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  • Morning Bell: The Investment Adviser in Chief

    The Obama Administration finally seems to have noticed that all of their policy announcements so far have only fueled economic despair, not alleviated it. So President Barack Obama took the rare opportunity yesterday of offering some investment advice to the American people: “What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you’ve got a long-term perspective on it.” In other words, Obama wants Americans to Buy! Buy! Buy!

    But before you rush out and follow President Obama’s investment advice, consider this: last week Obama’s Treasury Department announced that the government would take a 36% stake in Citigroup by converting $25 billion of its preferred shares into common stock. The Treasury paid $3.25 a share for the stock last week, which after a weekend’s worth of government nationalization rumors fell to $1.20 by Monday. So to recap, President Obama managed to lose billions of taxpayer invested dollars in just a few days. But that’s not even the worst part. So far the government has poured $50 billion into Citigroup. Meanwhile, Citi’s market capitalization is only $6.54 billion. In other words, taxpayers could have bought Citi eight times over already for all the money they have thrown at it already.

    We are in no way suggesting that President Obama should have, or should now nationalize Citigroup. What the Citi story does highlight though, are the perils and conflicts that make massive and intrusive government intervention in the economy a disaster for all involved. Congress has no idea how to run a bank, and that is why all the political posturing in the House and Senate is completely undermining the stabilization of the banking sector. Meanwhile, the private sector has no incentive to create jobs since they are facing a $1.3 trillion tax hike in the coming decade. Then there is the $646 billion tax hike every American will see in their energy bills from President Obama’s promised carbon capping plans. It is no wonder that nobody is taking Obama’s investment advice.

    The only sector of the economy that is sure to grow under Obama is the public sector. Our own Center for Data Analysis estimates that President Obama’s budget will require over 250,000 new government employees. Other expert estimates put the number at 100,000. Another big winner under Obama’s big government: lobbyists. Democratic staffers are now commanding $350,000 to $450,000 salaries at prestigious K Street lobbying firms. At least somebody is benefiting from this Obama economy.

    Quick Hits:

    • The Obama Administration is looking to go into business with private investors by offering to cap their losses if they agree to buy toxic assets from troubled institutions.
    • The Omnibus bill, set to be passed by Congress before Friday, contains nearly $300 million in earmarks secured by a half-dozen of President Obama’s Cabinet officials before they left Congress to join the new administration.
    • President Barack Obama told AFL-CIO union leaders Tuesday that the controversial card check legislation will pass, signaling his full backing for legislation that makes union organizing easier through intimidation.
    • Mayor Michael Nutter said Tuesday that Philadelphia would have to raise taxes to close its budget deficit.
    • Venezuela said it will seek to renegotiate contracts with oil-service companies and force food producers to produce basic items covered by the government’s price-control policies.
    Posted in Ongoing Priorities [slideshow_deploy]

    35 Responses to Morning Bell: The Investment Adviser in Chief

    1. Emags says:

      I think Obama means price to earnings ratios. Profit = earnings, so what is a "profit and earnings ratio"? Stick with community organizing, Obama. Has this guy ever owned a stock ? I believe his investment income was effectively $0 on his last tax return.

    2. Jack Lohman says:

      Give me a break. Would you prefer that he said "we are going to deregulate the banking industry?" The special interests are still in charge, and until we get public funding of campaigns, live with it.

    3. Tom, Georgia says:

      "Public sector economy" is an oxymoron.

    4. Recruiter, CT says:

      I don't know what it will take for many Americans who continue to support B. Hussein Obama's agenda for this country to wake up from their obvious coma? We are travelling at warp speed towards Socialism/Marxism. He is a MARXIST! He is implementing policies and spending that will literally mortgage our children's future, destroy business, create larger government and increase taxes for every American. If people that earn under $250,000 think that theeir taxes are not going to increase, better think again. Hold onto your wallets although the American dollar will probably be worthless in the coming few years. I am saddened and frightened by these events, and I intend to do whatever I can to vote these people out of office in 2012!!

    5. Jeff, Florida says:

      Barack Obama and his staff are a dangerous ship of fools that have taken debit and have more than tripled it which will enslave the working people of America for the next 80 years. I hope all that have voted this group of people in will suffer twice as much as the seniors that are going to suffer under the socialists dictators.

    6. Eugene Hoffman, Hous says:

      Our Nation's leaders for the last 25 years, or more, have become prostitutes to their own personal material gain, nepotism and cronyism. The Socialism that Orwell, Rand, and Steinbeck feared has raised itself up from the pit of mediocrity that political correctness creates. We the people must vote these flesh eaters out of office; we must demand term limits, we must demand the same accountability for them as they expect and ENFORCE upon us. "Rome is burning".

    7. Jamey, Central Calif says:

      Seems that everything is going to plan to me. What's everyone's problem. He said he'd bring change. Well here it is. We now have the blind at every level of government. I would like to personally thank all of the republicans for all they did to keep their word and campaign promises when they had the chance. I just hope we have a country left to fight for if anyone can EVER trust the republican party again. The saddest thing about what you republicans did is that you just set the template for the democrats now that they hold ALL THREE BRANCHES OF GOVERNMENT! Congrats! Seems the only safe place to be job wise is Washington DC.

    8. Phil, NC says:

      In November of 2008 my Government issued credit card changed from a Bank of America account to a Citi account. I wonder if this might explain the intense interest of the GOV to back Citi?

    9. Ron Conradi says:

      In a nutshell, I believe the O'Bama government knows exactly what they are doing. In order to install the "change" he has talked about, ie Government control, he has to break the back of the present system. Then he can say, "it did not work" so – The Dem's consolidate power and do their social changes. In less than 60 days, look what has been pushed. Do we see the picture?

    10. Rebecca, Michigan says:

      The man seems determined to find out the hard way that things are easier said than done.

    11. Dave in Los Angeles says:

      They elected a Marxist president. How would you expect the engine of capitalism to react? Look back to the spring of 2008, when it started looking like Barry was going to beat Hillary for the nomination. The market has dropped like a rock.

      Now we get this incoherent advice to buy stocks. But if you actually make some money on them, you're an evil capitalist, and he'll have to take your profits and spread the wealth.

      This guy's supposed to be such a genius… can't he do ANYTHING right?

    12. Daniel Rivers, Louis says:

      My God. I knew government was dislocated from "We the People", but to what depth, I really had no idea.

      These politicians sit up there in their "Ivory Towers", and make decisions based soley on their own personal interests. They are sent to speak for us. We pay their salaries, and at every turn, they show again, and again, the distain they have for the working class. They have no sence of right, and wrong; loyalty or fairness.

      There was a time in this country when their discetefull deads would have cost them everything.

      What a different world we live in now. Politicians are allowed to steal, ly, and disceive the American People without impunity. Taking care of their future, their childrens future, and their childrens future; while all the while, destroying any future/ retirement, the working class may have had.

      I wonder who is going to give me back my "Social Security" money that I will have paid into for 65 years when it is my time to retire?? Who will I be able to have prosicuted for stealing my retirement/ my future??

      I am a veteran, I am a patriot, I love my country. Where has my country gone??

      Let these banks fail. Let the "Free Market" heal itself…. It most certainly would if the Socialist would just get out of the way.

    13. Richard Cancemi,Arli says:

      Obama and the others wrecking our country don't have a clue to any reality other than their blind idealism to impose Socialism on all of us. They all appear drunk on the power they've been handed by the half of the voting electorate.

      I believe they rejoice inwardly at the loss of personal wealth because then we all get closer to being poor. When there are no jobs to "rescue" us, people will have to turn to the State.

      The economy has to be wrecked before Capitalism can be killed and Socialism prevail. We are perilously close to losing our Country to these arrogant hypocrites.

      Only true Conservative-Federalism can save the American way of life. Libertarians need to be encouraged to join with Conservatives to form a new Party. The Republican Party has lost its way!

    14. Dave McDuffie says:

      So exactly "WHAT" did you Obamatrons really expect?! Oh yeah, the "change" promised is the destruction of the US! Lets get something straight you illiterate fools: the Government HAS NO MONEY! They "take" it from the PRIVATE SECTOR which actually EARNS IT!!! No private sector=no economy=CUBA! Hope you enjoy learning Spanish!

    15. Eugene Hoffman, Hous says:

      Everyone should read the article regarding Chavez's Venezuela: Price controls do not work; government take over of industry does not work: the FREE MARKET works. Individuals motivated by competition make things work: profit is not evil; it is essential. Our founders under the Mayflower Compact new that elitism does not work: if you do not produce, you do not eat (Every able bodied person of working age: the retired have earned public support; along with the truly physically and mentally disabled). Socialism is EVIL.

    16. Ron, Derry NH says:

      This is a plan not an accident.

      Personal wealth needs to be destroyed so the change can occur.

      This is the plan Carl Marx and Engles proposed to break a capitalist society. Still he needs funds to fuel the demise, and what better way than to suck in more idiots to invest in the market and then declare it a failure. At the same time they must control the banks, either by accident or intent it will have the same strings attached.

      Pelosi, Reed, Obama they all think we owe them a lively hood and they are grabbing for it, and trying to impose servitude to the state for our own good. Next year at this time we will be enslaved. I am trying to sell off as much as possible to ride out the impending destruction of economic security as Obama is neutralizing personal value set by the work force with their efforts, to be replaced by a government value imposed without merit or worth.

      This is the change to Marxism.

      Every one acts for the end game including idiots. They are setting themselves up as lords and masters and destroying the competitors and the securities of yesterdays values.

      Freedom of speech needs to be attacked, it has begun, freedom of enterprise needs to be attacked, it is, and freedom to create your own worth by destroying the foundation of your value by imposing impossible debt and weakening your current worth (especially your savings); it is so.

      Security, communication and resources have to be put in to upheaval and inevitable government control for Marxism to succeed.

      All this will put you in the now, the immediate and fully ready to comply. The Democrats are stealing the future and creating the exact opposite of which they promised. Don't waste your breath on the seduced. Start preparing for the BO affect.

      This reminds me of James Earl Jones in Conan, seducing everyone into euphoric bliss only to be devoured in the soup to feed the beast.

      Run if you can, hide if you must but security won't be found from economics run with such ineptitude by the state, and the advice given from the serpent is to be avoided at all cost.

    17. ella quinn kinston n says:

      The democrats,obama,nancy p,harry reid,and many more think they are better than the american people.They actually think they are better than anyone who voted for them to.They party and laugh at us because we cannot do much. One day we will have someone to help us to overcome all us this.Keep our faith and donot give up.

    18. Kent, Virginia says:

      What mass insanity prompted the people to propel this empty suit, this slick talking no resume senator into the leadership of our country? We don't even know if he is Constitutionally qualified to sit in the oval office, but no one in the fawning media seems to care! How bad must it get before someone begins to question the motives of the Fascist Left now steering our ship of state!

      Please, people, read our Constitution, read our Bill of Rights, read what the great men that formed this Nation wrote and believed. The youth of today know nothing of the true history of this Nation, or they would not have been duped into thinking this Marxist, this Barry Soetoro really knows or cares about the prosperity of this once powerful, charitable sanctuary for the 'huddled masses yearning to be free."

      The people now in power are only aware of America's faults, they are ashamed of our Nation. They attack and seek to undermine the very principles that allow them to spread their cancer of socialistic Big Government that rewards sloth and failure and punishes success. They specialize in class warfare. They preach hatred towards those who have worked and innovated and promoted jobs and progress. They say people need to be punished for being successful. They continue to load taxes upon the smallest portion of the population and then wonder why industries and jobs are leaving our nation. Look at the history of regimes that promoted class hatred, persecution of minorities, tearing down existing economic structure–the Left wants you to think these governments were 'right wing fascist'! They were not! The National Socialists, the Italian Fascists, the Marxists, the Maoists, the Wilson 'Progressives' and the FDR 'New Dealers' were ALL the New Left of their time. And these Neo-Democrats, these modern day fascisti do not care whether they violate the Constitution or the guarantees of the Bill of Rights–they WANT to overthrow the existing order! How far must they go before America wakes up?

    19. ra,ohio says:

      Wouldn't it be great if we all woke up one morning and discovered that all their pensions were suddenly invested in the STOCK MARKET !!!!!!!!!!!

      We can only dream. sigh.

    20. Lantz, Chris. Florid says:

      The only area of the economy that seems to be flourishing is firearms and ammunition. I don't think this is what Liberals had in mind. Fear of attacks on the second amendment have gun collecters and sportsmen stocking up. I wish I had stock in Winchester!

    21. Ireland says:

      To liberals who feared that Obama would "rule" in the Center must be elated that he isn't. For Conservatives who hoped he would work with Conservatives/Republicans in Congress now know that campaign promise just just political rhetoric. Lessons are being learned by those who voted for "change" now realize that change meant bankruptcy. How nice.

    22. Melissa, Houston,TX says:

      These guys refer to the stock market like it is an opinion poll with no consequences. Can you imagine the audacity?

      My Dad was semi-retired after working for more than 50 years. He has now had to come out of retirement because he lost too much money. It is truly incredible.

      Most of us who blog or make comments are talking about waking up and how we wish those other people would wake up. My husband just called me about a meeting he had a few minutes ago. The whole room was full of people who were praising Obama for the stimulus package and talking about global warming as an absolute. When I hear about people like that, I realize that they can't wake up until something drastic happens to them. I don't know what it will be. They all have retirement plans that are dwindling just like everyone else in the country. By the way, we had a white Christmas here in Houston in 2005 and have had some snow every year since including this past December. I am sure that they are so in the tank on both issues that they will blame the loss of retirement funds on Bush and the snow on global warming.

      God help us all and God bless America!

    23. Dwana Townsend says:

      Where do our comments go? Just for each of us to read so that we don't feel alone out there. Blogging is a great way to put fuel in the tank, but how far is that tank going to get us.

      It is going to take a full scale revolution to stop them in their tracks, and possibly reverse some of what has been done. Conservatives, Libertarians, Republicans, Independants, need to come together, formulate a plan, organize it nationwide, and execute it. It shouldn't just be a one day protest, scattered through many cities on various days. It should be a full blown attack in the form of protests, one of which this nation has never seen before. 1,000,000 people marching on the White House Lawn for starters sounds great to me.

      There are many things on the agenda that need addressing. What are you most passionate about? Cap and Trade issue, Stimulus spending, Nationalization of our banks, Bailouts for the non deserving, Missle defense, loss of jobs, loss of manufacturing, not producing our own energy sources, releasing his birth certificate and college transcripts, transparancy, lobbiest in government, tax cheats in office, term limits, taxes?? and the list goes on and on and on. We need a list of the issues (written in plain english) and petitions against each specific issue to be signed, sealed, and delivered to Washington with copies circulating around the country to individuals, state and local representatives and every person in the Senate, House of Representatives, and to Obama himself.

      I really believe that those who are in charge now think that the American people as a whole are morons and uneducated. Afterall what do we know about running a country, we're not Harvard Grads with perfect IQs??? OHHH how I just want to Puke!!! I have to admit that they are doing a very good job at confusing the general population with so many things taking shape at once it is very hard to keep up with the latest and very hard to attack it. Its like an ecloi virous spreading like wildfire, that threatens to endanger our total population, well maybe with the exception of the Washington Elite.

      WE CANNOT SIT BACK AND WAIT TIL 2012, SOMETHING NEEDS TO BE DONE NOW!!! Should we form a new party?????

    24. Wallyblu, Zion, IL says:

      Someone who doesn't know the difference between a price to earnings ratio and thinks it's a profit to earnings ratio is not someone to take financial advice from.

      Another thing, to paraphrase Margaret Thatcher, the problem with socialism is that sooner or later you run out of other peoples money.

    25. Mary, Georgia says:

      Change, Change, Change, that was Obama's words to get elected. I knew what kind of change he meant, and did not vote for him. I was hoping he would get challenged and become more moderate. No such luck. We are just seeing the beginning of Socializing the USA. Having had relatives who lived in Communistic East Germany when it was ruled by Russia, I was told about Politicians who are arrogant, and preached change, and made Government Bigger,and caused private sector to rely on goverment. They owned their living quarters, because they took them, they owned the banks because they took them, their food prices were more expensive and they had less to choose from and had to wait in line to choose vegetables and fruits. Ian Rand's Atlas Shrugged is good to read to find out our future if this keeps up. President Bush inherited a recession from Clinton administration, we lost about 40% on our IRa's between 1999 and 2000 before the election. Our economy came back thru 2001 and 2006 despite 9-11 happening, and started to decline in 2006 when the Congress became Democrat again. Pelosi, Frank, Reid, Schummer, Chris Dodd, all need to go. They should be under investigation for the housing mess they made.

      We have The Change that voters who voted for it wanted. I hope they enjoy it.

      God help us all, Four years will be too late.

    26. ella quinn kinston n says:

      I agree with Dwana Townsend,a 1,000.000 is great or lets make it a 2,000.000 march.Who can organize it? Some one ask hannity t0 do it.

    27. Barb -mn says:

      Since Obama and his family get enough perks to live off of, how about the man put his $400,000 of unearned income stolen from the taxpayers into the stock market? He doesn't practice what he preaches he just sits back and smokes whatever he does and like ella stated, laughs at us all. Put your money where your mouth is Mr. President!

      We can't give up! Nor be belittled to follow their indoctrination. Stay and stand strong.

    28. Dave McDuffie says:

      This current economic environment was brought to us courtesy of the US government, namely Bill Clinton and Janet Reno who forced US lenders to lend money to "non productive people" who in no way could ever qualify for a loan, then those bad loans were insured by Fannie Mae or Freddie Mac so people like Franklin Raines(Obama advisor), and so many Democrat senators and even Jamie Gorelick(the 911 contributor who is still on OUR payroll!!!)and the like could pillage the taxpayer paid system to the tune of hundreds of millions of dollars,to go right into their pockets. If these were republican types their names would be all over the dirty rotten left wing media and they would be "encouraged" to pay this money back and then get out of town. Same holds for this group of out right thieves! Pay the money back and get the heck out! Then the rest, from ODUMBA on down, an immediate 40% cut in pay/benefits/staff/lunches/booze/dinners. And how about serving some good ole southern Barbeque at those white house parties rather than the $100/pound Kobe beef from Japan! Please pardon my slight of the president's name, but for someone in his position to call the stock market nothing but a tracking poll is a total dummy and a complete disgrace when so many Americans' retirement and LIVELYHOOD depend on the strength of those stocks!!! As a Vietnam vet I can not even begin to tell you how disappointed I am in the choice of a total Marxist/socialist to be our president. Kruzchev was right! He said we would be conquered from within, and we have been, and we should be ashamed, and by the way, cudos to George W for destroying the republican party by mostly immitating a democrat! He had them beat and did not even know it! The goal of democrats is to CREATE DEPENDENTS by tearing down the private sector, by name calling and by lieing. When we are all dependents, implosion will begin and Obama will be back in Kenya with boatloads of our money. This president has the opportunity to be a dream maker, getting the private sector going again with jobs for everyone, instead we have nothing but nightmares ahead with his socialist-economy destroying policies and principles. It will nightmares for the "little people" as well because without the wealthy's purchasing power there are no jobs to be had.

    29. Allen, South Carolin says:

      I urge you to call the White House, Senators, and Congressmen and demand that President Obama and Rush Limbaugh have a live debate on the EIB Network. Also, anyone with video cams need to go to your local welfare office and take videos of people standing in line now, because within the next few months those lines will double with people out of work. Post it on UTube…let everyone know whats going on in their communities.

    30. Dave McDuffie says:

      To Mr Obama: you referred to Rush Limbaugh as the "leader" of the republican party. Excuse me sir, he is more than that, he is the "COMMANDER" of a 20,000,000 man/woman army, and growing fast! You still have some time to reverse your socialist course intended for the destruction of our country, and enlist some Reaganesque principles to pull yourself and us out of the debacle you have created. No, you did not inherit any of Bush's problems, your demorat party is to blame for everything including the abhorrent giveaway of our social security system dollars, to the detriment of every single living American and for this crime TED KENNEDY should be hung on the capital steps! And you fools want socialized medicine?! EVER HEARD OF SOCIAL SECURITY?! This ship of fools could not sail their way out of a puddle!

    31. John Rosina, Bordent says:

      The 1990's witnessed the largest transfer of wealth in American History from the "scrimp and save – do not borrow" WWII generation. We have, with little or no experience in the markets, used our parents inheritance to become a huge block of "new age investors". They fell for or enjoined the Wall Street Monopoly game of Engineered Financials, which generated great "monetized profit returns". Unfortunately for these new found wealthies and their Wall Street gurus, the Market, by and large, had very little to do with real and sustainable wealth generation.

      All these baby boomers with inheritances to spend in the market, which was a strategy of the currency generators on Wall Street, played into the failures of over leveraged financial institutions we are now experiencing. Globalization made for easy transfers of wealth to over seas players and we are now paying for this unfettered greed.

      As a member of the baby boomer class, I suggest we are the most irresponsible and incompetent generation of Americans ever. Shame on all of us.

    32. John Rosina, Bordent says:

      ps Is Georgia still part of the United States? Just asking.

    33. Melissa, Alaska says:

      So what about stabilizing the financial sector? Geithner and the administration are apparently not planning to. I'm wondering what JP Morgan would do? What can what is left of the private sector do about this? At the least it would seem that business leaders could get together and get behind a program they believe would work and publicize it. Allan Meltzer, the great political economist who was a Reagan advisor, believes many of the banks need to be allowed to fail so the rest of the sector can get back on its feet. Is there not something the private sector can do other than stand by and watch government action and inaction destroy the economy?

    34. Ken Newton says:

      Who is going to bail out the senior citizen who has lost 60% of their investments, and worries that Social Security will fail along with the government. I am a recent retiree the is back in the job market.

    35. John, Peoria, IL says:

      OBama..the true Architect of Economic Disaster.

    36. Pingback: Economists Give Obama Grade Rating of F - An Ugly Ending | Mortgaged Future

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