By Charles Payne, CEO & Principal Analyst
3/22/2012 7:59:14 AM Eastern Time
Question of the Day|
President Obama's Gas Tour seems like a desperate attempt to appear engaged with solutions to soaring gas prices- how well will it work?
Click here to post your answer and let Charles know what you think. He will air some on TV- Fox Business at 2PM EST and on Payne Nation radio show.
Richard Taverner, Erasmus' Proverbs
Now that Occupy Wall Street is reemerging as a civil rights organization, it's clear the White House has finished the takeover of something that was for a split second genuine. Of course President Obama helped to birth the movement with speech after speech about how unfair the nation is and how there is simply no hope with present-day rules that built the greatest country in the world. There is a mighty attempt to tear down and replace those rules with an idea about the perfect society that's been around for centuries but has never enjoyed any real practical success.
It's all transparent when civil rights organizations and unions weave into speeches the word "occupy" and the so-called movement itself. None of these entities are focused on the greater society; instead, they are focused on their own niche of the world. Their power increases when the message is one of hopelessness. By establishing bogeymen and setting themselves up as the only refuge, these organizations belie the notion of "yes we can" and amplify an antiquated idea the rich have it all and we have nothing. An intense us versus them campaign leaves a scorched earth or broken promise. But the psychical nature of this situation goes beyond metaphors.
Before shutting down for the winter, the Occupy movement had become very violent, and around the nation this week there are signs that suggest the preferred and only way to make a splash is through anarchy and violence. In St. Louis this week, an ominous sign read "Only the Blood of the Rich Will Stop Occupy," and I believe there will be blood. The word "anarchy" was first used by Richard Taverner, famous for his interpretation of the bible from Greek and Hebrew into "A Recognition of Correction of the Bible after the best Exemplars." His Bible was dedicated to the king and allowed to be publicly read in churches for a year-that was 1539.
In 1540 his benefactor, Lord Thomas Cromwell, was arrested, placed in the Tower of London and executed. The upheavals of his day were the perfect backdrop for a word like "anarchy" to come to life. America is more civilized than Europe during its constant power struggles that spawned wars and religious revelations such as the Reformation. Perhaps this is why the group and those that pull their strings will have to move past intimidation.
I still think it's going to be a fringe movement with the kind of core followers that would otherwise be susceptible to joining a cult. But it is great media fodder, and once the anarchistic phase resumes, it could help promote the notion of victimization at the hands of the upper class. The solution is more redistribution of wealth and punishment of the rich. By the same token, it could backfire as the American public, too focused on high gas prices and stubborn unemployment, see it as a disingenuous distraction.
Cult of Equities
An uber-bullish report out of Goldman Sachs rekindled talk of the 'cult of the equity.' The work of Goldman portfolio strategists says stocks are a better buy right now than at any time in a generation. The trigger is the narrowing of the difference between dividend yields and bond yields. While dividend yields have been running below bond yields, dividend yields have been ramping higher and bond yields have been declining, making stocks more attractive and bonds less so. According to this notion, which is also the basis of Modern Portfolio Theory, investment managers will begin to load up on stocks. This approach is also considered a hedge against inflation.
It's Not Beatle Mania but Certain Group of Lizards Paying Attention
President Obama's Gas Tour began yesterday, and it wasn't quite Beatle Mania or Lollapalooza.
But in the face of plunging poll numbers, it's all about public relations.
The first stop many felt was a layup visit to a solar power plant. Copper Mountain Solar 1 was built in Boulder City, Nevada and sits on 450 acres. Its one million solar panels provide energy for 17,000 homes. That's the cute part of the story. The economic part of the story is altogether different. The project received $54.0 million in taxpayer money and created 450 temp jobs during construction but currently only employs five people. It's absolutely insane that anyone would point to this as an economic project or a job-creating project. Proponents of the project proudly point to the fact it will break even and generate revenue in only thirty years.
There have even been comparisons to the Hoover Dam built nearby which is often held out as a poster project for massive government involvement in infrastructure. The thing is that was a legitimate project. Moreover, the dam saw the tiny town of Las Vegas grow from 5,000 to 25,000 as unemployed men came from all over the country for a chance to work.
Today the tour stops in New Mexico where President Obama will brag about the sharp increase in drilling rigs and production since he's been in the White House. He will deliver this speech at an oil and gas drilling site on federal property. Of course he will not talk about the massive decrease in permits on federal lands, the foot-dragging after the Gulf tragedy or reneging quickly on drilling off the continental shelf.
There will be protesters as well trying to stop the administration from designating the Dunes Sagebrush Lizard an endangered species. Already listed by the state, animal rights activities have been pushing the federal government since 2002 to make the same designation. An announcement was imminent in December when Ken Salazar accepted a request from Senator John Cornyn (NYSE:R) of Texas for a six month reprieve. Opponents believe the government is using faulty data in its assumptions. We do know the lizard lives in the Permian Basin (covers Texas and New Mexico) where there are gobs of oil, gas and minerals like potash.
Would the president tout oil drilling at this location and then turn around and shut it down because of a lizard? I don't think it's out of the realm of possibility. Just think, the White House leveled a levy on Chinese solar panels a week after threatening China to sell us more rare earth materials, which is used in many things including, solar panels (go figure), which we just made more expensive in America.
This is nuts, especially since installation is the only bright spot in a very cloudy industry wasting billions of taxpayer dollars. The amount of permanent jobs created represents a criminal use of your hard earned money.
This stop is going to be a tough sale and not just because it's in Payne County, Oklahoma, but because it smacks at the intelligence of everyone that claims common sense. The White House is going to give the thumbs up to a portion of the Keystone pipeline. The southern portion doesn't need the president's stamp of approval, but still needs the rest of the project. It's like building the off ramp to a bridge that isn't going to be constructed.The last leg is Ohio where gas prices are leaping! It's a gusher of money bursting out of consumer wallets. How will the administration play the "all of the above" rhetoric in a swing state getting crushed by the stubbornly slow recovery and now gasoline? Plus, will environmentalists stop the state from reaping the benefits of natural gas drilling techniques that have created economic miracles in other states?
I saw a bunch of pluses yesterday including earnings from USG which is enjoying pricing power for wallboard. Moreover, On Assignment (NASDAQ:ASGN) is now the second biggest IT job staffer after a deal to acquire Apex (private) for $600.0 million. I like the idea of consolidation in the staffing space. I love that the acquiring company saw its shares up 26%! Also, yesterday, Watson Pharmaceutical (WPI) saw an 8% leap in its shares on scuttlebutt its ready to buy a Swiss drug company for $7.0 billion. This is positive stuff, especially the staffing stuff, and I'm going to ask Joanie Ruge of Randstad Holdings about this today.
She's my favorite guest on employment and our guest on Fox Business at 2PM so check out the show and also get her read on the next jobs report.