(http://www.bloomberg.com/apps/data?pid=avimage&iid=iyuUrGQbXjBE)March 25 (Bloomberg) -- Treasury Secretary Timothy Geithner sent the dollar tumbling with comments about China's ideas for overhauling the global monetary system, only to drive it back up by affirming that it should remain the world's reserve currency.
Geithner was initially asked at a Council on Foreign Relations event in New York about proposals from People's Bank of China Governor Zhou Xiaochuan for a new international reserve currency. He said "as I understand his proposal, it's a proposal designed to increase the use of the IMF's special drawing rights. And we're actually quite open to that."
After the stupid stupid gaffe, moderator Roger Altman told Geithner that it would be "useful" to return to the question, and asked if he foresaw a change in the dollar's centrality.
Then he continued with this jewel: "We will do what's necessary to say we're sustaining confidence in our financial markets."
Why doesn't this guy have a teleprompter? Somebody get him a teleprompter, a cue card or something. Perhaps he could write on his hand with a Sharpie or something. No wonder the flashing red box in TurboTax was a mystery to this guy.
(http://www.gigacrate.com/Blog/wp-content/uploads/2008/12/doh.gif)
It's going to be a big week for Saturday Night Live.
Good thread title there, Gas... in fact, a good percentage of conservative chattering class talking points can be boiled down to simple name calling and ad hominem personal attacks... kudos. ::)
Quote from: USRufnex on March 25, 2009, 02:39:06 PM
Good thread title there, Gas... in fact, a good percentage of conservative chattering class talking points can be boiled down to simple name calling and ad hominem personal attacks... kudos. ::)
I couldn't think of anything else. It's the first thing that pops into my mind when I hear him open his mouth. He has yet to do anything that proves he is competent. If you have a more accurate title please suggest it.
Now it's front page in Europe with this picture.
(http://www.telegraph.co.uk/telegraph/multimedia/archive/01007/dollar-gasp-460_1007200c.jpg)
"The markets appear baffled by the confused statements emanating from Washington. President Barack Obama told a news conference hours earlier that there was no threat to the reserve status of the dollar. "
There is no stronger argument for a TelePrompTer Requirement for this guy. At least they would be reading from the same page.
Would you have titled the thread "IDIOT" if the Treasury Sec were a Republican? I think not. I would like Obama to use this opportunity to replace Geitner with Robert Rubin...
Quote from: USRufnex on March 25, 2009, 03:25:57 PM
Would you have titled the thread "IDIOT" if the Treasury Sec were a Republican? I think not. I would like Obama to use this opportunity to replace Geitner with Robert Rubin...
Yes. If he was a libertarian, 199 IQ, and half Angel, I would title it the same if he displayed the same lack of competence.
Replace him with a cardboard cutout would even be better.
Geithner is to attend the G-20 Summit on April 2nd.
Ruf,
I would have absolutely no qualms replacing him with Rubin, but it would need to be done before the G-20. Rubin is both competent and experienced.
If Geithner is allowed to open his mouth at the G-20, I'm not sure where he will take us. President Obama and the TOTUS are scheduled to be with him, so perhaps the focus will be elsewhere.
Rubin's over the hill.....Eliot Spitzer maybe?
Republican Presidents have been pathetic at fiscal responsibility over the past 27 years. That is a fact! Deficits rose under Reagan then Bush Senior then Little Bush. If you care about fiscal responsibility then you must lash out at the party that has increased our National Debt. Fact.
This Rolling Stone article is interesting and long read: The Big Takeover -The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution
http://www.rollingstone.com/politics/story/26793903/the_big_takeover/8
"The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers."
AND
"just as Sen. Phil Gramm — a grinning, laissez-faire ideologue from Texas — had finished engineering the most dramatic deregulation of the financial industry since Emperor Hien Tsung invented paper money in 806 A.D."
AND
"In fact, most of Geithner's early moves reek strongly of Paulsonism."
Whine all day about Geithner. But where were we during the Gramm backed takeover?
The T in TOTUS stands for transparency and not teleprompter. Make yourselves believe what you want. The truth is the financial system was ransacked by stupid politicians and greedy Wall Streeters. Tim Geithner and Barack Obama are not in either categories. THEY ARE NOT THE IDIOTS!
I'm so glad you're back FOT/RIP. You present your arguments in a sane and organized manner.
We really admire you as a spokesman.
Quote from: Gaspar on March 26, 2009, 05:28:23 AM
I'm so glad you're back FOT/RIP. You present your arguments in a sane and organized manner.
We really admire you as a spokesman.
Don't get me going.....The devil does not wish to dive into the TNF archives to justify his prominent role as TNF Truth Teller.....
Quote from: USRufnex on March 25, 2009, 03:25:57 PM
Would you have titled the thread "IDIOT" if the Treasury Sec were a Republican? I think not. I would like Obama to use this opportunity to replace Geitner with Robert Rubin...
If it were McCain's treasury sec, the Dims would have never allowed a tax cheat. If it were McCain's tresury sec and he was such a bonehead, you can bet your 1040 bottom line, I'd be equally harsh. Stupid is stupid. It transcends political party boundaries, Ruf. These guys are pissing away our country--- the whole lot of them in Washington, not just those with a (D). BUT- this Geithner is a total and complete moron, the worst of the worst.
really? didnt see any thread titled IDIOT when Paulsen was at the treasury.... at least Geithner isnt some quarterhorse bureacrat from Edmond.
Dear Gaseus.... you can call the thread anything you want... and you can act like youre in kindy-garten and call people bedwetters... to which I will simply point out your hyper-prissy... er, uh... hypocrisy ... Politics aint beanbag.... so dont get your tin foil hats in a bunch, mkay?!?...
Did someone fart......?
http://online.wsj.com/article/SB124113406528875137.html
WASHINGTON -- On Jan. 20, Timothy Geithner took control of the Treasury Department, directing the government's response to the financial crisis.
Within three weeks, the White House tightened its grip, alarmed by the poor reaction to Mr. Geithner's performance during the rollout of his rescue plan, government officials say. Since then, White House Chief of Staff Rahm Emanuel has been so involved in the workings of the Treasury that "Rahm wants it" has become an unofficial mantra among some at the Treasury, according to government officials.
The White House involvement is welcomed by some officials at the Treasury, including Mr. Geithner, given that the department is short-staffed and not always attuned to the politics of the hour. But the White House also has pushed to announce programs before details were ready. Other times, the department has been left waiting for White House input -- even on such mundane matters as Web-site design.
Still, in a little more than three months, Mr. Geithner and the White House together have crafted complex programs to combat the financial crisis.
Mr. Geithner said White House involvement is critical to the success of the financial rescue, in part because the popular president can help sell the plan to the public. "I made a judgment...that to do this right, we had to have a fully integrated approach," Mr. Geithner said in an interview. "The president's capacity to lay out for the nation and the world a path through this crisis is as essential as everything we're going to do."
The former head of the Federal Reserve Bank of New York, Mr. Geithner, 47 years old, is described as a smart tactician who reviews scenarios before making a decision. Where former Secretary Henry Paulson -- who ran something akin to an imperial Treasury -- would make decisions while marching down the hallway, Mr. Geithner is slower and more deliberative, say government officials.
Mr. Geithner is in daily contact with the White House, often with Mr. Emanuel. The new relationship is a switch from Mr. Paulson, who was working with a weakened White House, and partly reflects the severity of the U.S. economic crisis.
"On any major policy -- on finance at Treasury or national-security efforts -- the White House is going to play a major role," said David Axelrod, a White House senior adviser. "This is no different. We face in essence an economic emergency. It's an all-hands-on-deck situation." He said Mr. Geithner is held in high esteem.
The shift also reflects Mr. Geithner's early problems, including a flap over his personal taxes, which raised concerns at 1600 Pennsylvania Avenue.
During the administration's first few weeks, Wall Street was expecting a revamp of the Paulson bailout plan, including a so-called bad bank funded and run by the government to buy troubled mortgages and other toxic assets. A Feb. 10 speech by the Treasury secretary on the new plan was scheduled by the White House.
Mr. Geithner knew markets wouldn't like what he had to say. At a presidential economic briefing just ahead of the rollout, Mr. Geithner was candid. "I'm laying out a strategy," he told the assembled officials, including the president, according to an aide present. "They're hungry for the tactics, and the tactics are going to take a little time."
It was a warning the White House didn't seem ready to fully hear. President Barack Obama pumped up the rollout at a prime-time news conference Feb. 9.
The following day, Mr. Geithner spoke in front of a national TV audience, awkwardly flanked by teleprompters and American flags. After he finished, markets plunged nearly 5%. A senior White House official said later that Mr. Geithner had not been well served by the president and his aides.
"There's not a hell of a lot here to get a sense of," Sen. Robert Menendez (D., N.J.) said at the time.
At the president's urging, Mr. Emanuel began to take a close interest in helping Mr. Geithner, a longtime friend. "There was an understanding that the chain of communication hadn't been great," said one official. "I think Rahm felt personally for Tim that there was a lot of responsibility to go around."
In February, the White House had pushed the Treasury to cobble a deal that would help American International Group Inc., which was going to need more rescue funds. The White House wanted to announce the deal on a Friday, to stop the news from spilling over into the following week, said people familiar with the matter.
Some at the Treasury and the Federal Reserve said they needed more time to make sure the ratings firms wouldn't downgrade AIG, which would have spelled disaster for the firm. Officials moved fast to hash out the deal over a weekend, announcing on Monday, March 2 that the U.S. would give AIG access to another $30 billion.
About a week later, a Treasury staffer told Mr. Geithner that AIG was set to pay a series of retention bonuses to employees. That hadn't surfaced during the speedy rescue. Mr. Geithner tried to stop the bonuses, but after learning they were contractual agreements, he concluded the government had no choice.
The resulting furor prompted calls for Mr. Geithner's resignation. Many in Washington wondered how long he would last.
Mr. Geithner remained calm, but a glimmer of the turmoil surfaced during a meeting with his senior staff. At one point, while he was trying to forge agreement, according to government officials, he smiled and said: "Come on, guys, I need your help. I'm getting killed here."
With Wall Street still awaiting details of how the bailout plan would work, the White House moved to make sure the relaunch went well.
On March 15, Messrs. Obama, Emanuel and Geithner, along with the president's economic team, gathered for a meeting in the Roosevelt Room to hear Mr. Geithner lay out details.
For three hours, Mr. Obama and his aides hashed over the plans with the Treasury secretary. As dinnertime approached, around 6 p.m., the president said he was leaving to eat with his family.
"We're not leaving until this gets resolved. Stay at it," he said, standing to go. "I'll be back, and I'll stay as long as we need," he said, according to government officials present.
As darkness fell and the president returned, Mr. Geithner took control of the meeting. He concluded: "Mr. President, in a perfect world there may be other options. In the world in which we live...this is the best option," according to one participant. The meeting adjourned around 10 p.m.
As he rolled out details of the administration's financial rescue plan March 23, the markets responded. This time, the Dow Jones Industrial Average rose nearly 500 points.
Great, so Treasury is now entirely a political organization. Mixing monetary and political policies is a bad idea. That's why the Fed and Treasury are supposed to be somewhat independent.
The idea being government officials are populists who have to pander to the NOW and to appearances and economists at the Fed and Treasury can be isolated from that crap and make sound economic decisions. Political decisions are too rash, uninformed, and short term focused.
They still have to report to elected officials of course, but insulation is a good thing.
In an ideal world, I'd tend to agree, CF.
But political appointees are... well...... political.
Secretary of the Treasury is a cabinet level position, meaning that it has always been and will always be a political position.
The story here is that Geithner was asking for political help/support from the WH, lest he be hung out to dry...
I think the reason Geithner is treasury secretary is because of his relationship with Paulsen as NY Fed chair and his previous relationships with Rubin and others....
http://www.ny.frb.org/aboutthefed/orgchart/geithner.html
IMO, the surprising part of this story is that of Rahm Immanuel.... kinda like Don Regan in reverse.... Regan (aka "high priest of Reaganomics") went from being Ronald Reagan's Treasury Secretary in the first term, to Chief of Staff for the second term up until Iran-Contra...
http://www.independent.co.uk/news/obituaries/donald-regan-548278.html
After reading the WSJ story, I am thankful that Geithner is still in there, lest we be stuck with Rahm-bo as Treasury Secretary...
(http://janeqrepublican.files.wordpress.com/2008/12/rahmbo.jpg)
Time for Tim to go. Geithner, himself implicated now in knowing about the Libor interest rate scam, and not doing much about it other than writing a memo in 2008. He may have been the right man at the right time but now it's bye bye Timmy time.
TOO MANY CROOKS!
Quote from: Teatownclown on July 16, 2012, 12:40:07 PM
Time for Tim to go. Geithner, himself implicated now in knowing about the Libor interest rate scam, and not doing much about it other than writing a memo in 2008. He may have been the right man at the right time but now it's bye bye Timmy time.
TOO MANY CROOKS!
Can anyone name a single action that Mr. Geithner has taken that implies he has any competence?
It should have been bye-bye Timmy time when they figured out he cheated on his taxes.
All this nonsense about Romney's perfectly legal off-shore bank accounts (much like prominent Democrat bundlers and DNC chairwoman The Dense Poodle) and we have someone leading the Treasury Department who tried to get away with outright tax fraud.
Quote from: Conan71 on July 17, 2012, 08:58:03 AM
It should have been bye-bye Timmy time when they figured out he cheated on his taxes.
All this nonsense about Romney's perfectly legal off-shore bank accounts (much like prominent Democrat bundlers and DNC chairwoman The Dense Poodle) and we have someone leading the Treasury Department who tried to get away with outright tax fraud.
Only question I have for Romney....12 years.
Quote from: Hoss on July 17, 2012, 09:06:09 AM
Only question I have for Romney....12 years.
Sorry dude, lost me there.
Quote from: Conan71 on July 17, 2012, 09:28:46 AM
Sorry dude, lost me there.
If his father thought it was OK to release 12 years of income tax returns, why can't he? Is that not a valid question?
Quote from: Hoss on July 17, 2012, 10:13:32 AM
If his father thought it was OK to release 12 years of income tax returns, why can't he? Is that not a valid question?
Sorry, that's class warfare.
Quote from: Hoss on July 17, 2012, 10:13:32 AM
If his father thought it was OK to release 12 years of income tax returns, why can't he? Is that not a valid question?
Do you do everything your father did just because he did them?
Quote from: Red Arrow on July 17, 2012, 12:44:03 PM
Do you do everything your father did just because he did them?
How about because it's right? What an argument. Ha!
Quote from: Hoss on July 17, 2012, 05:16:13 PM
How about because it's right? What an argument. Ha!
The argument you presented was that he should do it because his father did. The fact that his father thought it was OK (I'll accept a substitution of right for OK.) that he should do it. One does not necessarily follow the other.
He'll never do it because the rest of the tax evaders and avoiders would flip their smile at their secrets being exposed.
Quote from: nathanm on July 17, 2012, 08:11:40 PM
He'll never do it because the rest of the tax evaders and avoiders would flip their smile at their secrets being exposed.
And therein lies the BS in your assertions. I'm quite certain the Obama camp knows every dollar, yen, euro, and pound Romney has.
The Obama campaign is engaging in a slander campaign based on nothing.
Again, the treasury and SEC serve at the pleasure of the president. Don't think for a minute there's not already been a significant probe of Romney's dealings. If there was something there, he'd be under investigation. Regardless of supposed personnel shortages, he would be a far bigger priority than some idiot skimming $500 a month out of his liquor store.
The McCain campaign did. I'm not sure how the Obama campaign would have access to that. Unless you're accusing the administration of committing a crime, that is.
And as you're aware, tax avoidance is not tax evasion. Romney could easily have used a questionable interpretation of law to avoid paying tax without committing a crime. As is par for the course, were you or I to do that and have the IRS disagree, we'd pay penalties and interest in addition to the tax owed, while Romney would not have those addons by virtue of having the means to have a tax attorney draft a $200,000 letter advising Romney that the tax shelter was legal.
Looks like I was right.... ;D
Quote from: nathanm on July 17, 2012, 08:36:27 PM
The McCain campaign did. I'm not sure how the Obama campaign would have access to that. Unless you're accusing the administration of committing a crime, that is.
And as you're aware, tax avoidance is not tax evasion. Romney could easily have used a questionable interpretation of law to avoid paying tax without committing a crime. As is par for the course, were you or I to do that and have the IRS disagree, we'd pay penalties and interest in addition to the tax owed, while Romney would not have those addons by virtue of having the means to have a tax attorney draft a $200,000 letter advising Romney that the tax shelter was legal.
Yet, the Obama camp is somehow implying tax avoidance is a crime. I've said it a million times, re-write the friggin' tax code! It's not Romney's fault that the government allows people like him to keep more of their wealth- which does leave it available to them to reinvest, which does create jobs.
Warren Buffet employs many competent tax attorneys and is currently engaged in litigation which may result in penalties and interest. Don't make it sound like Romney gets special treatment that prominent bundlers and close associates of Obama don't get.
Reinvest? US companies are now sitting on over 5 trillion dollars in cash and equivalents. You know what will make them invest? Demand, not mollycoddling.
Quote from: nathanm on July 17, 2012, 09:15:29 PM
Reinvest? US companies are now sitting on over 5 trillion dollars in cash and equivalents. You know what will make them invest? Demand, not mollycoddling.
Confidence will create demand.
Quote from: Conan71 on July 17, 2012, 10:06:55 PM
Confidence will create demand.
And the government will create that confidence by taxing the rich.
(Just practicing again. :D)
Quote from: Conan71 on July 17, 2012, 10:06:55 PM
Confidence will create demand.
Confidence in what? Demand.
Quote from: nathanm on July 17, 2012, 10:57:10 PM
Confidence in what? Demand.
Confidence in the business environment.
We've re-treaded the reasons many times, you simply don't understand the behavioral aspect of those who make business decisions.
If Romney is elected in November, the Obamites will rejoice in claiming credit for Obama's policies finally resulting in 5% unemployment again when in reality it's been his rhetoric and policies which have kept many who are capable of new investment from doing it.
Of course, I'm only speaking of the business owners who are racist, listen to Limpbag, Hannity, and watch Faux 24/7.
Poppycock! The private sector is doing just fine. There is no crisis of confidence. Business leaders should rejoice in all of the policies that President Obama has graciously bestowed upon them.
I am so thankful that we can get an economics lesson every day from Professors gaspar and conan. They just must know everything about every business in the country.
If they want to ignore the surveys asking business owners why it is they are/aren't expanding, that's their prerogative. #1 answer is and has been poor sales. Let's ignore that and worship the confidence fairy, maybe she'll make people feel better. It's worked real well in Spain, Italy, and the UK.
Quote from: nathanm on July 17, 2012, 11:47:44 AM
Sorry, that's class warfare.
Bro, we are now referring to this term as
tax fairness. You probably know this.
I personally think we have been in the second dip of this Bushkin
hangover recession for 6 months now.
When the Fed does QEIII coupled with the reversibility in the tax code in December there will be definition and the economy will start to solidify. Rates are so low, equities will seem appealing.
The Repiglicans better get their ax together or be saddled with higher tax rates and roll backs to previous exemption limits.
I watched and participated in a webinar last week about recycle markets and business trends.
There was great discussion of Asian countries purchasing of commodities, technology breakthroughs in sorting, the price of oil (plastic), and increased tonnage because of new community collection efforts. These national experts discussed citizen habits and expectations, trade imbalance, shipping concerns, etc.
Obama's name never came up.
No one blamed him or gave him any credit.
Yet when I listen to gaspar, everything in the business world is in the toilet because of Obama. Every businessman he knows makes every decision based on what the President says or does. Why, people walk out on a conference and quit because of any positive news about the president, according to gaspar.
It is hard to believe our worlds are so different.
Quote from: Teatownclown on July 18, 2012, 01:34:25 PM
I personally think we have been in the second Nth dip of this Bushkin hangover recession the Great Depression for 6 months now.
Quote from: RecycleMichael on July 18, 2012, 01:41:06 PM
Obama's name never came up.
Longing for the good old days when everything was Bush's fault?
Quote from: Teatownclown on July 18, 2012, 01:34:25 PM
I personally think we have been in the second dip of this Bushkin hangover recession for 6 months now.
The threat of austerity combined with some of our biggest trading partners enforcing it on themselves will do that. Many European countries are doing worse now than they did in the Depression. We are, at present, somewhat above the equivalent performance in the 30s by most measures. I suspect that's more due to the FDIC keeping the banking system functional than anything else, although the stimulus undoubtedly helped somewhat, despite being half tax cuts in an already low rate environment (where most wealthy folks were going to be reporting a tax loss anyway, mind you)
Quote from: nathanm on July 18, 2012, 01:02:55 PM
If they want to ignore the surveys asking business owners why it is they are/aren't expanding, that's their prerogative. #1 answer is and has been poor sales. Let's ignore that and worship the confidence fairy, maybe she'll make people feel better. It's worked real well in Spain, Italy, and the UK.
Which surveys are you referring to?
QuoteBusiness Confidence
The Business Confidence Index is an indicator designed to measure he degree of optimism on the state of the economy that business owners are expressing through their activities of investing and spending. Decreasing business confidence often implies slowing economic growth because business owners are likely to decrease their investment. The idea is that the more confident business owners and managers feel about the economy, their companies, their jobs and incomes, the more likely they are to make investments and purchases. When business confidence is measured on a scale between 0 and 100, an index level below 50 means that business owners expecting their company's performance to be weaker in the next year outnumber those expecting stronger performance.
http://www.tradingeconomics.com/united-states/business-confidence
QuoteCompTIA IT Industry Business Confidence Index Takes Step Back in Q3
By CompTIA
Published: Wednesday, Jul. 18, 2012 - 7:28 am
DOWNERS GROVE, Ill., July 18, 2012 -- /PRNewswire-USNewswire/ -- Renewed uncertainty about global economic conditions outweighed more positive sentiments about prospects for the information technology (IT) industry in the latest CompTIA IT Industry Business Confidence Index, the quarterly survey from the leading non-profit association for the IT industry.
The index slipped 2.2 points in Q3, falling to 54.5 on a 100-point scale. By comparison, the Q2 reading of 56.7 was the highest level in more than a year. The six-month outlook projects a modest increase of 3.1 points.
"The unfortunate pattern of the last several years is repeating itself in 2012," said Tim Herbert, vice president, research CompTIA. "Momentum from improving economic fundamentals and positive sentiment fails to sustain itself, stalling at mid-year."
The index is an aggregation of opinions on the U.S. economy, the IT industry and one's company. All three components of the index fell in Q3.
"Any bullishness about the IT industry generally and companies individually was offset by renewed uncertainty about larger economic issues, such as unemployment, stalled earnings at some bellwether companies and softening demand in many overseas markets," Herbert said.
The survey indicates a slight increase in concern among IT industry executives regarding their ability to maintain profit margins. Inevitably, economic malaise leads to greater price sensitivity and decision-making paralysis among many customer segments.
IT firms still expect to increase investments in many areas, though it's likely that in the short-term the rate of growth will slow somewhat. In the Q2 survey, 37 percent of companies indicated they planned to increase expenditures on marketing and advertising. This number fell to 29 percent in Q3. A similar situation exists for spending increases associated with capital investments, new technology purchases, business travel and staffing.
On the hiring front, medium size firms (100 – 499 employees) are most likely to add new staff in the next six months. Overall, 32 percent of firms plan to increase staffing and 54 percent plan to remain at current levels.
The CompTIA IT Industry Business Confidence Index for Q3 is based on a July 2012 online survey of IT industry executives and professionals. A total of 445 IT companies participated.
CompTIA is the voice of the world's information technology (IT) industry. Visit www.comptia.org or follow CompTIA at www.facebook.com/CompTIA and twitter.com/comptia.
SOURCE CompTIA
Read more here: http://www.sacbee.com/2012/07/18/4639364/comptia-it-industry-business-confidence.html#storylink=cpy
Just released today:
QuoteAccording to the latest survey of small businesses by the NFIB (National Federation of Independent Businesses), optimism has slumped to an eight-month low. This result comes on the heels of last week's disappointing ISM (Institute for Supply Management) survey covering the manufacturing segment of the American economy. The ISM reading indicated that manufacturing was contracting for the first time in more than three years. Keep in mind that for most of the current economic recovery, manufacturing has been a bright spot. But the economic hardships in the euro zone and the slowdown in China and other emerging market economies have taken a toll on the more export-centric companies covered by the ISM survey.
Small business optimism, unlike the ISM manufacturing index, never did climb back to levels normally associated with a "good" economic environment after the most recent recession officially ended in mid-2009. When small businesses do not have a positive outlook on the future, they tend to be unwilling to hire additional employees unless absolutely necessary. In addition, cash reserves build as investment in expansion wanes. Indeed, the main concern for small businesses has been a lack of customers and fears the U.S. economy will slip back into recession. But there is more at work here than fears the economy will stumble; businesses are unable to confidently make strategic decisions and plan for the future. Why? Unfortunately, most of the lack of clarity is coming from our elected representatives in Washington.
Low business confidence trickles through the entire economy. It negatively affects consumer confidence and spending. In a consumer consumption-oriented economy like the one we have in the United States, when businesses are not hiring in decent numbers and wages are barely rising, discretionary spending by consumers typically suffers. The stock market also tends to feel the effects. Sure, the market has bounced back in a big way from the Armageddon levels seen during the financial crisis but valuations remain well below the historical average based on most metrics.
Can Washington provide answers to the questions business owners need? According to the small business survey, uncertainties over tax levels, the regulatory environment and the cost to hire an additional employee are all having a detrimental effect on optimism. Right now, gridlock in our nation's capital is one of the key factors holding back the economy and the stock market in our opinion.
Small business confidence needs to rise in order for the economy to get consistently up and running at anything close to an average rate of growth. Our year-end 1400-1450 target range for the S&P 500 assumes we will see a modest, sustained increase in the optimism levels of business owners that flows through to consumers and investors. So while business optimism may be down for now, a helping hand up from our legislators in Washington would go a long way toward restoring confidence in the economic outlook. And that is what is needed to push equity valuations higher over the next 12-24 months.
Past Performance is no guarantee of future results. This article was produced on July 11, 2012 by Scott Wren, Wells Fargo Advisors Senior Equity Strategist, and provided courtesy of Bhupen Agrawal, Managing Director - Branch Manager of Wells Fargo Advisors' Midland office, at 684-7335. The material has been prepared or is distributed solely for informational purposes and is not a solicitation or an offer to buy or sell any security, or instrumental to participate in any trading strategy. Additional information is available upon request at 684-7335. Wells Fargo Advisors, LLC, member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company. Investments and insurance products: NOT FDIC-Insured NO Bank Guarantee MAY Lose Value
Read more: Low business confidence is hindering entire economy - Mywesttexas.com: Business http://www.mywesttexas.com/business/article_8d081499-735d-55ba-84f9-0f4687fed715.html#ixzz210KjUbBJ
Under Creative Commons License: Attribution
Gee, you even highlighted this part:
Quote
Indeed, the main concern for small businesses has been a lack of customers
From the NFIB report:
(http://www.nwacg.net/gallery3/var/albums/random-stuff/nfib.jpg)
Given the complaints about taxes haven't changed much in 26 years, I find it hard to care much about that line. It's a constant complaint, and one that is to be expected. Who likes paying taxes? Sales, on the other hand, still beating out everything else, although not as badly as 2009-2011.
Quote from: RecycleMichael on July 18, 2012, 12:47:34 PM
I am so thankful that we can get an economics lesson every day from Professors gaspar and conan. They just must know everything about every business in the country.
I do work in a business which crosses multiple sectors of the economy:
Commercial construction; pressure vessel fabrication; oil and gas exploration, production & refining; manufacturing- anything from twine, chemicals, plastics, paint, wood, glass, you name it raw material processing to finished goods.
Every day I talk to purchasing managers, facility engineers, small business owners, CEO's, CFO's, sales people, and maintenance mechanics.
I don't pretend to be an expert on economics, but as a sales engineer, I listen and pay attention to what customers tell me are their challenges (anything from logistical to financing, to overall growth or lack thereof), goals, and needs. Quite often that conversation crosses into business in general and what's going well and what is not going well for them. It's important for me to know long-term growth objectives to make sure we meet any future planning needs when we do a design-build project.
I learn a lot about business and why businesses are or are not expanding at the moment from actually talking to people who make those decisions. Real life, every day people, not nameless faceless polls.
Quote from: nathanm on July 18, 2012, 02:42:23 PM
Gee, you even highlighted this part:
And gee, I expected you to cherry pick that and leave out a very important element to why the economy is still sluggish.
Quoteand fears the U.S. economy will slip back into recession. But there is more at work here than fears the economy will stumble; businesses are unable to confidently make strategic decisions and plan for the future. Why? Unfortunately, most of the lack of clarity is coming from our elected representatives in Washington.
Low business confidence trickles through the entire economy. It negatively affects consumer confidence and spending. In a consumer consumption-oriented economy like the one we have in the United States, when businesses are not hiring in decent numbers and wages are barely rising, discretionary spending by consumers typically suffers.
With an optimistic outlook, companies will, in fact, make capital expenditures and hire new employees in advance of a sharp uptick in demand.
If you want to play the blame game, you might look at the obstructionists who nearly shut down the government last year.
Quote from: nathanm on July 18, 2012, 02:53:34 PM
If you want to play the blame game, you might look at the obstructionists who nearly shut down the government last year.
Yea. Those creeps thought hurting their own economy would win them the White House. Just incredible.
Conan, the stock market has done amazingly well considering the market was %50 lower when Obama came into office....
I can't believe if RMoney gets elected a drug addicted drop out radio talk show host could be giving Mitten's direction...
Quote from: Teatownclown on July 18, 2012, 03:01:21 PM
Conan, the stock market has done amazingly well considering the market was %50 lower when Obama came into office....
I can't believe if RMoney gets elected a drug addicted drop out radio talk show host could be giving Mitten's direction...
Obsessed with bogeymen...
The stock market reached historic highs under the Bush admin, don't forget and the Dow average really doesn't mean anything to someone who has been out of work or underemployed for two or three years.
Quote from: nathanm on July 18, 2012, 02:53:34 PM
If you want to play the blame game, you might look at the obstructionists who nearly shut down the government last year.
Who's playing a blame game? I'm simply proving that confidence has a large part of a recession or recovery.
Was this one of the surveys you were referring to which said lack of demand was the biggest issue?
http://jan.ocregister.com/tag/small-business-majority/
(http://jan.ocregister.com/files/2012/02/concerns1.gif)
Quote from: Conan71 on July 18, 2012, 03:05:43 PM
Obsessed with bogeymen crazy people.
The stock market reached historic highs under the Bush admin, don't forget and the Dow average really doesn't mean anything to someone who has been out of work or underemployed for two or three years.
That's not how you measure an improving situation. The Dow went down during Shrubs term.
Quote from: Teatownclown on July 18, 2012, 03:26:15 PM
That's not how you measure an improving situation. The Dow went down during Shrubs term.
And you are right, the Dow has little basis in reality in measuring an improving situation under Obama.
IIRC, with some gyrations, the Dow went from roughly 10,000 when Bush took office to a high of over 14,100 in October of 2007. That's a gain.
Quote from: Conan71 on July 18, 2012, 03:34:11 PM
And you are right, the Dow has little basis in reality in measuring an improving situation under Obama.
IIRC, with some gyrations, the Dow went from roughly 10,000 when Bush took office to a high of over 14,100 in October of 2007. That's a gain.
And that's a lie....
Quote from: Teatownclown on July 18, 2012, 03:39:26 PM
And that's a lie....
I'm sorry, what's a lie? That you said a gain in the Dow is not an indicator of an improving situation or that the Dow reached 14,164 on October 9, 2007.
Quote from: Conan71 on July 18, 2012, 03:42:07 PM
I'm sorry, what's a lie? That you said a gain in the Dow is not an indicator of an improving situation or that the Dow reached 14,164 on October 9, 2007.
NO....the way you make it look like Shrubs term ended in 2007.....that was a lie. But hey Conan, you righties can't recognize a real lie nor can you honestly report the facts .... you all just love taking what's stated out of context and manipulating it like a drug addict drop out radio talk show host and FOX News attempts.
Dow under Clinton
start 3,310 end 10,587
Dow under Bush
start 10587 end 7,949
Dow under Obama
start 7,949 so far 12,908
Are both of you challenging the idea that the Dow hit an historic high of 14,164 in 2007???
Nobody has ignored the fact that the Dow fell of the cliff after it's record high. However, many people made millions & billions as the market crept up in the Bush years, just as people have made millions & billions since the early March 2009 lows.
To not recognize that is to also ignore those who lost money as the Dow fell from 7900 to 6500 during Obama's first six weeks in office.
A gain is a gain so long as you know when it's time to get out.
I am awed that you seem to know the exact time to get in or out of the stock market.
You make it sound so easy.
I am again amazed by your business knowledge.
Quote from: RecycleMichael on July 18, 2012, 04:06:22 PM
I am awed that you seem to know the exact time to get in or out of the stock market.
You make it sound so easy.
I am again amazed by your business knowledge.
Nice way to antagonize and ignore that the Dow was 2000 points higher while Bush was in office and that many people reaped the benefits of it. I hope it exceeds that under Obama.
I'm referring to the simple principle that people can set their limits for when they think a market is over-heated or they've made sufficient profit and don't want the risk of loss. I can't possibly tell you when to bail again, but if you got in at a DJIA of 10,000, it went to 14,000 and sank to 12,000, you remain in at your own peril, especially if economic indicators look bleak.
If someone loaded up in early March 2009, they would be close to doubling out right now if they have shorter term investment objectives. That's a great gain for not even 3.5 years. Personally, I think the market is over-valued right now and could be ripe for another downturn, therefore, I'm not putting more money in it right now. I don't see a great upshot potential at the moment. My outlook isn't scientific and doesn't hinge on who is currently in the White House, it's simply a personal belief and looking at trends, sort of how I approach Vegas gambling ;)
Conan, here's a tip: don't invest in equities. The rest of you can ride any index. :)
Quote from: RecycleMichael on July 18, 2012, 03:54:56 PM
Dow under Clinton
start 3,310 end 10,587
Dow under Bush
start 10587 end 7,949
Dow under Obama
start 7,949 so far 12,908
Quote from: nathanm on July 18, 2012, 02:42:23 PM
From the NFIB report:
(http://www.nwacg.net/gallery3/var/albums/random-stuff/nfib.jpg)
I am looking forward to your explanation of sales between early 1994 and early 2000.
What is there to explain? A low number means most firms do not consider the lack of sales to be an impediment to their business. A high number means they do.
As I said before, I'd give the tax complaints more weight if there was more variation when tax policy changed.
Quote from: nathanm on July 18, 2012, 07:28:42 PM
What is there to explain? A low number means most firms do not consider the lack of sales to be an impediment to their business. A high number means they do.
As I said before, I'd give the tax complaints more weight if there was more variation when tax policy changed.
Maybe I am reading your graph wrong. I would think low sales would lead to low income. Why would low income not be an impediment to their business?
Quote from: Red Arrow on July 18, 2012, 08:06:38 PM
Maybe I am reading your graph wrong. I would think low sales would lead to low income. Why would low income not be an impediment to their business?
It's a graph of the percentage of businesses in the NFIB survey that cited one of the four graphed responses as their most important problem.
Quote from: nathanm on July 18, 2012, 09:57:05 PM
It's a graph of the percentage of businesses in the NFIB survey that cited one of the four graphed responses as their most important problem.
OK, that makes more sense now.