Posts Tagged ‘stock market’

Our expert president

Wednesday, March 4th, 2009

Yesterday, President Obama shows his talent at stock analysis. He said:

“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,” Obama said Tuesday.

Would someone please tell me what “profit-and-earning ratios” are ? I’m not an expert, like Obama, and I don’t give advice but what I have read about are “price-earnings ratios.” That means, if the stock costs $50 and yields a dividend of $5 per year, the P/E is 10, usually a good place to buy if the stock is otherwise of value and has good prospects.

I’ve never heard of “profit-and-earnings ratios.” How would you calculate that with most companies showing poor profits or losses. How do you calculate a “profit-and-earnings ratio” for a stock of a company that shows a loss this year?

What this suggests to me is that Obama knows nothing about the stock market, except how to make it fall 20% since the election. I’m not the only who worries.

In fact, the market is collapsing precisely because Obama is doing almost everything wrong when it comes to putting in place a sound long-term strategy — from shaking the confidence of the market and the public, to targeting businesses and the investor class in America, to promising tax increases in a nasty recession, to increasing spending by trillions of dollars, to being clueless about how to deal with the banking crisis and toxic assets. The performance of the market is evidence it has almost no confidence that President Obama and his Administration know what to do to help the American economy regain its footing. And why should it?

An Obama win and its consequences

Saturday, October 11th, 2008

I think this editorial says it best:

The freeze-up of the financial system — and government’s seeming inability to thaw it out — are a main concern, no doubt. But more people are also starting to look across the valley, as they say, at what’s in store once this crisis passes.
And right now it looks like the U.S., which built the mightiest, most prosperous economy the world has ever known, is about to turn its back on the free-enterprise system that made it all possible.
It isn’t only that the most anti-capitalist politician ever nominated by a major party is favored to take the White House. It’s that he’ll also have a filibuster-proof Congress led by politicians who are almost as liberal.
Throw in a media establishment dedicated to the implementation of a liberal agenda, and the smothering of dissent wherever it arises, and it’s no wonder panic has set in.

The federal bailout bill has flooded the markets with money but it doesn’t seem to be working. Why ?

It starts with a tax system right out of Marx: A massive redistribution of income — from each according to his ability, to each according to his need — all in the name of “neighborliness,” “patriotism,” “fairness” and “justice.”
It continues with a call for a new world order that turns its back on free trade, has no problem with government controlling the means of production, imposes global taxes to support continents where our interests are negligible, signs on to climate treaties that will sap billions more in U.S. productivity and wealth, and institutes an authoritarian health care system that will strip Americans’ freedoms and run up costs.
All the while, it ensures that nothing — absolutely nothing — will be done to secure a sufficient, terror-proof supply of our economic lifeblood — oil — a resource we’ll need much more of in the years ahead.
The businesses that create jobs and generate wealth are already discounting the future based on what they know about Obama’s plans to raise income, capital gains, dividend and payroll taxes, and his various other economy-crippling policies. Which helps explain why world stock markets have been so topsy-turvy.

And that doesn’t even mention the assault on freedom of speech that is planned by the people who ensure that You Tube videos critical of Obama and his friends disappear in an hour.

We do have the advantage of a preview of Democrat government in charge in California.

The Golden State’s finances are a mess. California’s general obligation debt has tripled in the past six years and is now almost equal to the state’s $145 billion annual budget. Even without any new loans, in three years the state will spend a record 6.1% of its budget just to service the debt it already has. What’s more, with the economic slowdown, the state is now expecting a deficit larger than $1.1 billion for the first three months of this fiscal year. The state’s rainy-day fund is running dry, which has hurt its credit rating.

Would that cause a retrenchment in spending ? Not with Democrats (and a RINO governor).

California Gov. Arnold Schwarzenegger sent an extraordinary letter to Treasury Secretary Henry Paulson asking for $7 billion. Although the governor has since withdrawn that request, it testifies to the dire state of his budget. Yet days before penning his note, the governor told an audience at the Commonwealth Club of California not to worry about the state’s budget crunch and to approve $9.95 billion in new debt on the November ballot to build a bullet train to connect Los Angeles to San Francisco: “Just because we have a problem with the budget does not mean people should vote ‘no’ on high-speed rail.”

The bullet train is a fantasy that will never pay for itself, let alone add thousands of new net jobs. The Democratic Party used to be just as conservative on spending as the Republicans. The difference was in emphasis on working men and women vs businessmen. Now, rich businessmen donate most money to Democrats and fiscal prudence is not a feature of Democrat rule. It isn’t just limited to the state, either as cities and counties are also insolvent.

God help us all.