Focus more on Capitol than capital
During the shutdown, politics influence the stock market more than news from individual companies.
"Stick to stocks, Cramer!"
I get that a lot these days on @JimCramer on Twitter and my response, uniformly, is: I wish I could.
Believe me, I don't want to have to attempt to know Washington. I don't like politics. I had to do politics on Kudlow & Cramer, and I disdained it. First, you had to be uniformly polite to everyone, deserving or not. Second, what you asked was meaningless to them. They said what they had to say and no more. I was not left or right. I was dead center. No one wants dead center down there. It was impossible.
That said, right now politics is all that matters. So you immerse yourself, you use your contacts in Congress, the Fed, Treasury, whatever you can. And you set out to try to figure out what matters and what doesn't. You do that because of days like yesterday when news from individual stocks was meaningless. Think about it, the only stock that reacted to news of any sort yesterday was L Brands (LTD), and it was negative. Otherwise, what did it matter what any company said? The futures were in control and stocks were playthings.
Think about what has happened since President Obama got elected. Sure, the market's been strong, but that's really the doing of the companies themselves, which have worked hard to be free from Washington as best as they can, and the Fed, which has been most supportive of the wealth effect. There's been nothing good from the president or Congress for stocks that I have seen and I know first hand that what's good for stocks may actually be regarded as bad for the base, the people who support President Obama through thick and thin. This is very different from Bill Clinton, who I can tell you first hand cared greatly about the stock market and was fascinated by it.
Neither party in Congress is any good for stocks at all that I can tell. The Republicans used to be reliable when it came to oil and gas. Now they just back the Keystone Pipeline, which is becoming meaningless except for Canadian crude and while I personally believe it would be good for America, Green has become a religion, which is why I think that it will never be built under this administration.
But the rest are because the president isn't focused on it and the EPA just wants to put coal out of business. Tough to take on every fossil fuel at once.
So you have no choice but to try to figure out what's going to hurt you next from Washington.
It wasn't always this way. My friend and writing colleague Matt Horween predicted here that politics is what will matter most under Obama and that the federal government would amass tremendous power under Obama. I think that's true and it is often unchecked power because the media doesn't seem to ever want to be tough on the guy. That means capital doesn't have a friend in the White House and you can tell that the bankers are paid lip service for their intrusion into his life. The oil guys don't have a call into him at all. The rest of industry seems totally cowed by the president, scared, gunshy, afraid to get involved. How in heck could it take until Tuesday for the retail industry lobby group to get involved in a debate that would have left 80 million people without checks to go buy things starting in 19 days? How could they not be directly pressuring recalcitrant congresspeople?
One reason is that they know it probably doesn't do any good. The Republicans who want to starve the beast respond to the electorate that sent them there. Only by going against social security directly -- the way the president at last framed the debate -- can they lose because that's an entitlement and they don't call them entitlements because they are voluntary on the part of the government.
The president, meanwhile, is pro labor. He can't even harness the group to do his bidding. He probably hates Wal-Mart (WMT). Hillary Clinton was on the board of Wal-Mart. It was located in Clinton's home state.
More importantly, it's pretty obvious that the president is a divider and stocks and stock owners are not on his side of the ledger. He was voted in by his base and it is difficult to see why he should alienate them. I don't blame him. He ran on who he really is and the people elected him.
But that makes politics even more important. You know, he isn't sitting there talking to Jamie Dimon about putting people to work. I don't think he has a back channel to John Stumpf at Wells Fargo (WFC). His inputs to the stock world are horrendous.
So, yes, I would like to stick to stocks. But if you do that, you got everything totally wrong for the last month. If you stuck with stocks over the last few years you lost out on every decline we have had, meaning you sat through it and created very little value for those people who are active in the market. You went down 19 percent in 2011 and then went back up and it sure wasn't because of earnings. Same thing last year when you went down 7 percent. Those were price breaks created by Washington that first had to be avoided and then had to be exploited.
Reluctantly, we have to focus more on the Capitol than on capital. I would like earnings season to be different. But that's wrong, too. It's a sideshow right now, albeit an important one. Easiest way to put it?
You gotta know both.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long WFC.
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Jim, in your article you claim the media doesn't want to be tough on Obama. The facts are that the administration has cracked down on leaks and seized the records of the e-mails and phone calls of reporters covering the White House. Obama promised more transparency but has gone the other way.
The line about the president sitting down with Dimon and talking about putting people back to work is a hoot! Jamie Dimon could care less about the working man, except how he can induce them into taking on more debt and enrich the banks!
" a relatively new model of reimbursement program" ........ Do you think that is a rational argument LOM......... good god
It's just code for this is how you get your waiver. Waivers are susposed to be temporary but we all know how that shlt works.
Pretty much our stock market is driven by the free money from the Federal Reserve.
QE3 will never end and interest rates will never go up because the US economy is dead and nobody is doing anything to correct the economy.
You can not fire everybody making $80,000 a year and up and replace them with minimum wage workers working only 29 hours a week and expect your economy to recover.
Our leadership wants the US to fail and as to letting the illegals into out country legally that just shows you how much they want to destroy this country. Already half of us speak a different langauge then the other half. Nations are suppose to be united not divided.
Kiss your life style goodbye in about two years when the US collapses.
I usually find your articles informative but this time I could hardly follow what you were saying. I found myself having to re-read sentences to make sure that I had not missed anything so that it made sense. I had not missed a thing as there just was not clarity there. I would suggest a good edit although I know you have deadlines. Thanks for trying, as you were convincing in conveying your frustration.
The ACA (for one thing) means that a relief has been issued in the name of the people which
seeks to redress many of the traditional criticisms we have been pronouncing against HC in general, to wit; they keep driving up costs, they keep paying their CEOs too much, they keep giving pre-established, recurring or even new problems the boot, etc etc. At least these issues have been resolved via the new law.
Yes, the devil is in the details, and that never changes. But dlh, you must remember there really is no such thing as 'benign neglect' ...all neglect is not benign, but ensured to cancel the original problem or dissolve it somehow ( similar to the ostrich trick of burying the head in the sand).
We have no other options but to medically insure everyone we can, and soon.
For that reason, I am opposed to ad hoc maneuvers to relieve CONgress of their capability to go onto the ACA or for those corporations large enough to relieve themselves of their responsibility as well.
If you were putting your hand on the stove "NO" would be a good response.
Thanks for taking the high road in our discussion, unlike so many of the paid impolite
blog fleas on some of the other sites. I gotta run, too. Daughter #2 coming into town,
so must socialize, er.....clean her room for her.
You have a great weekend. See you Monday.
Yes, they are all on there, back and forth about Obama being
America's Hitler or some such rot......Plus, there is a lively
debate about Obamacare...
Even VolckerFan is there, backing the ACA and some fellow named Chris C,
both of whom are providing some very rational argumentation about the pros
of the law.
It was nice to have something else to do today, as well. Have a fine weekend.
Just pay the fine, which will not exceed the cost of the
insurance for about 5 years, then get it. Of course, this
means you will be on the IRS radar, so....
If you were really in charge of yourself, you should
already have your insurance so as not to be a burden
on the system, which I have seen crashed over and
over in Calif with my own eyes by the illegal and non-
covered segments of the population.
DLH:Is surfin boy your big concern?I can think of a lot of things more important.I left this
morning and you and others hit me below the belt.Is that the new policy of the GOP.Lincoln
would be so proud.
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The company has made at least 4 acquisitions in the space, and few people have paid any attention.
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