Posts Tagged ‘S&P’

“Financial Ruin: A Republican Legacy!”

The right continues to push U.S. into a deep financial abyss!

Holding Republicans responsible for the damage they’ve caused over the past three decades should be our first priority. And the damage is unprecedented.

The mid-term elections and the rise of the Tea Party has again changed the political landscape so it is even more imperative that the American people start paying attention to the reasons we’re in this incredible mess and why we’re sliding back into recession.

In the second article in the Republican Crises Series, “Financial Crisis: Made in America by Republicans,” eleven different events that have caused pain and suffering for the American people are listed.

Have Republican policies ruined America?

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Posted in Economy, HuffPost Articles, Politics, Republican Crises | Comments Off

“Financial Crisis: Made In America by Republicans!”

The cause of our financial crisis was deregulation—plain and simple!

Deregulation over the past 30 years has devastated the middle-class, thrown more families into poverty, while allowing the wealthiest Americans to become even wealthier.

As described in, “Double Dip: A Republican Conundrum!” we are about to feel the pain of recession again in the form of a double dip in the stock markets. Despite their complicity the Republicans continually decry re-regulation at a time when the entire global financial system is in distress as a result of their policies.

Every one of the financial crises was the result of deregulation and deregulation is a Republican ideology. These crises include:

  1. The Savings and Loan Crisis. Deregulation of the S&L industry was pushed by Reagan and Republicans.
  2. The dot.com bubble, created and allowed to overheat under a Republican Congress and a complicit Democratic President.
  3. The bankruptcy of Enron, WorldCom and a number of other large corporations as a result of the Commodity Futures Modernization Act, a Republican bill pushed by Phil Gramm.
  4. The largest financial failure since The Great Depression caused by passage of the Republican backed Gramm/Leach/Bliley Bill, signed into law in 1999 by a complicit President.
  5. The housing bubble blamed on Democrats but embraced by a Republican majority Congress, a complacent Fed Chairman, and a complicit President.
  6. The numerous bankruptcy laws enacted by Congress, each allowing the financial services industry more devices to steal from the people and help their corporate friends.
  7. TARP (Toxic Asset Relief Program), an unpopular bank funding program pushed by an incompetent Republican President and a duplicitous Secretary of the Treasury.
  8. The AIG Bailout from TARP, a money laundering scheme to transfer $64 billion dollars to Goldman Sachs and 8 other troubled banks.
  9. The British Petroleum spill in the Gulf, a failure on so many levels and one of the most devastating environmental events in our history.
  10. The failure of LCTM as a result of an unregulated derivatives market still supported by Republicans and some uninformed Democrats.
  11. The Bernie Madoff ponzi scheme which festered under a weakened Republican Securities Exchange Commission.

In nearly every example Republicans had help from some Democrats. But these are all Republican backed initiatives—failed policies that have caused varying levels of pain and suffering. Most have added to the erosion of the middle-class.

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Posted in Economy, Politics, Republican Crises | 5 Comments »

“Double Dip: A Republican Conundrum!”

The financial crisis is a Republican creation they won’t talk about!

Supply-side economics, Reaganomics, lazzez-faire, all theories of economics, developed and promoted by Milton Freidman—advanced by many—and responsible for the financial quagmire we are currently drowning in.

These theories are the mantra of conservative Republicans and the foundation of their party’s free-market-capitalism platform. It is also the cause of nearly all the financial woes and hardships hard-working Americans are experiencing. They have pushed supply-side for 30 years and it has led to the most damaging recession since The Great Depression.

The supply-side experiment is a failure and has left us in such a dire position that with a little shove we could fall into a global depression. The potential is so great that unprecedented steps had to be undertaken to prevent plummeting that far.

But we’re not through. As fears mount of a double-dip we could slide back to, or below, the March 9, 2009 lows when, the Dow fell below 6,600, its lowest level since April 15, 1997 and the S&P slid below 700, its lowest close since September 12, 1996.

In fact the Dow is poised to fall below the 6,000 level or further as it nears the second low. Read “The Dow at 6,000.”

Things were, and are still extremely difficult.

Who is responsible for the difficult problems we face?

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“One Fat Finger From Disaster!”

Living in a scary over-leveraged, under-capitalized global economy!

As everyone is well aware, on Thursday afternoon, panic struck like a lightning bolt on the trading floors of the stock markets.

Twenty minutes of feverish chaos exposed the vulnerability of the markets. World markets have embraced a model that teeters on tremendous risk. So much so that it has abandoned its purpose; its reason for existence. This leaves them vulnerable to the terrifying moves that occurred globally on Thursday.

Like the Big Banks, the markets have become giant casinos putting everyone’s money and financial stability at risk. That couldn’t have been more apparent than the meteoric fall near the end of the trading day on Thursday.

Some blame a ‘fat finger,’—a trader hitting a ‘b’ for billion instead of a ‘m’ for million—for triggering the events that sent markets spiraling to investment hell. But that wasn’t the only problem the market encountered in that brief, illuminating moment in time.

Human error could conceivably be at the center of Thursday’s sell-off, but technology could prove to be the market’s nemesis rather than its friend. Orders set in motion by high speed, market gaming, computers sent the market tumbling at a record pace as each triggered event triggered another round of events. The two, individually or together, may be the nexus for the eventual destruction of global markets. For whatever reason stocks went on that wild ride, it created a lot of excitement on the trading floors.

So what do investors do after such a frightening occurrence?

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“False Positives”

The markets are still bullish almost 8 months after the March 9th bottom. The Dow closed above 10,000 on October 14th and the bulls have been fighting to stay above it since then. But it has been trending below the ten thousand mark for the last 24 or so days.

The hopes were that earnings for the quarter being reported would be decent. This would give the bulls the ammunition to push the Dow and S&P still higher, well above the 10,000 mark.

So, where is the market going?

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“Challenging Cooperman”

Last October the widely respected founder and Chairman of Omega Advisors, Mr. Leon Cooperman, saw signs of a bottom in the markets. The Dow was around 9,200 that day and the S&P was just below 1,000 points.

After reading his comments and based on my own informal research I sent Mr. Cooperman a letter and a copy of my book, “Final Audit.” I issued Mr. Cooperman a challenge, a friendly one, stating that the market would continue to tumble and that we would be lucky if it bottomed near 7,000 on the Dow and 740 on the S&P.

We know what happened in March!

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“September, the Beginning of the Fall!”

In September the landscape changes bringing with it hues of gold and red, orange and maize, as Summer moves on to Fall. Beautiful colors that remind us winter, and harsher weather is approaching.

To think that such exhilarating, breath-taking beauty could succumb to cold, wintry days is a stark reminder that ‘Nothing Gold Can Stay.’

And so it is with the markets. The Dow, S&P, and NASDAQ have languished all summer in hues of gold and green. But will September bring fall to the markets; turning gold into maize and greens into browns?

September is notoriously a bad month for stocks. After the sleepy, halcyon days of summer the month of September traditionally brings varying levels of negativism which historically has pulled the markets down.

There are many reasons to believe that the September tradition will continue this year and possibly move the markets downward through the end of the year.

Last year in early October, after a negative September, I issued a friendly challenge to a prominent member of the investment community. At the time the Dow was at 9,200 and he saw several signs of a bottom. I offered that we would be extremely lucky if the Dow remained above 7,000, predicted that unemployment would exceed 8%, and foreclosures in 2009 would exceed the record number of 2008.

All of my predictions were correct, even earlier than I had anticipated, which led me to immediately rethink the next level and in late February I readjusted my predictions. After the March 9th low I wrote an Op-Ed to the Wall Street Journal entitled, “The Dow at 6,000.”

There were many reasons for deeper pessimism when I sent the article on April 2nd despite the nearly month long rise in the markets. Those reasons linger and  have increased despite the five month rise in the markets.

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Posted in Economy, Predictions, Uncategorized | 1 Comment »

“The Pain on Main” (reposted)

In April, the 16th, when the Dow had risen 20% I posted this article on It’s Worth an Opinion and sent it as an Op-Ed, to The Wall Street Journal. I predicted the market would decline by the end of April, based on the disconnect between Wall Street and Main Street. I was off by a few months, but now is the time to reread the reasons for that prediction. Though written last April the information, with different numbers, applies today:

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Originally posted – April 16, 2009

Over 610 thousand people applied for first time jobless claims today, and continuing claims surpassed six million; workers who are still seeking employment while collecting benefits.

The headline number, an improvement over last week, but during a holiday adjusted week, brought some level of excitement. It was “not as bad as expected” but it still translates to more Pain on Main Street. The ‘real’ impact will be lost on Wall Street.

The market has been on a tear for the last five weeks. The historic 20% rise in March continued well into April and hopes of a permanent turn in the economy was evident in the voices of the CNBC hosts, and the traders and analysts on Wall Street.

But, that euphoria, one of green shoots and mustard seeds, will be short-lived. The bear will again dominate the market much to the chagrin of hopeful and optimistic bulls.

No matter how traders and analysts evaluate the bits of perceived news in the economic data, they fail to see the disconnect between Wall Street and Main Street.

Main Street is in extreme pain, anguished by declining home prices and job losses that have a tremendous affect on the consumer, and an undetermined destructive force on the economy. Read the rest of this entry »

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Posted in Economy, Uncategorized, Wall Street | 8 Comments »