We Need Leadership

I'm watching Hank Paulson talk about the global economy and the downturn that we have been facing. Here is one issue that I have with Hank...I am seeing the top of his head more than his face. He is reading a script. Now, I know that not everyone is the best public speaker...but come on. Look us in the eye when you are giving it to us.

Is he saying anything worth while...uh, no. It is just a change in plans. They are now going to take an equity stake in banks and not buy up the troubled assets. So this isn't new but it is just a change of plans. But what about the bad debts on the books? Guess that goes into the dark matter world and hopefully everyone forgets about it right???


We need a real leader step forward and state, "This is what we are doing...This is how were going to do it...The banks need to get on board now or they are on their own. This is going to be painful, we can see that it already is. We are a great country. We have past every test that history has thrown before us and this time will be no different."

People are not that stupid. We can handle bad news. For real. Someone, anyone, come up with a path and stick with it. We must come up with a plan that is clear and understandable to the people at home. I know this is difficult. This is some pretty complicated stuff. But it can be done. And if you can explain it and you can tell the people that times are going to get rough (the well duh element) and SET A COURSE, then we can move forward. That is what the markets want, it is what the global economy wants, and it is what we need. The United States of America is still the light of the world. The world looks to us to set a course. We need to set one and soon. And NOBODY, Bush, McCain, Obama, Paulson, and Bernanke have not done it.

Give me a leader! Where are our Lincolns and our Volckers in today's world? That is all that we really need...a true leader. The world is not rainbows and unicorns, we're adults, we understand this. We don't want more spin and spin and spin. I guess that I basically want to say "GROW A PAIR!!!"

Samuri Ben

Ok, I gave 10 reasons not to cut this weekend and did Ben & Co. listen? Nope. They didn't listen to a darn thing that I wrote. I was encouraged that they did still mention that inflation was still a concern. If I say it once, I will say it a hundred times...inflation should forever and always be the Fed's main concern. Look at what treasuries did today.

Short term bonds are already starting to price in another cut. I think that may be misplaced. By cutting the rate .50 basis points here, the Fed can sit back and watch how things unfold over the next couple of months (as long as things don't get worse) and see what happens. If they had cut by only .25 basis points, that would have signaled a rate cutting campaign.

But notice that longer term treasuries sold off? Long term bonds determine long term interest rates, i.e. mortgages. It also is a clear signal that inflation is going to raise. Not a good thing.

Ultimately, I'm a little disappointed that the Fed did not make a stand here. By cutting the rate, it sets up the future to be more grim. Throwing easy money at an issue created by easy money doesn't make sense and someday in the future, maybe not this year or next, or even the year after that but someday we will all have to pay for the excesses we have seen over the last few years.

So we had a good rally today because of the Fed. Lehman Brothers posted a better than expected earnings report. Does this make everything gung-ho going forward? Not so fast my friend. Too many issues still remain and will remain no matter what the Fed does. It makes the holiday season a little brighter as credit card rates will decline. It will make businesses reinvest and start spending money again but these are short term fixes to a long term problem.