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Losing Faith

Yesterday I used "God" in the headline of the
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<P>morning report and got a couple of interesting responses. Every time I consider mentioning God I know it's going to be dicey, but the notion of faith in general is certainly part of the economic debate as people seem to have given up on this country and on the idea of investing.

I had a very bright young lady at the house on Saturday who feels people her age have it tougher these days because "it's all about who you know." That's always been the case but back in the day there was no Facebook, Twitter or YouTube. Back in the day there were only three television channels and social networking was a Tupperware party at best.

But these kids have taken it as an article of faith that they shouldn't have any faith in the system being fair or navigable enough to seek out and create their own fortune. I think a big part of this stems from the fact that they lack faith in general, especially faith in a higher being. They lack faith that God will provide the way.

On that note its interesting timing that the House will vote to fast track a continuing resolution on the national motto: "In God We Trust."

The resolution would reaffirm the motto of the United States, and support and encourage the public display of the national motto in all public buildings, public schools, and other government institutions. It needs 2/3 majority to pass and despite 64 co-sponsors it's not a layup.

Today on 2PM FBN is asking if you've lost faith in investing. Let me know at <A href=""></A>, I might be able to share your answer on air.

Will It Go Round in Circles?
I've got a song, I ain't got no melody
I'ma gonna sing it to my friends
I've got a song, I ain't got no melody
I' ma gonna sing it to my friends

Will it go round in circles
Will it fly high like a bird up in the sky
Will it go round in circles
Will it fly high like a bird up in the sky
- Billy Preston

The breakdown of the fabric of America is real and it's detrimental to our economic future. One can only hope we don't have to learn the hard way about faith. Certainly in my mind ceding over such faith to the government is a mistake, although some believe it's not only nature but even righteous. (I got a great email yesterday and wanted to share with readers- see sidebar above.) I would think even atheists understand the power of faith and belief and how pressing such a need is in these days and times. Yes, we need to see "In God We trust" in as many places as possible.

Then there is the notion of blind faith, which might be the only way to describe this administration's commitment to flushing billions of taxpayer dollars into solar panels. Yesterday another solar player bit the bullet. Beacon Power (BCON) shares closed down 73%, finishing the session at $0.12. The company must have thrown that cool pitch on the administration, although it wasn't a hard sell. But the focus on so-called flywheel technology must have sounded like the ticket. Heck, Energy Secretary Steven Chu was on hand for the opening ceremony at the Stephentown, New York plant.

Of course he should have been there considering the company got $72.0 million in taxpayer money through federal loan guarantees, stimulus programs and a couple of state incentive programs. Plus, who could resist the pitch: the first large-scale grid storage project to use flywheels. You know those flywheels, right? They spin super fast and absorb and release bursts of power onto the grid. I bet this one has the Chinese quaking in their boots. The Federal Regulatory Energy Commission (FERC) even changed the rules of the game to benefit the company and handicap gas plants by paying for speed of power, not just the power itself.

I've got a story, ain't got no moral
Let the bad guy win every once in a while
I've got a story, ain't got no moral
Let the bad guy win every once in a while

So, the administration forced through billions more in solar projects before the September 30, 2011 deadline where they admitted to scant job creation, but that wasn't enough. Rules were changed to funnel even more taxpayer funds to Beacon and I'm sure this is still only the tip of the iceberg. There is tremendous resistance to releasing important emails and documents related to Solyndra which smells so bad that if it's not pursued you get the feeling the bad guy(s) will win. But this story has moral value that should be investigated on each level. In the meantime we are on the cusp of going into a trade war with China over solar panels.

In the past week both Germany and the UK announced intentions to stop pumping so much of their taxpayer funds into solar subsides. Language around the UK decision sounded like a mea culpa. We need to transition to alternative energy but it must be natural and real and it must happen over the next couple of decades.

The notion that China is beating us at something worthwhile is preposterous. Unless they figure out how to monopolize wind, sun rays and ocean waves that argument is silly. Solar panels are destined to be a very cheap commodity made of glass and computer chips.

I've got a dance, I ain't got no steps, no
I'm gonna let the music move me around

In the meantime I interviewed Tom Kloza from OPIS and he shocked me with the revelation we are going to spend a record $490.0 billion on gasoline this year, an increase of $100.0 billion year over year. He also predicts prices will be at their highest ever next spring, even as US production surges to a possible 8.5 million barrels a day. Instead of making it harder to take advantage of amazing new technology and dragging on drilling permits, the administration should unleash the power.

Free markets will take care of alternative energy because the free market moves around with no prescribed steps, it just lets the music (demand) move it around.

Today's Session

Everyone was bracing for a pullback, but selling accelerated into the close, so it's kind of important the market makes a stand. I don't think major indices must close higher, but it can't be a carbon copy of yesterday where buyers cooled their heels on the sidelines. For the Dow the key support point is 11,700 to 11,650, but I wouldn't want to hit it today. Keep in mind this is also jobs week, so there should be at least one big session to the upside assuming there is some good news out before Friday.

Article of Faith

I guess we shouldn't be surprised Greece could be on the verge of snatching defeat from the jaws of victory as PM Papandreou has called for a public referendum on the bailout and the euro and a whole of lot of other stuff, too. The date isn't known but assumed to be in January. Of course all the nations that haggled, fought, and grappled with how to bail out the profligate Greeks thought the rescue itself was already approved. But Papandreou made this among other statements:

"It is not for others to decide but the Greek people to decide...we have faith in the people."

Apparently this is only the second popular vote to be held in Greece since the collapse of military rule in 1974. The nation chose a path of socialism that has become slow death. I actually believe Greece should go back to the Drachma, but experts tell me the nation isn't disciplined enough to grind through life with very bad credit and lazy people. Right now the euro remains popular and more than likely will pass, but there is a lot of time for anarchist to go full-tilt into action. In the meantime, the carnage has already begun in Europe where stock markets are crashing and bond yields are soaring.

Yes, the euro is under serious pressure, so the dollar is higher, and the stock market hates that.

It's an article of faith that Greece isn't going to make this easy, and for more and more observers it's an article of faith China is heading for a harder landing than we could endure. This morning's PMI reading came in below consensus and barely above the expansion cutoff.


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Then there's the MF Global situation, which is getting murkier by the minute as millions in client money can't be found.

The market is going to get hammered at the open.

Note: we are holding off on a morning idea.