McCain ETFs: What If the 'Maverick' Pulls It Off? 10 comments
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When companies served up loans that they shouldn't have, nobody was held accountable because there was diffusion of responsibility. ("We just did what everyone else was doing" or "We just did what we were told to do.")
When individuals purchased properties that they knew they couldn't afford, you had abdication of personal responsibility. ("I didn't know that a no-income/no asset loan at an adjustable rate would hurt me" or "The broker made me do it.")
In truth, corporate greed and individual greed are not that different. Moreover, the combination has left the U.S. -- and actually, the world -- waiting on the passage of a Congressional package.
Yet there's a bigger effect from the credit crunch/financial crisis; that is, the McCain/Palin ticket has a much slimmer shot at the Oval office.
Without getting political, I am simply observing the blame game in action. Polls overwhelmingly show that the country blames Wall Street and the Bush administration, in that order. That's certainly not good for the Republican ticket.
Nevertheless, I still wonder, what if the media-described "Maverick" pulls it off? What investments would likely benefit from McCain bucking the odds and serving as the next President of the United States?
I'm actually in the process of developing a Special Report, "ETFs for Obama, ETFs for McCain." For now, though, I thought I'd post a few examples below:
1. iShares Health Care Providers (IHF). For the most part, health care providers, HMOS and services, have done little more than act as a drag on the overall health care sector's success in 2008. Medical devices and biotech have pushed 52-week highs and pharmaceutical distributors have rallied handsomely.
The struggles of IHF stem from the fears associated with a form of nationalized health care under an Obama administration. The fear is that, under Obama, profit margins for the big insurers like United Health Group and Humana would suffer drastically.
Of course, this simply hasn't been a good enough reason to see these and other providers collectively lose 25% of their value in 2008 alone; these companies are mostly selling at attractive prices.
Now take it a step further. If McCain is tasked with addressing the issues of access to healthcare, he would like to create greater incentives for individuals and families to buy their own coverage. Under McCain's plan, individuals and families who purchased their own health insurance would receive a tax credit of up to $5,000 to offset that cost.
Add the need to get the banking system working properly in billions of dollars, universal health care would have a much tougher time making it through Congress under McCain. The iShares Health Care Providers (IHF) should rally.
2. iShares US Aerospace and Defense Index (ITA). If McCain stands for one thing more than any other, it may be a fervent belief in the country's need to "defend and protect." And with a potential military conflict looming between Iran and Israel, McCain is unlikely to shy away from shoring up the nation's defensive capabilities.
Defense and aerospace contractors have been knocked down with the rest of the bear. But price-to-earnings rations haven't been this cheap since the beginning of the decade.
Defense spending cut under McCain? Not with Russia, Iran and Afghanistan acting the way that they have. Even during recessionary times, "Defense" is a solid defensive haven.
For the most part, these are large companies with clean balance sheets; they're not caught up in the financial havoc, other than the general bear market movement. If McCain makes it to the White House, ITA should reap rewards.
Disclosure Statement: ETF Expert is a web log ("blog") that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Advisor with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.
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This article has 10 comments:
"Without getting political, I am simply observing the blame game in action. Polls overwhelmingly show that the country blames Wall Street and the Bush administration, in that order."
This is not the "blame game" this is trying to hold people accountable for their actions. Without accountability, there is no hope for a rational order in any organization from a family to the US Government. It is so ironic that the same people who want to hold individual lawbreakers responsible with mandatory sentences and doing away with safety-net service, are no screaming "blame game" and other excuses to avoid their own responsibility for this catastrophe.
On the individual borrowers' responsibility: Sure, a lot does rest there. There are many people who fall into the category of clearly taking on debts they could never hope to repay. But there are also a lot of people who took on responsibilities they thought they would be able to meet and either did not understand the issues or were outright deceived by the mortgage brokers.
As for the CEOs etc. They have no such excuse. They are making literally millions of dollars to manage these corporations. They are supposed to be educated in finance or economics. They have a responsibility that they consciously and willingly accepted to not only make a profit, but to safeguard the money of their stockholders. I should hope that they should also feel some obligation to the American people as a whole to not jeopardize the economy. Is it possible that these million-dollar-salarie... executives had never heard of the S&L bailout of the Reagan years? Of the Japanese Real Estate meltdown? Of the Junk Bond crisis? Is a PhD insufficient education to comprehend the principle that if loans are made to people for what they cannot afford to pay, then these people will default?
These people willingly took on a position of trust, of fiduciary duty. YES THEY ARE RESPONSIBLE!
Finally for the government.
25 years ago irresponsible deregulation led to the S&L bailout. Yet once again the republicans have sacrificed common sense on the altar of deregulation. There have been plenty of warning along the way that they chose to ignore. This willful disregard for reality, this totally blind chasing of political dogma no matter the consequences is precisely responsible for the current situation! So YES, the President and the Republicans are the ones who lead the charge to irresponsibility –so they are indeed responsible!!
Try listening to this. It is a great presentation on how everything happened:
audio.thisamericanlife...
On a parting note:
Bush ran his oil company Harken Energy Corporation into the ground (selling out a week before it collapsed). Why is it that those who elected him would expect anything different?
Many people tried to warn the public of this, but people refused to listen. It has been said that in a democracy you get the government you deserve. But what about the other half of us who wisely wanted someone else?
To imply that these problems only emerged over the last 8 years is laughable. The roots run deep and at least to the 1960's if not earlier. Both parties are to blame, including the Dem congressional leadership that was in power prior to 1994.
If you believe that Gore/Kerry would have done any better, I have a bridge to sell you. If you truly think Obama will be any more effective cleaning-up this mess, good luck with that. The only way you will come out ahead is if you apply for a job in his administration and make millions of $$'s along with every other DC politician and insider.
You are trying to dodge responsibility, like all the republicans. This is the "Not my fault" administration.
It is the Republicans who deregulated the banking industry and took out the checks that we had, NOT the democrats. It is Bush and the Republicans who have run up the deficit over the last 7 years.
In short - it is the Republican party that has run this country into an enormous hole. Just watch the price of oil when the Bailout gets approved. That will sink us even further.
McCain ETFs: tranquilizers and Depends.
McCain ETFs: tranquilizers and Depends.