Political theatre tonight: Perry is toast, Romney is closing
Caught most of the latest Republican debate earlier tonight and it is clear that the candidate shake-out is commencing.
Rick Perry is crashing and burning. The guy started off so strong and tonight he looked so weak as he meekly confronted Romney about his healthcare law being the template for Obama’s. You could tell he was much less confident than on previous occasions and it showed.
Romney is beginning to walk away with this thing. His business acumen really comes across and makes the other sideshows (Gingrich, Santorum, Bachmann,etc.) look foolish and exposed. The intrade odds of Romney being the Republican nominee in 2012 rose 11% today to 68% overall.
That is beginning to look like a safe bet.
Depositors set to abandon Big Banks…
If you live in a major metropolitan area in the U.S. you have likely encountered some version of the #OccupyWallStreet protests that have spread across the country with impressive speed and organization.
The organizers of these protests are in the process are articulating a coherent strategy going forward and they are calling for specific actions that will impact the large national banks that we are all so familiar with.
BAC has not done themselves any favors by deciding to charge $5 per month for use of a debit card. That action alone will drive customers away. Wells Fargo, Chase and Citi are all preparing variations on a similar fee to be imposed.
With the Occupy Wall Street protesters now pushing for everyone with accounts at any of the TBTF banks to switch to credit unions on Nov.5, we can assume that these banks will lose an unknown amount of deposits from this demographic in the near term. While the net deposits that will be lost is small, it should not be disregarded.
The banking industry is now facing a serious marketing challenge that is bad for business. It will become fashionable for young people to boast that they are out of these institutions.
Add in general uncertainty emanating from Europe and you do not want to be owning these stocks right now, particularly BAC.
Shorting U.S. financials right now is an attractive option. Assuming we experience a mild panic when Greece defaults, U.S. financials will crater and should then be moved into the BUY category, but not before Europe is resolved.
From Mark Cuban’s blogmaverick.com…
The Most Patriotic Thing You Can Do
Sep 19th 2011 12:25PM
Bust your ass and get rich.
Make a boatload of money. Pay your taxes. Lots of taxes. Hire people. Train people. Pay people. Spend money on rent, equipment, services. Pay more taxes.
When you make a shitload of money. Do something positive with it. If you are smart enough to make it, you will be smart enough to know where to put it to work.
I don’t care what anyone says. Being rich is a good thing. Not just in the obvious sense of benefiting you and your family, but in the broader sense. Profits are not a zero sum game. The more you make the more of a financial impact you can have.
I’m not against government involvement in times of need. I am for recognizing that big public companies will continue to cut jobs in an effort to prop up stock prices, which in turn stimulates the need for more government involvement. Every cut job by the big companies extracts a cost on the American people in one way or another.
Entrepreneurs are needed to create and grow companies to absorb those people in new jobs. If entrepreneurs don’t create those jobs, the government ends up having to spend more money to help them one way or another.
So be Patriotic. Go out there and get rich. Get so obnoxiously rich that when that tax bill comes , your first thought will be to choke on how big a check you have to write. Your 2nd thought will be “what a great problem to have”, and your 3rd should be a recognition that in paying your taxes you are helping to support millions of Americans that are not as fortunate as you.
In these times of “The Great Recession” we shouldn’t be trying to shift the benefits of wealth behind some curtain. We should be celebrating and encouraging people to make as much money as they can. Profits equal tax money. While some people might find it distasteful to pay taxes. I don’t. I find it Patriotic.
I’m not saying that the government’s use of tax money is the most efficient use of our hard-earned capital. It obviously is not. In a perfect world, there would be a better option. We don’t live in a perfect world. We don’t live in a perfect time. We live in a time where the government plays a big role in an effort to help lead us out this Great Recession. That’s reality.
So I will repeat my point. Get out there and make a boatload of money. Enjoy the shit out your money. Pay your taxes.
It’s the most Patriotic thing you can do.
Space Available for Rent…
I saw this earlier on barry ritholtz’s blog earlier and thought it was pretty clutch…:)
The U.S. economy and Obama’s reelection
Its my sense that the country and the Democratic party in particular are coming to terms with the fact that Barack Obama may not be reelected in 2012. In fact, if the election were held today he would likely lose.
The simple fact is that the economy has not improved during his tenure. We are now set to possibly reenter a recessionary period and any impact on the unacceptably high unemployment rate. At this point, the American people simply want relief and are willing to listen to anybody that will hear their pain and offer viable solutions.
President Obama’s problem is that the window of time that he had to deliver real impacts is nearly closed and people are now starting to look elsewhere. What his strategy should be going forward to pull off reelection is unclear to me, but his position seems to be growing increasingly fragile.
The unfortunate reality is that none of our politicians, Democrat or Republican are willing to be honest with the American people about the the true nature of our problem and what it means for them.
With the rise of social media over the last few years the opportunity for a third-party candidate with independent financial resources to flank both parties is there. If that were to occur perhaps we would witness some “bipartisan” action from both parties to protect their own warped interests. Unfortunately, it is a scenario that could come to pass.
Looking at Rentrak (RENT)
The market is trending lower right now and there are cheap stocks everywhere. One that jumps out is Rentrak (RENT) based right here in Portland, OR.
A small competitor against the Goliath that is Neilsen, the market leader leader in entertainment ratings, research and data. Rentrak offers a unique service that integrates audience demographics including age, income, viewing habits and other valuable stats to media companies looking to optimize ad targeting and spending.
Rentrak is now at an all-time 52 week low and looks very cheap. After suffering a big decline from earlier this summer, I think RENT is a compelling value buy.
What rock could Qaddafi be hiding under?
Maybe his view looks something like this. The Libyan desert is beautiful…
Interesting video from Tim Ferriss on body optimization…
Sell and be scared (No, don’t)
I was reading this article in the NYT earlier today about weakness in the large-cap bank sector and was laughing about how predictable things have become. Here’s the link. The general sentiment conveyed in the article is that banks are now suddenly high-risk investments again because hedge fund managers like John Paulson and David Tepper are dumping stocks and there are renewed concerns about litigation tied to fraud and mortgage disputes.
Truth is, these institutions are going no where. They were too big to fail before, and they are too big to fail still. Consider buying.
An Argument in Favor of Buying a Home
News came out earlier today that the Case-Shiller home price index reached a new low after seven months of ongoing price declines.
While my personal belief is that we will continue to see price declines on a national level for at least 2-3 more years, there is activity taking place that makes hesitate to give into the unceasing gloom and doom.
The first reason is that unlike the financial and government sectors, (which transferred toxic debt instruments from bank balance sheets to the U.S government and the Fed) the housing sector is undergoing a real restructuring via the foreclosure process. This restructuring of financial assets absolutely has not taken place elsewhere and this is a key consideration.
The result is that housing is an asset class repriced to reflect market demand, a true gem nowadays.
The second reason is that vulture investing in bank-owned properties is fashionable again, after a short respite.
Properties are returning to the market at a price that is highly motivating to investors and individuals looking for their first real home. In either case, both see real value and are willing to commit capital based on their beliefs. This type of activity is what will drive stabilization and eventual recovery in the U.S housing market.
The third reason is that residential real estate has become a hated asset.
That may sound strange, but it is actually one of the best times to buy and this is true largely for psychological reasons. Warren Buffet’s old adage was to be “fearful when others are greedy and greedy when others are fearful.” Large swaths of the population are so emotionally scarred by their experiences in home ownership over the last decade that they simply do not want to touch it again.
The bottom line is that homes are cheap now.
Opportunities abound out there for people who do their homework and have cash on hand.
That said, I’m not going to buy a house. Not never, just not now. There are lots of ways to invest money for superior returns right now. If real estate is your thing, give it a shot. The price is right and there are opportunities everywhere.
