Outrage Infatuation

America is infatuated with outrage.

We've spent the last couple of weeks spiking our collective blood pressure over bonuses at the faltering insurance giant AIG. Our anger wasn't even directed at the right people. We chose to blame the recipients and executives rather than Congress who, pressed by President Obama, passed an 1,100 page bill authorizing the bonuses without reading it. Nonetheless, we've revelled in our anger for weeks.

Today, a story emerged about a Dallas NFL player detained by a policeman in a traffic stop.

A Dallas police officer drew his gun during a traffic stop of
Houston Texans running back Ryan Moats last week in which the officer kept Moats
from going to the hospital room of his dying mother-in-law, the Dallas Morning
News reported.

According to the report, the officer, identified as Robert Powell, stopped the vehicle being driven by Moats in the hospital parking lot for going through a red light.

The mainstream media, sensing that the AIG outrage is waning and ratings slipping, is attempting whip Americans into a frenzy over this police officer's behavior during a 15-minute traffic stop. The irony in it is that this story broke today as Oakland, CA remembers four police officers gunned down last Saturday by a parolee. That shooting rampage began with a routine traffic stop.

Go figure.

The Week in Review

• The DJIA rose 54.40 points, .75% to close Friday at 77278.38
  
• The Nasdaq Composite gained 25.77 points, 1.80% to finish the week at 1457.27
  
• The S & P 500 rose 11.99, 1.58% to 768.54
  
• The 10-Year Treasury yield fell 0.263 percentage points to 2.626%
  
• Crude oil rose $4.81, 10.4% to $51.06
  

The markets had a second consecutive week of gains and are showing signs that we may have the first monthly gain in stocks since August.  The last two days of the trading week had investors trying to interpret the Fed's plan to buy treasuries.  

The Week in Review

• The DJIA rose 597.04 points, 9.01%% to close Friday at 7223.98

• The Nasdaq Composite gained 137.65 points, 10.64% to finish the week at 1431.50

• The S & P 500 rose 73.17, 10.71% to 756.55

• The 10-Year Treasury yield rose 0.059 percentage points to 2.888%

• Crude oil rose $0.73, 1.60% to $46.25

The absence of profit taking on Friday should be taken as a good sign as investors continued to buy on four consecutive days after setting 12-year lows on Monday. Oil prices have firmed and are up 43% in the last four weeks indicating that the economic shock of the last several months might be wearing off. But there's still lots of bad economic news ahead.

Let 'em fail

From The New York Times:

John McCain and Richard C. Shelby, two high-profile Republican senators, said on Sunday that the government should allow a number of the biggest American banks to fail, The New York Times’s J. David Goodman and Brian Knowlton report.

“Close them down, get them out of business,” Mr. Shelby, the senior Republican on the Banking Committee, told ABC’s “This Week With George Stephanopoulos.” “If they’re dead, they ought to be buried.”

While the Alabama senator did not say which banks to shutter, he suggested that Citigroup might be on that list, saying the bank has “always been a problem child.”

Mr. McCain, appearing on “Fox News Sunday,” echoed that sentiment without identifying any banks. Mr. McCain, who lost the presidential election last November, also accused the Treasury Department of avoiding the “hard decision” to let “these banks fail.”

Capitalism without bankruptcy is like Christianity without Hell.

The Week in Review

• The DJIA dropped 435.99 points, 6.17%% to close Friday at 6626.94

• The Nasdaq Composite fell 83.99 points, 6.10% to finish the week at 1293.85

• The S & P 500 fell 51.71, 7.03% to 683.38

• The 10-Year Treasury yield fell 0.213 percentage points to 2.83%

• Crude oil rose $0.76, 1.70% to $45.52

Just for grins, check out the last post before the hiatus, The Week in Review on August 26th, 2007, about six weeks before the market peaked in mid-October. Puts things in perspective, don't it?

Obama--already setting records

From Fox News:

The Dow Jones Industrial Average has fallen faster under President Obama than under any new president in at least 90 years, according to a review conducted by Bloomberg.

Bloomberg reports that since Inauguration Day, the Dow has fallen 20 percent, leading at least one investor to dub this the "Obama bear market." The Dow has also dropped 31 percent since Election Day.

Despite a string of government bailout offers and Obama's advice earlier this week that Americans should be buying stock while shares are low, the Dow has continued to freefall.

At what point does Obama actually start to take some responsibility for this?

Who's big mess?

President Obama keeps reminding us that it's not his fault. Again today at a police acadamy graduation in Ohio, he said, "We inherited a big mess." It seems to be his favorite line.

It is, after all, George Bush's recession, right? Sure, some of the pieces were put into motion long before W took office, but he didn't do anything to correct the developing sub-prime mess or the impending housing market collapse that triggered this recession. So, most of the blame should rightfully be placed squarely on Bush's shoulders.

Most of it.

But shouldn't others share some of the blame? What about Congress? What about the Clinton administration where it all started?

President Obama was a U.S. Senator for four years before being elected President. (Even if he did spend most of that time campaigning for his new job). And Joe Biden served in the Senate for 36 years.

Rahm Emanuel, Obama's Chief of Staff, was a senior advisor to Bill Clinton and then worked as an investment banker. Hmmm.

Obama's Secretary of the Treasury, Timothy Geithner, besides being a tax cheat, worked in the Treasury Department under Lawrence Summers and Robert Rubin during the Clinton administration.

Eric Holder, Obama's Attorney General, served as Deputy Attorney General under Bill Clinton and was deeply involved in Clinton's controversial pardon of Marc Rich.

Hillary Clinton, Secretary of State, a U.S. Senator for eight years and First Lady during the Clinton administration.

So when President Obama says "we" inherited a big mess, just exactly who is he referring to?

Barney Frank and The Young Liberal

The Young Liberal in our office approached me the other day and started a conversation about the pitiful mess our economy and stock market are in and asked some pretty good questions about sub-prime mortgages and and the collapse of housing markets. I was so encouraged when he seemed to come to the realization that government meddling had a significant role in our present lot. There's hope for The Young Liberal, I thought.

Then he ruined it all. He said, "I've been seeing a lot of Barney Frank on the news. He's a pretty sharp Congressman."

Crap!