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Obama's Radicalism Is Killing the Dow

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posted on Mar, 7 2009 @ 06:33 AM
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This is a sobering article. It details how Obama's approach to the economy goes much farther than trying to escape the current crisis - it is a deliberate step towards bring a European-type of socialism to the US.

Fortunately, the Omnibus spending bill was pulled off the Senate floor on Friday because the 60 votes needed for passage came up one vote short. However, Reid will use this weekend to twist the arm of targeted Republicans in order to get the votes needed for passage.

But that is only the beginning of many debates to come.

online.wsj.com...



It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis

The illusion that Barack Obama will lead from the economic center has quickly come to an end. Instead of combining the best policies of past Democratic presidents -- John Kennedy on taxes, Bill Clinton on welfare reform and a balanced budget, for instance -- President Obama is returning to Jimmy Carter's higher taxes and Mr. Clinton's draconian defense drawdown.

Mr. Obama's $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents -- from George Washington to George W. Bush -- combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs.





posted on Mar, 7 2009 @ 07:08 AM
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Yes, and NPR is already questioning his approach to this economic crisis, whats the odds of that! Were they not just a few months ago Gung Ho for this guy?

Looks like his saviour illusion has come to be caput, things are changing fast for this dude.

[edit on 7-3-2009 by 38181]



posted on Mar, 7 2009 @ 07:15 AM
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I agree with the article in the OP, everytime he opens his mouth the DOW goes crashing. He should just STFU already. His approval ratings are going to be lower then Bush II's by the end of the summer if he keeps up at it.

I am willing to bet the farm that if Obama shuts up and his media lackey's stop trumpeting his every move as a godsend that the economy will be almost totally back to normal by the end of 2009.



posted on Mar, 7 2009 @ 07:16 AM
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Obama has gone about financing his plans the wrong way with all that debt. But on the other hand he is spending on things that are worth while expenses.

They say, America is the richest nation in the world and so on but when you compare the facilities and infrastructure in America to other developed countries like Japan, or countries in Europe, America is never no1. What is the point of being the "richest" when you live in a slum ?? The social services in America are also falling apart. Our electric grids are ancient, so are our bridges and highways. Not to mention the fact that technology wise, even though we develop most of the world's leading technology, we are generally the LAST people to implement them ourselves.

I think its long overdue investment. With a system as broken as we are in, the value of the Dow is probably the least of the President's worries. Making sure people still have thier jobs, their houses would and should be the primary concern.



posted on Mar, 7 2009 @ 07:21 AM
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Nothing is killing the Dow.
It is returning to its normal value area.
The past years of market manipulation have falsely inflated it.
It was never worth 14000.
Heck its not even worth 5.
Remember this started back in 06-07, who was the president then?

Who were the republican criminals, heading the SEC, when they permanently removed the uptick rule?To allow a Bear raids?

Some people have minds like robots.



posted on Mar, 7 2009 @ 08:47 AM
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Originally posted by ChrisF231
I agree with the article in the OP, everytime he opens his mouth the DOW goes crashing. He should just STFU already. His approval ratings are going to be lower then Bush II's by the end of the summer if he keeps up at it.

I am willing to bet the farm that if Obama shuts up and his media lackey's stop trumpeting his every move as a godsend that the economy will be almost totally back to normal by the end of 2009.


Ah, but he won't. He not only thrives on attention but NEEDS it.



posted on Mar, 7 2009 @ 09:48 AM
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Mr. Obama's $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents -- from George Washington to George W. Bush -- combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history.


I'd really like to see some figures to back up these claims, and not word trickery like comparing the federal budget to the public portion of the national debt.

A $3.6 Trillion budget for 2010 will not add "more to the debt than all previous presidents -- from George Washington to George W. Bush -- combined." Easily demonstrated since the 2009 budget was $3.1T and the TARP program was $0.75T, making a total of $3.85 Trillion. There is also a 13% increase in the budget for the DOD from $515B to $663B.

Looks like a bunch of lies to me.



posted on Mar, 7 2009 @ 11:57 AM
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When George Bush took the presidency the S&P 500 ( a more accurate market barometer than the dow) was trading at a level of 1456. When Obama took office it was trading at 850. Down 41`% during the Bush years. Since Obama took office the S&P is down 167 points versus 550 points in the last 9 months of the Bush presidency. Blame this Obama but it is obvious that this decline is just a continuation of the Bush declines and the situation that he left the economy in.

As to the market being over/under valued, it is trading at 12 times earnings. Historically this is very low. If you use operating cash flow(add back in non-cash expenses) instead the market is selling at about 8 times cash production. This equates to about a 12% cash flow yield which compares to a .7% risk free rate. These two variables are at the biggest historical spreads in history making the market in my view, extremely undervalued. The market could double and it would still be relatively cheap on this basis. Likewise earnings could halve from here and still te market is undervalued.

Rates could go up but i doubt it. Low economic demand will cause deflation, which will make the real yield on treasuries larger than their coupon. So low rates are here for some time, so I think that part of the equation stays constant.

Goverment spending pales to the amount of money has been taken out of the economy. If you figure that every dollar created becomes five dollars in the economy, then if you figure $11 trillion in equity losses and $5 trillion in mortgage loan losses, not to count all the deravitive losses, then you are talking about 50-100 trilion being removed the economy when factoring in multiplication. This is a massive amount of money to disapear and if you wnat things to get better than you need to replace it.

The biggest problem of all this is that we issue debt to create dollars. We need to be able to mint our own money. Right now there is less than 2 trilion in real US money. That is totally insufficient for an economy of our size. As a result we have had to turn to a deposit -loan scheme where the amount of deposits is a fraction of the neeeded loans. This is entirely unsustainable in a period where loan defaults rise. We need to be replacing this debt with hard cash. In other words monetize the economy. With more money and thus more savings in the banks you could drastically decrease the leverage of the financial institutions while still maintaing a stimulative level of lending. It's effects on inflation would be neutral as the increased cash would replace many multiples of debt down the line.

I think the economy needs a paydown of debt of $10 trillion or so. If you figure 100 million legal households in the USA that works out to $100,000 each. Money would have to be used to pay off . If you have no debt than you get a payment of $25,000. If you don't have $100,000 but some you get reduced cash from the 25,000.

Then you attack the rest of the debt that is left(lines, credit cards, mortgages rolled into one). You refinance it all at 4% and let the debtor pick the term up to 30 years. You let the banks keep them, and they will be profitable, as banks will borrow directly from the fed at a fixed 2%. Amount of bank leverage then gets adjusted to stimulate or slow down the economy. once the $100,00 per household is paid off, then the banks will have much more moderate leverage. This will also make all the CDS expire without having to pay off (which by the way is what the big money doesn't want, as if they do payoff, certian folks will own almost all of the American economy).

So basically what you have now is $10 trillion being put in the hands of banks and investors who are getting repaid on their loans. This is basically money they had before anyways. They will use this money to invest in american industry, stimulating the economy. Foreiegn invetsors will use that money to buy american goods, that we will be making once again due to new investment in american industry. Families would be able to resume their normal standard of living again, having been relieved of some debt payments. Banks would be whole, although they would have to abide by much higher reserve and leverage requirements(target of 50% and 2X leverage over time). Borrowers would be held to stricter standards. Investors would have much higher quality debt to invest in. All this would serve to slow down the money velocity significantly enough to offset the effects of $10 trillion in investors hands.

Where does the $10 trillion come from? Under the current system I understand that the fed refunds to the treasury all excess interest it recieves above it's cost to operate. They also get some kind of dividend or something. I say lets scrap the dividend and use the fed for all the goverment borrowing rather than using foriegn countries. Of course just creating our own money instead of using the fed is preferrable, but I favor the Fed over other sovereign goverments.

Bottom line is if we want to eliminate debt in our economy, we have to increase the amount of money in circulation by a large amount. There really is no other choice. No better way to do it than to just wipe the debt out, pay off the lenders and let that money then be used to reinvigorate the economy. Regulate the banks properly and you could prevent it from being all that infaltionary, if at all.



posted on Mar, 7 2009 @ 12:13 PM
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Crunch all the numbers you want, point all the fingers you want.
Bottom line, there is no "faith" in the system and BHO isn't
bringing any faith to the table.

Start locking up some of these slimeballs that caused this mess
on both sides, and you have a start.

Won't happen because both sides are controlled by the banks,]
the same banks that run the world.



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