Waxie Email
Whew!
Well, there ya have it, Bush's proposed economic ST-ST-ST-STIMULUS plan!!
This is going to CURE all our economic ills, right?
Well, here is the skinny. Mind you, I have not had the time to read over the whole shebang, but I'll as always give you my take on things as I see them right now;
1)The package is VERY stock market friendly. In fact, the package is designed to move stock prices UP. Anyone who thinks otherwise is clueless.
YES, there are other POSSIBLE positives for the common folk who don't own stock (it's funny that Bush said that 50% of all Americans own stock personally or through a pension fund. That figure is SKEWED bigtime. It's more like 47%ish. Though that might seem like I am being picky, it is NOT a coincidence that they rounded the figures UPWARD in order to not show that a MAJORITY of Americans DO NOT own a single share of stock!)
To continue, the POSSIBLE positives are, as proposed by the Bush administration;
a)Creation of 2.1 MILLION jobs over the next few years.
-I doubt it, truly. Unless you just give people money and say "here, you have a job now!" there is little chance that figure will come close to fruition. Unfortunately we feel that in 5 years there will be HIGHER joblessness than there is presently based on a number of factors we'll get into here later.
b)Small business owners will get larger tax breaks, thus saving people like myself some cashola! Thanks, dude! This will also benefit the majority of companies who are public as well, of course.
c)personal income tax will decline as the tax cuts that were supposed to take effect in 3 years will be moved up to NOW, retroactive to January 1st, 2003.
-Problem here, again, is many fold, but mainly this is a HO HUM crumb they are offering to middle class Americans to smoke screen the FACT that the entire package is geared toward BIG BUSINESS, as always. Average married couple will save about $1,200 a YEAR on their taxes. Now, I know $1,200 is nothing to sneeze at, but considering that that is the HIGH END of savings more than likely, that seems pretty peanut butter to me!
Now, for the bad news;
The package will cost the country nearly $370 BILLION over the next ten years. For a country already tinkering with bankruptcy contingencies (or should be), thats a helluva lot of GREEN. Further, thats probably at the low end of things because thats only for the taxation of dividends. So, you are probably looking at TRILLIONS when they get done with it. That, my friends, is just irresponsible.
Further, the stimulus, sorry to say, simply will NOT work! We've said it 100 times, Japan has tried the same exact things over the last few years and their stock market has fallen from nearly 40,000 to where it is now in the 8000s. What makes anyone here think it will be different? Why, because we are the USA? Come on, be serious. There is an old saying - Smart men learn from their own mistakes, but WISE MEN learn from OTHERS mistakes so they never have to make them!
We have become a country that lacks creativity. Unfortunately we spend so little money on culture and creative endeavors and all our money on phoney programs designed to garner - VOTES!
That is the bottom line here, dudes. VOTES. This package is designed to get the "50%" (47%) of stock owners, who are the majority of VOTERS, out to vote for Bush when reelection time comes.
The package will NOT work, sorry. We are trend players and the TREND is that this package will fail MISERABLY. You can not make stocks worth more than they truly are. Bush during his speech said that "American's deserve for their stocks to perform well." I'm paraphrasing but thats basically what he said.
WHY? Why do American's DESERVE for the stock market to do well? Can anyone answer that for me? Cause I don't think the stock market has anything to do with deserve or not. It has everything to do with fundementals and valuations.
I'll tell you one thing, IF the market does rally hard into Bush's reelection, you can bet that the market will be CRASHING during his second term. Bank on it, because the game is being rigged(attempting) to suit the powers that be.
Only fools will buy into it, but there are a lot of fools around, so don't be surprised to see some people rush in.
Did you guys watch CNBC? Did you see my favorite martian Larry Teddy Bear Kudlow once again act as an aging cheer leader and throw his pom-poms up in the air after Bush was done?
Hasn't this guy made enough of a fool of himself? Seriously, the guy has called for a MONSTER RALLY for 3 years now and been WRONG 1000 times, or at least as many times as Abby Conehead!
And, what happened to professional NON-BIASED journalism whereby we get accurate and detailed PROS and CONS about the package?
Kudlow said and this is a direct quote; The DOW will go up 40% this year and next!
40%? That means the DOW will see basically 3400 points in the next two years. That means the DOW will close at 12,000 in two years.
Possible? Sure, why not? BUT not likely, sorry. But, that is not the point. The point is that this kind of reporting is again irresponsible and downright ludicrous. The best part was when he came on and said that "you see, the market isn't selling off after Bush!!! We have 40% higher to go!"
Well, obviously he was wrong about one thing already, the market DID selloff after Bush, sorry Larry!
Hey, as I always state,I hope I am wrong. I pray we go to 12,000 on the DOW cause that will make it easier to make money here, but it doesn't seem likely. Its smoke and mirrors and the mirrors are cracked!
I don't know what the market will be in a year, or two years and frankly I don't care. As long as YOU guys are making money, thats all I care about here. Unfortunately, these "reporters" seem to really care that they are right and that the market goes HIGHER.
I think that once again these people will lead people down a rosey path of destruction. Kudlow went NUTSO when the Fed eased 50 BP last time and before that he cheered and went nutso when the Fed eased other times.
At some point he'll be right, but I wouldn't bet its at DOW 12,000 just yet!
See ya on the other side,
WAXIE |
