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RIP Nelson Mandela

Well that'll be the day when you say goodbye
Yeah, yes that'll be the day when you make me cry
You say you're gonna leave me, you know it's a lie
'Cause that'll be the day when I die

Buddy Holly

With President Obama (re) declaring war on free markets to enact social justice this week, we have been warned and reminded that capitalism has no friend at 1600 Pennsylvania Avenue, NW. The taxes, regulations, and demonization only backfire and retard growth. Even yesterday's "great" GDP revision was marked by lower revisions for consumer spending, because people are earning less, and refuse to go back into the kind of debt that made them sitting ducks when the Great Recession began.

Fiscal policy, right out of the gate, has been designed to enact social justice; it was never intended to provide widespread prosperity.

Monetary policy, right out the gate, has been designed to fuel the beast of government spending, and to heal the wounds of unbridled greed of big banks.

People aren't taking the bait of lower rates to buy homes or spend on credit (revolving credit is down three months straight). The American public understands real economic growth, and understands when they're being manipulated. We are talking about people that like to spend money, and aspire to greater things, often rewarding themselves with the trappings of future success now, as a motivator and early reward.

So, it's quite shocking that Main Street is still so gun-shy. People have gotten smarter, although it doesn't take much to understand there is a limited upside to overachievement, and the nation is mired in self-doubt. But, there is that question of DNA: that natural impulse to make it rain in our own little universe. What is the formula? It's not as difficult as Fermat's theorem; in fact, the solution works everywhere in the world.

Job growth
Job security

Confidence in the future
Confidence risk will be rewarded
Confidence to take risks

In short, there has to be that enthusiasm, which acts as an invisible hand that stirs the virtuous cycle. Ladies and gentlemen...I give you Texas.

In 1890, Plumbing and Heating Inc. was opened in Beaumont, Texas. In 1933, the business hired Carroll Wayne Conn Sr., who became the owner the following year. Business growth, along with innovation, and a broader workforce looking for better home living was the formula for success. The store focused on appliances, then refrigerators, then gas ranges, and before you knew it consumers could get most things they needed for the home in a single stop.

The company grew at a modest pace, eventually venturing outside the state with its first store in Lake Charles, Louisiana in 1969. Finally, the company when public December 2003, with an IPO priced at $14.00. The stock was a solid winner for a while, topping out at $43.00 in January 2006. Then the company began a long and painful decline where it drifted all the way to $4.50 five -years after its all-time high.

All Hat More than Cattle

Ironically, during this period the population of Texas swelled by over four million, with more than 25% pouring in from different states between 2000 and 2010.

A couple of years ago the company found its groove, just as the nation was still stuck in the muck of recession and flimsy ideas on how to turn it around. But not the great state of Texas. Not only has the state enjoyed the most robust growth of any since 2000, it's not a one-trick pony. Seven out of fifteen of the fastest growing cities in the country are in Texas. Its cosmopolitan, leading edge, offers a lot more than longhorn cattle and black gold. The state is home to 51 of the Fortune 500, including number two Exxon Mobil, and number four ConocoPhillips.

The friendly taxes of Texas attract talented people and businesses, which in turn attracts talented people and businesses...and it goes on and on.

No Income Tax
No Tax on Social Security
No tax on Inheritance

Currently, the Lone Star State sports a 6.2% unemployment rate; that isn't smoke and mirrors, which speaks more to the mass exodus out of the jobs market and helped the United States sport a 7.2% unemployment number. Thus far in 2013, Texas has generated 265,000 jobs, or 14.2% of the entire total for the nation through November. Each day more companies announce they're packing their bags and moving to Texas. In fact, this week Cognizant (NASDAQ:CTSH) announced that it was joining the herd.

Most states would give away the farm or ranch to get a Fortune 500 company to relocate, but Cognizant actually agreed to fork over $150,000 as a grant to Texas A&M to support science, technology, engineering, and mathematics (STEM) education. The company currently employs 164,400 people around the world; 29,000 in the United States and it is thinking of hiring at least 10,000 more in the near future. (I actually got spooked out of the stock earlier this year because of its limited access to talent from outside America.)

When a high-tech company- always on the hunt for nerds resettles in Texas, it tells you this state is all hat, and a heck of a lot more than cattle.

All these people need to eat, which is why the state has more than 39,296 restaurant employees (2011), and there was no talk of protesting for a higher minimum wage. For every million dollars spent in Texas, restaurants create 26.3 jobs which means menu prices have to be reasonable in order to keep the crowds coming; I'm sureeveryone in the state knows how to throw down one mean barbeque pit.

Its estimated restaurant jobs will grow 15.9% from 2013 to 2023, far ahead of the 9.5% for California and 6.7% for New York.

Buddy Holly Swagger

"That'll Be The Day" was voted the third best Texas song by Texas Monthly, in part because it's all about swagger and confidence. That sums up the state now and sums up Conn's (NASDAQ:CONN), whose shares exploded more than 19% yesterday, closing at $69.80...a long way from four and a half bucks. Why is this company rocking when retailers around the nation are mostly struggling? The economic backdrop of Texas is the antithesis of America, and that gets a different reaction from the people that live there.

The company posted earnings that crushed consensus, with same- store sales up a staggering 35%. The company's biggest business segment is appliances, but all segment sales were huge.

Here's the rub; 93% of sales were made on credit. This is Ben Bernanke's dream come true. Moreover, 80% of the store's customers, had credit rating in range of 501 to 650, versus 28% of United States adult population. People have jobs and are spending money. If all Americans had the confidence to spend like they do in Texas, we wouldn't need a big jump in inventory spending, to mask an otherwise lackluster GDP number.

I'm sure for some there's concern that people are over extending themselves, but I don't think that's the case at all. The rest of us have become so afraid of success and so spooked of our own shadow, that when good things happen we only see sinister motives and outcomes. Most people hate the stock market rally, and think any asset whose price isn't depressed is in a bubble.

We have become a nation of doubters, always waiting for the next shoe to drop...except in a few places; the largest being Texas.

Stoke Confidence Not Fear

While the President of the United States stokes anger among people that are really grateful to have a job in his economy, employees of

Conn's are happy. Beginning salaries:

Store Manager $57,400
Assistant Manager $32,300
Sales Rep $43,500
Cashier $10.00 an hour

I've read where several seasoned store managers earn more than $100,000 annually, and I bet most began at what non-job-creators would say was an "unlivable wage". Of course, no wage makes life really tough, and becoming an indentured servant to the government makes life tough and humbling.

The CEO raised earnings estimates for his company this fiscal year and next above Wall Street consensus, and that's much better than an empty speech or promises.

Texas has gotten it right and it doesn't take smoke and mirrors, but it does mean a truce in the war on success. I guess if I could ask the administration if they would ever consider following this blueprint, the answer I'd get back would be:

"That'll be the day...that I die."

Government Employment Numbers

According to the latest data from the Department of Labor, the unemployment rate in November was 7.0 percent; lower than the 7.3 percent reported for October and below the Street's consensus estimate of 7.3 percent. Quite surprisingly, the household survey showed that those employed jumped by 818,000, and those unemployed decreased by 365,000 which resulted in those not in the labor force decreasing by 268,000. In essence, the jobs market improved from all angles in that those employed climbed, those unemployed decreased, and those not in the labor force receded, all while the civilian population increased. In addition, non-farm payroll employment increased during the month by 203,000 - better than economists' average forecast calling for a 100,000 increase.