It is now mid-July of 2013, more than 4 1/2 years since the financial collapse and still we hear the phrase: "we're recovering." How long are we going to hear that?
Below 2 percent economic growth and almost 8 percent unemployment means that the US economy is paralyzed. The Obama Administration seems to have thrown in the towel on the subject of growing the economy. Right they should! The Administration policies, piled on top of the policy history of the past fifty years, virtually guarantee that the vibrant economy of the Old USA is not in our future.
There are bright spots -- autos, housing, energy -- but there are always bright spots. What is missing is small business vitality. That's gone and not coming back until folks figure out how to get around the mass of regulations and taxes that bedevil the American economy. Other than outsourcing, it is not clear how to avoid the strangling effect of American regulatory policy. As for employment, hiring anyone seems downright irrational, given current tax and regulatory policies.
The Obama Administration has reduced the expectations of most Americans to the kind of future that Europeans now have -- stagnation, limited opportunity for the young, guarantees for the oldest demographic that are coming apart at the seams, and debts that no one has any intention of honoring.
So the phrase "we're recovering" is getting tiresome. We're not recovering, we're changing. The quasi-socialism that has supplanted free enterprise is preventing a serious recovery like the one we had in the 1980s. The "bad old days" were actually "good old days" as Americans are learning to their dismay.
Tuesday, July 16, 2013
Friday, July 5, 2013
The Real Message in Egypt
The Egyptian economy has collapsed. This was a process that began with the 'Arab Spring' and accelerated with the election of Morsi, deposed over the weekend by the Egyptian military.
What this shows is that the average Egyptian, Islamist or not, prefers to have food, shelter and safety to political ideology. Democracy doesn't mean much of anything if there are no free institutions.
The US foreign policy is not helpful here, because the US government is busily dismantling free institutions as a cornerstone of its own domestic policy. The US can hardly be expected to promote free institutions -- a free press, for example -- if it doesn't believe in free institutions on its own home turf.
A rule of law would be helpful as well, but current American domestic policy -- witness, the recent suspension of the employer mandate in the Affordable Care Act until elections are safely over -- is mainly a retreat from the rule of law. Actions speak louder than words and the world is plugged in these days.
The right to start a business and provide for your family is all that the average Egyptian wants and the demonstrations that crushed the political power of Morsi were a testament to that desire. Perhaps the Obama Administration should take notes.
What this shows is that the average Egyptian, Islamist or not, prefers to have food, shelter and safety to political ideology. Democracy doesn't mean much of anything if there are no free institutions.
The US foreign policy is not helpful here, because the US government is busily dismantling free institutions as a cornerstone of its own domestic policy. The US can hardly be expected to promote free institutions -- a free press, for example -- if it doesn't believe in free institutions on its own home turf.
A rule of law would be helpful as well, but current American domestic policy -- witness, the recent suspension of the employer mandate in the Affordable Care Act until elections are safely over -- is mainly a retreat from the rule of law. Actions speak louder than words and the world is plugged in these days.
The right to start a business and provide for your family is all that the average Egyptian wants and the demonstrations that crushed the political power of Morsi were a testament to that desire. Perhaps the Obama Administration should take notes.
The Next New Thing
Are you ready for this? How about "unlimited vacations for all." Paid for, of course.
Check out the NY Times editorial page today. These folks have launched their latest job-killing, economy-crushing plan -- unlimited paid vacations.
That should really entice employers to increase their work force. The new idea from the left is to have employees on the payroll who, in reality, are always on vacation.
Check out today's NYTimes editorial page if you think this is a mirage.
Check out the NY Times editorial page today. These folks have launched their latest job-killing, economy-crushing plan -- unlimited paid vacations.
That should really entice employers to increase their work force. The new idea from the left is to have employees on the payroll who, in reality, are always on vacation.
Check out today's NYTimes editorial page if you think this is a mirage.
Thursday, July 4, 2013
Affordable Health Care?
The truth on ObamaCare is gradually unfolding. Two things are becoming increasingly clear: 1). Health care provision in the United States is going to deteriorate dramatically in the future because of the 'Affordable Care Act'; and 2). Health care costs in the US are going to escalate dramatically because of the 'Affordable Care Act.'.
You would think that the above two facts are inconsistent, but they aren't. There are a number of parts of the Act that are driving 1) and 2), but they can all be summarized by the following: The "Affordable Health Care Act" promises services but provides no real means of payment. Sound familiar? The same truth is why medicare and social security (and public pension funds) are on a pathway to insolvency.
The Obama Administration's decision to postpone enforcement on the 'large employer' part of the "Affordable Care Act" is an open admission that they don't want the public to see the true costs of the new laws and regulations. Once the elections are past, then, they say, they will enforce the law. The "Act" itself does not provide the Obama Administration with the wiggle room to postpone enforcement, but in the new Obama world of 'selective enforcement' of American law, the Obama Administration announced (in a blog message, no less) that they do not plan to enforce the large employer provisions until elections in 2014 are safely over.
The best health care system is a free market health care system. The insurance industry should be free to offer whatever health insurance plans they wish, to whoever they wish to offer them to.....period.
Concern about the uninsurable can be dealt with in the same manner as is done with auto insurance for drivers that are not normally insurable.
There is no reason for the government to take over the health care industry in the US. Just as with public pension funds and social security, the government promises to take care of its citizens, but, in reality, has made no plans to honor those promises. Ditto for the Affordable Care Act.
You would think that the above two facts are inconsistent, but they aren't. There are a number of parts of the Act that are driving 1) and 2), but they can all be summarized by the following: The "Affordable Health Care Act" promises services but provides no real means of payment. Sound familiar? The same truth is why medicare and social security (and public pension funds) are on a pathway to insolvency.
The Obama Administration's decision to postpone enforcement on the 'large employer' part of the "Affordable Care Act" is an open admission that they don't want the public to see the true costs of the new laws and regulations. Once the elections are past, then, they say, they will enforce the law. The "Act" itself does not provide the Obama Administration with the wiggle room to postpone enforcement, but in the new Obama world of 'selective enforcement' of American law, the Obama Administration announced (in a blog message, no less) that they do not plan to enforce the large employer provisions until elections in 2014 are safely over.
The best health care system is a free market health care system. The insurance industry should be free to offer whatever health insurance plans they wish, to whoever they wish to offer them to.....period.
Concern about the uninsurable can be dealt with in the same manner as is done with auto insurance for drivers that are not normally insurable.
There is no reason for the government to take over the health care industry in the US. Just as with public pension funds and social security, the government promises to take care of its citizens, but, in reality, has made no plans to honor those promises. Ditto for the Affordable Care Act.
Wednesday, July 3, 2013
Political Unity Collapses in Portugal
Enforcing austerity doesn't win much popular favor as the politicians in Portugal have discovered. The center right government in Portugal has pretty much collapsed over the weekend. Greece is also back in the news as it struggles to implement its own version of austerity.
No European government backing austerity will survive. Germany's Angela Merkel will be the most prominent casualty as she faces the electorate next year. Gone already are the political leaders of Greece, Spain, Italy, and France. It won't be long before their successors are under siege as well.
The EU-ECB plan of increasing debt and forcing austerity on their populations has been a failure from day one. The political unraveling of Europe was easy to predict and not at all surprising to watch. The fear is that extremists of the far left will eventually assume power and Europe will become a different place.
No European government backing austerity will survive. Germany's Angela Merkel will be the most prominent casualty as she faces the electorate next year. Gone already are the political leaders of Greece, Spain, Italy, and France. It won't be long before their successors are under siege as well.
The EU-ECB plan of increasing debt and forcing austerity on their populations has been a failure from day one. The political unraveling of Europe was easy to predict and not at all surprising to watch. The fear is that extremists of the far left will eventually assume power and Europe will become a different place.
Monday, July 1, 2013
Tesla hits new all-time high: Do Androids Dream of Electric Cars?
After a recent consolidation along its 20 day moving average, Tesla (TSLA) closed at a new all-time high today.
As you can see from the daily and weekly charts, the runaway move started in April when TSLA broke out above the $40 level on large volume (over 7 times its daily avg. volume). TSLA soon consolidated that move and continued higher, amidst a stream of exciting announcements and a growing wave of "Elon mania" (see recent interviews, videos below), to its most recent prior peak in late May.
As of today, TSLA is up over 165% from its April 1 closing price.
After noting some weakness in several leading stocks (including TSLA) on StockTwits + Twitter late last month, I soon realized that I was wrong on TSLA. What I mistook for topping action was actually just a pause before this latest, new high. The uptrend continues...
Elon Musk discusses creativity, entrepreneurship and a new mode of travel (hyperloop) at Pando Monthly.
TED chats with Elon Musk: The mind behind Tesla, SpaceX, and SolarCity.
Disclosure: as of this posting, I have no position in TSLA (and I have had no prior positions in TSLA) and am watching from the sidelines. This may change at any time. If any follow-up posts coincide with my holding a position (long or short) in the stock or in TSLA options, this will be noted within said posts.
As you can see from the daily and weekly charts, the runaway move started in April when TSLA broke out above the $40 level on large volume (over 7 times its daily avg. volume). TSLA soon consolidated that move and continued higher, amidst a stream of exciting announcements and a growing wave of "Elon mania" (see recent interviews, videos below), to its most recent prior peak in late May.
As of today, TSLA is up over 165% from its April 1 closing price.
After noting some weakness in several leading stocks (including TSLA) on StockTwits + Twitter late last month, I soon realized that I was wrong on TSLA. What I mistook for topping action was actually just a pause before this latest, new high. The uptrend continues...
Elon Musk discusses creativity, entrepreneurship and a new mode of travel (hyperloop) at Pando Monthly.
TED chats with Elon Musk: The mind behind Tesla, SpaceX, and SolarCity.
Disclosure: as of this posting, I have no position in TSLA (and I have had no prior positions in TSLA) and am watching from the sidelines. This may change at any time. If any follow-up posts coincide with my holding a position (long or short) in the stock or in TSLA options, this will be noted within said posts.
China Slows
Asia is beginning to weaken. Given the stagnation in the western economies, this is not good news. Unemployment in the Eurozone remains above 12 percent and US unemployment rates have fallen only because of the massive shift of workers out of the work force. Growth in the West is so slight as to be within the margin of error for measuring the data. The only real global economic strength has been Asia and that may be ending.
Granted there are bright spots in the US -- fewer in Europe. US housing is stabilized and there are pockets of feeding frenzy here and there in the residential market. But, overall, there is still weakness. Now with Obamacare looming and the unleashing of the EPA, things could easily deteriorate in the US.
While everyone watches the Fed, the real story is a micro story. The mass of regulation, rules and additional costs that businesses face, even if demand were to increase, will keep a lid on economic expansion. Debt problems will also limit the future of Western economies. Too many promises, too few resources to deliver on those promises.
Fed activity is mainly important for inflationary expectations and pressures. With a sick economy (made sick by federal policies since 2008), there isn't much inflation. But there will be. That's what the recent uptick in treasury rates is all about.
Granted there are bright spots in the US -- fewer in Europe. US housing is stabilized and there are pockets of feeding frenzy here and there in the residential market. But, overall, there is still weakness. Now with Obamacare looming and the unleashing of the EPA, things could easily deteriorate in the US.
While everyone watches the Fed, the real story is a micro story. The mass of regulation, rules and additional costs that businesses face, even if demand were to increase, will keep a lid on economic expansion. Debt problems will also limit the future of Western economies. Too many promises, too few resources to deliver on those promises.
Fed activity is mainly important for inflationary expectations and pressures. With a sick economy (made sick by federal policies since 2008), there isn't much inflation. But there will be. That's what the recent uptick in treasury rates is all about.
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