What Does Our Closest Ally Merit? What’evs in the WH Gift Shop

The statesman that was supposed to make the world like us accepted pens made from a historic ship to match the “Resolute Desk” (yes in the movie National Treasure)… gave a “historic” gift of DVDs (that probably won’t play in the UK due to regional encoding)…Michelle did even worse – taking a first edition book and framed commission for the HMS Resolute and giving a couple of Marine 1 models from the gift shop…

These aren’t tourists on the white house tour! They are the heads of state of our closest ally!!

As he headed back home from Washington, Gordon Brown must have rummaged through his party bag with disappointment.

Because all he got was a set of DVDs. Barack Obama, the leader of the world’s richest country, gave the Prime Minister a box set of 25 classic American films – a gift about as exciting as a pair of socks.

Mr Brown is not thought to be a film buff, and his reaction to the box set is unknown. But it didn’t really compare to the thoughtful presents he had brought along with him.

The Prime Minister gave Mr Obama an ornamental pen holder made from the timbers of the Victorian anti-slave ship HMS Gannet.

The unique present delighted Mr Obama because oak from the Gannet’s sister ship, HMS Resolute, was carved to make a desk that has sat in the Oval Office in the White House since 1880.

Mr Brown also handed over a framed commission for HMS Resolute and a first edition of the seven-volume biography of Churchill by Sir Martin Gilbert.

In addition, Mr Brown and his wife showered gifts on the Obama children giving Sasha and Malia an outfit each from Topshop and six children’s books by British authors which are shortly to be published in America.

In return, the Obamas gave the Browns two models of the presidential helicopter, Marine One, to take home to sons Fraser and John.

How Low Can The Dow Go?

As the Dow continues to drop day after day, I thought it might be telling to look at the market’s reaction to several historical events… (Note elections end after the market closes)

G. W. Bush Elected Nov 7, 2000

11/07/00 – 10,952
11/08/00 – 10,907


09/10/01 – 9,605
09/17/01 – 8,920

Democrats re-take Congress Nov 7, 2006

11/07/06 – 12,156
11/08/06 – 12,176

Government “Helps” Dow Find The Bottom with Bank Bailout:
Dow drops from 10,917 on Sept 15 to 8,852 Oct 17, 2008

Obama Elected Nov 4, 2008

11/04/08 – 9,625
11/05/08 – 9,139

Obama Inaugurated Jan 14, 2009

1/13/09 – 8,448
1/14/09 – 8,200

Obama Stimulus Signed into Law Feb 17, 2009

2/13/09 – 7,850
3/17/09 – 7,552
(Market closed for Presidents Day 2/16/09)

So how is the stimulus doing???  As of Today (Mar 9, 2009) the Dow closed at 6,547.

-13.3% since the “stimulus” was signed.

-20.1% since America’s first black President.

-31.9% since Hope was elected.

-46.2% since Democrats took control of the government (save a lame duck President).

Market Shorting Obama’s “Stimulus”

An interesting piece from two Economists: Prof. Bittlingmayer, University of Kansas & Prof. Hazlett, George Mason University.  For those that don’t understand what “shorting” means check here.

…So the Obama theory – government spending is stimulus. If so, financial markets should feel the love. The U.S. budget is awash in red ink, and $800 billion more of it should easily move the needle on our economic prospects. Indeed it has – in the wrong direction. Financial markets don’t want more government debt or a scramble for “shovel-ready” spending projects. They want the skeletons in the banking sector’s closet exposed and expunged.

The Bush Economy went up in smoke in September-October 2008. The financial meltdown hit Wall Street, devastating bank equities and laying waste to America’s 401-Ks. The Republican ticket, McCain-Palin, was a 50-50 bet on Sept. 15; by Oct. 15 it was a 5-1 long-shot. Voters saw the carnage: the Dow Jones Index lost 17% of its value from Sept. 2 through Nov. 3. In a flash, Americans lost years of toil, and Republicans the election. Decisively.

The election marked a turning point. Investors looked forward to the economic policies crafted by Democrats in Congress and the White House. More pointedly, they wanted decisive, well-crafted action on the banking crisis. Hence the Dow soared 6.5% Nov. 21 on news that Timothy Geithner, the highly-respected head of the New York Federal Reserve Bank, was Obama’s pick for Treasury Secretary.

Yet, from Nov. 4, 2008 through Feb. 12, 2009, the DJI overall fell 18% — a larger drop than during the Sept-Oct plunge. In January, when the Obama plan, promising far greater deficits than the two much smaller “emergency stimulus” plans signed by Pres. George W. Bush in 2008, was unveiled, the market tanked – the worst January performance in 113 years.

More pointedly, key political victories for the Team Obama spending plan have not been viewed as buying opportunities on Wall Street. A string of negative market reactions began with the December 18 announcement of a stimulus bill of $700 billion (Dow down 2.5%), continued with the January 7 announcement that the actual plan would be “on the high side” (-2.7%) and continued with last week’s 61-36 Senate vote supporting the Administration’s fiscal plan. The White House victory and the new bank bail-out plan announced the following day by Treasury Secretary Geithner were met with a 5% wipe-out in the DJI, and a decline in Treasury bond yields, indicating a “flight to quality.”

There are many problems with Keynes’ “stagnationist thesis,” as Joseph Schumpeter called it, not the least of which is that it didn’t test so well when applied by New Dealers. U.S. unemployment was perniciously high throughout the 1930s, peaking at 25% in 1933 but still over 17% in 1939.

Many claim that World War II brought us out of the Great Depression, but the lesson to be learned is still being debated. Federal budget deficits soared (reaching 26.5 % of GDP in 1942 as calculated by Harvard economist Robert Barro), providing Keynesians an argument for spending as stimulus. But WWII also brought a profound shift in the New Deal’s regulatory policies. Attorney General Thurman Arnold’s vigorous campaign to break-up “the bottlenecks of business” in major industries like steel, chemicals and electrical equipment was shuttered, and America’s largest corporations enjoyed a respite from threats of dismemberment (Arnold was kicked upstairs to a judgeship). As Thomas K. McCraw writes in his superlative Schumpeter biography, “Under the life-and-death pressure of war mobilization… the Roosevelt Administration, which had been hostile toward alleged monopolies, now decided that big business must lead in the job that had to be done.”

The only thing guaranteed by the spending stimulus is more national debt. One stroke of the presidential pen has now increased it by $800 billion. Democrats recently screamed about W-era profligacy. On July 28, 2008, Sen. Kent Conrad (D-ND), Chair of the Senate Budget Committee declared, “If they gave out Olympic medals for fiscal irresponsibility, President Bush would take the gold, silver and bronze. With his eight years in office, he will have had the five highest deficits ever recorded. And the highest of those deficits is now projected to come in 2009, as he leaves office.”

Kent Conrad was right. The projected 2009 deficit then stood at $482 billion. In January it was forecast by the Congressional Budget Office at $1.2 trillion. Pres. Obama’s new plan now ups that to $1.7 trillion. If W got the gold, the new Administration has landed the Platinum in just its qualifying heat…

President Obama – Moron or Genius?

Glen Beck on the recent insanity from Washington:

Here’s the one thing: I’ve been watching the things that President Obama has done in three weeks and I’ve come to the conclusion that the man is either a moron or a genius.

If this were George Bush, I would look at all these bad starts – like all the Cabinet picks who are tax cheats – and say “this guy is a train wreck.” But after seeing the campaign that Obama ran – where no one even knew who he was – I know he’s not an idiot.

So I contend the president is a genius.

Who is he? He’s David Copperfield: A master of misdirection, who is making sure that so much is going on that it wears you out. You’re feeling overwhelmed and it’s all intentional.

Look at all the things going on just in a few weeks:

Obama closed Gitmo and dropped the charges against the guy who bombed the USS. Cole. He moved the Census into the White House. Then, there’s the No. 2 attorney general who stood up for child pornographers, TARP 2.0 and all the clowns in Washington with scandals: like Tim Geithner, Tom Daschle, the performance czar, Charlie Rangel and Chris Dodd.

These are all individual outrages, set up to divide the media’s attention and your attention – which need to be unified, like an army.

It’s simply a matter of divide and conquer.

You are saying, “I’m just trying to hang onto my job. What? I don’t know what to do.” And we say, call, call, call your representatives right now. And you do call, but at some point it becomes too much and you say, “I’m not calling anymore.” And I don’t blame you. But that’s exactly what David Obama-Field wants.

Let’s look at this giant spending bill:

Are we to believe that Obama stupidly went to Nancy Pelosi and her progressive friends and said come up with the best bill possible and she just loaded it up with pork all on her own accord? Is he that inept that he thought they could get away with overseas abortions, fluorescent light bulbs and polar bear habitats? Or did he know it would distract all of us from what this bill is really about: universal health care – which was quietly tucked into the bill at the last minute. What else is tucked in there?

It’s not about the pork; it’s really about pushing forward a socialist agenda. And the best way to do that is by distracting you with the right hand, when you should really be looking at the left.