war back. Or another way to say it is simply "be sensible". Look at Exxon. They're saying, "Hey, you want to do this to us, we'll spend our money thusly."  This is not America's money...Exxon's shareholders include people all over the world - Norwegian nurses, Singporean stewardesses, Scottish school teachers.  Everybody.  Exxon owes all these people the best returns possible on their money.  Period.  I only wish that more companies would make it clear what they are doing and who is to blame.

UPDATE:  Chesapeake Energy today announced it is shutting down 7% of production.  The energy sector is in the process of going into a growth hibernation.  Obama's clean energy crusade will devalue any investments they make today, at least temporarily until some of this efforts hit the wall of economic reality, so why make them.  Hoarding cash and/or looking for returns abroad is the sensible thing to do and hope Obama energy agenda hits a wall.

Thursday, February 26, 2009

Capital Will Flee

Obama's America is shaping up to be so devastatingly unfriendly to business and capitalism that capital will, and should, flee these shores. If I were the CEO of a large company, I'd be focusing on my non-US projects in the coming years. When the newspapers call up wanting to know why they are investing and hiring abroad, they should confidently say, "We can't do business in Barack Obama's America. It's a losing proposition."

Libertarians for Vastly Less Liberty?

Will all the self-professed libertarians ("liberaltarians") who voted for Obama now please stand up and confess that they got it so damn wrong...?

Barack Carter Asks Nicely?

I love it..."Highest Earners Asked to Pay for Obama's Heathcare Overhaul". Yeah, "asked". The correct word here is 'forced'. Although I still expect alot of taxable income to go into hiding.

Wednesday, February 25, 2009

A Day Late and Several Trillion Short

Professionals have been lamenting the disappearance of the uptick rule for months now, and have advocated its return. People stopped talking about it because they got blue in the face and they just threw up their hands because the government wasn't listening. So, months and trillions of lost wealth later, Ben S. Bernanke merely hints that bringing back the uptick rule would help and the market comes roaring back off its substantial lows of the day. There is somebody home in there after all, maybe. This is giving the market hope that the government will stand down defending some of its more idiotic rules. Could Mark-to-Market accounting forebearance be next? Maybe.

Tuesday, February 24, 2009

Buh Bye

How do I feel about the bankruptcies of the Minneapolis Star-Tribune, the Philadelphia Inquirer and the impending bankruptcies of the San Francisco Chronicle and the New York Times?   Great.  I feel great.  Detroit made crappy cars with overpaid labor that nobody would buy...let them go bust.  Liberal newspapers made crappy journalism with overpaid labor that nobody would buy...good riddance. 

Did I Say Catastrophe? Just Kidding.

Translation of Obama's speech:  "Bill Clinton said I was bringing everybody down, so forget all that and Cheer Up!"


Just a small taste of the monies to be wasted chasing the theory of anthropogenic global warming. Enjoy.

Monday, February 23, 2009

Note to Dumbass Republicans

Start campaigning for 2010 RIGHT NOW with this simple promise:
We will repeal any piece of the stimulus not spent by 2011, and convert the balance to tax cuts.

No hedging, no phony slowing the rate of growth of government. You must have a plan to shrink - really shrink - the government and rescind every dollar of government expansion contained in the phony stimulus.

World Votes On America With Dollars: Thumbs Down

I usually pooh-pooh the guy as a loudmouth, but I have to say that I wholeheartedly agree with Cramer...
- Geithner is a disaster, but worse than that
- China has done Keynesian stimulus right, we have done it 100% wrong, and the world knows it. (UPDATE: Samuelson admits it.)

With China and the US pulling hard, the world economy could get moving, but only China is actually pulling. We are faking it. We have let the world down - 300 million hard-working, hard-spending, innovative, optimistic Americans have been told to hide under their desks, expect a tax beating, and get ready for massive energy regulation. Should be no surprise that they have gone AWOL.

UPDATE: Geithner gets some help (babysitting?).

Why Do We Refuse to Help Ourselves?

We could create millions of jobs and billions of tax revenue for our various bankrupt governments (i.e. California), but we simply refuse to choose to do so, blinded by a religious idealogy called environmentalism. I'd say we deserve what we get if I wasn't part of the we.

Friday, February 20, 2009

Another Day, Another Attempt to Totally Destroy Americans' Standard of Living

Hah, I was just about to go to bed thinking that the market might have a good day tomorrow.  After all, there doesn't appear to be any occasion for Team Obama/Pelosi/Reid to shit on capitalism tomorrow.  At least nothing is on the docket.  Oh, naive me.  Harry Reid wants to get the Great Sausage Factory all fired up over global warming.  What is the appropriate response?  Clicky clicky and send some capital down to Brazil, where they have made a $175 billion dollar investment in something that has a track record...fossil fuels, baby.  Gorgeous, beautiful, delicious fossil fuels.  

Or maybe Canada.  The Canucks will keep on producing hydrocarbons for us.  If we don't want them, they'll figure out a way to sell their hydrocarbons to somebody who appreciates their wonderfulness better than we.   Of course we've got several hundred billions of dollars of pipeline infrastructure already laid so that heating your home is easy-peasy-Japanesey...and cheap.  Screw that though.  Let's rejigger everything, so that we have to spend several more billions just to test out some new energy sources that may or may not work.  Awesome!

Thursday, February 19, 2009

Early Call...I Think The Obama Meltdown Is Starting...

Folks, as usual, you (all 10 of you) heard it here first.  As soon as the gloss starts to come off The One, all the hangers-on, principally the former Clintonites, will start not to hang on so tightly.  This guy is only as bankable as his media sheen.  When the bloom comes off the rose, the party faithful will abandon him.  Here is how it begins...

And all the Goldman Sachs liberals who love to talk all that Obama-love at cocktail parties will start to realize that The One is gettin' in the way of them makin' their coin.  It's one thing to want the Bushwhacker gone, it's another thing altogether to have GS stuck at $80 when it used to be at $250!

I guess what I am saying is what I have said before...if The One thinks he can shit on capital and business leaders for four years he's got another thing coming.  People who hire other people will hide under their desks, the campaign money will dry up, the layoffs will accelerate, and his base will be be too fat and happy with their bailed-out mortgages and welfare checks to get off their asses to vote for him again.  Your average, hard-working, tax-paying American...perhaps not.  If Volcker and Buffett love this guy so much they'll do him a favor and whisper in his ear to get ahold of himself and just stand down for a spell.  Otherwise, it is One Term City for the Big O...this guy's well of goodwill is a mile wide and an inch deep.

Does Rick Santelli Read NBfPB?

Rick, I said "quiet rebellion".  Don't buy treasuries, pay your plumber in cash...that sort of thing.  I didn't say take to the airwaves and streets!  I guess maybe you are right though, politicians only respond to overt incentives, they won't get the underlying movements of fundamentals.  Still, with it so easy to move money from the US to the rest of the world, why not vote with your dollars first and while the rest of the world is making you a return take to the streets.  So while we starve the US of capital, let's be happy we can invest with a few clicks in the Canadian energy sector, or Bermuda-domiciled shipping, or Australian natural resources.  The world is craving the capital that Team Obama/Pelosi/Reid would just as soon piss on.  Rant and rave, yes, but invest abroad first and foremost.

Tuesday, February 17, 2009

Two Out of Three IS Bad

The market is crapping all over President Obama's economic leadership. The Geithner-announced bank plan...barf. The stimulus bill...barf. Next up is Obama's plan for stabilizing the housing market (which it could be argued doesn't need help). Frankly, I expect a barf on that too. The market has come to the determination that Obama is supine - the stimulus is Pelosi's, with compensation caps by Dodd; the bank plan is, well, nobody's, and the housing plan is likely to be Barney Frank's. Volcker? Buffett? All these other assorted economic geniuses? MIA. Why did we elect this guy if this is what we were going to get?

UPDATE: Shaping up to be strike three. Looks like more heavy-handed, tin ear type of stuff. If I'm running a bank, I'm going to hide under my desk rather than lend and be subject to a cram-down. Hopefully, this is Obama's trial balloon leak, and the plan will get altered. If not, as I said, hang on.

A Citizen's Guide to Quiet Rebellion

The Generational Theft Act of 2009 will pass (update: it has passed). We will sink the better part of $800 billion dollars into welfare, uneconomic green pipe dreams reminiscent of the 1970s syn-fuels debacle, the beginnings of universal healthcare, and all manner of money transfers from the productive to the unproductive and power from the people to the bureaucracy. The Leviathan has just been fed a carbo-loading meal. Our neophyte President, who promised us a new era, has given us the worst ideas of the last 30 years in a lethal dose, and he had to overtly lie to get it done. Three Republican Senators have let themselves be played like a stradivarius and been bamboozled into voting for something that they haven't read that represents everything they have opposed for their entire careers.

The answer, short of actual rebellion, is guerrilla economic resistance. Mad? What are you gonna do - write your Congressman? (Although it wouldn't hurt for Republicans and Libertarians to boycott Maine and Pennsylvania.) Change parties? Please. Voting and advocacy have been proven to be for pikers. Our elected leaders simply will not serve our interests. The only answer is to deny the government the very oxygen it needs to breath. My fellow citizens, if you are as repulsed as I regarding not just the content of the Generational Theft Act of 2009 (aka the "stimulus" bill) but also the dishonest process by which it was crammed down our throats, we have to take action. We will have to make some hard choices and some sacrifices, but we have to do everything we can to thwart the expansion of Government through the choices we make with our money. We have to drive our unwieldy ship of state onto the fiscal rocks. We have to deny our government the tax dollars it craves at every practical turn - from buying a pack of cigarettes to investing your 401K money.

The guiding principles are this:
- Engage in any and all tax avoidance and income sheltering that you can (see here)
- Do not buy US Treasuries either directly or indirectly (no 401K money into Treasuries)
- Reduce consumption of highly taxed consumer goods (I know it is hard, but quit smoking, not for your health, but to deny Leviathan his due and proper; or have a cell phone or a land line, but not both)
- Embrace the grey market and the underground economy (yes, pay your plumber in cash, drive across state lines to get goods tax free)
- Move any economic activity you can to the lowest tax jurisdiction that you practically can

I will be back with additional thoughts on how to starve our Leviathan state of the tax dollars it needs to enslave you, but for now understand that while these suggestions seem a little 'out there', they are a sound basis to start thinking about how you can repeal the Generational Theft Act of 2009 without waiting around to cast your vote or hoping that your elected representative gives a damn about you. Don't be dissuaded by thinking that that your choices are a drop in the bucket. Every little bit counts. Isn't that what the greenies tell us? Turning off a light switch when you leave a room is a critical habit to develop if we are to make a difference toward they're phony global warming doomsday scenario, so they tell us. Well, I say the same. From a black market pack of cigarettes to maxing out your tax deductions to simply hoarding your cash (remember, your government is counting on you to spend your way to its health), every small way you can deny our out of control government the resources it needs to expand is a day you bring the reckoning, and change, closer. We will never have smaller, less intrusive, and less arrogant government unless we forcibly humble it. Hold off on the pitchforks for now. Wage guerrilla economic resistance. I, for one, am starting today. If you agree, please share this post with others.

Monday, February 16, 2009

Welcome to the Working Class Struggle: More Tea Breaks

A strike at a UK refinery has been a major controversy of late and has caused a number of sympathy strikes that have only served to exacerbate the fragile economic environment. All sorts of intense rhetoric was flying about depicting the issue as one of deep economic and social importance. Turns out, a government-funded panel has discovered, the dispute boiled down to "tea breaks." (For the Anglo-phobic or Amero-centric among you, this would be equivalent to "coffee breaks.") You see, the companies doing the work were able to offer it to their clients more affordably, not because they were importing low-skilled coolies from dirt poor countries or employing substandard materials, but because they allowed fewer tea breaks. It was actually cheaper to bring workers from the other side of Europe and house them, than it was to hire the locals, all due to overgenerous perks. Why couldn't a British company get the work and hire locals to perform the jobs? The tea breaks are compulsory, as mandated by a union agreement. Of course, the unions would never admit they overreached. Instead the law is wrong, and doesn't "put working people first." Kind of like our "jobs bank."

Will the struggle of the working man ever end?

Chris Dodd: Final Nail Driver?

Here is yet another tidbit to add to the mountain of evidence that the recently passed stimulus is a disaster for America's economic competitiveness. Obama seems to be opposed to these compensation limits, but let's be honest, who can really tell since it is becoming clear that he doesn't really have much in the way of a strong, principled stance on anything. I am not going to give the standard economic defense of freedom to contract for labor. That is surely made more eloquently and cogently elsewhere. I am however going to point out the two most obvious direct consequences of these compensation limits. Let's analysze with respect to banks.

1) There are a handful of large troubled banks. At least to some extent, these banks got large and stayed large through smart management along the way. Any large bank is a multi-faceted operation with strong components and weak spots. As we saw with AIG, one weak spot can sink the entire operation and ruin life for the smart managers in the good parts of the company. So if you are the management team at a profitable and healthy unit within, say, Citibank, you are gonna chafe at the new compensation restrictions. Why should you suffer, when you didn't sink the company and your division may be one of a handful of divisions that are keeping Citi alive? There is always some other bank that would want to get in on heathy business like yours, and if Citi can't pay you what they've been paying you because the government says so, some other bank gladly will. So, let's pretend a healthy bank, say US Bank, lures you over to run a new division to compete with Citi - its you and your highly motivated team against the pay-limited folks at Citi. Whose gonna win in the marketplace? You are, and Citi will fall further into the abyss. Thank you Chris Dodd (and President Obama for going along).

2) Same deal, except that you needn't rely on the presence of a healthy, acquisitive bank to come along. Citi is paying you what they are today presumably because they feel you are worth it. Government restrictions don't change what they want to pay you, just what they can. So you work out a deal, Citi pays you exactly what they currently do, but they don't do so in an employer-employee relationship. You hive off into Joe Divisionhead LLC and Citi contracts with you to outsource the management of its business to you. Now Citi is the client and you are the outsourced provider. Voila. Government restriction avoided. Although there is a dead-weight loss imposed since the formal transition needed to redefine the relationship will occasion lawyers' fees and management time, etc.

Neither of these outcomes is necessarily optimal, but they may be the most rational response to the new government-imposed reality. This policy could be the final nail in the coffin of such firms as Citi, General Motors and handful of others. Stay tuned.

Friday, February 13, 2009

Turns Out That Obviously Phony Story...Was Phony

This Caterpillar story - where CAT CEO Jim Owens told Obama that he'd rehire laid-off workers if the stimulus bill passed - was so phony and dishonest, I'm glad it only got a day's worth of traction before it was debunked. (As Churchill said, a lie can get halfway around the world before the truth can even get out of bed and put it's pants on.)

If anything, Owens probably told Obama, "Hey, if you want help me out, how about signing those free trade agreements with Colombia and South Korea."

Thursday, February 12, 2009


Great...Arlen Spector doesn't even know what is in this "stimulus" bill. My guess is the only people who do know are Pelosi, Obey and Reid. Hell, Obama may not even know.

Why Banks Aren't Lending

CNBC points out today what I pointed out back in December...banks aren't lending because regulators are riding herd on them in the field, regardless of the rhetoric in Washington. If I'm a bank, why would I lend out money when the old capital ratios might get tossed in favor of Geithner's new supra-regulatory "stress test"? I don't know what this stress test entails, I don't know the rules of the road. Better to hold onto the capital. Alas this escapes the geniuses in our government.

UPDATE: And then there is this...

Reversal: Obama Up, Market Down

Last week I said that the market was rallying on Obama's stumbles. This week it appears that the market is tanking on Obama's successes. Although the final vote isn't done yet, the administration and Harry Reid successfully peeled off (bamboozled) three squishy Republicans in order to foist this dishonest and dangerous stimulus package on the American people. This constitutes a success for the President. Markets not so much. Previously this week, the one tax scofflaw that Obama did get through the confirmation process - another Obama success - made his contribution to the markets rather inauspiciously.

So far the pattern has emerged. Obama's agenda slows, markets are up. Obama's agenda advances, markets are down. Not that Obama's priority is the stock market, but it is a barometer of the economy and of our future. If it stays in the tank, Dear Leader is a One Termer. How much hedge fund money and Goldman Sachs money will be lining up for Obama 2012 if we've had dead markets for four years? Not much. Maybe that is why Obama is ramming the stimulus, with its government employees' union and ACORN goodies - down our throats. This is not surprising. During the campaign Obama was smooth, he lined up Buffett, Volcker, Furman, Goolsbee and a parade of financial luminaries. That looked like a solid bet economically. What happened? Either he got rolled by Pelosi, Obey, Reid & Co. or he was simply lying all along. The market has to adjust to that new reality, the reality that, in the economic sphere, we bought usselves a pig in a poke.

UPDATE: Wall Street is realizing..."Holy Shit, these guys are awful. Volcker? Where's Volcker? Where is anybody with a brain?"

One Question Quiz for Global Warmists

Brazil is making a $175 billion investment in finding and making hydrocarbon fuels. Let me repeat that, global warmists...Brazil is making a $175 billion investment in hydrocarbons. Why? National greatness. How does one think they will vote on the next global, Kyoto-esque effort to reduce hydrocarbon consumption?

Just a Reminder

In response to candidate Obama's promise to raise taxes, I countered with the promise to shelter income. Of course, I'm not alone - smart folks have been scramblin' to put their money out of reach of Obama's taxman for months now. All legally of course. More importantly, I also reminded my readership - that there was to be no cheating! I would never encourage cheating, not even if you are incensed about this or this or this or this or all of this. Never would I encourage proud, law-abiding Americans to game the system in order to shield their money from the disgusting and outrageous profligacy, bordering on theft, that a quasi-socialist cadre of leaders has rammed down their throats. Never. Not me. No, sir.

UPDATE: No cheating, especially not after you read this.

Wednesday, February 11, 2009

Crazy: Barney Frank Has a Good Idea

I think Barney Frank is the single most dangerous man in America as it relates to our well-being and ranks #1 or #2 in culpability for the financial meltdown that is now cratering the economy. That said, I am going to credit him today for a good move, a move that may even be responsible for pulling the market up off its early morning lows. He said that banks that didn't want the TARP money and don't want to live with the restrictions that come with it, can give it back today. Granted, this was just him chirping on CNBC, but if he really means it (and Jamie Dimon should ask him if he means it and then ask him where he should send the money) that means that healthy, well-run banks can get out from under the government yoke and reclaim control over their own affairs. It will also separate out the healthy banks from the bad banks alot quicker than Geithner's new and improved regulatory stress test. This is good news for the banking system - we can separate the wheat from the chaff on the quick.

File This Under "Be Careful What You Wish For..."

Well, all the mercantilists and Rubinomics adherents who kvetched about the trade deficit for all these years have gotten their wish.

Tuesday, February 10, 2009

All This Government Help Will Be the Death of Us

Obama is promising a plan to help homeowners (read give money away). Well, let's see...the country is increasingly against the stimulus everyday, the stock market barfed up the administration's financial stability plan...

Please Mr. President, no more plans from your team of geniuses...

Market Reacts to Geithner Plan...

So far, only the broad outlines are out, no details. The market isn't barfing all over what it sees, it is reacting more like it swallowed a hair.

UPDATE (11:10 am): Uh, now it is barfing...not a single mention of addressing mark to market accounting...barf...$1 trillion...barf...

UPPDATE: I said that Geithner needs to put in a heroic performance in order to salvage Obama's cabinet picking report card. Unfortunately, Geithner didn't clear the bar and it looks like Obama will get anywhere from an F to a C, depending on where your expectations were.

So why is the market barfing on Geithner's plan? Why isn't it. It's terrible. First, it's incredibly expensive. Second it doesn't appear to be aiming at the heart of the matter and the details are sketchy. Public-private partnership? Fine, but the details are important. No details. Do you think a hedge fund or private equity shop is going to take on the restrictions that the government has imposed elsewhere? No way, and this annoucement is chock-a-block with restrictions and accompanying populist rhetoric. Private capital might take a pass. Next up, regulators are going to get together to come up with better standards? Whoop-dee-doo. What's that gonna do? It might even be scary. And if banks don't meet the new stress tests, they will get a "capital buffer". What exactly is that? Is this the mark-to-market accounting reform that gave the markets some juice the other day? If it is, it is damn underwhelming. The rest of the plan is just more of the same stuff Bernanke has been doing, albeit with more populist restrictions/rhetoric and too much Barney Frank-type social engineering. I read an article somewhere today that made Geithner out to be a private enterprise hero by battling within the cabinet to hold the more heavy-handed big government types at bay in crafting the stability plan. Wow. If this plan is Geithner's heroic plan to save us from something worse cooked up by Obama's inner circle, we are in trouble.

This is not a financial stability plan, designed by central bankers for the banking system, at all. Rather it is closer to the typically stunted and misguided legislation that we always see coming out of the Great Sausage Factory. In fact it resembles the stimulus bill, that continues to reveal itself as the disaster that it is, despite the media's reluctance to offer any critical analysis of it.

UPPPDATE: Just for fun, let's round up the media coverage of the plan. Of course the most accurate headline would be "Markets Barf On Geithner's (Obama's) Plan" but you won't see that one. The WSJ comes the closest with "Details Scarce in Rescue Plan." CNBC focuses on Geithner's reaction to the reaction "Geithner Defends Plan, Says Fix Will Take Time" the barfing being implicit but unmentioned. At the NYT, CNN and MSNBC, you wouldn't know anything is awry at all with the plan. Reuters UK has it right, "Wall St. Tumbles on Bank Plan Misgivings."

Monday, February 09, 2009

Foreign Policy Tests Piling Up

With this post I began the task of chronicling the inevitable parade of legislation that is to come in the next few years that will damage America economically. Although, I think I missed the real locus of action. My list may turn out to be quite small compared to a similar list focused on foreign policy. Pakistan, Russia, Yemen, etc. The missetps there seem to be piling up more quickly.

Friday, February 06, 2009

Senate Republicans: Hang Tough and Scuttle the Stimulus

I said the Republicans would have to endure some name calling, and I was right - "Obama to call stimulus delay "inexcusable and irresponsible" amid "devastating" jobless numbers." It's just words. Hang tough Republicans. This is not Obama's stimulus bill, there is no input from all the economic minds that Obama paraded before us in the campaign. It NancyPelosi's bill. The CBO even says the bill would do more harm than good over time. Ignore the President (or in the words of some famous liberal nutter somewhere "Screw Them."

Thursday, February 05, 2009

Mark-to-Market Rally

"Stocks eked out a gain after a rough morning as banks got a boost from market chatter that the government may suspent a controversial accounting rule blamed for much of the contagion in the financial industry." (full story)

Take a bow, Brian Wesbury.

Buy American = Be Brazilian

I love these stories (in the bad way). It appears that the large Brazilian oil company, Petrobras, wants to buy a bunch of oil tankers. It was all but certain that that order would go to a Brazilian shipyard who would in turn buy the steel (lots and lots of steel) from Brazilian steel mills. But to keep their fellow Brazilians honest or to cover their butts or something, Petrobras took bids from all over the world. All the Brazilian steelmakers had to do was not be total pigs. But they weren't, they came in 60% higher than the nearest bid. Now they are accusing Petrobras of being disloyal to the nation by getting the international bids and exposing their rapacity. Clearly, loyalty means sticking the Brazilian nation with several billion dollars of needless overpayments to build out its infrastructure. This is just the mentality down there, they don't need to have a special "Buy Brazilian" provision in any legislation. This is the type of banana republic economics we'd be miring ourselves in if this crack cocaine-stupid "Buy American" blather makes it through the Great Sausage Factory intact.

UPDATE: The WSJ gives the President some mild kudos for injecting some semblance of sanity into the debate. Why is it that we give our leadership credit for avoiding insanely stupid ideas? Shouldn't our leadership at least be of a certain quality that truly awful ideas are non-starters to begin with? (Ah, there I go again exhibiting my irrepressible optimism/political naivete again.) And note how little Obama had to do to garner such praise (as well as the mealy-mouth liberal language) - "we don't want to send a message..." that we would do something so destructive. Messages. Hints. Semaphore. Code. Flying Methaphors. What stunning clarity, directness, and resolve our Great Leader possesses. How about something like this Mr. Obama: "Protectionism is dangerous and destructive and the United States of America will not resort to it, and I, as President, will not let it happen."

Fear and (Tax) Dodging in DC

Another day, another tax compromised appointee and more fear. This is what we get folks for putting a neophyte into the highest office in the land. You heard it here first (11/19/08) my fellow citizens, we bought usselves a pig in a poke.

UPDATE: Ouch. (That's gotta hurt.)

This Is Leadership? This Our Great New Hope?

Obama is getting desperate. Irreversible? Like, as in never to be reversed? As in, we'll henceforth be in recession for all time? Forever? No more economic growth ever? Ever? So, he means unless we remodel federal buildings to make them "green" our standard of living is permanently frozen where it is today?

Wednesday, February 04, 2009

$150 Per Hour to Run GM?

Regardless of what you think about corporate executives, they do work pretty hard. You don't get to run Bank of America by being a 9-to-5er. The modern large company CEO's life is pretty much consumed by his/her job. I'll be conservative and say that such a CEO probably works a 65 hour week. With two weeks vacation, that's 3,250 hours a year. So at Obama's salary cap of $500,000, that works out to $153.85 per hour. $154/hour to run Bank of America or Ford or even a small piece of Citibank? My plumber bills more than that per hour. No top executive in his right mind would put in the work and dedication it takes to run a huge organization for that kind of money. So companies would either see top management leave or work less hard. This is a good idea? At such a wage rate, American business will very quickly cease to be the envy of the world as the talented and driven decide it is better to pursue other activities.

Obama: Don't Sweat the Details, I Didn't

Who cares what is in the stimulus package? Like, who cares if Tom Daschle paid his taxes?

Tuesday, February 03, 2009

Company Finds Useless Black Sludge in Middle of Nowhere

Guess what? Another 100 million barrels found right here at home! Go figure. Move along though, nothing to see here, our energy problems are too complex for you to understand.

UPDATE: Two big finds in a week!!

Markets Rising On Obama's Stumbles?

I think so. Markets might be sighing relief at a weakened executive. President Obama is by no means weak but he is losing relative strength.

1) The parade of his nominees that are bedeviled by tax problems is highly embarassing and the Daschle loss is a big one. One tax scofflaw who made it through, Geithner, is arguably Obama's most important appointee and is under a cloud. A heroic performance is needed out of Mr. Geithner to salvage Obama's cabinet line-up. (It will be interesting to see if the smoothest sailing nominee gliding into office turns out to be Republican Judd Gregg. This could be interpreted as a bipartisan triumph of new Washington under Obama, but I doubt that's how it will be looked at - Dems will be bitter that the Mr. Clean in Obama's cabinet is a Republican, and the far left will just puke at the thought of Sec. Gregg.)

2) Right out of the foreign policy gates, Obama has given Iran a chance to demagogue against the US. If this isn't a free "Save Some Face" card that is accompanied by backroom hardball, well, it constitutes another embarassment. We'll see, but the optics stink.

3) Obama's base already seems to be wise to the fact that they are being thrown bones without alot of meat on them. Guantanamo, "Don't ask, don't tell", CIA renditions - all seem like they could be "policy" but are really just a giant TBD.

4) The stimulus vote in the House was a mini-disaster for Obama. Through sheer stupidity, the Senate Republicans could allow Obama to snatch victory from the jaws of defeat, but they still have a chance of rebuking Obama's call for bipartisanship and making it look like just what it is, an empty plea with no leadership. Obama has an all-star economic team, but it looks as if his team wasn't allowed within 4 counties of the room where the stimulus package was put together. People are scratching their heads; they see no Summers, no Romer, and no Furman fingerprints on this thing at all. This isn't in Obama's loss column yet, but it could be. (UPDATE: Apparently, Obama's all-star line-up of economic heavyweights hasn't even met yet. So, Obama is trying to ram this thing down the nation's throat, but his economic best and brightest haven't even gotten together? Hmm.)

5) Obama is ratcheting up the populist rhetoric against banks and bankers. He may be just playing to the crowd but he has to be careful here. All this rhetoric combined with the serious calls for bank nationalizations spooks the business community. If these bankers and enough business leaders decide to hide under their desks for four years, Obama is a one termer. Already, GE and Caterpillar are having to mobilize against the protectionist elements of the stimulus (and they have European politicians joining in). There will be many more who join this fight. Obama needs the business community, but he's not starting off well.

Finally, and this is not a blunder but rather a fundamental flaw, Obama's legislative support is only as good as his public sheen. The reason he had to stack his administration with Clintonites is that he had no decent network to speak of. His limited experience in government, and life actually, has left him lacking in broad and deep connections to people who can achieve things and stand by him. His quick rise to popularity and electoral promise has attracted a cadre of government and business types to fill the ranks now, but they do so for the sake of Democratic power in and of itself. Does anyone think that previously loyal Clintonites/now Obamites will stay loyal if the bloom starts to come visibly off the rose? I truly wonder how much uphill sledding those around Obama now are prepared to endure. I guess some, but not much.

Directionally, I think this is all fairly obvious, but what matters is magnitude, which I can't estimate. If Obama's stumbles continue and are big enough, the massive expansion of government that is disguised as economic stimulus could run aground. I think the markets have a slight sense of this and are perking up at the thought that we aren't necessarily going to ride a wave of populism to monstrous government intervention in the economy. Bottom line, investors think Obama will be capable of alot less damage than they had originally feared, and the market is reflecting this cautious optimism.