Monday, September 26, 2011

The Monday Morning Quarterback Is Alive and Well

Trying to get a handle on the deluge of information constantly bombarding investors on a daily basis is a daunting task, to say the least. This morning I had the distinct pleasure of hearing a sports reporter, who was reporting on Michael Vicks' broken hand, launch into a dissertation about how sports serve as a distraction for the "disasterous state of our economy, the horrendous jobs situation and polarized politics". Well, no duh! However, is it appropriate for a sport's announcer to utilize negative and potentially inflammatory language about the economy on a Monday morning?

Anyway, as the campaign season heats up in earnest, Obama is already stumping for the 2012 election, while the Republicans continue to try to convince voters to get behind an "electable candidate". The two front runners have written books recently, both of which have remarks towards Social Security which can be utilized by the Democrats to sway voters. Meanwhile, the economy and employment, issues which we are told are priorities of both parties, will not see any significant legislative action for the foreseable future. The reasons being the Democrats hope to paint the Republicans as standing in the way of job growth, by not adopting Obama's new "jobs program", and the Republicans hope to convince voters the blame belongs to Obama for 9% unemployment from "failed stimulus plans" and trillion dollar deficits. Of course, there is the possibility that a lack of any government fiscal intervention might actually allow the economy to limp along and begin to repair itself.

Thanks to a swift and effective move by the Swiss to intervene in their currency when traders were moving to the Franc as a safe haven due to the rout of the Euro, the dollar has strengthened significantly. Gold, silver and other commodities have taken it on the chin as the dollar has once again become a safe haven for investors worried about worldwide demand slowing. Many emerging markets are in bear market territory as the week begins, and economists are all over the place in handicapping a new recession, or "double dip". Hopefully, the Eurozone will strengthen their political union enough to agree to sell bonds, which will backstop Greece and the rest of the PIIGS.

On the home front, I can't help but ask when we will finally unleash a credible energy plan utilizing natural gas, uranium and coal to put people back to work. We've seen the result of the government trying to pick technologies, as evidenced by Solyndra debacle and it doesn't work. I am not saying abolish the EPA, but I am saying we might be able to postpone some of the drastic steps we need to take to "save the planet" until our economy is functioning better and our energy sources are not quite as precarious. While we are at it, we could also evaluate if our response to 9/11, while a complete and utter success, might not have given al Qaeda more credit as a threat to the US than they actually turned out to be. Balance is what we need going forward.

John H. Kaighn

Jersey Benefits Advisors