Random Thoughts – and the Best-Ever Market Indicator
 A Missed Opportunity
I’m afraid our President is on the verge of blowing a Reagan/Clinton-style opportunity of a lifetime. When Mr. Obama won the Whitehouse I mouthed off to my friends that he was a shoe-in two-termer. I mean you couldn’t ask for a better scenario; the man inherited an economy in shambles and his predecessors had already built the mouse trap. All he had to do was cut-taxes (or not raise them, for crying out loud!), maybe come up with a new idea or two to inspire capital investment (or not), and simply sit back and watch the economy grow itself right out of the doldrums – while taking all the credit. Then, once we’re back on firm-ground, he could go right ahead and take a stab at the healthcare system, and sure, maybe even mitigate a little financial sector risk by adding a new reg here and there.
God grant our leaders the serenity to accept, and adhere to, the things that have always worked, the courage to change the things that need changing, and the wisdom to know the difference… Amen.
Spread the Wealth
In a powwow with republicans last Friday, President Obama made the statement; “I’m not going to give Warren Buffet a tax break”. That sentiment, though seemingly benign and arguably justified, asserts a very destructive class-warfare mentality. Some of us have forgotten, or perhaps never understood, that in a free-market society there will always be a disparity between the rich and the poor. Not because our system is unfair. In fact, in a free-market we have the definition of fairness – every able-bodied citizen has the right to work his or her tail off, go to school (perhaps) and become wealthy if he or she so chooses. Some will and some won’t…
If we ever buy into the insane notion that the government’s function is to create financial parity in this country, it’s all over. And by the way, we would never reach that ideal economic equality – a gap would indeed remain, it would separate the poor and the super-poor. That’s if you didn’t include the super-rich dictators…
Politicians, They’re all the Same
The Right of the Aislers like to suggest that all this Keynesian-ness (government spending to (attempt to) stimulate growth) is a Left-thing. It’s amazing how we defend our own party’s actions then turn around and condemn those very same actions (in spirit (rampant spending) if not in substance (how it’s spent)) when they come from the other party – or, as in our present predicament, when one party simply picks up where the other left off…
Tax Breaks for the World-Changers
And why wouldn’t you give Warren Buffet, or Bill Gates for that matter, a tax break? I tell ya, if I had my way, Buffet and Gates would not pay another penny of income tax as long as they both shall live. Not because they’ve worked incredibly hard to get where they are, not because they’ve indeed made this world a better place to live, not to reward them in some taxual fashion – but simply because they do marvelous job-creating, tax-revenue building, and even philanthropic things with their money. As opposed to what Uncle Sam would do with their money.
Tax Credits for Results
If I had my way, we would not offer tax-credits for “green”-supporting projects. We’d offer future tax credits to anyone who develops a new technology that is proven to create jobs while cleaning up the environment. The tax breaks would come only after the results are in – when real world demand creates real world, sustainable, employment. As opposed to pouring “taxpayer” money into an idea that theoretically may produce a job or two while reducing an emission here and there. The funny thing is, the developer of the legitimate new technology wouldn’t even need the tax-break when it’s all said and done.
It wasn’t a tax break that inspired Gates and Allen to create MS DOS in their garage.
It’s the Dollar (in case you missed last Friday’s blog)
Sure, the attack on the banks is upsetting, and sure, the prospect of higher taxes next year is upsetting, and sure, cap and trade and healthcare are scary propositions – but you know, the market rallied last year in historic fashion when three of these four were very much on the table (the bank-bashing is new). In fact, if healthcare is even passed, in its present form (while it’s still scary) it’s not nearly the albatross it was going to be. So what gives? The dollar, that’s what. Our currency has become a very desirable commodity of late. That’s right – we still have a little mojo goin on. And in the short-run, falling commodity prices ain’t good for the market (and it does nothing for our trade deficit). In the long-run however, a stable currency is a very good thing for the economy.
For more on the dollar, read “What’s Happening to this Market?”…
The Super Bowl Indicator
If you really want to know what the market’s going to do this year, and profit from it, wait for the Super Bowl winner to be crowned, then jump in or bail out. Sounds crazy I know. But believe it or not, the Super Bowl Indicator (SBI) has been right on the money 80% of the time over the past 40 years – absolutely incredible! Superstitious or not, you better not ignore this one…
The SBI tells us that if the NFC wins, we’re going higher – if the AFC wins, we’re screwed…
Of course you know I’m just having fun. I would never make a buy or sell recommendation based on something as superstitious and nonsensical as the Super Bowl Indicator…
On a more serious note; if you forward this commentary to 200 of your friends within the next 20 seconds you’ll experience a miracle between now and Super Bowl Sunday…
Have a great day!
Marty
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