A Big Reason For the Market Decline

The stock market continues to plummet almost daily. Five percent drops, almost unthinkable a month ago, now occur two or three times a week. Weren't these drops the main reason Congress crammed through a bailout bill of $700 billion? Wasn’t this going to stop the sky from falling and Armageddon from happening? Isn't this the same reason the Federal Reserve lowered interest rates by 1/2 a point the other day? How come this hasn't stemmed the tide? The S&P 500 is down almost 20% in the LAST TEN DAYS. People have lost a combined $2.5 trillion dollars in wealth.

There are many reasons behind a market's rise or fall. It is much too big a phenomenon to explain by simply one thing. Fear and greed always swing the pendulum too far in one direction or the other. I suspect this major drop is long overdue but shouldn't be quite as deep or have occurred quite as fast as it has.

The market is a forward looking indicator. The "people in the know" about future profits (institutional investors) take positions in the market for a profession. Their livelihood is looking at companies all day long. Their success depends on being right about the direction of the market more times than not. These investors talk to professionals all day long. So, despite the bailout and global interest rate cuts, why is the market still tanking? I believe there is one big reason right now. Investors are discounting a Barack Obama presidency. It is becoming ever clearer Mr. Obama is going to win the election. Our economy is struggling right now and the market sees Barack’s ideas as a death blow to corporations’ ability to make money and create jobs. One need only look at a few top line bullet points from his speeches to figure out why people are beginning to hide money in their mattresses.

*Barack’s sidekick believes taxes are “patriotic.” To an investor patriotic taxpayers cause very upset stomachs. I actually believe this comment was the precipice for the decline. Since Sept. 19th when he said it, the S&P 500 is down more than 30%. In only three weeks.

*Universal health care for all including the 12-20 million illegal aliens here. Why do I say this? You say “it can’t be Mr. Conservative in Ohio.” Well, Barack continually cites the 47 million uninsured he is going to take care of. Illegals are included in this number, so either he is going to insure them, or his rhetoric is a bit off. Either way, assuming he is lying about the number and subtracting them out, free health care for another 30-35 million folks has got to be paid for somewhere. This somewhere is all the rest of us.

*He is going to substantially increase taxes on “the rich.” While this sounds nice, they are the ones creating jobs. Would you invest in companies soon closing up shop rather than giving half their earnings over to the government? How about investing in companies moving offshore to avoid the excessive taxation? Or companies laying off workers because they had to raise their prices to cover the increased taxes?

*Mr. Obama has this very nice sounding rhetoric about our “shared responsibility” as a nation. This just seems so nice and fuzzy, but when you pick it apart, it really means those at the top of anything in society need to care about others through the use of government force. Forced caring is socialism and is what has put Europe on the back burner for a very long time (at least economically).

*An additional $1 trillion dollar government spending spree is the cure for what ails us according to Dr. Obama. Granted, Republicans have been no better for the last ten years on this issue, but digging the ditch deeper to, in essence, buy votes is sickening.

I have no proof that my theory is correct. Maybe the sky is falling? Maybe the market isn’t sure who is going to win the election or what their real policies will be?

All I know is the market looks ahead, and with 27 days until the vote, this issue is front and center in the minds of everyone. It sure seems like more than a coincidence to me. If you care about the next four years, please discuss this issue with everyone you know. It is too important to ignore.

It's Not the Economy, Stupid

This whole election cycle comes down to our economy. Most folks have one eye on the stock market and one hand clenching their wallet. Case in point, much of last night's debate centered on our 'dismal' economy and what each candidate will do to avoid the Great Depression Two. Most of the questions during the first hour were all basically the same, "How are you going to fix my wallet"?

Don't get me wrong, the reasons behind Fannie Mae & Freddie Mac's demise are important, but are they any more important than who the next Supreme Court nominee will be? People defaulting on their mortgage payments is very troubling, but is it as troubling as the imminent legalization of marriage for a lifestyle choice abhorrent to God? Is it more important than approving behavior which has been the downfall of every civilization in history?

People losing jobs is some serious stuff, but is it any more serious then finding out why one of the candidates regularly associates with an unrepentant terrorist? A candidate who pledges to keep us safe from these same terrorists?? BTW, thank you Sean Hannity for talking about this every day for the last year until finally the NY Times brought it up last weekend. Folks defaulting on credit card bills is devastating, but is it more devastating than securing our borders from nuts trying to get in here and kill us all?

Many in our own churches often criticize Christians as being focused exclusively on abortion and homosexuality as campaign issues. I would counter the general public is focused almost exclusively on their wallets and as a campaign issue.

Allow me to elaborate on just one of these important 'other issues.' There is an excellent chance our next leader could permanently alter the balance of power in the Supreme Court for the next thirty years. This same Court just spent the LAST thirty years largely making up law to suit their social engineering goals. The result? Abortion on demand. Prayer taken out of school. Our Judeo-Christian framework torn down every chance they get. Liberal policies are hailed as landmark judgments and progressive. Conservative policies are struck down as judgmental and restrictive. Often times, the victims have more rights than the accused. The Court has long held speech is free as long as this speech agrees with the current liberal think tanks. Clearly, if Mr. Obama is elected and an existing member of the Court steps down, the most liberal nominee possible will be nominated.

We don't have another thirty years to wait. The country will continue to slide morally, ethically, and spiritually. I know, I know, "you can't legislate morality" is often uttered by liberal atheists and liberal Christians alike. My concern is no longer "legislating morality", it is being in such a minority that anyone who doesn't agree with the present radical leadership will be censored. All countries have a framework for their laws. The question is not "if" but "what" do these laws get tied back to? Up until recently our framework, while not perfect, gave religious freedom for all. The government has never forced us to believe anything. But the buzzards are circling, and what liberals really want is religious freedom for all except Christians who they want to shut up.

Economic cycles come and go but a nation's soul continues to hang in the balance.

Advice to McCain

Time is running out for the Maverick campaign. Today we learned Obama-Biden won the first two debates against McCain-Palin by 50%-29%. It is time for them to stop playing up John's call for the successful surge in Iraq, and start defining why Barack Obama's policies are going to put the nail in our economic coffin. In a time when every one's focus is on their wallet, and the media reminds us daily of our economy's imminent collapse, people have tunnel vision and your message much be targeted to that vision.

When running against someone who's playbook includes 'patriotic' tax increases for people, you must come to the fight with concrete reasons why pilfering money from job creators ultimately hurts everybody. The class warfare argument plays well until people understand how they actually get hurt in the long term beyond the handouts given them in the short term. I offer up some useful dialogue for McCain's sprint to November.

*Ask the everyday folks this simple question. "All other things equal, would you work for a company charging you $2,000 for health insurance or $7,000 for the same insurance"? This simple decision is no different for companies choosing to locate in countries charging 10% versus our 35%. Companies will keep jobs in the U.S. when tax policy is more favorable to them.

*Economies are not built from the bottom up. Jobs are not created from the bottom up. Risk taking should be rewarded in life when a person succeeds. Inactivity (failing to take risks) should be discouraged.

*Lowering taxes actually increases revenue to the government. Out of control entitlement spending is the major cause of our $9 trillion national debt.

*Our current falling stock market and credit crisis are not the fault of deregulation as our media and Democrats would have you believe. Much of the fault lies with Democratic regulators IGNORING Republican calls for MORE REGULATION back in 2004 & 2005. When government mandates shaky loans to folks who can't afford it, all in the name of fairness and building the economy from the bottom up, this is what happens.

*Personal responsibility still matters. Gov. Palin began to touch on this at the beginning of the debate last week and McCain needs to continue the dialog. McCain needs to spread the blame where it actually belongs instead of on the Bush administration who had nothing to do with people's mortgage defaults. Blame the Federal Reserve for keeping interest rates artificially low solely to keep investors happy. Blame Barney Frank and his friends for being in bed with Fannie & Freddie executives instead of regulating them. Blame Republicans and Democrats in congress for spending our money recklessly. Finally, pointedly indicate those folks who took out loans they obviously couldn't afford are at fault as well.

I've said, since the beginning of my blog, McCain needed someone like Newt Gingerich or Mitt Romney who could clearly articulate these salient points to the American people. Believe me, Barack Obama couldn't dance with Mitt Romney on the economy and Mitt understands it much better than John McCain. When Republicans are in office, the media always makes our economy the defining issue, and the McCain camp should have been smart enough to figure that one out. War records gain respect, but fat wallets get votes.