Saturday, August 06, 2011

Only One Bullet Left

In June 2011, I came to the realization that Keynesian economic policies had failed miserably even though the stock market was doing relatively well. I also realized that the Fed and the Obama administration had almost no options left to improve the economy.  So I sold just about every stock in the retirement and savings accounts I control.   At this time, it appears I made the right decision :-)
I expect a buying opportunity soon when the market declines 20% (about Dow 10200).   I know this sounds unlikely to many readers.   But I can't see any trajectory other than downward given that Fed and the Obama administration only know to continue what they're already doing.
I do see one opportunity to reverse the bear market and economic decline: the repeal of Obamacare.  To me, this is the only bullet that's left.  This would give business a positive outlook for 2-3 years and lead to job creation. However, I think it is an action the administration will take only if Obama's re-election is in jeopardy, which it is not at this time.  
So for now, I'm waiting for a Dow 10200 before putting money back into stocks.   By then, Obama may need  to consider his final option to improve the economy and protect his re-election.
For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2011 Achievement Catalyst, LLC


AS said...

No explanation or justification for why repealing the healthcare law would provide such a benefit.

Your original post is just an unsubstantiated anti-Obama post. Like many of the ones leading to it. Easy to attack Obama when you don't offer an alternative, *SUBSTANTIATED* position.

Maybe you need to start calling out Republicans too.
"Extending the Bush tax cuts for the wealthy will create jobs". Didn't work. "Massive Financial Stimulus (TARP etc)." Didn't work. "Major Energy Tax Breaks". Didn't work, oil more expensive than ever. "Ethanol Preferences". Didn't work, drove up food prices.

Also if you want anything around certainty and positive outlook, maybe you should ask your dear Republican friends why they allowed the debt limit debate to extend until the last minute, holding the Administration, Treasury, and American people hostage to the views of the Tea Party?

Super Saver said...

@ AS,

Obamacare is a major reason businesses aren't hiring. Businesses don't have a positive future outlook due to this policy.

As for calling out the Republicans, weren't all the programs, except Bush tax cut extension, you attributed to the Republicans passed with a Democratic congressional majority? Extending the Bush Tax cuts, agree little impact except to keep the goverment from wasting, oops investing more money. TARP, agree was a failure. Ethanol preferences, agree a big waste, but wasn't this an Obama "green" initiative?

Congress could have passed the debt ceiling increase in 2010 when the Democrats had majority in both houses of Congress. Why did the Obama wait until Democrats lost the majority to tackle the issue?

Super Saver said...

@ AS,

Recall, TARP funds were used to bailout Chrysler and GM, which Obama showcases constantly. I'm glad that you agree with me that TARP was a failure :-)

Finally, the $800 billion stimulus which was guaranteed to keep unemployment below 8% --- Failure. Also under a Democratic majority in both houses.