Worldwide Business Search Engine

Loading

Saturday, November 10, 2012

Why the GOP Lost the Election


These days there is a lot of soul-searching going on within the Republican Party.  Most analysts talk about how the GOP should have worked harder to get female or Hispanics votes, or those of minorities.  They say that Romney should have been tougher against Obama's economic record.  These analysts have it all wrong.  The thing that killed the GOP is their acceptance of gonzo madness.
 
It’s hard to believe, but when Mitt Romney was Governor of Massachusetts he signed a cap-and-trade program to reduce carbon emissions.  At the time, he touted the program as contributing to the future health of our children and the “stewardship of this Earth.”  He also supported abortion rights.  Not any more.
 
Over the last 20 years, the GOP has altered its platform to appeal to powerful splinter groups such as the Tea Party, the Libertarian Party, civilian militia groups and survivalists.  And in becoming the lunatic sponge, the GOP has lost the nation -- and the world.
 
In today’s GOP, it is common to believe that Barack Obama is a Satan-worshipper, that he is the Anti-Christ, that he is a secret Muslim extremist intent on wiping out Israel, that he is a secret Communist agent sent to destroy the US economy, or any combination of the above.
 
In October of 2012, Mitt Romney visited Reverend Billy Graham at his home in North Carolina.  Following Romney’s electoral defeat, Graham warned voters that God’s punishment is coming because the Lord “brings bedlam when countries turn their back on him.”  Just prior to the election, Pastor Robert Jeffress of First Baptist Texas assured his followers that he doesn’t believe Obama is the Anti-Christ, but merely “paving the way for the future reign of the Anti-Christ.”   To many Americans (and most of the world), opinions such as these are bat-shit crazy.
 
It is well known that most GOP members deny the existence of global warning (and who knows, they may be right).  However, few GOP supporters mention their reasons for not believing in global warming.  One is that global warming is a Communist plot.  Donald Trump summed it up nicely on his Twitter account on Nov. 6th, just before the election: “The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive.”  It’s a bizarre idea, especially since most climate change scientists are Westerners.  The second (and more popular) belief is that God created the Earth and that he would never have made it fragile; therefore, global warming cannot exist.
 
You’ll never hear a GOP candidate talk openly about Communist conspiracies, God's wrath or Satanism, because that would be political suicide.  Instead, they let talking heads like Donald Trump, Wayne Allen Root, Glenn Beck, Rush Limbaugh and others do it for them.
 
During the campaign, when Donald Trump attempted to extort the President by offering a charitable donation in return for the President’s college records (so that he could “look them over”), Trump looked and acted just like an evil character from an Austin Powers movie.  GOP insanity was suddenly vaulted to the forefront of the public mind.  With that weird conspiracy-theory speech, Trump probably helped Obama’s re-election more than any single person except campaign leader David Axelrod.
 
Finally, there is the GOP and Tea Party’s religion: Founding Fatherism.  Sarah Palin can hardly get through an interview without mentioning the founding fathers as if they were omniscient gods.
 
The GOP didn’t lose the election because they lost the female or Hispanic vote.  They lost the election because too many GOP members have boarded the crazy train.
 
____
 
 
"He is purposely overwhelming the U.S. economy to create systemic failure, economic crisis, and social chaos- thereby destroying capitalism and our country from within."
 
Professional gambler and former Libertarian Party Vice-Presidential Nominee Wayne Allen Root, describing President Barack Obama.
 
____
 
 
 

Thursday, October 11, 2012

Bad for Banks, Good for You


People hate banks.  Especially US banks.

In 2008, when President George W. Bush signed into law the biggest corporate bailouts in history, banks became the enemy.  They are retirement killers, staffed by toga-party heathens.  They are social pariahs.  Few mutual fund managers dare to buy them.  And this is what makes them great.

The Frost Report has been recommending bank stocks during every dip in the market since 2008 (which has been a great strategy), and things only look better for the future.

As of Oct 3, 2012, the six largest US lenders - including Bank of America, Citigroup, and JP Morgan - earned a combined $63 billion in profits.  In Q2, Wells Fargo had its most profitable quarter in 160 years.  Despite this, many bank shares are still trading at below book value, and at single-digit PE ratios.  In other words, despite sustained earnings, US banks remain ridiculously cheap.

Enter the complainers.

Wall Street hates regulation.  There is a natural tension between the motives of short-term profit and long-term sustainability.  Without regulation (and sometimes despite it), the creative minds of Wall Street regularly devise new ways to make vast hordes of money before self-destructing.  It is the loathsome job of government to prevent the latter by preventing the former.

When bankers are complaining about downsizing and frugal compensation, complaining about low leverage (which reduces risk, but also the opportunity to profit), complaining about high capital requirements and complaining about trading restrictions, you know that your money is both profitable and safe.

The greater the number of people who live in fear of bank stocks - while those banks continue to earn excellent profits - the better.

____


"The future looks very dim."

Michael Greenberger, University of Maryland, regarding US Banks

____

Absolut-ly Bad Trade


 

Last week, the Financial Services Authority (FSA) finished a long investigation, and confirmed what Wall Street insiders already knew: that the large and unexpected jump in the price of oil on June 30th, 2009 was caused by a single trader.

Between the hours of 1:22 and 3:41 am, a highly intoxicated senior broker at PVM Oil Futures purchased 7 million barrels' worth of crude oil futures - equivalent to 69% of the global market for oil.  The trader, Mr. Perkins, unfortunately has no recollection of the event as he subsequently experienced a blackout.

Shortly after waking up at 6:30 am, Perkins did what anyone would do under similar circumstances - he sent a text message to his supervisor, explaining that could not come into work as he had to care for a sick relative.

Unwinding the massive orders lost PVM 9.8 million USD.

As a result of his binge, Perkins was ordered to pay a fine of 72 thousand pounds, and had his license revoked for 5 years.  In truth, not a bad penalty for momentarily changing the world, and for a great story to tell for the rest of your life.

_____


"Mr. Perkins poses an extreme risk to the market when drunk."

The Financial Services Authority

____