President Obama has touted General Motors (GM) as a successful example of his administration’s policies. Yet GM’s recovery is built, at least in part, on the increasing use of subprime loans.
The Obama administration in 2009 bailed out GM to the tune of $50 billion as it went into a managed bankruptcy.
Near the end of 2010, GM acquired a new captive lending arm, subprime specialist AmeriCredit. Renamed GM Financial, it has played a significant role in GM’s growth .
JUST LETTING YOU KNOW
Quite an interesting two days.
Going into 3:00p Wednesday, the Dow was down 200. The Nasdaq was down big. And then a leak about how the Fed going to announce more printing of money, come this week when they meet. And it reversed the market about halfway.
But the market still looked kind of awful. The market was messy and range-bound, with not much leadership.
Thursday morning, the futures were down Dow 50 or 60 points. And then a gentleman by the name of Mario Draghi, who is the president of the European Central Bank (basically the head of the European Fed) announces that they’re going to do everything in their power…meaning they’re going to print a lot of Euros.
So we gapped up 250 points yesterday, which for me, is a good start. Investor’s Business Daily called it a Through Day (FTD) because the major averages never broke support.
So the futures were flattish this morning.
And Mario Draghi opens his yapper again. Futures immediately go up. And at one point today, we were up about 100.
And then, the news comes out about just what Draghi’s doing to do. The going to cut rates, do a long term refinancing on whatever debt there is, and they’re going to buy bonds.
But you ask, how are they going to do this? How is it possible?
It’s simple. They create money. They are going to the school of Greenspan and Bernanke (especially Bernanke) and they’re creating money out of thin air and adding it to the system to hopefully fix things up. Now in Europe, yields in Italy and Spain have skyrocketed. It’s the same thing that has happened in the U.S. except that our Fed bought 60% of our bonds in the past year. Well, they’re following suit in Europe.
We’re not talking about small amounts of “printing of money.” We’re talking about trillions. Trillions!
And if there’s anything we know, the market loves it.
And the market immediately went from 100 to up 220, settled in…but let me be clear and concise here. I don’t care about yesterday’s 250. I don’t care about today’s 187.
I care about whether growth stocks are showing some real strength, backed by conviction and breaking out of range. And today, we finally got some.
And simply put, let’s hope it sticks.
But 7 out the past 8 FTDs failed. Some miserably.
Now the cynic in me is saying it’s just “more money printing” and it’s “end of the month window dressing.
But the market guy in me says, “Man, there’s some compelling good action here, over the past day, and a gap.
Let’s hope it continues. I don’t have a prediction. I just have a hope. I know where leadership is. I know where strength is.
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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.
President Obama’s health care law raises taxes by $1 trillion, according to a new report from the Congressional Budget Office.
The individual mandate — which the CBO calls a “penalty tax,” in apparent deference to Chief Justice John Roberts — will produce $55 billion in “penalty payments by uninsured individuals,” the CBO told House Speaker John Boehner, R-Ohio, in a Tuesday letter. Of course, the framers of the law didn’t design the mandate as a tax, and so it produces less revenue than any other provision in the bill.
The “additional hospital insurance tax” is the largest tax increase in Obamacare, projected to bring in $318 billion in new revenues. According to the 2010 report from the Journal of Accountancy, this tax hits “high-income tax payers” — individuals making over $125,000 a year or households making over $250,000 a year.
This is why I like Bill O’Reilly. Pure logic…simple logic! I don’t know this Congressman…but here’s a guy with absolutely no logic. Imagine not wanting to report someone buying 60,000 rounds of ammunition! READ THIS AND WATCH THE VIDEO:
During Tuesday night’s edition of “The O’Reilly Factor,” the Fox News host got into a heated exchange with Rep. Jason Chaffetz (R-Utah) over the concept of Congress passing legislation that the FBI would be notified whenever anyone purchases “heavy weapons.”
Bill O’Reilly said it makes sense for Congress “to pass a new law that requires the sale of all heavy weapons to be reported to the FBI. In this age of terrorism, that law is badly needed.”
Just what the heck is going on here. And I do believe the Mayor is Jewish. How do such miserable, racist human beings get into a position of power?
Ignoring Nation of Islam leader Louis Farrakhan’s history of anti-Semitic remarks, Mayor Rahm Emanuel on Wednesday welcomed the army of men dispatched to the streets by Farrakhan to stop the violence in Chicago neighborhoods.
Ald. Debra Silverstein (50th), an Orthodox Jew, has said it’s good that Farrakhan is “helping” in the fight against crime, “but it doesn’t eradicate the comments that he’s made about the Jewish community.”