Prudent Man CFA

Despite Its Recent Run-Up, The DJIA Isn't Expensive

Optimism is good. The question is what is the market discounting, if anything but momentum?

I am naive enough to want the market to try to measure value. This is difficult when earnings are continuing to decline year over year, especially when the analysts estimates are close to being criminal and what earnings gains there are appear to be coming from cutting costs and, thus, increasing unemployment.

Later earning comparison should improve which should give us a better view on how companies adjust to the new economic realities. Then we have the imperative of decreasing the bloated money supply and federal debt and interest rates become "real" accordingly. Hopefully, Fed subsidizing debtors at the expense of savers stops.

In summary, confidence is increasing but is the move in prices increasing risks? Are we looking at "real" economic growth or the result of the printing of money? Top line growth and free cash flow have been deteriorating and they are two financial metrics that are difficult to manipulate and are indicative of increasing or decreasing value.

I would be careful of analysts over-adjusting their earnings for the next quarter. That is why I continue to lighten my equity risks during these rallies. I rather be late than broke. I have been both and it is a expensive education.

5 Perverse Bailout Consequences

Crony Capitalism has nudged out the Free Enterprise System fifteen years ago, possibly before.

What is hard to understand is why Goldman would want to pay back the TARP as they own the Administration and Congress. Oh! It is about those bonuses. So, they say they have the money yet they dilute the shareholders equity with a secondary. Proves that you never believe Wall Street or politicians as they are inveterate, interchangeable liar and thieves.

Toxic Assets, Obama's AIG and Budget Woes: Friday's Lou Dobbs Show Transcript

It will be sooner rather than later that a larger portion of the country will learn, aside from being a liar and fraud, Obama is a puppet to Wall Street, especially Goldman Sachs where most of his advisers either worked, if one would call skimming clients' money work, or were on their payroll. Just look at Obama's cabinet, including Hillary whose husband was their front man just like Obama substituting charisma for policy.

As of now, the U.S. doesn't have any viable economic policy. My biggest concern is that our foreign policy has shown that we also don't have any defense policy and our leaders apparently believe that being nice to thugs is going to make them civil while it only convinces them you are weak.

Wall Street Breakfast: Must-Know News

Sophistry of lost jobs in the auto industry.

Consumers will buy cars and they need workers to build them. The company's name makes no difference as the quality and cost of the product is most important factor to the consumers.

The jobs lost by one company will be picked up by another. Like the makers of buggy whips getting jobs in the auto industry. This is the natural dynamics of the Free Enterprise System. Any government intervention tends to pervert this natural process.

President Bush asked congress for programs to retrain workers. Like the oil legislation he proposed in 2001 they not only ignored him but vilified him. Time for Congressional Term Limits as Barney Frank and Chris Dodd have overstayed their welcome and though they are good at providing "pork" to their constituents their continuance in office are detrimental to the economy of the U.S.

If Congress treated Medicare and Social Security like they treat Wall Street mismanagement and greed, those programs would have been solvent twenty years ago.

Wall Street Breakfast: Must-Know News

Print money. Keep filling the punch bowl. Don't make anyone responsibility for their reckless greed. This make countries great? Ask the Soviet Union when the made jobs and entitlement.

None of this increases production of goods and services but gives us more inflation than LBJ's "Guns and Butter" of the sixties. We paid the price in the seventies.

So drink now and be merry. The hangover will come sooner than you want. The sophistry of the politicians are pathetic and detrimental to the now Democratic Socialism of the U.S. whose Commander in Chief will be Barack Hussein Obama who only has shown he can get elected by those idiots who thought they were electing the president of the Student Body.

Lehman's CDS Mess: Who's on the Hook?

If the Treasury & the Fed told the market it would have to pay the price for its foll this nonsense would be over. Bringing in Congress is like pouring gasoline on the fire.

The Free Market works but the Capitalistic power brokers are bothered by that. Consequently, we will get SociObamism and we won't have a free market as the will control the Treasury, Military, Courts, Media (superfluous?) all without firing a bullet.

Wells Fargo Swoops in on Wachovia: Days of 'Something-for-Nothing' Likely Over

Don't complain about the ignorant, incompetent, greedy politicians as they are just being politicians and you have given them all of this power over our economy. All these politicians live in homes outside of the government pay because of kickbacks.

Time to give the next president, whomever that may be, the line item veto, then put on a full court press to rid Congress of the professional term seekers and enact Congressional term limits. This may not answer all of out problems but two of the most egregious professional politicians, Chris Dodd whose father got chased out of office, and Barney Frank whose addition to the discourse is to insult his adversaries which Bill O'Reilly shoved down his fat throat and the fat slob ran off the set. What a "guy?".

Rid of us all these "experienced" policians and we wouldn't have the current credit crisis.