“We are God’s partners in matters of life and death.”
President Barack Obama – August 20, 2009

A friend of mine sent me an e-mail with this quote and his reply – a new low. It came from this article. Everyday something unbelievable comes out of Washington. Let’s dissect this statement. We (you and I but mainly the Government) are partners (make decisions together – are equals) in matters (all situations) pertaining to life (killing babies) and death (determining who lives and who dies).

According to this article and many others that verify the statement, President Obama was on a phone conference with a group of rabbis yesterday morning. He was trying to get support for his healthcare plan. This is a frightening statement if he truly believes it.

Tags: Bob Brooks, death, Deceptive Money, God, Government, healthcare plan, life, President Barack Obama, Prudent Money, rabbis, Washington

I know that I have been very critical of politicians.  Of course, I think with good reason. Let me stop and just pay a big compliment to the Obama administration.  This administration has to be the greatest marketing machine on the planet.  

So, we have the “I want to spend 3.5 trillion dollar” road show that President Obama has orchestrated this past week.  A Jay Leno appearance, a 60 Minutes appearance, a President New Conference (pre-empted America Idol) and then the White House live internet question and answer session.  The last one was especially interesting to me.  The news conference didn’t go so hot for the President this week.  He was asked unscripted questions and had to answer them on the fly without losing his cool.  Well, said another way, he had to answer unscripted questions.  He didn’t really get the “keep your cool” part down.  Media, don’t ask the President questions about AIG.  He might not have all of his facts together to give you an answer.

So, what makes the most sense?  Rally the American people and the media together and answer our questions that we e-mail to the White House.  This was ingenious.  It is as ingenious as the e-mail campaign he is running.  I really mean it.  This man knows how to market a message. 

Now do you really think that President Obama saw those questions for the first time or that those questions were randomly selected or maybe even scripted?  Some of it seemed to be prepared answers for hand selected or maybe even scripted questions.  It all flowed together too well to support his message.  I will say that he is the master of selling a message.

Then we got this news release yesterday.  

Financial Experts See an End to the Recession by Year End 

Well, call me relieved to know that the worst recession since the Great Depression is going to be over by year end.  I just find all of this strangely coincidental.

A Chicago-basedcompany gathered the experts and hosted the event.    Hmmm…a Chicago-based company…President Obama pretty much owns Chicago… Sorry, I was thinking out loud.  Well, as I wrote in a previous blog, the experts rarely get it right.  The timing of this news seems pretty convenient.  It is released right in the middle of the “I’m going to fix everyone’s problems…just rely on the Government” road show.   Don’t get me wrong – I hope that they are correct and I hope that everything I am writing right now will appear to be foolish in 9 months.  Just in case, I want to keep you informed.

This country is firmly entrenched in, at the very least, a horrible recession and maybe even a light depression.  Besides some construction worker jobs (who all have to be part of the Union if they want to work Government jobs) created by all of the building projects, I don’t see a whole lot of jobs being created.  Can someone seriously solve this job problem with real programs and stop needlessly spending money we don’t have? 

The stimulus program might start to give some stimulus in a few years from now.  The experts say that credit will start flowing again.  I have an e-mail question for the President.  Who can borrow the money?  Who wants to borrow money?  How about some more debt?  Who would like some more debt right now?  Credit scores are shot and people are without jobs.  It doesn’t look like the beginnings of a borrowing binge to me.

The article that I read made a point to announce that this declaration by the experts was made on the 64th day of his Presidency. 

So, where does all of this marketing get us?  Well, it keeps an American population believing that politicians will save the day.  Thus people remain entitled and continue depending on the Government.  That just continues the building of an enormously Big Government. 

The worst part is that Americans go back to sleep because of the illusion that the Government is going to take care of them.  They don’t do the things that are needed.  They don’t take the steps that are necessary. They just let the agenda live and allow their quality of lives to diminish. 

The sad thing is that most people don’t realize that there is hope.  There is opportunity.  However, no one will ever see it without taking that control back and focusing on the only thing that matters.  How do you take control back?  You give it to…God.  

Tags: entitlement, President Obama, recession, Unemployment

President Obama has been working overtime (Jay Leno, 60 minutes, Presidential Press Conference) to convince you that he knows what he is doing and that his 3.5 trillion dollar budget needs to be passed.   It is turning into Obama Overkill.  To make matters worse, his news confidence to tell me the same thing that he has been saying in all of his other media appearances forced American Idol to move to Wednesday night.   At least on American idol the American people’s vote really counts. 

All of the arguments for the largest budget in US history are based on the assumption that we will have mild losses this year and rebound next year and have strong growth for the following 3 years. 

This week, Christina Romer, head of the White House Council of Economic Advisers, said she was “incredibly confident” the U.S. economy will recover within a year.

Wow, the worst economic crisis since the Great Depression and just like that it will recover and everything will be OK.  I thought that Obama said it would take time.  That isn’t much time to me when considering the scope of things.

Here are some quotes from another time when politicians and economists desperately wanted you to believe everything was going to just fine.

 “We will not have any more crashes in our time.”
- John Maynard Keynes in 1927

“There will be no interruption of our permanent prosperity.”
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

    “There may be a recession in stock prices, but not anything in the nature of a crash.”
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

“This crash is not going to have much effect on business.”
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

“We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices.”
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

“Buying of sound, seasoned issues now will not be regretted”
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

“Some pretty intelligent people are now buying stocks… Unless we are to have a panic — which no one seriously believes, stocks have hit bottom.”
- R. W. McNeal, financial analyst in October 1929

“…despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation…”
- Harvard Economic Society (HES), November 2, 1929

“… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”
- HES, November 10, 1929

“The end of the decline of the Stock Market will probably not be long, only a few more days at most.”
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929

“In most of the cities and towns of this country, this Wall Street panic will have no effect.”
- Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

“Financial storm definitely passed.”
- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

      “I see nothing in the present situation that is either menacing or warrants pessimism… I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress.”
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

“I am convinced that through these measures we have reestablished confidence.”
- Herbert Hoover, December 1929

“[1930 will be] a splendid employment year.”
- U.S. Dept. of Labor, New Year’s Forecast, December 1929

  “…there are indications that the severest phase of the recession is over…”
- Harvard Economic Society (HES) Jan 18, 1930

 “There is nothing in the situation to be disturbed about.”
- Secretary of the Treasury Andrew Mellon, Feb 1930

 “The spring of 1930 marks the end of a period of grave concern…American business is steadily coming back to a normal level of prosperity.”
- Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930

Between 1929 and 1932, the stock market lost 89%.  The greatest stock market decline on record marked the beginning of the beginnings of the Great Depression which lasted until 1937.  The entire time politicians and economists were working to make the American People believe that nothing was wrong. 

Tags: bear market, Great Depression, Obama

It is absolutely amazing to me that every time anyone from Washington delivers a new “solution” to the financial crisis, the word “trillion” is used.  It is so bad that I think we have become de-synthesized to the word.  As the bill continues to add up, we need to make sure that we understand what “a trillion” really means.

·    The country has not existed for a trillion seconds.
Western civilization has not been around for a trillion seconds.
One trillion seconds ago – 31,688 years – Neanderthals stalked the plains of Europe.

·    Million: $1,000,000
Billion:  $1,000,000,000
Trillion: $1,000,000,000,000 (12 zeros)

·    A million seconds is 12 days.
A billion seconds is 31 years.
A trillion seconds is 31,688 years.

·    Republican Senate Minority Leader Mitch McConnell once said that if we started spending $1 million the day Jesus Christ was born, and spent $1 million every day since then, we still would have not spent $1 trillion! (Unverifiable but interesting)

·    If you laid a trillion one dollar bills end to end, you could make a chain that stretches from earth to the moon and back again 200 times before you ran out of dollar bills! One trillion dollars would stretch nearly from the earth to the sun.

OK, you get the picture.  A trillion dollars is a lot of money.  So, why is it important?

President Obama wants Congress to pass a $3.5 trillion dollar budget (the largest in history).

This might be an outdated number due to the latest announcements.  The total debt obligation of the United States now exceeds 46 trillion dollars.  

After you have picked yourself off of the floor, ponder the following questions:

·    Do you honestly believe that we are ever going to escape this debt problem?

·    President Obama is a smart man and can do the math.  Does he care that he is going to destroy the economy with this spending?  It seems to me that his main priority is building a huge Government that Americans are dependent upon and that the health of the economy is not even a concern.

·    Every aggressive spending plan that he has proposed has been forced down the throats of America and Congress and bullied through to passage.  What is he really up to?

·    What will American look like in the future?

Tags: Debt, Obama, trillion

The Treasury Department and President Obama unveiled details today on the “Home Affordable Modification Program” – the first program rolled out by the Government without an acronym.  We have TARP and the recently introduced TALF.  What?  No new acronym for the new mortgage program.

Personally, I would have called the program – BAIL (Buyers Assistance Incentive Loan).  Yes, it encourages the entitlement attitude in this country.  Yes, it encourages America to depend on the Government.  Yes, it rewards bad behavior.  Yes, the people who have not made bad decisions or ripped people off will fund the program.  Finally, yes we are taking more and more steps down the path of socialism.  All the great qualities of every bail-out made by the Government.  However, this one has a new one – Incentives.

Yes, this is the new ugly word.  I am not going to waste our time together by talking about the details.  If you want the details, listen to this podcast.  I want to make sure that you are aware of the INCENTIVES in BAIL.

Basically, Obama is going to reward bad decision-making as well as reward those who have ripped off the American people.  Here are the INCENTIVE details of BAIL.

There are two sets of incentives.  There are incentives for the servicers (the people who handle your mortgage and the people who are originally responsible for creating these toxic loans) and there are incentives for homeowners.  Yes, we are going reward homeowners who are in bad loans.  These incentives will be paid out if everything goes successfully in BAIL.

The servicers will receive an up-front payment               $1,000

Servicers will receive Pay for Success payments             $3,000

Borrowers will receive Pay for Performance                     $5,000

One time bonus incentive payments to lender/investors   $2,000

One time bonus incentive payments to servicers             $500 

                                                          $11,000 potential incentives per loan

So for every loan that is written there is potentially $11,000 dollars paid out in incentives.  If the Obama Administration is correct in their math, taxpayers could pay out anywhere from $44 to 55 BILLION for BAIL.  Taxpayers are going to give homeowners in the program $1,000 each year for 5 years, which will go to reduce their mortgage.  Plus, taxpayers will pay for the cost of reducing the payment. 

This is OUTRAGEOUS!  Are you kidding me? 

OK, bail out the homeowners if you think that is going to save the system.  Don’t get me wrong!  I don’t agree with any of these bail-outs as a solution.  Give them money for participating?  Give the servicers money for doing their job?  How about homeowners just being grateful they are not going into foreclosure?  How about these banks just being happy they are not going to have to deal with millions more in foreclosures?

Honestly, I am getting to the point where I can hardly write about this irresponsibility anymore.  It is way out of control.  My opinions have nothing to do with Republican or Democrat or Obama or whomever.  It is about “out-of-control politicians” that are running this country into the ground.  I hate to think where we are heading.

My wife asked me the other day why I was talking more about politics these days?  My reply – years ago, I didn’t have to pay as much attention.  Today, we have to watch them like a hawk.  

I will say that President Obama is digging a very deep hole.  For his sake, I hope that the American people forget about his promises during his first 100 days.  The reality is that until we get the politicians out of Washington, we will have more of the same.  All you have to do is look at the stimulus package to come to that conclusion.

He says he is going to cut the approximately 1.2 trillion dollar deficit in half by the end of his “first” 4 years.   Well, let’s start with roughly $600 billion or so in his “save the economy” bill that could be cut out.  We are at 1.2 trillion dollars because of the 700 plus billion dollar stimulus package.  He could do it right now with a stroke of a pen. 

We have countless problems that have been created because politicians have run this country into the ground for decades (yes, both Republicans and Democrats).  The reality is two-fold.  First, we have many more problems that will have to be addressed, which will add hundreds of billions of dollars of additional deficit.   Second, the dollars don’t add up.  He can cut costs in Iraq all day long and it will not put a dent in the deficit. 

America, wake up!  Either this President is ill-informed or he is playing some extreme hardball politics.  I don’t have anything against Obama.  I have a problem with politicians and their lobbyist/campaign-contributor favoring politics.

Today, I am interviewing Michael Panzner in his new book When Giants Fall.  I would highly encourage you to listen to the interview at www.prudentmoney.com if you didn’t get a chance to read the book.  In Michael’s previous book Financial Armageddon, which he wrote in 2007, he wrote about the upcoming financial crisis and foretold everything that we are seeing at this moment.

His latest book is a sobering look at the end of the American era.  OK, many of you might automatically write this book off as a sensationalized gloom and doom book.  In my opinion, I don’t completely agree with all of his predictions in the book.  At the same time, I do agree with the probabilities of many of the outcomes he describes.  It is not tough to come to the conclusion that this country is on the decline.  The question is to what extent.  This book should be required reading for anyone who wants to be prepared for any of a number probabilities of the future.  For more information on the book, click here.

This country is in a dangerous place.  Consider what Jerome Corsi wrote over the weekend:

As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.

The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account.

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the “2008 Financial Report of the United States Government” as released by the U.S. Department of Treasury.

We have a Government practicing Socialism.  The history books will show you that Socialism has never been a good solution.  We have had an $800 billion dollar stimulus bill passed this weekend that consists of programs designed to keep people on unemployment benefits for months at a time and create mainly construction based jobs. 

One of the highlights of the bill is a high speed rail project to be built between Las Vegas and Los Angeles.  That is something extremely important right now in the midst of a financial crisis.  This bill does one thing – it promotes the pet projects of the politicians that are doing everything possible to benefit the people who keep them in office.  The best part of the passing of the stimulus bill is that apparently none of the politicians have even read the 1,100-page bill.  They delegated that to their staff.

Well, to all of the politicians in Washington, the members of your staff were not the ones elected to office.  You should have read that bill from cover to cover.  It is a disgrace.

Whether or not this has an ending as dire as Panzner’s predictions in his book is hard to say.  I feel pretty comfortable in saying that what is happening in this country could not possibly have a long-term positive effect on the economy and the stock market.

It is important to remain very defensive with your investing as well as make sure you are controlling your risk.  Risk remains high. 

“I read your comments on the stimulus plan that the President is asking for and I just want to know if you think he is wrong in what he is doing. What do you suggest he do?  When he was elected the president, the Bush Administration had already made the mess the world is in now. He (President Obama) didn’t make this thing. It was already in action when he got elected so I am just trying to understand what you think he should do. No disrespect to you. I love listening to your broadcast when I can. Please answer this for me. Thanks.”

Great question and no disrespect taken!

First of all, let me state that my feeling regarding the actions of the Obama Administration or any of the politicians has nothing to do with Republicans or Democrats or the individual holding the office.  My problem has to do with politicians playing self-interested politics.  

I just don’t think that you spend hundreds of billions of dollars on all of these projects that have very little to do with solving the problem.  We need solutions that help people restructure bad mortgages and not solutions that have a ton of strings tied to them.  

We have to aggressively attack the foreclosure problem and focus our resources on getting the banking system healthy again.  All of these other projects should wait rather than creating trillions of dollars of debt for future generations.

The jobs that these programs are going to create will be primarily construction related.  I hardly see that as a plan to fix unemployment.  My biggest problem with the politicians is the lack of detail to the American public.  We apparently get no say in how they are going to spend our money.  They will not disclose the details.  President Obama had said originally the details would be on the web for a period of time before anything is signed into law.  That isn’t the case now.

There is a reason they will not release the details.  The plan will be scrutinized and danger its passing.  We will see all of the special interest.  

We just opened up the checkbook to every lobbyist and special interest group in Washington to where they can get their projects started and funded.  It will be one big spending free for all.  This will end up being horribly mismanaged.

The most troublesome part of the process is Obama going back on his word of making this a bi-partisan project.  Nancy Pelosi said that the Democrats won and they get to write the bill. This is a democratic bill with very little Republican involvement.  

Obama did inherit a mess. The Bush Administration really made some fatal errors.  The Republican Congress was a horrible steward of this country the years they were in control.   

I appreciate your question.  

So, let’s say that the politicians really can fix the problem.  They introduce a stimulus package with the main objective to create jobs.  As a side note, the other main objective should be to save the housing and credit markets.  You know the problem that has created the crisis?  If you take a good hard look at the stimulus plan, the only objectives getting accomplished are President Obama’s campaign objectives.  There has never been a time in history when a President has been able to walk into office with an open checkbook filled with billions of dollars waiting to fund stated campaign objectives.

Do you really think that it is necessary to spend billions of dollars right now for all of these initiatives that are not even focused on the overall problem?  Well, President Obama, I hope that you get everything accomplished and get re-elected.  My 5 and 7 year old sons don’t mind paying the debt that you created for the rest of their lives.

Then there is the promise of no pork and no agenda.  Well, guess where 30 million dollars of this plan is going?  The Washington Times reports that the plan “includes $30 million for wetlands restoration that the Obama administration intends to spend in the San Francisco Bay Area to protect, among other things, the endangered salt marsh harvest mouse.”

That is Speaker of the House Nancy Pelosi’s state.  Of course, she had nothing to do with it, according to her people.  With all due respect Ms. Pelosi, you should be outraged by the fact that you are wasting 30 million dollars on a mouse.  I hope that this project “that you don’t have anything to do with” helps get you re-elected as well.  It is well-known that you have championed this initiative for a very long time.  However, I am sure you had nothing to do with it.

Then there was the spectacle yesterday on Capital Hill with the CEO’s of the nation’s largest banks who were “on trial” yesterday.  CEO’s of the nation’s largest banks were being grilled by the politicians on how the Government money has been spent.  One politician asks, “Do you have anything to apologize to the American people for?”  I just wish that one of the CEO’s would have said, “Well, Senator, you go first.”

That was a typical capital bill witch hunt where these politicians just ask pointless grand standing questions that do nothing more than belittle the people who are on trial.  As an American, I was embarrassed to watch how little these politicians who are supposed to be overseeing the financial sector knew about the banking industry.  My hats off to the bank CEO’s for very professionally answering the questions meant to belittle them.

 For these politicians, this is all about pointing fingers and displaying their power.  

 The ultimate power position in this country appears to be the upper echelon of politics.  That power is all in the hands of the politician as long as he or she gets elected.  That is the name of the game.  If you are elected to Congress, you get addressed as Mr. or Mrs. or by the name “Senator” or “Congressman” or “Congresswoman”.  You get all of the “capital” of Capital Hill.

How do you stay elected?  Well it comes down to keeping two different parties happy.  First, you have to make sure that the voters like you.  You accomplish that by making sure that it always appears you have the voters’ best interest at heart.  More importantly, you have to keep the campaign contributors happy.  Without their money, it doesn’t make a difference what voters think.  You need capital to stay on Capital Hill.

We have elected politicians who are so good at staying elected that they live well into their 90’s holding prominent positions in Congress.  They could be on life support serving their 20^th term of office.  They still have a vote in every American’s future.  

There is a dark side that comes with all of that power.  It is the responsibility to oversee the workings of the United States.  The politicians are supposed to be the watch guards of the American people.  They are charged with writing and passing legislation designed to protect the American people.  

This is where the conflict of interest occurs. You cannot protect the American people and keep happy the hand that feeds you at the same time.  It is impossible.  So, who do they protect?  Campaign contribution and voting records would show that the politicians protect the hand that feeds them and not the hand that pulls the lever.

So, they continue this process of making sure that the right people are happy.  Then the dark side gets in the way.  They shrug their true responsibilities to the American people.  They allow a mortgage industry to get completely out of control.  They allow the Greed Machine of Wall Street to get utterly out of control. The next thing you know we have crisis on our hands.

This is where the politicians blame everyone but themselves.  This is where they grill people on Capital Hill in outrage as to how these industry leaders could let these things happen. With all of the self-righteous finger pointing, no one ever asks the politicians the questions “Who is the ultimate body in charge?”  “Where does the buck truly stop?”

It doesn’t matter because the politicians show up like the Cavalry ready to spend our tax payer dollars to “fix’ the problem and protect mice in California.  Their arguments for indebting our children to trillions of dollars have holes in it.  Most of these plans have an agenda and filled with special interest.

They create the crisis by allowing it to happen and then ride in on the white horse to fix the problem that they allowed to be created, all to benefit those who help them get re-elected.    

Obviously, it would be unfair to say that every politician in Washington operates this way.  I am sure that there are some who lead with a heart for service and what is true.  

So, this is the problem America.  Are you outraged?  The question is at what point do we as a country put our foot down or is it too late to do so?

Tags: Congress, Stimulus Plan

Smoke and mirrors is defined as “something that is intended to draw attention away from something else that somebody would prefer remain unnoticed.” 

Bloomberg wrote the following this morning about Government actions towards the stimulus:

“The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve. “

A friend of mine sent that to me this morning.  His comment – “this is starting to tick me off.” 

President Obama is making the rounds this morning speaking aggressively to how we should pass this stimulus bill.  Someone fires a question from the crowd concerning foreclosures.  He replies that we are going to fix that too.  That is in another bill. 

So, how many bills are they going to try and pass?  How many trillions of dollars more does he want to put us in the hole as he lays out a new type of politics in Washington?  It seems like the same old thing to me. 

A top White House advisor said this morning that this would promote “new lines of credit in a climate of greater transparency.” 

Therein lies the problem with politics.  It is the lack of transparency.  With this second part of the TARP money, they want to mask bad assets off the books of banks.  This way we don’t know how bad of shape these banks are really in.  That isn’t transparency.  The first part of the TARP plan leaves us with no idea of how the money was distributed.  The Treasury will not disclose where OUR money went and why the $350 billion did nothing to help the credit markets. 

Then there is the stimulus package, which we have to watch Congress painfully argue over.  Why do we need a stimulus package and then a separate housing package and then the second part of the TARP program to fix the situation?  Let’s get one thing straight upfront.  It is highly unlikely that the politicians are going to fix the problem by spending.  It hasn’t worked in the past and I doubt it will going forward. 

Obama and the other politicians want to take all of his campaign initiatives, such as healthcare and energy, and roll them up under the disguise of the stimulus program.  Of course, he is going to throw $50 billion towards troubled mortgages (which should scratch the surface).  This is more about getting the agenda of this administration met than addressing the problem.  We are going to spend billions of dollars addressing things that can wait. 

If he wants to address energy and health, then do so in separate bills.  This is a unique way for politicians to satisfy their agendas and take care of those who got them elected.  It is fiscal irresponsibility at its highest. 

All of the initiatives that Obama wants handled that have nothing to do with the current crisis are not going to even produce jobs anytime soon.  This analysis was performed by a non-partisan (neither Republican nor Democrat) committee.

It is smoke and mirrors politics.  They are trying to pass something that will not even directly address the problem.  It will however fix a lot of things that can wait.  It will not matter how energy-efficient we become or how pretty those new roads and bridges are while we are facing huge amounts of debt on top of a broken financial system. 

Looking at the market this week, we will see how the market takes the new spending plans of the Government.  I think that the market will probably “sell” the news as they have gone up on the “rumor” of a new plan. 

Be sure and continue to watch your risk!

It has been quite a day for this country as President Obama was sworn in as President.  Although I don’t agree with his ideas or politics, I am in full support of him and do not envy the mess that he has inherited.  Although I was not in favor of his election, I do think that he is the best man for the job given what we are facing right now.

The most important crisis that we face is the crisis of confidence.  NOTHING will work without confidence.  Politicians have done just about everything possible to destroy confidence, which leaves President Obama to pick up the fragile pieces. 

On top of that, you have the Bernie Madoff scandal and the loss of 50 billion dollars, as well as the latest scandal involving money manager Arthur Nadel disappearing with 350 million dollars. 

December Low Indicator

I wanted to alert you to an indicator that is flashing a huge warning sign.  There is an indicator that is written about in the Stock Market Almanac called the December Low.  It states that anytime the lowest close in December is surpassed by the Dow Jones during the first quarter, bad news typically follows.  It is a warning sign for the stock market.

Well it didn’t even take but 20 days.  As I write, the Dow is below the December low (8,149).  Another indicator is the January Effect.  The old saying is “so goes January so goes the rest of the year.”  Well, thus far the Dow is down -7.6% (as of this writing).  Combined they represent an ominous indicator.  Thus far they are both warning.

The financial stocks are getting hammered

The Banking Index is a good indicator to watch for potential recovery in the overall market.  Without the banks and financial stocks recovering, it is going to be tough overall for the stock market.  Since ‘07, the Banking Index is down -77%.  Today (Tuesday) as I write, the Banking Index is down another 13%. 

Banks fear an Obama Presidency.  President Obama wants to walk in and clean house.  Banks have been without TARP money and the problems are bubbling to the surface again.  Wall Street is concerned that Obama will get too aggressive too quickly.  Although we desperately need some reform and accountability, the patient is fragile.  I hope that he treads lightly. 

What to expect for the week?  The markets are speaking loudly that risk is high.  My concern lies with the stock market lows in November ‘08.   As I write, the S&P 500 is just 10% above that level and the Dow is just a tad over 7% above those levels.  In the event that the stock market indexes fall to those levels and lower, we could quickly be heading towards 600 in the S&P 500. 

Tags: Arthur Madel, Banking Index, Bernie Madoff, Bob Brooks, Deceptive Money, Dow Jones, politics, President, President Obama, Prudent Money, Stock Market, Stock Market Almanac

It is amazing to me that there is very little outrage concerning the cost of this inauguration.  I must admit that I got it wrong.  I wrote last week that the taxpayer picks up the bill.  Actually, I read tonight that the Inaugural committee picks up the bill.  The article also said that the Disctrict of Columbia will pay $48 million for security and that Congress contributes $15 million.

To be fair, President-elect Obama has also raised a lot of money.  However, I cannot find anywhere who funds the “committee.”  They say they are being transparent and not to worry because the taxpayer is not paying for it.

That sounds like spin to me.  Who is this committee and how are they coming across so much money? 

Carole Florman, spokeswoman for the Joint Congressional Committee on Inaugural Ceremonies, told the New York Daily News:

 ”We’re always very budget conscious. But we’re sending a message to the entire world about our peaceful transition of power, and you don’t want it to look like a schlock affair. It needs to be appropriate to the magnitude of events that it is.”

Apparently you are not that budget-conscious.  You don’t have to spend millions of dollars to make something important.  It is either important and sacred or it isn’t.  Obama being elected as the first African American President is huge.  You don’t need to spend $150 million to show the world the impact of such an event. 

How about an accounting of that $150 million?

Tags: Bob Brooks, Congress, cost of inauguration, Deceptive Money, District of Columbia, inaugural committee, President-elect Obama, Prudent Money

Well, a very long and historic election process is over and we have a new President-elect.  We can choose to debate the issues and whether Obama is the right man for the job.  We can argue amongst ourselves.  We can take any event and turn it into a negative.

If you are a staunch supporter of Senator Obama, I congratulate you on your candidate winning.  I personally did not vote for Senator Obama.   While voting, I was actually trying to talk myself into voting Libertarian.  I didn’t really care for Senator McCain as President either. 

If it were up to me, I would get rid of all of the politicians because they are the problem.  I don’t agree with Senator Obama’s stand on how we fix the problems this country is facing.  His politics really concern me.   My hope is that his heart is truly in the right place, but as with any politician, we will not know that for a long time. 

Obama has the unique opportunity to take his strengths and unite a country that is broken and divided.  As with any politician, it comes down to the intent behind their actions.  Unfortunately, most politicians are concerned about getting re-elected and their own personal ambitions, not about the goal of the American People.  The jury will be out until time has passed.  I hope that he proves all who doubt him to be wrong.   There is so much at stake right now and huge penalties for any bad decisions.    

Last night was an extremely important night for African Americans.  Although I am not a big fan of how Jesse Jackson goes about his fight for equality, the moment of the night was the expression on his face and the tears in his eyes.  It was a realization for him that all he has fought for throughout his life mattered.

Racism is a real problem in this country.  All Americans now have an opportunity to change that problem.  Individually and collectively we have a choice regarding how we react going forward.  It is time that racism no longer be an issue in this country.   

Most importantly, as Christians, we have the responsibility to support the individual who God has allowed to hold the highest office in the country.  We have the responsibility to pray for our leaders. 

Prayer is what President-elect Obama will need more than anything.  He faces one of the toughest tasks any President has faced in decades.  My hope is that he surrounds himself with very wise individuals who can guide him along the way. 

It is time to move on and go forward and be thankful that we don’t have to listen to anymore politics…at least for a while.          

Tags: Bob Brooks, Deceptive Money, Election, politicians, Prudent Money, Senator McCain, Senator Obama