October 15, 2009

POR Economy/Obamanomics Graph of the Day (Revised)

Filed under: Economy,Taxes & Government — Tom @ 1:37 pm

Readers may be wondering why I haven’t said anything about the Dow reaching 10,000.

First, it’s less than halfway back to its all time peak of 14164 on October 9, 2007 from its March 9, 2009 trough of 6547.

Second, as the graph below shows, the price-dividend ratio of the Dow has fallen, and hasn’t gotten back up (Update — Instapundit originally put up a graph I referred to that he mislabeled (tardy and apologetic HT to an e-mailer) and I was not able to properly identify, so I’ve gone to one that I can; I should have recognized that the numbers in the Instapundit graph were too high to be “PEs” from the get-go, and apologize for that error; what’s impressive about all three graphs that have been presented here at some point is that they all support the narrative that follows):

DowOverCPI

This graph goes to 8/31/09, when the Dow was just below 9500, so the value is a bit higher now.

The markets began noticing that the GOP’s slate of candidates to succeed George W. Bush was particularly pathetic by the late summer/early fall of 2007. The slide began, and then halted a bit in the Spring of 2008 as the economy looked to be recovering from a rough first quarter.

But when Barack Obama, Nancy Pelosi, and Harry Reid began talking and taking down the economy in the summer of 2008, the decline returned, and accelerated. There was a slight flattening just before the presidential election, as the markets hoped that John McCain and Sarah Palin might somehow drag themselves over the finish line. Alas, it was not to be, and the plunge into the abyss continued for several months after the election.

We’re not much above where we were on Election Day in early October of last year. Big whoop.

I would not be surprised if the situation is even worse for small caps, which generally have smaller dividend yields to begin with. A rent-seeking, crony capitalism economy tends to favor big companies over small ones.

Those are my added notes about the market’s anticipations and reactions. I just wanted to make it clear why we are where we are.

The duration of the decline illustrated above, and of the 53.8% decline in the Dow from its peak, and of the frightening increase in unemployment that appears destined to linger for quite a while, regardless of whether the equity markets recover, represents what frequent BizzyBlog commenter JoeC so accurately pegged and accurately predicted on October 3, 2007 as “the Democrat effect”:

With the prospects of Democrats in power, the smart money (i.e. businesses and capital) is preparing a year ahead of time for the coming punishment. At minimum the tiny tax rate cuts of 2001 and 2003 that saved the US from the perfect storm of insults to the economy need to be made permanent. REAL tax relief is needed, but that ain’t gonna happen when the economic Grim Reapers are in charge.

I would also add that October 2007 marked the beginning of the first full budget year under the legislative control of the majority-Democrat Congress elected in November of 2006. After the GOP actually contained spending in its last year of control, spending went out of control from October 2007 forward. The concomitant market slide is no coincidence.

The working definition of “the Democrat effect” is “the rational response by firms to prepare for the inevitable insult to the economy from unsurmountable regulation, litigation, and taxation to come (and which is now largely here) – which started on election night ‘06.” It took the markets, entrepreneurs, businesspeople, and investors a while to believe that the Democrat-controlled Congress and now the Obama administration aren’t merely indifferent to free-market capitalism and the prosperity it brings. It is hostile to it. Now they know.

Lucid Links (101509, Morning), Including the Stalinist Treatment of Rush

Filed under: Lucid Links — Tom @ 7:52 am

RushNFLThe following characterization is sadly, objectively true.

The media’s complicity in the apparently “successful” campaign against Rush Limbaugh’s involvement with NFL team ownership, and not even as the lead person, was right out of the Stalinist handbook.

The allegedly racist quote attributed to Rush has been proven — PROVEN — to be totally made-up. When caught, the media response has in essence been, “Well, he didn’t say that, but he’s said plenty of other racist things” — without naming them. This is show-trial reporting.

One of the worst among many examples is Yahoo Sports reporter Adrian Wojnarowski, who told Jim Rome on Rome’s ESPN show that “He’s a racist. He’s a bigot. He’s shown it for years.”

Wojnarowski then added:

I mean, are you going to allow him to make an NFL, an African-American NFL assistant, with the Rooney rule, who has to sit in his office for what’s essentially going to be a token interview and patronize that guy?

Martin Finkelstein correctly states that “Wojnarowski was clearly claiming that Rush would never hire a black coach.”

01125112Par89380ImageFileI guess Rush, who rarely has guests, demonstrated his obvious racism when he gave two segments of his program to an over 3500-word in-person interview with former Tampa Bay and Indianapolis head coach Tony Dungy back in late January. Rush wrapped the interview by saying:

Coach, thank you so much. This has been a real thrill for me. I’ve wanted to meet you and talk to you for the longest time and I can now say I’ve done it.

Oh, but Rush would neeeeeeever hire Tony Dungy as a coach, because Dungy is African-American. (/sarc)

Wojnarowski owes Limbaugh an apology that will surely never come. Wojnarowski should himself be fired — not for expressing his views, but for lying.

Limbaugh’s opponents have a larger goal. Plainly stated, it is to marginalize anyone and everyone holding sensible conservative views from the mainstream of American life as much as humanly possible, and to employ whatever tactics are necessary to do that. The American people are being sent a clear message that holding such views could be dangerous to your career, your success in life, and the well-being of others you love. And heaven help you if you express those views.

If that’s not Stalinist, I don’t know what is.

That’s why the establishment media’s usually firm grip on the flow of “discussion” in matters such as these must be broken.

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The wonders of having a NATO coalition supposedly fighting a war:

French troops were killed after Italy hushed up ‘bribes’ to Taleban

When ten French soldiers were killed last year in an ambush by Afghan insurgents in what had seemed a relatively peaceful area, the French public were horrified.

…. What the grieving nation did not know was that in the months before the French soldiers arrived in mid-2008, the Italian secret service had been paying tens of thousands of dollars to Taleban commanders and local warlords to keep the area quiet, The Times has learnt. The clandestine payments, whose existence was hidden from the incoming French forces, were disclosed by Western military officials.

…. Western officials say that because the French knew nothing of the payments they made a catastrophically incorrect threat assessment.

The US-led coalition in Iraq achieved victory is because we were running it with the help of other nations. Nobody will admit the dirty little secret that Afghanistan came back as a problem after the initial U.S. ouster of the Taliban in 2001 because we allowed NATO and the UN to have more involvement and control than they should have. The mission turned into a muddle. It seems that some troops from at least one nation set a goal of conflict avoidance instead of victory, or even real containment.

It looks like drugs may not be the only reason the Taliban are reportedly in good financial shape.

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There would be one word to describe a Republican congressman with the “problems” of Democrat Charlie Rangel:

The powerful chairman of the House Ways and Means Committee recently revised six years of financial disclosure statements, revealing more than $600,000 in previously unreported assets and tens of thousands of dollars in unreported income. Among the holdings Rangel failed to report, an investment account and a checking account, each worth at least $250,000. Rangel also has admitted that he failed to report and pay taxes on $75,000 in rental income on this villa in the Dominican Republic.

That word is “gone.”

Positivity: Priest beats poker pros to win $100,000 for parish church fund

Filed under: Positivity — Tom @ 6:38 am

From Los Angeles:

Oct 15, 2009 / 03:54 am

A South Carolina priest bested an NBA basketball star and two professional poker players, including former world champion Daniel Negreanu, to win $100,000 in a poker tournament and qualify for a competition with a $1 million grand prize.

Fr. Andrew Trapp, associate pastor of St. Michael’s Church in Garden City, played in the PokerStars.net Million Dollar Challenge held in Los Angeles, California. Among his opponents were retired NBA star John Salley, Team PokerStars.Net pro Vanessa Rousso and Negreanu, a four-time World of Series of Poker bracelet winner.

The young priest, who Fox News says is known as “Father Rambo” for his love of paintball, at one point held rosary beads while in a big hand against Salley. Fr. Trapp defeated Salley and Rousso before defeating Negreanu.Playing the final hand of a game of Texas Hold’em, the priest was dealt a Jack of clubs and an eight of diamonds while Negreanu took a six of spades and a five of diamonds.

The flop, the game’s first three community cards, consisted of an eight of spades, a four of diamonds and a two of clubs. This gave the priest a pair of eights, while Negreanu could make a straight with any seven or three among the next two community cards.

Fr. Trapp lived up to his name when he went “all-in,” putting all his poker chips on the line.

“I wish you wouldn’t have done that,” Negreanu told the priest.

“You told me to be aggressive, so I’m trying,” Fr. Trapp replied..

“You’re bluffing right now, right, you don’t have an eight?” the poker pro asked. “You have a pair of eights? You don’t have to answer that…”

“My gut says I’m going to hit it,” he continued. “I call.”

The priest again took out his rosary. The next card was a jack of hearts, giving him two pair.

The final card, a two of diamonds, secured Fr. Trapp’s win.

“It’s one of those ‘Thank you, Lord!’ moments,” the priest explained to the show announcer after his victory. He also thanked Negreanu for teaching him how to play poker. ….

Go here for the rest of the story