- Editorial Commentary -

August 10, 2009 (FinancialWire) (By Bud Burrell) — Last Frday’s trading day ended with Fannie Mae (NYSE: FNM) trading on volume of 5,830,000 shares (losing $144.0 million) and Ambac Financial Group, Inc. (NYSE: ABK) trading on volume of 8,610,700 shares (losing $97.7 million). In the face of such losses being taken by such companies, FinancialWire(tm) editorial contributor, Bud Burrell, offers some perspective:

As we watch the current regulatory paralysis of our elected representatives, the breakdown of our securities regulatory bureaucracies, and the schizophrenia of key elements of our economy, any logical mind is going to be driven into a “If, then” form of logic.  We have major components of our economy that are in catastrophic disarray, ranging from all sides of the energy sector, to job creation, to health care, and to a polarized political process.  The resulting variables provide for a potential meltdown of the most durable economic and political system yet devised in world history, and the disruption of one of the most beneficent, generous, tolerant and kind countries of World history, not perfect, but a hell of a lot better than second best.

As we face crises on every front, from our monetary system, to our political structure, to our economic models, to our fundamental health care, we see more focus on opportunism than on solutions.  We have elected leaders who are more interested in furthering their political agendas than in preserving democracy and capitalism.  What will be the ultimate outcome of this n-dimensional societal train wreck?

Three topics dominate our current environment, those being a breakdown in the financial stability of the US, to a religious fervor driven crusade to have this country unilaterally take on the Carbon Dioxide levels of a world they don’t control, to a drive for a universal health care system that has been shown to not work in all but one place it has been tried, that being Switzerland.  As we look at how each of the problems is being addressed by our current government, we see potential outcomes associated with the options, which on their own legs can’t stand.

The first move of this administration has been to adopt a monstrously deficit driven governmental stimulus budget, which was tried by FDR in the 1930’s, with absolutely no result other than an elevated rhetoric unmatched by any economic results to support it.  We face debasement of our currency, attended by a major set of future tax increases than even its supporters can’t deny.  This country is moving its tax burden on corporations to a uniquely high level, at a time when just the opposite is needed.  Worse, the legislative process was insulted when our budget wasn’t even read by its proponents who forced it through by threats of catastrophe.

The next move has been to move similarly press cap and trade policies through the Congress, a bill that would increase energy prices by astronomical levels, with the most regressive and egregious taxes on those least able to afford it across the board.  It has to get through the Senate, but interestingly, India was smart enough to tell Secretary of State Hillary Clinton to pound sand before they would place energy taxes in such a poor country, at the risk of alienating our most important ally in South Asia.  The promises of an 8% unemployment level, and 3.5 Million new jobs are fantasy, or worse, fraud.

Finally, now this administration pushes an undefined cost Universal Health Care system through our legislatures, at astronomical costs they refuse to disclose.  Anyone who knows how Canada and the UK treat patients with special medical needs knows that their first option is to come to this country and pay for it out of pocket.  Speaking personally as an individual who has had special medical needs over a very long time horizon, I have to make a choice about my citizenship if they push this forward.  Be certain that if I am forced to make such a decision, I will force others to make decisions they might not like.

Our markets have behaved schizophrenically for months now, rallying off the 6400 level, in what every professional I know describes as a bear market rally.  When it turned off the 6400 level, the Fibonacci level would predict a recovery to 9500, which this market seems determined to make no matter what.  The good news is our corporate management has proven it knows how to make money in a difficult time.  The bad news is that at least 2.5 Million jobs have been vaporized, and if those taking part time jobs out of desperation are added to the unemployment statistic, we are now at a 16.8% total real unemployment, headed higher.

This market needs to correct yet again.  No major market bottom has been technically defined since the 1974 lows by a single bottom.  If perchance the half-cocked ideas of an inexperienced President and a knee jerk Congress can be moderated, we may survive until the 2010 elections, and a shift in control of our legislatures. If this is not to be, and the President gets what he says he wants (and I am not sure he even knows what that is), then look for the Dow and S&P to go much lower than the old low of 6400, and for unemployment to go 25% with much higher tax rates and a virtual annihilation of job creation in this country.

You need to speak up with a unified voice.  Let your elected officials you are watching them.  Make them accountable, professionally and personally.  The option is life in a socialist train wreck emulating the Eastern Bloc under the Soviets.

As we watch the current regulatory paralysis of our elected representatives, the breakdown of our securities regulatory bureaucracies, and the schizophrenia of key elements of our economy, any logical mind is going to be driven into a “If, then” form of logic.  We have major components of our economy that are in catastrophic disarray, ranging from all sides of the energy sector, to job creation, to health care, and to a polarized political process.  The resulting variables provide for a potential meltdown of the most durable economic and political system yet devised in world history, and the disruption of one of the most beneficent, generous, tolerant and kind countries of World history, not perfect, but a hell of a lot better than second best.

As we face crises on every front, from our monetary system, to our political structure, to our economic models, to our fundamental health care, we see more focus on opportunism than on solutions.  We have elected leaders who are more interested in furthering their political agendas than in preserving democracy and capitalism.  What will be the ultimate outcome of this n-dimensional societal train wreck?

Three topics dominate our current environment, those being a breakdown in the financial stability of the US, to a religious fervor driven crusade to have this country unilaterally take on the Carbon Dioxide levels of a world they don’t control, to a drive for a universal health care system that has been shown to not work in all but one place it has been tried, that being Switzerland.  As we look at how each of the problems is being addressed by our current government, we see potential outcomes associated with the options, which on their own legs can’t stand.

The first move of this administration has been to adopt a monstrously deficit driven governmental stimulus budget, which was tried by FDR in the 1930’s, with absolutely no result other than an elevated rhetoric unmatched by any economic results to support it.  We face debasement of our currency, attended by a major set of future tax increases than even its supporters can’t deny.  This country is moving its tax burden on corporations to a uniquely high level, at a time when just the opposite is needed.  Worse, the legislative process was insulted when our budget wasn’t even read by its proponents who forced it through by threats of catastrophe.

The next move has been to move similarly press cap and trade policies through the Congress, a bill that would increase energy prices by astronomical levels, with the most regressive and egregious taxes on those least able to afford it across the board.  It has to get through the Senate, but interestingly, India was smart enough to tell Secretary of State Hillary Clinton to pound sand before they would place energy taxes in such a poor country, at the risk of alienating our most important ally in South Asia.  The promises of an 8% unemployment level, and 3.5 Million new jobs are fantasy, or worse, fraud.

Finally, now this administration pushes an undefined cost Universal Health Care system through our legislatures, at astronomical costs they refuse to disclose.  Anyone who knows how Canada and the UK treat patients with special medical needs knows that their first option is to come to this country and pay for it out of pocket.  Speaking personally as an individual who has had special medical needs over a very long time horizon, I have to make a choice about my citizenship if they push this forward.  Be certain that if I am forced to make such a decision, I will force others to make decisions they might not like.

Our markets have behaved schizophrenically for months now, rallying off the 6400 level, in what every professional I know describes as a bear market rally.  When it turned off the 6400 level, the Fibonacci level would predict a recovery to 9500, which this market seems determined to make no matter what.  The good news is our corporate management has proven it knows how to make money in a difficult time.  The bad news is that at least 2.5 Million jobs have been vaporized, and if those taking part time jobs out of desperation are added to the unemployment statistic, we are now at a 16.8% total real unemployment, headed higher.

This market needs to correct yet again.  No major market bottom has been technically defined since the 1974 lows by a single bottom.  If perchance the half-cocked ideas of an inexperienced President and a knee jerk Congress can be moderated, we may survive until the 2010 elections, and a shift in control of our legislatures. If this is not to be, and the President gets what he says he wants (and I am not sure he even knows what that is), then look for the Dow and S&P to go much lower than the old low of 6400, and for unemployment to go 25% with much higher tax rates and a virtual annihilation of job creation in this country.

You need to speak up with a unified voice.  Let your elected officials you are watching them.  Make them accountable, professionally and personally.  The option is life in a socialist train wreck emulating the Eastern Bloc under the Soviets.

Predicate Outcome Analysis for the Present Financial Crises

As we watch the current regulatory paralysis of our elected representatives, the breakdown of our securities regulatory bureaucracies, and the schizophrenia of key elements of our economy, any logical mind is going to be driven into a “If, then” form of logic.  We have major components of our economy that are in catastrophic disarray, ranging from all sides of the energy sector, to job creation, to health care, and to a polarized political process.  The resulting variables provide for a potential meltdown of the most durable economic and political system yet devised in world history, and the disruption of one of the most beneficent, generous, tolerant and kind countries of World history, not perfect, but a hell of a lot better than second best.

As we face crises on every front, from our monetary system, to our political structure, to our economic models, to our fundamental health care, we see more focus on opportunism than on solutions.  We have elected leaders who are more interested in furthering their political agendas than in preserving democracy and capitalism.  What will be the ultimate outcome of this n-dimensional societal train wreck?

Three topics dominate our current environment, those being a breakdown in the financial stability of the US, to a religious fervor driven crusade to have this country unilaterally take on the Carbon Dioxide levels of a world they don’t control, to a drive for a universal health care system that has been shown to not work in all but one place it has been tried, that being Switzerland.  As we look at how each of the problems is being addressed by our current government, we see potential outcomes associated with the options, which on their own legs can’t stand.

The first move of this administration has been to adopt a monstrously deficit driven governmental stimulus budget, which was tried by FDR in the 1930’s, with absolutely no result other than an elevated rhetoric unmatched by any economic results to support it.  We face debasement of our currency, attended by a major set of future tax increases than even its supporters can’t deny.  This country is moving its tax burden on corporations to a uniquely high level, at a time when just the opposite is needed.  Worse, the legislative process was insulted when our budget wasn’t even read by its proponents who forced it through by threats of catastrophe.

The next move has been to move similarly press cap and trade policies through the Congress, a bill that would increase energy prices by astronomical levels, with the most regressive and egregious taxes on those least able to afford it across the board.  It has to get through the Senate, but interestingly, India was smart enough to tell Secretary of State Hillary Clinton to pound sand before they would place energy taxes in such a poor country, at the risk of alienating our most important ally in South Asia.  The promises of an 8% unemployment level, and 3.5 Million new jobs are fantasy, or worse, fraud.

Finally, now this administration pushes an undefined cost Universal Health Care system through our legislatures, at astronomical costs they refuse to disclose.  Anyone who knows how Canada and the UK treat patients with special medical needs knows that their first option is to come to this country and pay for it out of pocket.  Speaking personally as an individual who has had special medical needs over a very long time horizon, I have to make a choice about my citizenship if they push this forward.  Be certain that if I am forced to make such a decision, I will force others to make decisions they might not like.

Our markets have behaved schizophrenically for months now, rallying off the 6400 level, in what every professional I know describes as a bear market rally.  When it turned off the 6400 level, the Fibonacci level would predict a recovery to 9500, which this market seems determined to make no matter what.  The good news is our corporate management has proven it knows how to make money in a difficult time.  The bad news is that at least 2.5 Million jobs have been vaporized, and if those taking part time jobs out of desperation are added to the unemployment statistic, we are now at a 16.8% total real unemployment, headed higher.

This market needs to correct yet again.  No major market bottom has been technically defined since the 1974 lows by a single bottom.  If perchance the half-cocked ideas of an inexperienced President and a knee jerk Congress can be moderated, we may survive until the 2010 elections, and a shift in control of our legislatures. If this is not to be, and the President gets what he says he wants (and I am not sure he even knows what that is), then look for the Dow and S&P to go much lower than the old low of 6400, and for unemployment to go to 25% with much higher tax rates and a virtual annihilation of job creation in this country.

You need to speak up with a unified voice.  Let your elected officials know you are watching them.  Make them accountable, professionally and personally.  The option is life in a socialist train wreck emulating the Eastern Bloc under the Soviets.

About Bud Burrell

Bud Burrell’s experience spans a diverse spectrum, including service with the U.S. Military in the Special Forces, as a Finance Officer and as a Project Finance & Accounting Officer. Burrell also pursued studies in fine arts, the Renaissance, Russian history, and Chinese culture. Following years of working on Wall Street, he worked with specialty and derivative money management consulting and research and development in IT and AI.  Since then, Burrell has worked globally with major development stage companies from the IT, energy, alternative energy, bio-pharma, and general technology arenas, as well as on counterfeiting and financial fraud scandals.

Mr. Burrell also regularly contributes to Investrend Weblogs (http://infoescrow.net/f/?q=http://www.investrendweblogs.net).

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