Today is Super Tuesday, and there's a great chance Mitt Romney will deliver a knockout blow to his opponents. I know there are a lot of Paul, Gingrich, and Santorum fans but at this stage of the election process, I think the best thing that could happen is to wrap up the nomination process and focus on the task at hand. By now, it's evident how impactful action and inaction in Washington can be on the stock market, and while I'm bracing for a $1.0 billion mudslinging party, I'd like the focus of the GOP to shift to the economy and individual rights. It's time for clear-headed and smart people to join together to rescue the nation on the edge.
I mention this because Republicans have done themselves no favor with a campaign that has too often resembled a Vaudevillian act or cage fight. Maybe it prepares the eventual nominee for the general election, but I'm ready to hear about concrete plans to rebirth our greatness and bring unity to the country. The stock market will be watching, and I think it would be vulnerable to mean-spirited rhetoric, especially the kind of talk that portrays the nation as unfair and the American dream as unattainable. I see where the sound bites are incorporated in speeches from President Obama, union leaders, and civil rights leaders.
They all have taken to weaving "occupy" in their interviews and hints at civil disobedience as the weather warms up.
Over the weekend, several groups gathered to celebrate the 47th anniversary of the famous march from Selma to Montgomery. Many are participating in a reenactment of the march this week. My mother was at Edmund Pettus Bridge over the weekend to listen to speeches and remember the struggle. She was born and raised in Alabama just a few miles from Selma. Her life has seen things most people couldn't image, yet she never complains or talks about it. Yet, I know her pain. A few years ago she suffered a mild heart attack, and I raced down. I drove from Atlanta and on my way crossed the Edmund Pettus Bridge.
Tears rolled down my face as I crossed that bridge-it's a very powerful place and symbol.
There are obviously struggles and challenges ahead for our nation, including more work in the area of racism and discrimination. And while none should forget the hard battles that were fought, we have to make sure they aren't exploited. Selling fear and victimization holds back more and more people in America each day. It's a deliberate campaign that creates the need for rescue. Beyond the initial economic failings, the greatest disappointment of President Obama and civil rights organizations was fanning the flames of fear instead of saying there's a blue print to success that begins with seeking knowledge, working hard, and rejecting victimhood.
Instead, Al Sharpton is leading the march and shouting that blacks and Latinos are being stopped from voting. It's not that blacks and Latinos are being asked how many bubbles are in a bar of soap or how many jellybeans are in a jar, but instead they have to appear with proper identification. This isn't a nefarious plan and makes a mockery of the things my mother went through and saw. Of course, the plan is to cobble together a disparate group in which Sharpton includes among the victims of having to have ID to vote in America: blacks, latinos, elderly, and the young. Instead of demanding more from people, really shouting out as in the past, Sharpton and President Obama are saying that cracked door has monsters, not opportunity lurking inside.
Yes, this is an economic issue. It's an economic issue that will haunt our nation for decades and longer. Push for things to get better and dare I say "fairer" by taking advantage of the greatness of the nation rather than by spending so much time on fanning flames of hate. Instead of demanding everyone step up their game, the narrative is that somehow a few people have all the opportunity. I can tell you I do not know any rich person, and I don't mean a couple making $250,000, that's chilling at the beach milking their good fortune because most earned it the hard way. Those silver-spooned kids that squander inherited wealth will be passed over by someone that's starving.
The reality is the door has been jarred open enough to get in the mix. Once in the game, merit has to carry you to higher levels, not finger pointing.
So there is a serious economic threat to this nation, and when those tents go up and disgruntled American youth tie on those bandanas and make a lot of noise and threats, it wastes time, precious time we no longer possess. We need to march to a tune of unity and build on the greatness of America. Al Sharpton gets power by keeping people afraid. President Obama gets power by keeping Americans afraid. You don't walk away from a speech from either of them feeling empowered or proud. You walk away feeling like a victim in need of rescue and retribution. You walk away thinking someone else is responsible for holding you back no matter how you may have sabotaged your own opportunities.
Brown on the March
Perhaps no contest this fall reflects contrasting ideas that America is a collective versus America is the land of opportunity where people have to take their shot more than the Massachusetts battle for Sen. Scott Brown's seat. Elizabeth Warren exploded on the scene with rhetoric that said nobody in this country made it on their own-nobody. She hasn't beaten around the bush about redistribution, and her campaign has laid the path for President Obama in the fall. Elizabeth Warren has been all about punishing the rich. Warren became the cause celeb in the party and took an early lead in polls. Now it's all changing, and Scott Brown has a solid lead in a number of polls including one that sees him with across-the-board support.
50% favorable among women versus 28% negative
Interestingly, Brown has gained momentum since the newest talking point from the left has been that republicans are assaulting rights of women. His stance that it's about religious freedom has won over women in the most liberal of all states. Overall, Brown is leading 49 to 41, and in the process is proving the message of tearing down America by tearing down its success is backwards and dangerous.
Occupy and the Market
When the "Occupy" movement began on September 17, 2011, the Dow was at 11,509. By October 3, the Dow was plunging and sitting at 10,650. There were a lot of things going on, but Occupy was a bonfire, and all the other stuff just sent the flames higher. Of course the market withered under the assault. But the American economy kept plowing ahead, and soon it became the story. Once Zuccotti Park was liberated, stocks were able to shine as a reflection of capitalism and free markets.
There is a consolation prize. Wall Street bonuses are going to be down a lot! According to the New York City Independent Budget Office bonuses were down 25% in 2011 from 2010. This good news translates into 4,300 jobs lost.
Despite that win, its clear Occupy has lost. Rich people are enjoying their wealth and the American dream is alive. Moreover, President Obama has jumped on the Super PAC bandwagon; so much for rich people and corporations influencing the market, and so much for standing firm on principle. Young people are always anxious but tough and figure things out. They will again this time, and those that choose to be victims will find that's a trap that destroys life and dreams. It's just heartbreaking to watch, as heartbreaking as my drive across the Edmund Pettus Bridge.
The last week has seen the market hint at a bona fide pullback, but during each session buyers or, more accurately, machines kicked in and we rallied into the close. Yet it's becoming more difficult to ignore red flags. We are at about 28% cash right now having sent alerts to close out old lingering ideas to mitigate risk and raise cash. Beyond the cheering, which seems disingenuous and obviously late, my biggest concern is how the market reacts to a punch in the mouth. It hasn't been hit hard this year. Last year it was riding high but crumbled when faced with real adversity.
This year the main characteristic of the market has been its resolve but it is one thing to bounce back from a light sell off and another to stop a stampede. I'm licking my chops for a pullback because there are still a lot of great ideas out there that are worth owning, but I would like to get them on sale. We are looking at the harshest opening this year. Let's see how the market responds.