Cramer v. Stewart

I posted this on hulu and decided to paste it up here. I posted this as commentary on the March 12, 2009 Daily Show featuring the face off between Jon Stewart and Jim Cramer.

Here is a link to the show if you haven't seen it:

http://www.hulu.com/watch/62203/the-daily-show-with-jon-stewart-thu-mar-12-2009


This was dull, cramer was a treestump. He was exactly like this years ago on Bill Maher's show. When he gets confronted by someone he is a fan of, like maher or stewart, he backs way down.


Meanwhile, he's owned up over and over to the way the markets are and the power that big money has over the markets. The he goes on telling people to buy or sell with no more accuracy than anyone else. Big money moves markets. Period. Big money trumps news. That's what cramer is saying in these online videos. He made money by trumping the news with big money. That's the way markets have always worked. Read Richard Wyckoff circa 1910.


Cramer makes ironic statements in those videos on purpose, and stewart doesn't get it. why doesn't cnbc read ceo's minds? People make mistakes when they try to predict the future? Duh Jon, if that's the way your name is really spelled, what's on A&E right now?

Stewart does get:"We capitalize your adventure". Right. Now just like 100 years ago.
The only way to make money in the markets is to follow that money.


Cramer wimps out here. It could have been a lot more interesting. But stewart hasn't said anything that wasn't said on cnbc's own message boards over and over ever since they've had a web site. So what if there is a show called Fast Money. That's a debate point?


So again, this show was no big deal, anticlimactic, very disappointing on both sides, boring.

Is there anyone Obama knows who HAS paid their taxes?

This record is so broken. US Trade Representative nominee Ron Kirk is now in trouble for not paying taxes. No one in the media questioning Obama's vetting procedures. Ron Kirk and his friends are all smiles. Oh you caught me, guess I'll pay my taxes. There were a couple of issues, but mainly back taxes are owed on taking deductions for tickets to Dallas Mavericks games. Because, you know, that's work.

The questions here isn't so much what exactly are the rules, when one candidate withdraws for owing less than $1000 but Kirk presses on. The question isn't about whether he was trying to cheat the tax man. He deducted the cost of tickets to basketball games. Nuff said.

The real question is what would the reporting sound like right now if Kirk, Geithner and Obama were Republicans?

Obama announces the End of World War II

Well he has announced the end of the Iraqi War, and that end is due in 2011. In reality we will have withdrawn all troops from Iraq before the end of 2011. So that's when the Iraq war ends?

Based on that logic, he should pull all American troops out of Germany. Finally World War II, the seventy years of bloodshed, well mostly peace but lots of bloodshed at the beginning, will be at an end. The 50 year Korean War could finally be wound down by pulling US troops out of that country.

Evidently it's the withdrawal of troops that ends a war, not any of that "fighting battles" stuff we used to hear about. Based on Obama's latest announcements on our pullout, and the non-announcement that we are following Bush's plans to the letter, the media will be reporting that Obama plans to end the war in 2011.

The war in Iraq has been over for awhile. Granted it was declared over once before, when Baghdad fell. That was wrong. That was also then. This is now and the War has been over and it was won while Bush was calling the shots.

But why ruin fawning headlines with reality. Hey while you are at it Obama, why not get those nasty Normans off the British Isles, and bring that war to an end?! That Battle of Hastings is closing in on 950 years.

What's up with State of the Union

That's been a question for a few days. In every mention of this speech tonight, no one calls it a "State of The Union" speech. Neither did I. I've seen it called "State of the Union - like". Well I finally looked around to figure this out, and turns out the speeches we get in January of February are not always State of the Union speeches. The first speech of a presidency is not a state of the union evidently. Here's a good discussion of State of the Union speeches:

http://www.presidency.ucsb.edu/sou.php

The third paragraph gets you the recent history. Next year we will have a State of the Union, maybe.

For this year, Obama starts with a "we shall overcome the economy" message... and that's the right way to go. There's been quite a bit written about his Scare Monger in Chief style the last few weeks, especially here, hopefully we will now see a more proactive leadership style starting tonight.

.... and nary a negative word to be heard. Tonight was by far the most positive statements from Obama since becoming president. Trading would be a good way to judge the speech, Australia and oil are both non-reactive to the speech, but at least there's been no massive selloff. So the verdict is, cheer leading is good. Scare mongering is bad. Obama did a little cheer leading.

Details? There were a few vague references that could spell big trouble for our future. Rumor has it he wants to ax missile defense, and there was a vague statement tonight refering to that. Missile defense has been hated by democrats ever since it was a gleam in Ronald Reagen's eye. It is amazing technology that we need to protect ourselves against Iran's EMP scenario, if for no other reason. A successful EMP attack would set our economy back 100 years, and change the world overnight. The same people who ridiculed the idea of terrorist attacks against the US in the 90's today ridicule the idea of an attack from Iran.

Well, like I said there were no specifics. It was a good cheer leading speech. That's what was needed tonight.

Halloween coming early this year

Tuesday night we will have one trick or treater coming through, and since we didn't buy candy, I'm expecting a big trick. Obama plans an address to the full congress. Not unlike a State of the Union address. Or a declaration of war. It seems Obama will be dressed in his FDR costume, and I'm guessing we will be hearing some of the most dire, "depressing" statements about our economy yet.

I hope I'm wrong. The Scare Monger in Chief is getting a lot of help here, but talking down the economy works and I'm afraid everyone will be told exactly what we should think about our current economy tomorrow night. Those of us not out on a ledge, will be dragged out to one by Obama as he sets his own bar for performance to the lowest level yet. you see, he says that he inherits a 1.3 Trillion dollar deficit. Well, that's not really true. The $800 billion spent by Bush/Paulson and our TARP is not part of any annual expenditure. It was the bailout. Is he planning to do that bailout every year? It's already been matched by the so called stimulus bill, but that also is a one time thing. Obama has announced that he plans to cut the current "budget" in half. That means, believe it or not, he will be "cutting" our annual deficit back to $533 million. Really? Cutting it back to a larger budget deficit than Bush had at any time in his first seven years in office? Does anyone else get the feeling Obama plans amazing amounts of spending over the three years?

How will he talk us into spending all that money?

Here's the likely scenario for tomorrow night. Obama wants to spend huge amounts of money. To get everyone to go along, he will spend tomorrow night talking about the Great Depression II. That 's where we are headed if we don't agree to spend the money. Talk of a brighter future will apply not to next week or next month, but years from now. He will scare democrats to death, and republican Lindsey Graham who has already terrified himself talking about nationalizing banks, and this show under the big top will send the real economy further into the tank. He will have both halls of congress so that pictures reflect the proper gravitas needed to convince people, to trick people into thinking that thing's are really that bad. It's just like 1933! It will be an FDR moment, to help pass a budget to be introduced in a couple of days. I'm thinking.... a really big budget.

I hope I'm wrong, but just in case turn off the porch light on Halloween Tuesday, because here he comes. Booo!

Obama will not deliver on Wall Street

Obama talks tough on Wall Street today. Whether or not he deliver's on Wall Street is another question. After a month he has already discovered that talk is much cheaper than action. It was Wall Street's influence in his White House that changed up, or ambiguitized, Treasury Sec Tim Geithner's original plans for dealing with banks. Plans finally so vague that they caused a 500 point Dow day when they were announced a day late last week.

Here's Obama's new plan: treat income from trading OPM, "Other People's Money", like regular income, and tax it at regular income tax rates. Today George Soros, Warren Buffett and their ilk trade OPM and generate fee's based on the gains from that trading. Soros is theoretically retired, but still involved with his Quantum Fund. They then treat that income, the 20% fees, as if it were capital gains. So they pay taxes at a much reduced tax rate to what they would pay if that income were treated as if from doing a job that happened to involve trading. There are several points to be made.

Kudos to Obama, for the first time, for even mentioning it. However "IT" will never happen.

Every time we have had to listen to Soros or Buffett, billionaires both, say that the government should raise taxes, they meant that the government should raise your taxes and my taxes, not their taxes. Because they trade OPM they are on a different rate table than we are, and they have never spoken up when this issue has been raised in the past, nor will they now. "IT" was raised while Bush was president, and it got so little air play, and got so over-complexified, that today few know what "IT" is. Watch democrats flee this issue, like rats from a ship, when the phrase "taxing the rich" actually refers to billionaire hedge fund traders.

"IT" is one of the more bazaar and nonsensical aspects of US Tax Code so let's be clear. The line from OPM traders is that the money they make is payed to them directly from trading profits, and so their pay is literally capital gains, not income.

Here is capital gains the way you experience it. If you buy a stock, and later sell that stock, you will pay cap gains taxes on that stock. The taxes you pay are figured on the schedule D. If you held the stock long enough for it to qualify as long term capital gains, then you have a maximum tax rate, the "Capital Gains Tax" rate, that you pay. This rate changes a lot since it has been shown to be directly tied to economic activity. Both Bush W. and Clinton lowered Cap Gains Tax rates while president, and both times economic booms followed almost immediately. If you are wealthy enough to invest in a hedge fund, and the minimum is set by the SEC and was changed a couple of years ago but might be net worth of over $1000000, then your hedge fund profits would be treated the same way. See, you are risking capital in the markets. Your capital feeds progress, because companies go to these markets to raise money for their own new investments in people, equipment, marketing, or sometimes in other companies. Not unlike your savings accounts being used to loan money for new business creation by your bank. Your money is being used literally to fund progress, and in lieu of a flat tax system, the tax code rewards your behavior with lower tax rates on gains and dividends.

Hedge fund traders are not putting any money at risk. Not one dime. Their customers are, and pay Cap Gains rates as well they should. But to extend that tax treatment to the traders has never made any sense. They typically charge an administration fee, say around 2%, and they charge a piece of the profits, usually 20%, sliced right off the top. It is that 20% that turns traders like Soros and Buffett into billionaires. Because that cash is taken directly from proceeds of trading profits, they argue that their share of that cash gets identical treatment to the share that goes to the investor. For decades, this has been the case.

Their share should NEVER have been treated the same. They are not risking their own capital. Their investors are. Traders are paid from profits of trading. For one thing, if traders get the same treatment as the investor, then everyone who gets paid from those profits should get that treatment. To be consistent, if someone mows the lawn of the investor, that $30 should get treated as long term capital gains. There is NO difference. The Hedge Fund trader is being paid 20% for making good trading decisions, that is their job. Sales people for companies that build capital equipment get paid a % of what they sale, let's call that pay "commissions". Yet commissions are taxed at normal income rates, not at the rates paid by the corporation for their own gains from the sale of that equipment. Traders are taxed differently because their day to day activity resembles that of an investor or trader making profits from their own capital investments, but it is just a resemblance. They are not the actual investors, and should never have been treated as if they were the investors. They are just pretending to be the investors, by making trading decisions for those investors.

Would either Soros or Buffett be billionaires if they had been paying the same tax rates the rest of us had for the last 40 years? Good question. I'm thinking the answer is NO. When I see either of those men, I see two people who have the money they do because they have been allowed legally to cheat the tax code for their entire lives.

The business news media, and I guess we all know who I am talking about, will immediately obfuscate the debate in banalities that have nothing to do with the real issues. "Do Hedge Fund traders make too much money??" Remember that ridiculous discussion? It was just a couple of years ago. You can bet they will do it again. The real issue is as stated in this blog. Is the money paid from Capital Gains it's self Capital Gains. If it is, someone tell the guy doing the lawn!

Obama looses control part 3

Did the Attorney General of the United States call America a "nation of cowards?"

In the White House press briefing from earlier today, linked to in my previous post, just after the 26 minute mark, a reporter asked a question where he quoted our Attorney General.... let's say "Obama's Attorney General", as saying "on things racial, we are essentially a nation of cowards". Evidently this unbelievable comment was made several days ago.

Where is the outrage? Where is the story?? Why hasn't such an absurd comment been given air by the media. Unless of course, their job is to filter the news, and cover up loose cannons for the administration.

This guy is not a spokesperson for the president of Cuba, or Iran, or Venezuela. If he made such a hateful public statement about the country he is supposed to be Attorney General of, if his opinion of the people who pay his salary is so low that we are so despicable to him as to be cowards, then he should resign immediately.

Here is the exact quote: "Though this nation has proudly thought of itself as an ethnic melting pot, in things racial we have always been and I believe continue to be, in too many ways, essentially a nation of cowards."

Where has this person been the last 45 years?? This is hate speech straight out of Jeremiah Wright's book of sermons. Probably what he really means is that he wants a different outcome in the race debate that American's have had, and that we continue to have. There are signs of bigotry in his statements, and someone who calls Americans cowards is probably very close to leveling that charge at one group of people above (or below) all others. Maybe there is one group that perhaps he feels haven't participated in the race debate to the extent that he thinks they should have. Because he's been waiting for some sort of apology. Some sort of "truth and reconcilliation".

I wonder if that commentary is frank enough for the AG.

Obama needs to tighten up this administration. The loose cannon quotient is off the scale just 1 month into his term. But the AG calling out his own country as a "country of cowards" is inexcusable. It doesn't matter what spin you come up with Mr. Obama, but Eric Holder must go. He is no longer qualified to hold any cabinet position for any American President.

Once again, Obama's top people and allies are completely out of control. Day by day, we see an underlying hatred for the rank and file people of the Untied States, and for the free market capitalist system, from Obama's top allies and cabinet members. Chris Dodd, Rahm Emanuel, and now AG Eric Holder, show us that with leaders like these, who needs enemies.