Rescued by the Junior Geniuses

Sunday, May 03, 2009

Rescued by the Junior Geniuses

· Government

Have you noticed that time has a way of exposing truth, copycats and frauds? It seems the current politicians in the majority are reinforcing their opinion the voters gave them a mandate for the enactment of Democratic polices. And now it seems those polices are assuming a 21^st century –type of manifest destiny. Yet when you examine the proposed actions, two facts stand out: not one of the people proposing these changes has ever had any success in prior attempts in what they are suggesting we do on a nationwide basis, and that each of their proposed actions have been attempted before, in much the same way, and have not only resulted in failure, but the correction of the “experiment” took a long time and cost much more than if the original position had been improved instead of dismembered.

Each of the proposals being worked on is recycled from prior attempts. The difference this time is the voting control – not the quality of the act or its potential for success. Perhaps the voting public needs better information regarding what is being proposed, and how it will affect individuals, families, businesses, and the country as a whole. Information that is more factual (less ‘branded’). Information that is provided from the documents themselves, not from “media” or “public relations” or “press secretaries”.

Another little point to keep in mind is that most of these politicians are promoting ideas from staff or selected “authorities in their field”, most of whom have been academians and have never actually built or run for- profit organizations. Given the opportunity to prove their theories on a national basis is exciting to them. They see tremendous upside for themselves if successful. On the other hand, if they are wrong, someone else will clean up the mess. I believe there may be major problems in the not-to –distant future simply because I see very few people asking “but what if you’re wrong?”

· Finance

If everyone received a penny for all the articles written about the major banks in the last 18 months there wouldn’t be a recession. Since that’s not possible, let me offer this. From the 3 year highs of the major banks and bank indices (at 30 –to 1 leverage) to the proposed 10-to -1 leverage that these institutions should operate, bank stock prices are about were they should be. Yes, some banks are better (or worse) than others, but as we all know, the market, such as it is, is forward looking. So give a 16% variation in price, based on the old 8% average return of the good old S&P 500, add in a little positive slope because we are not going to zero, and most of us should stop worrying about the banks and pay attention to the real problems.

Till next time