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Charles Payne
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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • Rooting For More Rich People And Longer Lines At Airports By Charles Payne

    It's so weird to hear nothing but doom and gloom from government officials including Kathleen Sebelius who actually said yesterday morning that airports were already suffering with long lines. I was shocked by this bald-face attempt to stoke anger in people. Airport delays? Are you kidding me? I travel through LaGuardia and JFK where delays are part of the daily program - but now we can blame them on sequestration and mean old Republicans. The blame game is the shame game.

    We are nearing the point where every inconvenience will have its genesis in GOP politics (unless it's clearly from global warming) from traffic jams, to slow computer jams and to low jam supplies at the local supermarket. While we continue this assault on success and this demonization of wealth, the phenomenon of wealth growth continues. Forbes is out with its richest list of 1,426 billionaires. There are 210 newcomers and 23 names under 40 years old (see list). What's interesting is how high tax nations are falling behind on the rich list or simply hanging on via old inherited wealth. No matter what anyone says, the inability to generate super wealth has negative consequences on even the poorest citizens.

    (click to enlarge)

    While places like Ukraine are seeing wealth never experienced before, the rich in old welfare nations in Europe are just waiting for their richest citizens to pass on to confiscate even more of their wealth. The following are nations with taxes of 48% or more on incomes of less than $100,000 and the average age of their billionaires.

    > Sweden 66
    > Denmark 58
    > Netherlands 70
    > Belgium 74
    > Austria 72
    > Finland 56 (just one person)
    > Ireland 68

    A new report shows where the top 20% of earners spend 38% of the money in this country, dismissing the notion they're hoarding the money (which would be their right in a free country) and putting that welfare multiplier nonsense on its ear. Yesterday, Auto Nation reported its February sales, which showed domestic cars up 6% while premium luxury car sales increased 19%. Auto nation has 21,000 employees, hard working Americans that take pride in getting up in the morning and contributing to society. It would be a bigger disaster if taxes on their customers increased to the point where they lost their livelihoods.

    It would be a worse disaster than the government pulling in its belt 2.5%.

    On that note, those European nations with staggering tax rates also dole out the highest percentage of GDP toward welfare and social programs. Some think this is a fine system where almost everyone is equally living a good quality life. But when was the last time any great inventions came out of these countries? When were these countries able to save the world against tyranny? They had such huge leads over the rest of the world they can enjoy (for lack of a better word) the status quo but for how much longer?

    The world is a very competitive place and the next one hundred years, maybe one thousand years, will belong to Asia and to a lesser extent South America as Europe freezes executive pay, innovation and outsized dreams. I hope this never happens to America where even people that only recently had a legitimate shot at unlimited greatness buy into the mean-spirited and cruel notion that punishing someone else's success makes for a "fair" society.

    Today's Session

    All of a sudden we are on new high watch for the Dow Jones industrial average. It's more than symbolic although most professionals will downplay the moment for a variety of reasons. By the way, if adjusted for inflation the all time high would be 15,732. Be that as it may, for all the negativity surrounding this rally it's been ongoing for a while. It's stealthy, it's hated and that is one reason I think it lasts. Beyond that psychological stuff, however, it's about fundamentals. For me it's all about the global economy. Every big winner we had last week except Dollar Tree (NASDAQ:DLTR) saw strong global growth as the difference-maker, the catalyst.

    Yes, Fed money-printing is playing a role, not to the degree naysayers say it is but that's going to happen. As money finds its way past bank walls and deeper into society much will land in the stock market. Those funds will be coupled with rotation out of bonds and of course a sense of hysteria. That scenario hasn't played up yet and will not happen in a flash but instead with a hockey-stick formation with traction compounding and generating a self-fulfilling momentum.

    Of course the irony is when the domestic economy gives the all-clear sign, which I don't suspect will happen under current economic policies and schemes unless many can be rebuffed and Czars can be held at bay, that's when the market will probably correct. But know this, corrections for the most part are typically short-lived and create opportunities. Most of the same people waiting for a correction now or simply too skeptical to play this game missed the lows of 2009 and subsequent dips along the way.

    When the Fed takes away the punch bowl the message is the economy is fixed. But by the time that happens the inflation seed will have taken root.

    https://www.wstreet.com/user/register.asp?source=3

    Tags: DLTR
    Mar 05 9:51 AM | Link | Comment!
  • Enduring Pain By Charles Payne

    Nothing begins and nothing ends
    That is not paid with moan
    For we are born in other's pain
    And perish in our own

    Francis Thompson

    Last week I was reminded that the reason why the West will be won in essence is mostly the opposite of how it was won, the inability to deal with issues in a way that results in pain. In fact, the essence of pain itself has evolved to encompass emotions and feelings that manifest mentally or physically. We are jealous of our neighbor to the point where it hurts to see them succeed any more. We are envious of another group of people that seem to have favored status and it makes us sick. We think the challenges of life are so difficult that trying only means more pain, more anguish and more disappointment.

    Of course this has always been the case with mankind, as I'm sure the caveman that stopped gathering crops to dine on red meat was looked upon with a scorn and envy by those on a high grain diet.

    The thing that's developed with rich western nations, however, is the ability to treat the pains of life. Of course it only makes sense to want to ease pain. Heck, these days I'm wondering when they're going to make the shot the dentist uses to mitigate pain less painful. But there are times when we can't avoid pain or times when masking it only results in greater pain down the line. Growing up, I admired people that endured pain. We all loved the cowboy movie character that fights on despite searing pain and sure death.

    In real life, watching Martin Luther King Jr. getting hosed down, bitten by dogs and hit with Billy clubs without resorting to violence won over a nation and the world. He was using the template of Gandhi, whose non-violent approach meant enduring unlimited pain. In other areas of life those that took the pain won our admiration. Watching Willis Reed limp into the championship game was the way we thought everyone should attack the biggest challenges in life - sucking up the pain while focused on the prize.

    In his rookie season Michael Jordan insisted on playing in pain even as management asked him to sit out the end of the season. The list of pro athletes that sucked it up to play in pain included all pros in all sports before 1980. As each year passes that's no longer the case in the major sports, and for the most part it reflects a nation with shifting priorities, shifting notions of greatness and shifting rationales for respect. Perhaps it's the new enlightenment period where those that work too hard and succeed too much even while making enormous sacrifices are considered more villains than heroes.

    In Switzerland a new law has passed aimed at curbing executive pay that will surely negatively impact the corporate culture there (I should point out the vote had a xenophobic animosity feel as some of the biggest companies in Switzerland are helmed by foreigners. Maybe if Americans didn't run Credit Suisse, ABB and Novartis, and an Austrian Roche, and Belgian Nestle, there would have been less resentment). The vote mostly assuages the pain associated with envy and jealousy and hatred. The only good news is there was only a 46% turnout but it was an overwhelming 67% victory for those that blame Anglo-Saxon pay for economic woes in Switzerland.

    Also over the weekend Rory McIlroy, the young golf superstar, quit during perhaps his worst round as a pro - certainly as the world's number one player - citing a toothache. We haven't gotten to the level in sports where it's okay to quit, but it used to be frowned upon to stop because of a toothache, no matter how excruciating. Andrew Bynum, once considered the best prospect in the NBA at the center position, was given the thumbs up to play basketball last week but said his knee was too sore. How many people went to work with toothaches and sore knees-a whole lot that's how many. Those still working are often in pain with daily moans but do so because of a commitment to life.

    Sadly, more and more Americans are okay with our progeny being born with their own pain. Yes, most would step in front of a moving bus to save a child, but fewer and fewer are willing to make changes needed to stem an avalanche of pain right around the corner. Sequester has begun, and there are many that will feel the pain directly and immediately. It's not that they shouldn't feel the pain; it's that pain should be spread to all that care about the future. It means some have to work more years than previous generations. It's already meant tax hikes but those with the least in the game are saying it's okay to tax even more.

    The nation is split. Government officials are urging more economic pain on those already carrying the load and casting those taxpayers as ingrates or worse. Everyone has to take the hit. Everyone has to have skin in the game. Everyone has to feel and play with pain. Everyone has to be ready to limp into the game with the championship on the line. We have to be our own Willis Reed in order for the nation to win this game so our children don't perish in our pain.

    (click to enlarge)

    Today's Session

    It's quiet this morning, which is neither here nor there with respect to where the market finds itself at the closing bell. That being said, the Street is looking for that elusive catalyst, which may have to wait until Friday's jobs report. These early weak sessions serve a good purpose to see where anxious sideline money feels the need to make its move, but remember this is still smart money, and we will not force the issue unless there is a feeling their rivals are making a move. Let's sit back and watch.

    https://www.wstreet.com/user/register.asp?source=3

    Mar 04 9:52 AM | Link | Comment!
  • Break Dancing And Head Spinning By Charles Payne

    Question of the Day

    What event has to happen to make you want to break out the Harlem Shake in a flash mob?

    Click here to post your answer and let Charles know what you think.

    Hold off on the Harlem Shake for now. The Dow Jones industrial Average came tantalizingly close to clearing the old all-time high, but it stalled like one of those reality television shows that uses the same gimmicky build up before going to commercial break.

    Today we'll be back from commercial, but the question many are asking is just how much of this rally is reality and how much is manufactured enthusiasm brought to you by the Federal Reserve and runaway government spending?

    I think there is Fed free money in the mix, but we aren't near the hysteria part of the equation where that money finally flows out of banks and into the economy. It's helping housing more and propping banks for the moment, but it's not the main reason for this stock market rally.

    I still think it's about corporate earnings driven by overseas profits.

    When that Fed money really hits the stock market, doubters will become believers; and that's when I'll be really afraid. There will be strong volume and water cooler talk will shift from last night's game and parking spot allocations to hot stock tips - the best stocks to buy with no earnings.

    Right now there are too many deniers, so I'm waiting for everyone to shake their tail feathers, baby.

    Hysteria - Best Dance Music

    The original Harlem Shake is said to have been inspired by watching people shot in the legs squirm. After a week of listening to doom and gloom from politicians, I felt like the first person to do that dance back in 2001. The fear mongering reached fever pitch with a warning from Congresswoman Maxine Waters of California. She claims 170,000,000 will lose their jobs over sequestration. Wow, that's a lot more than the net 3,000,000 jobs gone in the last four years. Heck, it's enough to make a person actually stop and scratch their head. I knew republicans were mean, but they are trying to not only get all 134,000,000 workers fired, but want millions rehired so they can be pinked slipped again.

    I guess that was the last ditched attempt to force more tax hikes, or as some would call them, more compromise as Congress bolted last night for a three day weekend ahead of all those cancelled airline flights (smart move). I can't believe how much work went into creating real mob scenes over a 2% cut in planned spending hikes that only lessen increases of spending, not actually cut money coming out of the treasury. Of course, now there is a convenient excuse for any hiccups in the economy, and believe me, there will be hiccups.

    In the meantime, the countdown begins to the largest wave of layoffs known to mankind. I have to say, Representative Waters has given me a lot of great laughs over the years, especially her confrontations with Alan Greenspan, but this was beyond the pale. Perhaps it was panic, seeing the market rally and the White House take a softer stance (tough predicting end of the world and it doesn't happen). She must have figured they were using matches when a blowtorch was needed. The market didn't pay attention even though the rally faded hard into the close.

    For now the stock market is focused on the bottom line, and that's being driven by global prosperity.

    At some point the US economy has to be a contributing factor to stocks. In the meantime, it will continue to be a contributing factor in the politics of blame. It's nothing to sing about and doesn't make me want to dance.

    It was a foregone conclusion today would be a jittery session, so stocks look to open lower. A disappointing report on personal income last month isn't helping. But it's the culmination of all those scare tactics that cast the greater shadow over the market. I would love to see a lower open yield to midday buyers, but for the moment let's hang out on the sideline.

    https://www.wstreet.com/user/register.asp?source=3

    Mar 01 9:31 AM | Link | Comment!
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