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April 27, 2006

Why is the U.S. public unhappy?, Thurs., Apr. 27, 2006, 2:54 PM

My two cents on why the huge majority of Americans think the country is headed in the wrong direction is that the issue is not about presidential politics. Besides, the whole of Congress is receiving the same low marks, and I don't think the issues are political at all.

It is (i) the high oil price (which leaves consumers with less disposable income) and (ii) fear that interest rates could rise enough to hurt the real estate market. These are market issues that people are worried about.

That's confirmed in the poll, so why are pundits talking about immigration, Iran nuclear policy, the war in Iraq, and so forth? None of these market issues can be resolved by the President and Congress.

Market issues are being linked to politics to get people upset so that they over trade, and, in doing so, make mistakes.

Except for the thinking that goes into casting one's vote, people ought to be thinking and talking about tape watching. And when prices get extreme they ought to be doing something about it.

For example, if every homeowner had locked in a 20 or 25 year fixed rate mortgage (or longer) at record lows, then they would not be so fearful. So why not put the blame on the banker or financial advisor (who enjoy the repeat business of adjustable rate mortgages), instead of the elected representative?

And like Senator Grassley just said while interviewed on CNBC, if the average American could cut back just 3 percent on their weekly driving, the country would be afloat in gasoline supply, and the price at the pump would plummet.

People have to share the responsibility. It's not right to keep putting all the blame on others, including the President.

I sit back and say let's keep politics out of the market. You know, the more we do this (like the results of today's poll), the more we give politicians the opportunity to yank our chain.

And how stupid is it to let politicians talk about fixing prices in markets? Is that the free market that people want?

Btw, at the NYSE as I write this, the Dow 30 is up +44 but there are 1461 stocks up and 1481 down. And 93 hit new lows while just 148 set new highs today.

All the Money Center Banks are up today because traders are thinking they have a friend in Ben. If the Bank Rate is frozen, then the long rates will rise, which will give some room for the lending banks to profit " presuming of course that more corporations will borrow more at higher rates than they did before at lower rates.

I can tell you that bankers today are not unhappy with the politicians -- for now anyway.

Posted by Posted by Bill Cara on April 27, 2006 02:54:27 PM | Category: Cara Today in the Market

Discourse

Posted by: sergio [TypeKey Profile Page] at April 27, 2006 3:45 PM [link]

"Stupid is as stupid does".

Posted by: g034 [TypeKey Profile Page] at April 27, 2006 8:01 PM [link]

personally I'm unhappy because I can't trust any information coming out of Washington. Bill, I feel like you that this market is on shaky ground. As a government employee, like I assume many of your readers are, our retirement plan is the Thrift savings plan, which mainly gives you five different choices. The G-fund which invests in government securities, the F-fund which is bond based (and I got out of just in time thanks to you!), the C-fund which in invested in the S&P 500, the S-fund-small caps and the I-fund-international stocks. Given the current situation, where would you allocate your funds. I currently have the majority of it invested in the G-fund, with the rest in the I and S funds. Any thoughts? Thanks again for all you do.

Posted by: johnc [TypeKey Profile Page] at April 27, 2006 8:51 PM [link]

BC - I am most concerned / unhappy b/c I think I see the writing on the wall re the long-term problems faced by the US: massive public debt, non-solvent social systems, non-existant private savings rates, and a general sense of entitlement to the american dream....except it's the american dream from 1955 and that one is long gone in my opinion. the rest of the world has caught up in many respects - and they can do much of the same work with the same quality for Less $. I don't think that from a cultural point of view we (u.s. citizens) stand much of a chance. there is very little (read: no) willingness to make sacrafices for people / generations we will never meet or be related too. Top it off with the fact that our politicians from both parties are purely horse-trading our future(s) away to gather favors / votes for the next election cycle (@ $154K per year.) Do they really think we can stem the rise of 2 asian powers with trade penalties and strong toalk about devaluing currency? The bottom line is that many othe countries / cultures are much more willing to Work / Save and earn real skills that make them competitve. We (u.s.) are chugging along, graduating social science majors at an alarming rate - and they wonder why they're not going to get a competitive job...(?) I'm afraid it's a sad state of affairs. rk

Posted by: rjk9 [TypeKey Profile Page] at April 28, 2006 6:56 AM [link]