Apparently Wall Street would quite like gridlock in Congress.
Short term, maybe. Long term, I’m not sure gridlock is going to help Wall Street. I’ve said it before, for the market to head upwards in a sustained fashion, it will require sustained doses of good news, something that logically, surely, can’t be on the cards?
For yes, the “d” word again. The US federal deficit, running at 10% of GDP, needs to be dealt with it. And a gridlocked congress is barely going to be able to get to grips with anything, let alone such a tough topic as that. Which long term, doesn’t bode well for anyone.
There’s a growing call for a national moratorium on foreclosures, although at present the White House is standing strong and is opposed to one.
To me, this is the right course of action. You can’t at this present time throw even more uncertainty into the fragile housing market. You also have to keep in mind that there are valid foreclosures that should go forward.
But you say, people losing their homes is a tragedy – what do I know? Well, of course it’s a tragedy. But I was always taught, always thought, that part of being American was all about personal responsibility. The deal with the bank, although it may be doing a deal with the devil, is that you take out a mortgage, you keep up with your repayments or your bank gets the house. That’s the devil’s security so it will continue to lend money to others. It’s the rules.
The housing market is causing pain at the moment and I’m afraid we’re going to have to see more pain before it gets better. The government is there to see big picture – and it would benefit the US more for the government to do nothing – to allow the market to tank and then figure out its own recovery.
Because I’ve also been taught that’s what Americans do. Recover.
Biden informed a Democratic audience he was addressing in Wisconsin this week that they were dull.
It got a laugh. (Although my first instinct with politicians is: leave comedy to the comedians).
However, there is a more serious point here. The Democratic leadership is having difficulties in energising their supporters. The Republicans, with all their tea partying going on, are at least not lacking in enthusiasm.
It doesn’t bode well for the Democrats next month. Although I’m convinced that Obama will win by a landslide in 2012.
Well no, of course we all know that the Dow can go up as well as down, however there has been a certain amount of excitement in some quarters about the Dow flirting with the 11k mark.
Yes, stocks are coming off historically strong performances in September. But for the market to head decisively higher again, it will require sustained doses of good news, something I can’t see it getting.
This economic recovery is slow – for every two steps forward there seems to be one and a half back. And there is the looming issue of the US deficit which neither Republican nor Democrat appear to be coming up with a realistic plan to deal with.
Apparently the Fed is considering inflation as a fix for the economy.
I think this is All Talk No Trousers – a bit of blustering and posturing going on. The Fed spent the past three decades getting inflation low and keeping it there. Any gain from higher inflation would be temporary.
I suspect this talk is coming from certain quarters to try and push colleagues towards more stimulus. Also, they don’t want the Fed to be seen as out of ammunition, as it would further spook the markets and the economy as a whole.
It’s all about perception, isn’t it…
No, I’m not talking about how you vote in the November Elections – something far more important than that.
Neil Cavuto, whose shows I’m a regular on, has decided he’s going to run for President. You get to vote who his VP is – and I made the shortlist.
Since this is going to be the only shortlist where I ever feature alongside Rupert Murdoch, please vote for me at: http://www.foxbusiness.com/on-air/cavuto/index.html
The fact that Cavuto is about as likely to run for President as I am to discover my mother actually gave birth to me on American soil is beside the point!
US airline fees are increasing – some by more than 50% since a year ago.
Unfortunately this is no big surprise. Baggage fees etc. are here to stay. During the past decade, the global airline industry has collectively lost almost $50 billion, so America has looked to the airlines that have made money.
Leader of the pack is the European based RyanAir, which has turned itself from a tiny regional airline into a serious power player. In the past 10 years it has generated net profits in 9 of those years and in the last financial year earned $431 million. It was of course RyanAir with its charismatic Michael O’Leary at the helm who introduced the concept of so many of these fees. He’s now all for bringing in a standing cabin and charging for use of the toilet.
And you thought airline travel was going down the toilet? It has only just begun…!
I taped a TV segment today on the question of Mr Geithner’s future. Should he stay or should he go? Will he stay or will he go?
What can be in no doubt was that he was given the ultimate poisoned chalice. He inherited financial Armageddon and we still have a bank account. I imagine history will be kinder to him than certain sections of the news media are at present.
Inevitably the Democrats are going to lose seats in November. It is part of a political cycle that seems to now be ingrained in American politics. There will be fall guys. There will be changes of personnel.
And yes, I can see Tim Geithner having had enough of his poisoned chalice and deciding that he actually wants to be one of them. Summers is off to the safety of academia and that has to be an appealing proposition to many on the political front line – or should that be firing line – at the moment.
I am not, by an stretch of the imagination, a fan of the politics of Sarah Palin or Christina O’Donnell, who recently had that infamous victory in Delaware after being endorsed by Palin.
However, I do admire them as women, who are fighting in what is still a male dominated world. One of the most respected American (and Conservative) journalists I’ve ever met said to me the other day that they thought America was more sexist than racist.
At the moment, the media are writing a pile of cr@p about how Palin and O’Donnell are embroiled in a catfight because the latter may be stealing the former’s limelight.
Oh please. Would they be using the same pathetic, vitriolic language to describe two men? No.
Palin is a woman who supports women. I do admire that. The media should be celebrating it, not blowing it apart.
The big debate on the Bush tax cuts rages. On the one hand, you have a recent poll saying that 45% of Americans oppose tax hikes on the rich. On the other, you have a poll just in declaring that 53% of Americans agree with Obama to end tax cuts for the wealthy.
You work hard enough, you’ll find a poll saying that the British are happy the Pope is visiting. Well, maybe not. But I’m not entirely convinced that polls being bandied about help here.
Let’s just look at the facts. The US 2009 poverty rate was confirmed yesterday – 14.3%, 1 in 7 Americans. I think we can all agree that is too high and a tragedy of modern times. Meanwhile, the number of millionaires increased in the US by 8%.
Of course I’m not saying “oh no, people are doing better, punish them”. What I am saying is: the poor are getting poorer, the rich are getting richer and that is a deeply sorry – and shocking – state of affairs to be in.
The US deficit is running at 10% of GDP. And calculations are now showing that if the GOP locked the tax cuts in as they would like, it would add $4 Trillion to the deficit over the next 10 years. Their current proposed spending freeze would save only $300 Billion.
We all have limited resources. The maths isn’t adding up. But if these tax cuts, a form of stimulus, are to remain, then surely the lower middle class need them more than the wealthy, who seem to be doing just fine.