Charles Payne's  Instablog

"When you listen to what the Federalists said about the Anti-Federalists, and the names that Jefferson called Hamilton and back and forth — I mean those guys were tough. Lincoln — they used to talk about him almost as bad as they talk about me. So democracy has never been for the faint of heart."- Barack Obama

Last week, President Obama brought up the treatment that Martin Luther King endured during his life and how he was vilified, and this week he actually said he has it tougher than Abraham Lincoln. We have become the country of "woe is me," which begins with the most powerful man on the planet to people that would rather pay sky-high rents than own homes because they have little faith those homes will ever increase in value. So, instead of McMansions, we are getting more and more apartment dwellings. Even though it smacks of nouveau riche, I'd rather live in the former than the latter.

Not sure everyone feels that way these days when shows about hoarders in filthy houses get ratings MTV Cribs used to get. This woe I am feeling is a depression that stops dreams, commerce, and prosperity. This sinking feeling is reflected in a stock market that is filled with sorrow and hopelessness. We mostly, however, feel sorry for ourselves. Of course, there is more to the market than general depression, but when it's all said and done it really boils down to people feeling good enough to engage in life. People don't feel that way at the moment. That's a wildcard. How to engineer a reversal of confidence, how to get people to believe the future is bright.

In the process, they will actually make it a self-fulfilling event. If there is a double-dip recession it would be a self-fulfilling event. Consumers are hoarding money, especially rich consumers, who have been moving into cash in record amounts. In a piece by Robert Frank of the Wall Street journal, the Spectrem Millionaire Investor Confidence Index is cited. In that organization's most recent survey, confidence dropped to its lowest level in a year. That was in July, and I suspect the next reading will have more dire consequences. Top reasons for lower confidence in July included:

24% Stock Market
21% Economic Environment
13% Political Climate
8% Household income
8% Retirement

In the meantime, Frank points out the actual number of millionaires (net worth, not income) swooned to 237,000 in 2009 from 390,000 in 2007. Taxes paid by this group tumbled 42% even as their effective tax rate climbed 24%. In other words, this group of people that we plan to leave broken with empty rabbit-eared pockets and with a scarlet letter "G" written on their foreheads is already an endangered species.
Plus, the notion of taking their money and putting it in the hands of a government intent on spending each nickel to pay off political favors is theft. In the meantime, if you knew someone was coming to take your gold would you hide it?

To break Americans, things have to get real bad. We have rawhide skin, it's so tough, but we are bruised. There are only two roads available at this point. We can suck it up and fight, or continue to tumble along the path of self-loathing. We can ask, like President Obama: "why is everybody always picking on me." Or, we can determine our future. We can follow Lincoln's lead. Just consider the difficult path Lincoln took to become president and what was waiting for him in office.

Something tells me Abraham Lincoln had it worse than Barack Obama in every way. His pain and agony groomed him for the ultimate task. People talking bad about Lincoln was the least of his worries...good thing for America he was focused on other things.

The Economy

JP Morgan is now looking for 2012 GDP growth of 1.3% and unemployment of 9.5%. If this is the case, then it's going to feel a lot worse than it sounds (I bet when adjusted for people quitting the workforce altogether the rate could be more like 10%). We don't need a jump start or to be pulled from one ditch to land in another that's even deeper. I'm not looking for a wonderful campaign speech next month. I don't expect the Super Committee to produce anything but harsh rhetoric unless they get real leadership from the White House. The only way that could happen is with a realistic game plan that eschews ideology for the real world.

President Obama keeps bragging about being able to figure this out on the back of a napkin. I agree, it's not rocket science or a Rubik's Cube, but it becomes Fermat's Last Theorem when we skip the obvious.

> Real tax cuts not just for people not paying federal taxes, but for all Americans.
> Unlocking our true energy potential not racing China in a no-win solar game where cheap labor wins; let's create and put a million roughnecks to work. They make real money and love their country.
> Ditching the healthcare law; could save embarrassing court defeat unless that's the goal all along. Either way, it's an economic atomic bomb that has already gone off.
> Let corporations bring back the money without the Somalia pirate treatment.

"If I be wicked, woe unto me; and if I be righteous, yet will not lift up my head. I am full of confusion; therefore see thou mine affliction."- Job 10:15

No more self pity and self loathing, the time is now to take a stand.

Today's Session

Futures have settled this morning, although the bias is to the downside and very little has changed since yesterday. Not only is Germany balking at more bailouts without serious strings attached, but more countries are saying they must have collateral before chipping in on that $225 billion Greek bailout. It's hard to imagine investors flocking to buy today, which would make a rally a remarkable feat. On that note, the Dow off 100 points in my mind would be a small victory. Technically, we must hold above 10,719 on the Dow as the next support point is 10,000. 
 

I gave the best ETF short (ProShares UltraShort Technology; ticker symbol REW) to the downside I could think of yesterday, and this morning think we need to hold cash.