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Friday, February 27, 2009

 

TGIF - The Budget Plan Blues

Is it really necessary for me to explain how much I hate the Obama proposed budget? Why would I need to "expound on the obvious," to borrow a phrase from Haverford's last football coach, the late Dana Swan?

It's really funny to watch Jim Cramer on "Mad Money" railing about the end of capitalism in America, and how there are no "Obama stocks." So what is one to do with one's money if we are going to be the Peoples Republic of the US?

Beats me. My formula is based on the theory of following the market wherever it goes, letting it tell us when it's low so we can buy and high so we can sell. If it all goes to zero, the music stops and we are left without a chair, that is, no one to sell to.

By then, Obama may outlaw the ability to take any tax deductible capital losses at all, since the Treasury will be down to its last few tuppence.

In the meantime, my plan is to follow the formula, even unto oblivion, making sure to take my $3,000 of net allowed losses on each year's tax return. They shouldn't be very hard to assemble. I didn't mind taking gains each year during the low tax Bush years (even tax year 2008), figuring I could save the losses for the higher tax years surely coming (2011 at the latest). But I'll be darned if I want to pay an extra shekel into this Treasury.

No surprise that a plan to undo our health insurance system made it into the budget scheme. Look, our system is not perfect, and there is a significant uninsured population it does not serve, but they are outnumbered by those it does. I expect the controversy over that issue to be a real donnybrook. Looked at from the perspective of the world, there should be at least one country where you can get immediate service and right now that's here. If we go the socialized route, where will Canadians go when they need surgery?

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I often blog about things I read in the Wall St. Journal, which I consider the best value of just about any product I buy. For those who eschew old fashioned newsprint, the on-line edition is just as serviceable and affordable. By pointing out the many shortfalls of the new administration, the editors and op ed writers on the WSJ serve the important function of loyal opposition, certainly more effectively than their political allies in the GOP. I would gladly offer the following deal to every one of my liberal friends: I will suffer through the daily editorials and op eds of the New York Times (or Slimes as Mark Lavin calls it), giving it full attention and consideration, if you will do the same with the WSJ. I predict you will be at least partially converted before me. And much more entertained.

I say this with confidence since like many neo-conservatives, I am a refugee from the left.

By the way, one controversy erupting this week involves efforts by some of the commissars in Congress to rein in conservative talk radio. Their case seems to be that conservatives' time slots are more the result of some vast right wing conspiracy than market forces, and that's why there are no lefty talk shows. Of course, they completely miss the point. The reason Rush and Mark have an audience is because the mainstream media is left - dominated, and conservatives need another outlet. How could a left oriented show have listeners and advertisers if they are just going to repeat what we hear on the 11:00 network news every night?

President Reagan's elimination of the "fairness doctrine," which was anything but, should not be reversed. I say this even though I am willing to stipulate that Rush and Mark ain't exactly Pulitzer Prize caliber journalists.

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Tiger Woods is back, and not a moment too soon for the professional golf tours, losing sponsors and tournaments steadily in his absence. What's more, he seems to have made a remarkable recovery from his serious injuries, walking and swinging easily, looking as fit and athletic as ever. That he lost in the second round of this week's match play (where almost anything can happen) does not take away from the impression that he returns as good as ever.

Great news for golf; not so great for his competition.

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Best Family Feud Poll Result - What do you take on a hunting trip with (former) VP Cheney? Most popular answer - Bullet proof vest.

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Monday, I bought 400 shares of Gencor (GENC), a value buy at the discounted price of 6.15. We had a refreshing short covering rally Tuesday, but you knew it was the shorts since the stocks that acted best were the ones that have been pummeled the most recently. In a real rally, the less unscathed would have led the advance. Sure enough, the rest of the week was down.

Today, GE, as has been long predicted by this blog, cut its dividend by two-thirds. We continue to see layoffs, downgrades, rising foreclosures, and lousy revenues and earnings. Having fun yet? In Germany, they have started burning BMW's and other luxury cars. If you still have a Lexus, you might want to trade it for a Camry. Ostentatious is out.

One bracing item was that Fed Reserve Chairman Bernanke, in a stunningly intelligent dialogue with Representative Ackerman (D-NY), agreed that restoration of the short selling uptick rule and relaxation of mark-to-market accounting might alleviate the economic crisis. I never would have suspected that Helicopter Ben was a redwavemusings reader. That was enough to intensify Tuesday's rally, but for the rest of the week, it was all news Obama all the time and every time he spoke in front of the cameras, it was good enough for 100 Dow points in the wrong direction. His speaking style may be great, but what he is saying is just killing us. At least Bush kept himself cooped up in the Oval Office most of the time.

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