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Trending Lower with Team Obama
02/11/09 by Matt McAbby
Filed under Charts of the Week
As of this writing, the short term trend of the market is decidedly down. Whether this lasts a day or two, or extends to a week or more is not knowable.
The reason? Timothy Geithner, President Barack Hussein Obama’s choice for Treasury Secretary, was inadequate to the task given him. He said nothing concrete about the government’s new proposals vis-à-vis the banking system, and the markets reacted (as markets do) when faced with ever more uncertainty: they collapsed.
Did no one instruct Mr. Geithner in the ways of the government con? Did no one explain that one must instill confidence at all costs? Wall Street would have reacted better to a series of well-crafted lies than the obfuscation proffered by Geithner.
In short, we have an Obama plan in the making. A plan to make a plan. This required a televised speech? Is there no one on the illustrious financial team who knows how markets work? Where was Buffet? What happened to the dream team?
I’m starting to worry.
We have written recently in this space about the need for the dramatic to instill confidence in investors. Confidence is all that lies between current market levels and the soaring heights that will be achieved when (if?) sideline sitters and their trillions are put into motion. Just confidence. Timothy Geithner failed to deliver that confidence. It’s now the big man’s job. And if he fails, so do we all.
In fact, it may already be too late. Expectations were building for a long time regarding this message, and the one to come next. We needed a show and we got a dud. A show, man! A show! Something crafted along the lines of the great American musical tradition. Give us Hair; give us Cabaret; give us Porgy and Bess! Wrap them all into one, and make a stage, and set the lights, and give us a show!
Meanwhile, In Germany, a Factory Sector No-Show
The chart below shows the latest numbers for German Industrial production and factory orders, and it doesn’t look good.
The Europeans, you see, know very little about American showmanship. And so, while we throw everything we can at the economic enemy we face, Europeans prefer a tepid, measured response. A response, incidentally, that isn’t working. ECB Chief Trichet has held off on lowering interest rates in Europe for a number of reasons, none of which make any sense at all. Data show that the economy there is clearly deteriorating. Along with the Euro. Take a look:
The Chinese, on the other hand, do seem to get it. Not only have we seen two distinct and sizeable stimulus packages out of Beijing, but they have been working from the fiscal side as well and what! hey! they threw one heck of an Olympics back in the summer, didn’t they.
China’s factory orders show a glimmer of hope:
The economy there appears to be responding well to both monetary and fiscal measures – even if the long-term trend still appears lower. Time will tell.
And that leaves America. The market will now begin to digest the news from abroad and domestically with a decidedly less positive spin. Whereas before, judgment was withheld when negative economic news was revealed, those days are likely over. No longer will traders be so long-suffering.
And that leaves us with a question:
Can the President put on a show?
For want of a shred of confidence, will this market be lost?
Matt McAbby
Analyst, Charts of the Week
M Sidhu on Fri, 13th Feb 2009 10:46 PM
Yes we can!!
Warren B. on Fri, 13th Feb 2009 11:03 PM
I THINK THIS WHOLE STIMULUS MESS WAS PUSHED THROUGH WITHOUT ANUONE [INCLUDING MEMBERS OF CONGRESS] KNOWING WHAT WAS INCLUDED IN THE BILLS.
THIS IS THE BIGGEST FARCE THE U.S.A. HAS EVER HAD TO STOMACH.
THIS WILL EVENTUALLY CAUSE SEVERE INFLATION.
WHO IS GOING TO BY ALL THE U.S. DOLLARS THAT WILL BE PRINTED???
CHINA HAS ALREADY MADE IT KNOWN THEY WILL NOT BE BUYERS AS USUAL.
OUR NATION MAY BE HEADED INTO BANKRUPCY!!!!??????????????
WHAT WOULD HAPPEN TO ALL OF THE MANY OF US WHO DEPEND ON THE MONTHLY GOVERNMENT CHECKS????
Joanne on Fri, 13th Feb 2009 11:29 PM
I know there is a God and His Son Jesus and the Sweet Holy Spirit still in this world and HE is still in control and knows what is and what is to be. People say that the earth is running out of stuff – oil, gas, etc., but that is not true. Get to know HIM and you will then have nothing to worry about. HE made this earth and HE knows what HE is doing. Trust HIM and HE will show you great and might things to come!!!!
Blessings,
Joanne
RER on Fri, 13th Feb 2009 11:35 PM
Greed got us into this mess and believe it or not, it will also get us out. I predicted this mess back in 2002 and had a long discussion with my banker about what was to come. Unfortunately, for the country I was right on. We are proceeding down the wrong road with the government bailout of trillions of dollars down the rat hole. By the time our stupid government spends us into oblivion, we will not have enough resources left to preserve the union. The best solution is to let it hit bottom, because unless we let the markets solve the problem, we are destined for another round of bailouts in another 15-20 years of much greater magnitude. I have worked through three recessions and each one has been more serious than the previous and it will only get progrssively worse, if we don’t let it bottom out and build back from the real bottom. Even though I predicted the fall of the Russian empire twenty years before it happened, I now predict: Watchout for Russia during the next twenty years. China has tremendous financial power, but Russia has the will to control the world as well as substantial resources to back it up. The U.S. could be faced with losing its super power leadership status within the next 50 years, while Russia is patiently waiting in the wings for our financial collapse. WE MUST LEARN TO LIVE WITHIN OUR MEANS AND INVEST WISELY FOR THE FUTURE PRESERVATION OF OUR COUNTRY. WE NEED TO PUT COUNTRY FIRST, FOR WE HAVE BEEN PUTTING IT LAST BEHIND OUR INSANE GREED FAR TOO LONG.
C. Price on Fri, 13th Feb 2009 11:38 PM
You tipped your biased hand when you employed the worn out McCain/Palin tactic of using Obama’s middle name to remind people of his Muslim Father’s faith. That is not an issue here.
What you seem to long for is the Bush method of lying to the public. Don’t you know that is what America voted out last November? We are tired of lies. Truth may me painful but it’s the best way to go. The lies got us into this mess, let the truth work for a while. So what if the market falls? It will recover in time, regardless of the GOP’s hopes for this administration to fail.
Shan R. on Sat, 14th Feb 2009 12:03 AM
you guys don’t know what you’re talking about. who about we just blame the economy on the weather tomorrow, or better yet, on that guy who opens and closes his umbrella on the sunny afternoon. why on earth would you think that one guy and his mumbling would effect a world economy? how about this, maybe markets are inflated due to our consistent recourse to printing fiat money, and therefore it’s desperately trying to get to it’s true value.
hot air has kept it up this long, but i have a feeling no matter what timmy or any other bumbling treasury secretary says, they wont be able to exhale enough hot air to keep this sour global economy from rectifying itself.
John E. on Sat, 14th Feb 2009 12:25 AM
Geez! Give Obama a break. he probably hasn’t even had a chance to try out the hot-tub yet. How can anyone expect this brand new president to fix 8 years of GOP (Dubya’s)screw-ups in one month? Personally, I give him credit for even taking the thankless job of sweeping up the cr*p that the GOP have left after their little party. Further, I really appreciate him stating quite clearly that there are no easy fixes. I know that, you know that and any person with an IQ over 20 knows that. We’ve just gotten so used to being lied to by the last administration, that it kinda hurts when we’re treated as adults.
So far, I like what I see. And for the record, I’ve voted Republican my whole 61 years up till the last GOP abortion.
jegan
dante f. on Sat, 14th Feb 2009 12:31 AM
Actually the president knows what has to be done but it will be so drastic and explosive that he is willing to try all the destructive ideas that are in the stimulus to avoid persecution, blame and unpopularity. He needs to declare bankruptcy proceedings and begin to install the Bretton Woods systems. That would require the fortitude of a Lincoln or a Washington –The president has the opportunity to achieve greatness or failure if he refuses. Pelosi and Frank are not stupid but rather intentionally destructive – a fifth column if you will.
Stephen W. Ph.D. on Sat, 14th Feb 2009 12:36 AM
Very good article and our sentiment exactly.
True financial principles are being ignored or papered over.
The Piper has to be paid, the question is only when and with what.
Looking at history, we are in for a rude awakening, possibly a Dollar devaluation or a new currency, linked to what?
The Dow will hit 5500 before the system stabalizes ever so slowly. 90% of all Americans will lose their savings.
It will get ugly when the Stimulus package fails.
Bob on Sat, 14th Feb 2009 1:36 AM
It is my opinion that the current administration, including
the liberal senate and congress do not want a real recovery package. They are doing things backward to building a postive economic climate. They apparently want us to suffer great loss in order that “THE GOVERNMENT” can come along with promises in order to concentrate power at the federal level. They seem to be more interested in power, than “promoting the general welfare” mentioned in our great constitution.
dan e. on Sat, 14th Feb 2009 2:26 AM
Yes Matt- The country is in INTENSIVE CARE.Congress does not know whever its on FOOT OR HORSEBACk.
TOOTS PELOSI is waiting for REIDS new train to Vegas.Play numbers 5 and 15 TOOTS on the Roulette,
DAN E.
denise on Sat, 14th Feb 2009 3:01 AM
I am so tired of opinons like YOURS!!!!!!!!!!!!!!!!!!!!! If this problem was SO EASY to fix….where are YOUR solutions!!??????? Did it ever occur to you that a quick fix might take us directly into a finacial abyss??!! President Obama INHERITED this problem on day 1……..the Bush administration took us here over an 8 year period which was preclude by the deregulation-big business Regan era!! SO……LIGHTEN up and give this incredibly intelligent, calm leader of ours the time HE requires to get it right!!! And as you indicated with your tables and charts if other intelligent countries are getting it “wrong” then it must be more complicated than YOU are ranting about!!!! It’s opinions such as yours that got us into this MESS!!!!!!!!!!!!!!!!!!!!
Charles M. on Sat, 14th Feb 2009 4:49 AM
The “market” can only work by one principal: supply and demand. The market can not work properly with polititions fiddling with the rules, as most of them know nothing about anything except staying in power. The country needs someone like me to run it because I know the basic rules, have no friends in Washington and would not mind hurting their feelings. What can you say about a state where the voters keep electing morons like Biden, Byrd, Kennedy, etc.?
Henrik U. on Sat, 14th Feb 2009 4:50 AM
Self-confident faking of the economic facts of reality will only do harm, not good. So you guys should not be wishing for the Washington politicians to go about faking reality with self-confidence. See Ayn Rand and Ludwig von Mises.
nina h. on Sat, 14th Feb 2009 5:57 AM
Will no senator or representative stand up and say that the taxpayer cannot support any more pork at all. This is a crisis so stop the nonsence and work out a bipartisan plan to survive this crisis. Nina H.
Rusty on Sat, 14th Feb 2009 7:01 AM
Without the american citizen getting involved with what’s going on this country, it will continue to degrade. the politicians are only doing what they want because they know their constituants don’t care. Politicians are the children and WE are the parents. How we raise them is our responsibility and WE as parents don’t seem to want to take that responsibility
Lee W. on Sat, 14th Feb 2009 7:05 AM
GREAT ARTICLE, THANKS! You put your finger on it — the world’s money is sitting on the sidelines waiting for a dramatic leader. We need confidence to start trading again. Manufacturers and bankers, too. I’m passing on this article to all my friends, and look forward to more good stuff from Oxbury. Also, check my website (www.ideasforourfuture.com) for some other possibilities to improve the situation.
Best wishes,
Lee W.
Naples, FL & Denver, CO
william s. on Sat, 14th Feb 2009 8:46 AM
This reasoning is wrong, stimulus never works. Just extending
a debt economy. European method better than stimulus. Growth comes with demand, not stimulus.
Jim G. on Sat, 14th Feb 2009 8:59 AM
As a lifelong Republican I am appalled at the “Rule or Ruin” stance of the RNC and their herd if sheep in Congress. The financial press with their natural biases are little better. Instead of giving the Obama team a little room and encouragement, they are crowding them to make quick feel good decisions with apparently a goal of screwing up so the initiative fails. Rush Limbaugh has openly called for a strategy to make the program fail and urged all good conservatives to get behind it. What country do these effete morons live in and where are their true loyalties? Some might call it Treason!
david s. on Sat, 14th Feb 2009 8:59 AM
your quote “Chinee factory orders gives hope”.
You hit the nail on the head. This cannot be said in this country because so maany US factories have been outsource to China.
Rick J. on Sat, 14th Feb 2009 10:33 AM
Let’s see… we have an ACORN lawyer for a President (as far as I know, his only job other than brief tenures in the Illinois Senate and the U.S.S.A. Senate) and a guy who can’t figure out his own taxes as Treasury Secretary. How does that not inspire confidence? If you think it’s bad now, wait until Putin, the Chinese, and the Islamists get through with Obama.
I’m sure Soros couldn’t be happier.
George R. on Sat, 14th Feb 2009 11:02 AM
It would be nice if you or any of the reporters on the lack of brilliance of the last three presidents could come up with the right idea to help the world out of its doldrums. Evidently, no one knows just what it will take ( NO ONE WITH ANY AUTHORITY AT LEAST). Too bad. I guess we will have to waiy for time to heAl all of the wounds that we have msde, AND WILL CONTINUE TO MAKE, without leadership.
One other thing. Why don’t the thugs that put these know nothing types in office clear the decks ane start us up again?
Don’t they suffer when we suffer?
George R. on Sat, 14th Feb 2009 11:05 AM
Lee, get it out there farther than your website.
StevenDC on Sat, 14th Feb 2009 11:25 AM
Hey Matt,
I have a belief that you cannot be: Republican, Middle-class, and educated. Based upon your bias showing by employing the fourth-grade tactic of using the President’s Muslim middle name, you are apparently lacking the third qualifier.
I have now unsubscribed to your garbage and placed your website in my “Blocked” fire wall filter.
Does the word Fidiot reach your intellect? If not, contact me and I’ll break it down for you.
robert a. on Sat, 14th Feb 2009 11:50 AM
Democrats and those that voted for the pres have changed his name to Odama. Both the democratic party elite and voters are now saying What Is He Thinking? Then following up with we will in no way chage our thinking! Both parties could care less about the country and are spending vast amounts of our childrens money to prove it. Republican or Democrat we can now see the error in allowing politicians more than two terms in ofiice. They have sold our country and our heritage to the highest bidder that provides personal wealth and status.
Paul F. on Sat, 14th Feb 2009 12:13 PM
All the “show talk” in the world will not sustain this market. Show me the turn in the economy that will generate earnings growth and the market will respond!
john r. on Sat, 14th Feb 2009 12:27 PM
Good article, however it’s wasted on this generation of sixties deadbeats. This whole country is in a cocane haze and does not want to, cannot, and will not hear truth. They insist on beliving that personal economic salvation comes not from taking control of one’s own life, making the hard decisions and applying self discipline, working hard, but from simply putting “Froggy the gremlin” in office who will ” plunck his magic twangger” and instanly give you everthing you could ever want and sending the bill to that evil rich guy who lives up the street. Yes I know, his house is nicer than yours.
Herbert K. on Sat, 14th Feb 2009 12:52 PM
Without intent of criticism of your great article, I also point out that Russia’s position has changed markedly with the lower oil prices prevailing. Their economic position of strength might well be precarious. This will effect the political posture towards world economic cooperation, more likely in a negative manor … and blaming the US.
This factors in with potentially long term effect of the administrations policy of ramrodding it’s “package” through, as I believe it is seen by the inernational markets … as disastrous!
Only time will tell …
Texas warrior on Sat, 14th Feb 2009 1:33 PM
When you have bimbos running the show, what can you expect. Washington DC is now full of bimbos.
Hal M. on Sat, 14th Feb 2009 3:23 PM
Hi Matt:
I can only think that the object of your article was just to push peoples buttons. As a s…… disturber, I give you full points.
On the other hand, anyone that wants to fix the problems created by desception and unbridled avarice accepts that we are all in for a shock before the correction is complete.
The days of lying or blaming it on someone else are temporarily over. The greedy scum bags, whining for a continuation of the corruption had better run for the hills, or fess up and join in on the repair work.
Let’s get on with it without delay !
H
Larry D. on Sat, 14th Feb 2009 4:44 PM
How hard it must be to put on a show when it seems the script is not yet written.
Patricia N. on Sat, 14th Feb 2009 6:23 PM
I have worked in chicago for many many years.You have a political stalemate around money,Big Business and Labor.
The sooner someone admits it and says who is in Charge (OBAMA)
for labor. What do you want ? lowered intrest rates ,money back from being ripped off by the banks. Decent jobs !decent jobs !decent jobs ! We have been top heavy pay for Managment not paying any attention. Big Business does’t like Labor for a long time. I think if we want the markets to move again We better include labor and rebuild a STRONG MIDDLE CLASS.
We need schools and transportation and Solar ,wind and other tecnologies. Too many older homes and neighboorhoods around Brownfiels are long forgotton about. I believe in Urban Gardens
clothing the poor and helping people get off drugs,get rid of gangs and celebrating Diversity. I also believe that business should be regulated,paper work done on time,no Corporate Sabatouge. These are Christian Busines Principals.
Big Business has NOT PAID ENOUGH ATTENTION for too long.
You are paid to much your Carbon Footprint is too large and
we need to have sustainable (REDUCE<RECYCLE <reuse) walkable friendly communities with small business.
Tim on Sat, 14th Feb 2009 6:24 PM
Easily one of the stupidest articles I’ve read in a long time. If Wall Street whiners would quit begging for govt to breast feed them and get to work and actually DO something instead of steal everything they are trusted with, then maybe the Dow would respond. The author must be one of those at the trough used to fattening off obscene commissions for churning other people’s retirement funds until there is nothing left. Hint: There is nothing left. It’s time for Wall Street “brokers” AKA thieves to get a real job.
Busted B on Sat, 14th Feb 2009 10:58 PM
So, what ought the US do? What is the right way to go about recovery? All I see is criticism. Yet, I have yet to see or hear any answers. Well, I have heard so-called answers, all of which go something like this: Let’s just spend our way out of debt. Your tongue in cheek reply is to ignore the truth and put on a show. Everyone deserves at least a good show. If someone in government stands up and says they do not know the answer, then criticize the crap out of him and demand Porgy and Bess so that our market gurus can have something – anything, for crap’s sake – to back their predictions and recommendations on.
Here is a problem to consider: All of my life I have been told that the best and the brightest will rise to the top and lead us into prosperity and point our eyes to the Light. The best and the brightest, mind you, have proven themselves unworthy of leading us. It seems they have lead themselves to previously unimagined wealth that the rest of us shall never see. The best and the brightest – the captains of industry, finance and government – never intended to lead us anyplace. Their entire vision has led them to the trough from which their fellow gluttons are filling themselves. The Wall Street no-good-doers who took home $18.4 billion of their clients’ cash as a reward for losing
>$2,000,000,000,000 in equity are crooks, thieves, liars and cheats. Were they to have preserved their clients’ capital, I suppose they would have asked for ten times as much. And heaven forbid if they had made money on their crappy management. They they would have felt entitled to take all of their clients’ cash. Is that how it is supposed to work? Enormous performance bonuses for lousy performance? The logic goes something like this: If we don’t pay the best and brightest losers enormous salaries, we won’t be able to attract and retain them. As far as I am concerned, get rid of every asshole who won’t earn his way by contributing to those whose money he would roll in. Screw these felonious gluttons. Let them go earn enormous bonuses in other industries besides those in which they are running amok in their fiduciary responsibilities.
The banks? Let them fail. Don’t pay their managers bonuses, for crying out loud.
The brokers? Let them fail. Don’t pay them bonuses so that they will stick around. Make them leave.
The insiders? Let them fail. They are cheaters anyway. Put them in jail
The lobbyists? Ban them from Washington DC and prosecute them for buying government stealing from the taxpayers.
Madoff? Execute him and any of his cronies and relatives who helped him perpetrate the biggest fraud the world has ever seen. In China, he would have been marched in front of a firing squad two months ago.
Let’s make rules that make it clear to “the best and the brightest” that they cannot lie, cheat and steal from those who give them their power through the trust we place in them. We spend trillions of dollars in hopes of preserving our security, while those self same best and brightest plunder our chances and ruin our standing in the world.
What has happened here is obscene. Justice and fairness are long over due. Take down the plundering plutocracy that rides this once great nation.
pete c. on Sun, 15th Feb 2009 12:11 AM
I think our country is in BIG, BIG trouble, and latest “economic stimulus package” is a veiled package of failed European socialism!!!!! Pete C., retired mortgage banker, builder, and realtor
Jim on Sun, 15th Feb 2009 2:20 PM
I think it is a big brain wash scheme by the media, inspired by govenment. FOr the last eight years we have been told how we were in the worst economy since the 30′s. how bad it is. Last week the media has now started the inproving economy. After being told these things for long enough, as in the campaigne change chnage change we belieed it and we are now getting change. The media will try and leaad us into believing things are getting better and many will believe and start spending and with the stimulus it might work. The goernment have bailed out there sponsors to get elected as usual. With taxpayer funds.
John W. on Sun, 15th Feb 2009 7:24 PM
So far team Obama has done nothing right and the prospects for the future actions look worse.
janet z. on Sun, 15th Feb 2009 10:54 PM
If Soros owns the Democratic Party and also owns a large hedge fund, what is to stop that fund from spreading rumors like the ones that drove the market up regarding bank rescue…then sending the treasury secretary out to say absolutely nothing and drive the market straight down….I bet someone made money that day…Are we to believe that was set up or is TG just the stupidest individual alive? I would have to believe it is the first and most obvious.
steve e. on Mon, 16th Feb 2009 11:58 AM
the spending plan that passed friday is the stupidest thing I’ve seen our out of controll goverment do in my 57 years.It appears that the spending bill is nothing more than a streight up pay off to democrat voters.Do they not understand basic economics and how our system works. We are in uncharted waters with regards to government takeing ownership of big business. what about us that have to compete with these businesses, what about the management of these businesses. We all know that government is the most ineficient, ineffective managers of anything. If you whant to gurantee it will be screwed up just let government manage.Cash is king I’m out of stocks and liquidating all real estate. I’m an optimist by nature but now am very concerned about our country and economic direction.
best regards
Steve E.
wayne s. on Wed, 18th Feb 2009 12:39 AM
I wish Ron Paul was our treasury secretary. He would kmow what to do to fix the economic mess we are in. In the meantime, buy silver!!! Thats what I am doing!!
G. Sanada on Wed, 18th Feb 2009 4:54 AM
What kind of “show” you looking for ????
Nobama B.S. show??????????????????
Maybe the Nobama bread and circus show???????????????
FADE the frickin Nobama/Nobamanoids. FADE the corrupt interventionist/meddling politicians.
Corruption = ultimate FAILURE.
Dig it????????????