As of next Friday, the United States Treasury will be unable to issue bonds for the purposes of paying for government debt, unless the debt limit ceiling is increased. You remember the debt limit ceiling? It comes around every so often after President Obama has squandered trillions of hard earned tax payer dollars and demands that congress increase the limit on the nation's credit card, which currently has a balance owed of 17 trillion dollars. The Republicants in congress dutifully acquiesce after pretending to put up a fuss just to fool their base into thinking they are fiscally responsible.
The current debt limit debate, which will be more like the sound of one hand clapping, if one remembers, was the "fight" that Republicant leadership said they were going to have in lieu of possessing the gonads to defund ObamaCare when they had the chance last spring. But lately, John Boehner and his band of misfits are making noises of defeat, not even demonstrating the pretense of exacting concessions from President Obama in exchange for his ability to put the country in even deeper debt. The Republicant leadership is said by some to be "worn out" over the constant battles with the president. It must take an extreme amount of energy and effort to engage in all that rolling over.
The broken record of congressional Republicant leadership on the issue of "taking a stand" has alienated much of their base to the point that many may stay home in the upcoming mid-term elections this November. While pundits and others on the Right are predicting gains in the House of Representatives and a "good chance" for a Senate takeover by Republicants, I see a different scenario playing out.
My pessimism is not because I think Democrats have a more electable platform to run on, after all they have driven this country to the edge of bankruptcy and the worse unemployment we have ever seen, but because Republicants have been more enablers than opposition. Simply raising the debt limit with no concessions from the president makes the whole concept of a limit null and void. The Republicants should remove the farce of the debt limit and allow the president to borrow and spend as much as he wants. In essence that has been the modus operandi over the last 5 years with little exception.
Speaker of the House, John Boehner, recently quipped that there is no sense in congress passing laws that the president is going to pick and choose which parts of said laws he wants to enforce or not. Well jiminy cricket Batman, is it not congress that has allowed this president to run wild in the candy store, ignoring the restraints put on him by the constitution like a child ignoring the flaccid voice of a weak parent? The power of the constitution is in the willingness of each of the three branches of government to restrain the other two branches, and for the people of the United States to restrain them all with their power of the vote. Sadly, we have become an unrestrained society in which the constitution has no place, and the vacuum will be filled by the oppression of tyranny, realizing the greatest fears of our Founding Fathers.
Saturday, February 8, 2014
Friday, February 7, 2014
Governance Inequality
Listening to President Obama and other divisive voices on the Left would lead one to believe that the biggest problem in search of a big government solution facing this country is income inequality. But the gap between the rich and the poor is inconsequential, unlike the gap between the governed and those who govern. Wall Street bonuses and corporate golden parachutes are not important, what is important is the government graft, corruption, and influence-peddling that allows middle-class politicians to become millionaires vis-a-vis their time in the public service.
Unfortunately you will not hear the president or members of congress proposing solutions to solve governance inequality, the gap in the constitution having been torn so wide one could float an oil rig through it. The Founders of this great nation created a system of government that understood, in the words of James Madison, "...if men were governed by angels, there would be no need for restraints on government." That is why the majority of the power to govern was placed into the hands of the people.
But the chasm between federal power and the people who were given the right by the constitution to be the control on that power, has grown exponentially over the last 60 years, but has accelerated out of control in the last couple of decades. From legislation like ObamaCare and Financial Reform, which are just blank checks to be filled in by members of the bureaucratic class, to presidential edicts that subjugate the will of the people's representatives in congress, governance inequality has become a beast too wild to tame.
Our "leaders" in Washington no longer see themselves as public servants, but as public masters, an elite class of individuals who perpetuate government wealth by confiscating private wealth. They have subverted this great republic into a three card Monty game where they are the dealer and the rest of us are just the poor rubes who senselessly shovel our hard earned money onto a table rigged by the greed and graft of federal governance.
Income inequality is a sign of a healthy economy, governance inequality is a sign of tyranny. When the power of government to change people's lives over takes the power for people to change their own lives, then governance inequality has robbed a free people of the purse of their liberty in which their freedom is kept. And when the lawgivers have become separated from those who are subjugated to the full operation of the law, then the sanctity of the constitution becomes swallowed in the profanity of governance inequality.
Unfortunately you will not hear the president or members of congress proposing solutions to solve governance inequality, the gap in the constitution having been torn so wide one could float an oil rig through it. The Founders of this great nation created a system of government that understood, in the words of James Madison, "...if men were governed by angels, there would be no need for restraints on government." That is why the majority of the power to govern was placed into the hands of the people.
But the chasm between federal power and the people who were given the right by the constitution to be the control on that power, has grown exponentially over the last 60 years, but has accelerated out of control in the last couple of decades. From legislation like ObamaCare and Financial Reform, which are just blank checks to be filled in by members of the bureaucratic class, to presidential edicts that subjugate the will of the people's representatives in congress, governance inequality has become a beast too wild to tame.
Our "leaders" in Washington no longer see themselves as public servants, but as public masters, an elite class of individuals who perpetuate government wealth by confiscating private wealth. They have subverted this great republic into a three card Monty game where they are the dealer and the rest of us are just the poor rubes who senselessly shovel our hard earned money onto a table rigged by the greed and graft of federal governance.
Income inequality is a sign of a healthy economy, governance inequality is a sign of tyranny. When the power of government to change people's lives over takes the power for people to change their own lives, then governance inequality has robbed a free people of the purse of their liberty in which their freedom is kept. And when the lawgivers have become separated from those who are subjugated to the full operation of the law, then the sanctity of the constitution becomes swallowed in the profanity of governance inequality.
Thursday, February 6, 2014
The Lesson Of Isaac Lufkin
Watching Isaac Lufkin move through his daily life, no one would conclude that he is disabled, least of all not Isaac himself. The young Mr. Lufkin was born with no arms, but it has not kept him from becoming a kicker on his high school's football team. The 14 year old Isaac rejects what some might call a disadvantage with his matter of fact statement, "I don't want any one's pity, pity only makes me weak." This extraordinary young man is not only special in and of himself, but he is the result of special parents. He is certainly not the result of modern parenting techniques applied by so many parents that create self-esteem monsters whose only goal is to be receptacles of pity and victimhood.
Isaac Lufkin is more agile than many of us who have two arms. From using his chin and shoulder to grasp his cafeteria tray and carton of milk, to employing his legs and head to dress himself in his football uniform, including his shoulder pads, Isaac does all the things that anyone with two arms does and more. On the football field, Isaac does not simply kick the ball and run off the field, but runs down field to help tackle the opposing player who was on the receiving end of his kick. Isaac also engages in another teen past time of using social media and the Internet by employing his feet to operate his computer.
Isaac is truly a breath of fresh air in a society that has become more and more corrupted by a Leftist ideology that teaches young people that they are the axis upon which the earth spins simply for existing. Isaac wants nothing, save that which he achieves of his own grit, determination, and industry. This 14 year old wants to someday be a kicker in the National Football League, and I fully expect that he will achieve that dream. In fact, this young man will be successful in life no matter what his field of endeavor.
The lesson of Isaac Lufkin is that the truly successful and happy person takes the cards that life and fate has dealt him and lives life to its fullest. Once as a young man, I was complaining about some problem I was having and a priest friend of mine told me, "That is not a problem. Come to me with no arms and tell me about your problems and I will then show you a man with no arms and no legs." That lesson has always stuck with me and has once again been realized in Isaac Lufkin. Isaac lets it matter little that he has no arms, he considers himself blessed to have two legs with which he can operate a computer keyboard, dress himself, open car doors, and kick a football better than anyone else. He knows that the secret ingredient to life is not the things which are external to a person, but the power of heart and mind to accomplish in spite of hurdles and obstacles.
Isaac Lufkin is more agile than many of us who have two arms. From using his chin and shoulder to grasp his cafeteria tray and carton of milk, to employing his legs and head to dress himself in his football uniform, including his shoulder pads, Isaac does all the things that anyone with two arms does and more. On the football field, Isaac does not simply kick the ball and run off the field, but runs down field to help tackle the opposing player who was on the receiving end of his kick. Isaac also engages in another teen past time of using social media and the Internet by employing his feet to operate his computer.
Isaac is truly a breath of fresh air in a society that has become more and more corrupted by a Leftist ideology that teaches young people that they are the axis upon which the earth spins simply for existing. Isaac wants nothing, save that which he achieves of his own grit, determination, and industry. This 14 year old wants to someday be a kicker in the National Football League, and I fully expect that he will achieve that dream. In fact, this young man will be successful in life no matter what his field of endeavor.
The lesson of Isaac Lufkin is that the truly successful and happy person takes the cards that life and fate has dealt him and lives life to its fullest. Once as a young man, I was complaining about some problem I was having and a priest friend of mine told me, "That is not a problem. Come to me with no arms and tell me about your problems and I will then show you a man with no arms and no legs." That lesson has always stuck with me and has once again been realized in Isaac Lufkin. Isaac lets it matter little that he has no arms, he considers himself blessed to have two legs with which he can operate a computer keyboard, dress himself, open car doors, and kick a football better than anyone else. He knows that the secret ingredient to life is not the things which are external to a person, but the power of heart and mind to accomplish in spite of hurdles and obstacles.
Wednesday, February 5, 2014
The Expansion Through Contraction Theory
The Congressional Budget Office released a report yesterday that estimated ObamaCare will cost the economy 2.3 million jobs in 2021. A steady loss in the ensuing years will be realized do to employers reducing the number of work hours as a means of escaping the new law's mandates for full-time employees. A similar report produced by the CBO in 2011 had the loss of jobs at 800,000, a number that the current report has tripled. As is the case with government accounting, by the time 2021 rolls around, the number of jobs lost to ObamaCare will be well over 10 million.
The CBO report reads like the medical chart of a patient on hospice care, as it outlined growing deficits after a short period of reductions, Gross Domestic Product growth that will struggle to maintain even a modicum of improvement, and unemployment that will not fall below 6% until late 2016. I remember President Obama saying that unemployment would drop below 6% by the end of his first term, and if it did not then it would be, "a one term proposition," for his presidency. Well, the American people rewarded him anyway with a second term even though he failed to meet even the modest goals he set for himself. People sometimes forget that the average unemployment rate for the entirety of the George W. Bush administration was 4.9%.
The way in which the Obama administration has been able to fool the American public into believing in the myth of an improving economy is what I call expansion through contraction. Barack Obama has of course had help in this scheme from his marionettes in the financial media and elsewhere. A data point that illustrates how this work was released yesterday, it was factory orders, which dropped 1.5% in the month of December. But since the analysts seeded everyone's expectations for a 1.7% drop, the markets responded positively to the contraction in factory orders. This "bad news is good news simply because it is not worse news" has been the cornerstone of the Obama administration economic policy for the last 5 years.
The analysts create a positive from overstating a negative. The biggest negative is the fact that the president, as well as those in the media, are still talking about "recovery." Five years after the official end of the recession we should not be in recovery or even talking about it, but enjoying a full blown thriving economy. The reason for the acceptance by those in the financial world of substandard economic data is the bottle of free flowing liquidity the Federal Reserve has held up to the lips of a wino market in the form of its quantitative easing program. But now that the bottle is beginning to be pulled away with the Fed's tapering program, the market is giving a little more weight to actual economic data, hence the recent downturn in the market indices.
The expansion through contraction theory has held President Obama in good stead, as there has been a plethora of bad economic data over the last five years that has given the president an opportunity to trot out the worn, old horse of, "it could be worse." And the American public, by and large, have accepted economic mediocrity as excellence simply because it is not abject failure.
The CBO report reads like the medical chart of a patient on hospice care, as it outlined growing deficits after a short period of reductions, Gross Domestic Product growth that will struggle to maintain even a modicum of improvement, and unemployment that will not fall below 6% until late 2016. I remember President Obama saying that unemployment would drop below 6% by the end of his first term, and if it did not then it would be, "a one term proposition," for his presidency. Well, the American people rewarded him anyway with a second term even though he failed to meet even the modest goals he set for himself. People sometimes forget that the average unemployment rate for the entirety of the George W. Bush administration was 4.9%.
The way in which the Obama administration has been able to fool the American public into believing in the myth of an improving economy is what I call expansion through contraction. Barack Obama has of course had help in this scheme from his marionettes in the financial media and elsewhere. A data point that illustrates how this work was released yesterday, it was factory orders, which dropped 1.5% in the month of December. But since the analysts seeded everyone's expectations for a 1.7% drop, the markets responded positively to the contraction in factory orders. This "bad news is good news simply because it is not worse news" has been the cornerstone of the Obama administration economic policy for the last 5 years.
The analysts create a positive from overstating a negative. The biggest negative is the fact that the president, as well as those in the media, are still talking about "recovery." Five years after the official end of the recession we should not be in recovery or even talking about it, but enjoying a full blown thriving economy. The reason for the acceptance by those in the financial world of substandard economic data is the bottle of free flowing liquidity the Federal Reserve has held up to the lips of a wino market in the form of its quantitative easing program. But now that the bottle is beginning to be pulled away with the Fed's tapering program, the market is giving a little more weight to actual economic data, hence the recent downturn in the market indices.
The expansion through contraction theory has held President Obama in good stead, as there has been a plethora of bad economic data over the last five years that has given the president an opportunity to trot out the worn, old horse of, "it could be worse." And the American public, by and large, have accepted economic mediocrity as excellence simply because it is not abject failure.
Tuesday, February 4, 2014
A Bit About Bitcoins
P.T. Barnum, the great showman once said, "There's a sucker born every minute." No truer a statement has ever included a more willing bunch of suckers as those who currently invest in bitcoins. You may or may have not have heard about bitcoins, the pseudo-currency/commodity that are comprised of computer algorithms and are used by some in exchange for goods and services over the Internet. Many more have traded their valuable currencies and precious metals for this worthless computer code as a means of investing.
Bitcoins, a peer-to-peer electronic payment system, was first suggested in an Internet paper in November 2008, and the first bitcoin block was "mined" in January of 2009 by an individual or group of individuals going by the pseudonym of Satoshi Nakamoto. Bitcoins are "mined" by participants developing algorithms that meet the protocol for discovering a block of bitcoins, which currently equals 25 coins. The protocol has been written to make it difficult enough to discover these blocks that only one is discoverable every ten minutes. Every four years the number of bitcoins per block is halved, requiring 100 years for all 21 million bitcoins to be discovered. The 21 million limit is imposed by the original bitcoin protocol written by Satoshi Nakamoto.
People sign up for the bitcoin network and receive electronic wallet software in which to keep their bitcoins. "Miners" of bitcoins often work in pools because of the enormous computing power it requires to develop the algorithms to discover blocks of bitcoins. Dozens of online websites have begun to accept bitcoins for payment of goods and services. When new blocks are discovered, or transactions with bitcoins occur, they are recorded in the block chain, which is a database tracking bitcoins from discovery through every participants' account they occupy.
The value of bitcoins since their inception has fluctuated between 0.30/USD per bitcoin to 1124/USD per bitcoin. The enormous volatility of the bitcoin is just one reason it is unsuitable to be a currency. The other is that it has an intrinsic value of zero. In other words, bitcoins are comprised of electrical impulses on a computer and have no value other than the perceived value of the participants in the network. One might make the perceived value argument about anything, i.e., something is only worth as much as someone is willing to pay for it. But currencies backed by governments, and precious metals like gold and silver actually have intrinsic value in the full faith and credit of the issuing government and in their physical properties, respectively.
The bitcoin scam is a house of cards built on a foundation of sand in an earthquake zone. Many countries have banned their use, and the European Union has strongly admonished their people to avoid exposure to this Ponzi scheme. But, oddly enough, the United States government has sanctioned their use, which seems to me to violate laws restricting individuals from creating their own currency. The bitcoin "market" is every bit as lawless as the scheme perpetrated on investors by Bernie Madoff, who fooled his clients into thinking they had value in their accounts simply because he said so.
The bitcoin hysteria is like a cruel game of musical chairs. When the music stops, and the blatant worthlessness of bitcoins is realized, those poor souls stuck holding the bitcoin bag will be left poorer and with no recourse against faceless and nameless computers on a network which will have dispersed their money into the ether.
Bitcoins, a peer-to-peer electronic payment system, was first suggested in an Internet paper in November 2008, and the first bitcoin block was "mined" in January of 2009 by an individual or group of individuals going by the pseudonym of Satoshi Nakamoto. Bitcoins are "mined" by participants developing algorithms that meet the protocol for discovering a block of bitcoins, which currently equals 25 coins. The protocol has been written to make it difficult enough to discover these blocks that only one is discoverable every ten minutes. Every four years the number of bitcoins per block is halved, requiring 100 years for all 21 million bitcoins to be discovered. The 21 million limit is imposed by the original bitcoin protocol written by Satoshi Nakamoto.
People sign up for the bitcoin network and receive electronic wallet software in which to keep their bitcoins. "Miners" of bitcoins often work in pools because of the enormous computing power it requires to develop the algorithms to discover blocks of bitcoins. Dozens of online websites have begun to accept bitcoins for payment of goods and services. When new blocks are discovered, or transactions with bitcoins occur, they are recorded in the block chain, which is a database tracking bitcoins from discovery through every participants' account they occupy.
The value of bitcoins since their inception has fluctuated between 0.30/USD per bitcoin to 1124/USD per bitcoin. The enormous volatility of the bitcoin is just one reason it is unsuitable to be a currency. The other is that it has an intrinsic value of zero. In other words, bitcoins are comprised of electrical impulses on a computer and have no value other than the perceived value of the participants in the network. One might make the perceived value argument about anything, i.e., something is only worth as much as someone is willing to pay for it. But currencies backed by governments, and precious metals like gold and silver actually have intrinsic value in the full faith and credit of the issuing government and in their physical properties, respectively.
The bitcoin scam is a house of cards built on a foundation of sand in an earthquake zone. Many countries have banned their use, and the European Union has strongly admonished their people to avoid exposure to this Ponzi scheme. But, oddly enough, the United States government has sanctioned their use, which seems to me to violate laws restricting individuals from creating their own currency. The bitcoin "market" is every bit as lawless as the scheme perpetrated on investors by Bernie Madoff, who fooled his clients into thinking they had value in their accounts simply because he said so.
The bitcoin hysteria is like a cruel game of musical chairs. When the music stops, and the blatant worthlessness of bitcoins is realized, those poor souls stuck holding the bitcoin bag will be left poorer and with no recourse against faceless and nameless computers on a network which will have dispersed their money into the ether.
Monday, February 3, 2014
A Battle Cry Of Failure
During the 2012 presidential campaign the Obama re-election effort depended heavily on the slogan, "Osama Bin Laden is dead and General Motors is alive." The slogan, first uttered by Vice President Laughing Hyena, was dutifully repeated by the lapdog media. But with the distance of some time having lapsed, even those fairly shallow reasons to re-elect a president who single-handedly has destroyed not only the economic health of this country, but our standing in the world, have failed to live up to their billing.
"Osama Bin Laden is dead...," the first part of the slogan was meant to imply that since Barack Obama finally allowed himself to be pulled off the golf course after repeated attempts and he graciously allowed a photo to be taken of himself in the White House situation room wearing a sports jacket hastily covering his golf shirt, that that somehow made him a great president. It was also more than an implication that since Osama Bin Laden was dead, so was his terror organization, Al Qaeda.
Today, around the world, Al Qaeda is more influential and capable of inflicting terror than when Barack Obama first took the oath of office in January 2009. The recent taking of Fallujah in the Anwar province of Iraq is just one in a long line of incidents that prove my assertion. The hi-jacking of the Syrian revolution by Al Qaeda is another. Every where one looks there is evidence that Al Qaeda is far from "on the run," as President Obama stated many times. From Libya, where they murdered a U.S. ambassador and three other Americans, to Tunisia and a majority of North Africa and into the Middle East, where they have increased their stranglehold on that region.
Al Qaeda has become stronger because it has become decentralized. No more is every operation of terror orchestrated by the bearded cave dweller in the mountains of Afghanistan. But it has become a federation of terror groups that can strike independently while advancing the same goal.
The second part of the Obama 2012 campaign slogan does not fare any better than the first. The violation of this nation's bankruptcy laws and the manner in which secured creditors, i.e. the bond holders, were handled by the Obama administration was strictly illegal. But that was only the first sin of the GM bailout. Recently, the government quietly sold its final shares of GM stock at a loss to taxpayers of $10 billion, quite an investment the president made on our behalf. GM also employs half the persons it did in 2000. The waste of hard earned tax payer dollars and the disintegration of this nation's laws was engaged in so that the president could payoff his union supporters with other people's money.
President Obama's campaign slogan, "Osama Bin Laden is dead and GM is alive," is exemplary of the failure endemic in his administration. But far from the president and his sycophant supporters being ashamed of their failure, they gleefully wallow in it, blissfully unaware of the utter disaster they have created and the hardship they have wrought upon millions of their countrymen.
"Osama Bin Laden is dead...," the first part of the slogan was meant to imply that since Barack Obama finally allowed himself to be pulled off the golf course after repeated attempts and he graciously allowed a photo to be taken of himself in the White House situation room wearing a sports jacket hastily covering his golf shirt, that that somehow made him a great president. It was also more than an implication that since Osama Bin Laden was dead, so was his terror organization, Al Qaeda.
Today, around the world, Al Qaeda is more influential and capable of inflicting terror than when Barack Obama first took the oath of office in January 2009. The recent taking of Fallujah in the Anwar province of Iraq is just one in a long line of incidents that prove my assertion. The hi-jacking of the Syrian revolution by Al Qaeda is another. Every where one looks there is evidence that Al Qaeda is far from "on the run," as President Obama stated many times. From Libya, where they murdered a U.S. ambassador and three other Americans, to Tunisia and a majority of North Africa and into the Middle East, where they have increased their stranglehold on that region.
Al Qaeda has become stronger because it has become decentralized. No more is every operation of terror orchestrated by the bearded cave dweller in the mountains of Afghanistan. But it has become a federation of terror groups that can strike independently while advancing the same goal.
The second part of the Obama 2012 campaign slogan does not fare any better than the first. The violation of this nation's bankruptcy laws and the manner in which secured creditors, i.e. the bond holders, were handled by the Obama administration was strictly illegal. But that was only the first sin of the GM bailout. Recently, the government quietly sold its final shares of GM stock at a loss to taxpayers of $10 billion, quite an investment the president made on our behalf. GM also employs half the persons it did in 2000. The waste of hard earned tax payer dollars and the disintegration of this nation's laws was engaged in so that the president could payoff his union supporters with other people's money.
President Obama's campaign slogan, "Osama Bin Laden is dead and GM is alive," is exemplary of the failure endemic in his administration. But far from the president and his sycophant supporters being ashamed of their failure, they gleefully wallow in it, blissfully unaware of the utter disaster they have created and the hardship they have wrought upon millions of their countrymen.
Saturday, February 1, 2014
The Politics Of The Market
As another earnings season on Wall Street whimpers to a close with a majority of companies having reported their earnings for the quarter ending December 31, 2013, the politics of the financial world have never been more in focus. There is of course the financial media beating the drum of a roaring economy by quoting meaningless statistics, like 67% of S&P 500 companies having beaten analysts' estimates. Those estimates being the result of constantly lowered expectations for profit and sales from companies cutting work forces to the bone in order to just tread water.
Many of the companies that have beaten the pathetically low expectations of analysts have also given guidance (a company's sales and profit estimates for the current quarter just beginning) that is lower than expected. Companies know what the average American knows, which somehow escapes the analysts brilliant minds i.e., the economy is slowing down even from the snails pace it has traveled for the last five years since "The Summer of Recovery" was announced. But the Obama lapdogs in the financial media wet themselves over a pathetic statistic like fourth quarter Gross Domestic Product growth of 3.2%. Which barely equals the average for post-World War II economies, and does not even come close to the 5% or more needed to pull the country out of a recession.
Even when a meaningless statistic like consumer sentiment takes a beating, the analysts see it as good news because it was not worse. The Thompson Reuters/Michigan University consumer sentiment number for January, that was released Friday morning, was a full five percentage points worse than Decembers. But the analysts and the rest of the financial media did hand stands because it was not as low as they expected. This being analogous to expecting your pay to be cut by 25%, and then considering it a raise when it only gets cut by 24%.
One of the few bright spots in earnings season was another record-breaking quarter by Apple, which sent its share price tumbling 10% in the days following their earnings release. Conversely, Google missed analysts estimate for earnings and saw an appreciation in their share price of $40. Once again proving that Wall Street runs as much on politics as fundamentals. Google plays the game with the financial media and curries their favor by schmoozing them before, during, and after earnings. Apple has developed a corporate culture that keeps a tight lid on company business, so leaks to the almighty analysts are not as forthcoming as in other companies, ergo, Apple is punished by never meeting the analysts expectations for it.
One thing is clear from this earnings season, the economy is slowing and companies can not cut anymore from their bottom lines to simulate top line growth. With the Federal Reserve pulling away the candy of quantitative easing, ObamaCare stealing more jobs and wealth from the economy, and a record number of people unemployed in this country than ever before, it is going to be a bumpy ride for the financial markets and for all Americans.
Many of the companies that have beaten the pathetically low expectations of analysts have also given guidance (a company's sales and profit estimates for the current quarter just beginning) that is lower than expected. Companies know what the average American knows, which somehow escapes the analysts brilliant minds i.e., the economy is slowing down even from the snails pace it has traveled for the last five years since "The Summer of Recovery" was announced. But the Obama lapdogs in the financial media wet themselves over a pathetic statistic like fourth quarter Gross Domestic Product growth of 3.2%. Which barely equals the average for post-World War II economies, and does not even come close to the 5% or more needed to pull the country out of a recession.
Even when a meaningless statistic like consumer sentiment takes a beating, the analysts see it as good news because it was not worse. The Thompson Reuters/Michigan University consumer sentiment number for January, that was released Friday morning, was a full five percentage points worse than Decembers. But the analysts and the rest of the financial media did hand stands because it was not as low as they expected. This being analogous to expecting your pay to be cut by 25%, and then considering it a raise when it only gets cut by 24%.
One of the few bright spots in earnings season was another record-breaking quarter by Apple, which sent its share price tumbling 10% in the days following their earnings release. Conversely, Google missed analysts estimate for earnings and saw an appreciation in their share price of $40. Once again proving that Wall Street runs as much on politics as fundamentals. Google plays the game with the financial media and curries their favor by schmoozing them before, during, and after earnings. Apple has developed a corporate culture that keeps a tight lid on company business, so leaks to the almighty analysts are not as forthcoming as in other companies, ergo, Apple is punished by never meeting the analysts expectations for it.
One thing is clear from this earnings season, the economy is slowing and companies can not cut anymore from their bottom lines to simulate top line growth. With the Federal Reserve pulling away the candy of quantitative easing, ObamaCare stealing more jobs and wealth from the economy, and a record number of people unemployed in this country than ever before, it is going to be a bumpy ride for the financial markets and for all Americans.
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