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3/10 Upgrades & Downgrades

UPGRADES

Lazard upgrades Sandisk (SNDK)to BUY
BB&T Capital upgrades AeroVironment (AVAV) to BUY
RBC Capital upgrades Oil and Gas Equipment & Services stocks (Cameron, CAM; FMC Technologies, FTI; National Oilwell Varco, NOV) from sector perform to OUTPERFORM
CIBC upgrades Silver Wheaton (SLW) to SECTOR PERFORM
SunTrust upgrades Abaxis (ABAX) to BUY
Goldman Sachs upgrades Dr Pepper Snapple (DPS) to BUY, Investment Technology Group (ITG) to Neutral
FBR upgrades Cameron (CAM), FMC Tech (FTI), National Oilwell (NOV) to OUTPERFORM
UBS upgrades Nucor (NUE) to BUY
Stifel Nicolaus upgrades Capital One Financial (COF), Discover Financial (DFS) to BUY
Morgan Stanley upgrades US Cellular (USM) to EQUALWEIGHT
Credit Suisse upgrades Barclays (BCS), Con Edison (ED) to OUTPERFORM
Barclays upgrades Clorox (CLX) to EQUALWEIGHT
JP Morgan upgrades Gaylord Entertainment (GET) to NEUTRAL
Bank of America upgrades Kohl's (KSS) to BUY
Credit Suisse upgrades Duke Energy (DUK) to OUTPERFORM


DOWNGRADES

Morgan Stanley downgrades aerospace & defense sector (Boeing, BA; Lockheed Martin, LMT; Northrop Gruman, NOC; Honeywell, HON; General Dynamics, GD) to CAUTIOUS
Howard Weil downgrades GMX Resources (GMXR) to MARKET PERFORM
Janney Montgomery Scott downgrades Netflix (NFLX) to SELL
UBS downgrades LG Display (LPL) to NEUTRAL
FBR downgrades Metlife (MET) to MARKET PERFORM
Goldman Sachs downgrades Computer Sciences (CSC) to SELL
Baird downgrades Genentech (DNA) to Neutral based on valuation
BMO Capital downgrades XTO Energy (XTO) to UNDERPERFORM
Credit Suisse downgrades BJ's Wholesale Club (BJ) to UNDERPERFORM
RBC Capital downgrades oil & gas drilling and exploration stocks (Halliburton, HAL; Schlumberger, SLB) to SECTOR PERFORM
Citigroup downgrades Wal-Mart (WMT) to HOLD on EFCA/card check concerns

Simon Johnson: Nationalization for Beginners

The last video I posted introduced a professor in MIT, Simon Johnson, who I thought was brilliant in the lecture. (He's the type I wouldn't mind, and perhaps look forward to, going to school for.) He maintains a blog called The Baseline Scenario (find link on the sidebar) and today, he laid out well five possible definitions of nationalization and distinguished between what is currently being feared by the markets and what may in fact be in the heads of its proponents.

1. Owning more than 50% of the bank, by which people typically mean owning more than 50% of the common equity, but he argues this depends on whether the (stock) ownership comes with voting rights or not

2. Consolidating the bank onto the government balance sheet, which happens once the government owns 80% of the bank (and as a result, takes over the debt of the institution as well)

3. Turning the bank into a government agency - this is when the government actually controls the activities of banks, which is what he and free marketers don't want

4. FDIC-style conservatorship, which according to him is what the proponents of nationalization have in mind. He further describes:

The bank itself is shut down and its assets are transferred to a new entity controlled by the FDIC. The FDIC attempts to maximize the value of these assets, typically by selling them to another bank or banks. From the customers’ standpoint, little changes during this period: the branches, ATM machines, web site, and so on remain in operation during the transition, except that customer may not be able to withdraw amounts above the insurance limits.

5. System-level nationalization - so it doesn't lose its meaning, straight up from the blog:

[T]he government is where the money comes from, and the government decides on a high level where it goes, through capital injections, loans, and securities purchases. And the government bears the vast majority of the risk. The net result is we have a semi-nationalized banking system largely made up of some very sick but private banks.

Find the rest of the entry and start following him, here.

Ken Lewis: Nationalization not good

Ken Lewis wrote for the Wall Street Journal claiming that nationalization would undermine confidence in the financial system. He also pointed out some "myths", which according to him are not taken as facts:

The banks aren't lending. ...bank credit has actually increased over the course of this recession, and business lending is trending up modestly so far in 2009. Most banks are making as many loans as we responsibly can, given the recessionary environment.


The banks are insolvent. In the past 18 months, we've seen fewer than 50 bank failures. That compares to about 2,000 failures or closings of commercial banks or savings institutions between 1986 and 1991.

The Troubled Asset Relief Program (TARP) hasn't worked. Not true...The point of the program was to stabilize surviving banks, prevent a total meltdown, and enable banks to lend more.


Taxpayers have given the banks billions and won't get their money back. This is a win-win: Banks are getting the capital they need, and taxpayers are getting a strong return on their investment.


The banks that caused this mess must be held accountable. The managers and shareholders of those institutions have been held accountable by the toughest, most unforgiving master of all: the free market.

The only way to fix the banks is to nationalize them.

The complete article here.

Triumvirate of Mergers. Oh wait, there's four of them!

Yesterday was quite special. There were talks about three mergers going on while the markets was open.

It was reported that an agreement about the Roche-Genentech deal is moving closer. From the current 93/share bid by the Swiss drugmaker Roche, the price could potentially move up to 100. Remember that Genentech initially wanted the shares to be sold at 112 each but it seems Roche wouldn't budge. At the end of the day, the price that was floating was $95, some 2% above the 93 that was reported over the weekend. This deal is more of done than not. Just a little but more tinkering with the price and the talks could be done soon. Very, very soon.

That was all the update I expected to hear upon waking up. But voila, there was another one. And it was similarly from the biotech world. This time, Merck has declared its interest to buy New Jersey firm Schering-Plough for a $41.1bn deal. The agreed upon cash-and-stock deal, which values the latter firm's shares at $23.61 each, is a 34% premium on Schering's Mar. 6 closing price. Merck's CEO Richard Clark said of the deal, "The combined company will benefit from a formidable research and development pipeline, a significantly broader portfolio of medicines and an expanded presence in key international markets, particularly high-growth emerging markets." The two firms already have a partnership for cholesterol drugs Vytorin and Zetia. But Schering also has a deal with JNJ to market drugs outside the US, which might be endangered if the acquisition pushes through. CEO Clark still defends, "We believe the transaction is structured so that Schering-Plough's rights are not affected by the merger," Clark said.

Next. Rohm and Haas and Dow Chemicals. The saga is finally heading to a close. Tonight, the Financial Times reports that the two firms have reached an agreement and Dow is finally pushing through with the the deal it almost abandoned. But I suppose the fear of the mess of the courts forced it to make a U-turn. The initial price of $78 per share will be maintained but it is to be split between $63 of cash and the remaining in preferred shares. The FT reports that Paulson & Co, an investment firm, and a group of trusts controlled by the Haas family will buy $2.5bn of preferred equity in Dow. The Haas trusts, which own a combined 32 per cent of Rohm and Haas, have agreed to buy another $500m of Dow’s equity if Dow exercises that option. The acquiring company said the proceeds of the issuances will be used to cut down the debt to be taken from the $12.5bn bridge loan it has secured from a group of banks. Taking in more from the bridge loan could mean rating downgrade for Dow. Berkshire Hathaway and the Kuwait Investment Authority will contribute $3bn and $1bn, respectively, of convertible preferred equity to help finance the deal- agreed when the transaction was first announced. Now it seems everyone is finally happy.

Last one, this time a merger involving three parties. Agrium (NYSE: AG), CF Industries Holdings (NYSE: CF), and Terra Industries (NYSE: TRA). So here's the story: CF made a bid for Terra, which Terra's shareholders are rejecting. Then AG made a bid for CF worth $3.6bn conditional on CF dropping its bid for TRA, but CF also rejects. Now what CF did was revise its offer to TRA. As long as CF's shares trade above Friday's (March 6) closing price of $60.59, TRA shareholders would get at least $27.50 a share. Illinois-based CF's earlier offer was 0.4235 of its own shares for each Terra share. The firm changed its exchange ratio to a range of not less than 0.4129 of a CF share and not more than 0.4539 of a share.

I wonder who's next in line tomorrow?

Nouriel Roubini's speech from yesterday's conference

Posting Nouriel Roubini's speech yesterday at the CBOE (Chicago Board Options Exchange) conference, courtesy of CNBC. Pardon the big gaps. It's something with the code.

Part 1:

Part 2:

Part 3:

Challenges to the Global Economy: An MIT Lecture

An excellent lecture held in MIT, with speakers Harvard Economist Martin Feldstein and MIT Sloan School of Management Professor of Entrepreneurship Simon Johnson, focused on the ongoing financial crisis. Q&A followed after the two professors spoke; Feldstein took the questions and provided some of his own solutions to some of the problems.



Enjoy! I did.

Some interesting reads: CDS, Cramer, Harvard

Here's an interesting read about the possible "blow-up" of OTC derivatives market, suggested by Myron Scholes- one of the three who came up with the Black-Scholes model for pricing options, taken from the Bloomberg website. Some excerpt:

The “solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and let us start over,” he said, referring to credit-default swaps and other complex securities that are traded off exchanges. “One way to do that, through the auspices of regulators or the banking commissioners, is to try to close all contracts at mid-market prices.”

Another one from TheStreet.com presents Jim Cramer's stock-by-stock dissection of the Dow, presenting the worst-case scenario which if it happens he claims could bring the Dow up to 5,320 level. I'm putting up his comment on Boeing (NYSE: BA), General Motors (NYSE: GM), and MickeyD (NYSE: MCD).

Boeing's balance sheet could be stressed mightily by the huge downturn in aerospace and a cut in defense spending for Boeing-like systems. That means the 5.6% dividend is questionable, and so is the low of $30. With big order cancellations, a place like Boeing begins to lose money, even though it is extremely profitable right now. The stock can drop 20% easily on that news. Make it $24.

General Motors common stock gets canceled in my estimation in a bankruptcy which we all seem to know is coming. Goose egg.

McDonald's: A strong dollar could cut estimates, as could a decline in traffic in Europe, where MCD has a big franchise, Still, it's a solid company and a good bet, so I will call it no lower than $45, as dividend protection and great management could cushion any decline. I want to buy this one, too, when it gets to $50, as you have to start somewhere, and the idea of it going to $45 implies a garden-variety worldwide depression.

Finally, a story on Harvard's financial meltdown, courtesy of Forbes online.

It would have been nice to have cash on hand to meet margin calls, but Harvard had next to none. That was because these supremely self-confident money managers were more than fully invested. As of June 30 they had, thanks to the fancy derivatives, a 105% long position in risky assets. The effect is akin to putting every last dollar of your portfolio to work and then borrowing another 5% to buy more stocks.

Harvard has oversize positions in emerging market stocks and private equity partnerships, both disaster areas in the past eight months. The one category that has done well since last June is conventional Treasury bonds, and Harvard appears to have owned little of these. As of its last public disclosure on this score, it had a modest 16% allocation to fixed income, consisting of 7% in inflation-indexed bonds, 4% in corporates and the rest in high-yield and foreign debt.

GE: Powerful no more?

I'm linking below a good narrative about GE and its woes written by Joe Nocera in the New York Times. It appeared on today's issue of the newspaper. This week and the ones leading up to that has been quite a ride for the giant General Electric. With one of the few in the US who's maintained its triple A credit rating, the company is on the verge of losing that prestige amidst the issues it is facing with its finance arm, GE Capital. Some excerpts from today's piece:

The company sent out a blast e-mail message Wednesday morning saying it was well positioned to handle whatever the economy might throw at it. It made no difference. Earlier in the week Jeffrey Immelt, the chief executive, released his annual letter to shareholders, pointing out that the company had $18 billion in profit last year. Investors shrugged.

On Thursday morning, the company’s chief financial officer, Keith Sherin, appeared on CNBC, which G.E. conveniently owns, and offered a passionate defense of the company. “We have an incredibly strong liquidity position,” Mr. Sherin said. “We don’t need more capital,” he insisted. “On a tangible common equity basis, we are fine. Our tangible common equity for GE Capital is higher than any of the big banks.”

“The last time G.E. cut its dividend was during the Great Depression,” [Jerry Useem] pointed out. He was quiet for a minute. Then he added, “If G.E. is in trouble, God help us all.”

In truth, G.E. delivered on its earnings estimates because of GE Capital, which often sold assets at the end of the quarter to make up for any shortfall.

Read the whole piece here.

Roche raises its bid for Genentech

Amidst the sea of bad news this week, this is perhaps one of the few good news one can take. Swiss drugmaker Roche first made a bid of $89, rejected in August, to increase its stake in San Francisco-based biotech firm Genentech (NYSE: DNA) , 56% of which it already owns. Believing it could get a better deal using the recession as an excuse, it brought the bid lower to 86.50 proposing the hostile takeover directly to DNA shareholders. The twist of events made Roche come back with a higher bid of $93. It seems that at this price, the chase will soon be over.

“Based on conversations with Genentech shareholders, we believe that there is a strong sentiment to bring this process to a conclusion,” Roche Chairman Franz Humer said in a press release.

Owning 90 percent of the outstanding shares of DNA when the deal is consummated would see Roche make an immediate cash payment equal to the price per share in the offer ($93) and a future cash payment based on a valuation, according to a squeeze-out provision in a Roche SEC filing last month.

Cheap... and that probably means don't bother. Yet.

Some of the cheapest stocks now in the market are, not suprisingly, the blue chip stocks - the once biggest and best in their industry. With the complete evisceration of stock values, and no, they’re probably not yet done, many of what once were the shining stars of the stock market universe have turned into the dark, fading life-sucking trap of a blackhole.

From the Dow, there’s Citigroup now trading at $1.03 followed very closely by General Motors at $1.45. Third runner up goes to Bank of America at $3.14 and the last spot is taken by materials firm Alcoa valued at $ 5.22 per share. Outside of the Dow, there are more and they go for under a dollar:

* AIG is almost worth a quarter at 35 cents
* E*Trade Financial stands at $0.61
* Friends Fannie Mae and Freddie Mac share the misery at 36 cents each

Some other players may be part of the race to the downside:

* Ford ($1.70)
* Las Vegas Sands ($1.77)
* MGM ($1.99)
* New York Times ($4.07)
* News Corp ($6.00)
* GE ($7.06)
* Dow Chemical ($7.11)
* Wells Fargo ($8.61)

These may look very cheap stocks and without knowing that the economy is still not showing signs of recovery, you might be easily deceived to make these stocks part of your portfolio. The banks alone, BAC, WFC and C, still have a lot to go fixing their companies (or the indstry overall). Bank of America alone still has the ongoing saga with Merrill Lynch and the NY Attorney General’s office. They still contain the toxic assets which until removed from their system would probably not see them recover from this slump. Don’t forget that the government and Tim Geithner’s office haven’t really produced anything worth cheering about.

Then there’s the insurer AIG and the fourth bailout in 5 months. They are in about the same situation as the banks, only magnified. If they’re too big to fail then bailing out is probably not the solution. What’s needed is for them to be small enough to fail, hence, the need to break them down and let go of the more profitable divisions in order to prevent the downward spiral of completely bringing the whole firm down. After all, it’s onle the firm’s hedge fund that is dragging AIG to its downfall.

Dow Chemical is still in the “trying” stage of pushing through with the Rohm and Haas takeover. The deal with Petrochemicals Industries Co. of Kuwait to form a 50-50 K-Dow Petrochemical joint venture has become uncertain as the plunge in the prices of commodities made it difficult for the Kuwaiti firm to complete the transaction. Now ROH is suing DOW for failing to complete the transaction, which had a deadline of January 27, and to force them to do so.

New York Times and News Corp. will probably continuously see slump in their businesses as ad placements remain troubled. If it’s any consolation, the misery is shared by the whole media industry

Las Vegas Sands and MGM. It’s one thing when there’s not very many people who go to Vegas to gamble anymore. And it’s another when you warn the public about the possibility of defaulting. That’s the situation MGM finds itself in. Down 40% just this week, it has gone down 30% since it made the announcement on Tuesday. This bad news is compounded by the failure to reach a deal with Deutsche Bank to finance their CityCenter project with Dubai World in the amount of $1.2bn loan, potentially in exchange of a stake in the project.

General Electric is still in shaky grounds even after dividends have been cut more than 60% last week. Company CFO defended the company saying they are still doing well and the downward trend seen by its stock the past two weeks are attributed to the speculation and CDS plays that is prevailing in the market. Trading last at $7.06, there’s a significant open interest in the March 5 as well as March 6 puts.

Maybe some of these look attractive from a valuation standpoint, but in deciding which one to buy, take note about the troubles they still have to spare you the trouble of losing money.

Signs the Congress has gone mad

One indication that Washington has gone mad is when you have two ridiculously stupid proposals coming from both Democrats and Republicans alike… the same day. Let’s begin with the Republican.

Republican Senator Grassley today came up with an utterly brilliant idea of how to save jobs in America: fire foreign workers first. I take offense not because I am part of that group of internationals seeking to find work here in the US. Instead, I am against this because if you want the US to remain competitive, what she needs to do is hire the best people- regardless of their nationality. In case he doesn’t know, the reason why some companies are hiring more internationals than Americans is not just because of cost (if at all it is an issue), but because the best and the brightest just are not found here in the US. What is the point of hiring your own people if they are less productive than those being hired, whether it be Chinese, Indians or what-non-US citizen?! Voting against this H1B issue is not so much a case against US unemployment as it is a case against growth, productivity and competitiveness. I’m ashamed to be hearing this from a Republican.

The more ridiculous proposal came from Democratic Congressman Defazio who suggested that trading of stocks, options and other financial instruments be taxed at 0.25%. Has he seriously gone mad? Oh wait, no. It is typical of Democrats to be taxing their deficits away. 0.25% might not sound like a lot but if you look at how much trading happens every day, and how much is involved, 0.25 or 0.20 or 0.15 is no simple thing. It’s only ridiculous to us who understand the implications of this ridiculous taxation. Okay, so capital gains tax are already being raised. The Bush tax cuts will no longer be renewed. Income taxes for those making more than $250,000 will be following a rate of 39% vs. the current 36%. And now we have this. Passed or not, this tells me that seemingly the only solution in the minds of Democrats is taxation. I wonder what’s next? Taxes on paying your bills? Or hiring people?

These are indeed extraordinary times… These are the times when we see the Congress going bonkers. And it’s not just the liberals.

Soap of America

Ever since Bank of America’s acquistion of investment bank Merrill Lynch in January, there has been a string of events, which by the day made the deal of paying a 70% premium on ML’s September 19 price look not as good as Ken Lewis claimed it was. He went as far as boasting that amidst the crisis, he managed to spot opportunities. Fast forward to three weeks later and John Thain, the former Merrill CEO bade farewell to the firm, for whom he served as a CEO beginning in November 2007. He was fired resigned amidst the extravagant renovation Thain had in his office. Amounting to as much as $1.22 million, the tab included $800,000 paid to designer Michael Smith, $130,000 for a few rugs, $35,000 for a commode, and the rest to be divided among curtains, chairs and coffee table. Thain agreed to pay back the amount he spent on the renovation. That was just the beginning of this heavy BofA-Merrill drama.

In February, Merrill unveiled a loss of $15bn in the 4th quarter of 2008 and a total of $27.6bn for the whole year. The BofA CEO came under fire for the deal, which no longer seemed as sweet as it was back in September. The Merrill loss only compunded the bank’s need for capital leading them to tap the TARP funds for another $20 billion just to complete the acquisition. In a testimony to the Congress, the CEO defended himself by saying that he did not know about the loss when the deal was being put together. How’s that for a hasty due diligence? Then just like every other firm who’s received bailout, Lewis was back again in the limelight for the huge bonuses that were paid to Merrill executives before the consummation of the deal between the two banks in early 2009. Days after, more details emerged about these payments. The top 11 highest paid in Merrill were paid an aggregate amount of $200m while there were another 140 who each received more than a million. To make this even more ridiculous, some of the top earners have not even spent longer than a year on their post.

And then today. In the attempt by New York Attorney General Andrew Cuomo to investigate these bonuses, it was John Thain who first received the subpoena as early as January 27. Then followed the other executives who received millions. Included are Andrea Orcel, the firm’s top investment banker, global sales and trading chief Thomas Montag and Peter Kraus, Merrill’s former head of strategy who now works at Alliance Bernstein Holding LP. Gregory Fleming, ML’s former president, was next on the line. Called for deposition, they’re now wrangling over his testimony. BofA says Fleming needs to be silent and the confidentiality maintained while the Attorney General’s office says it is the public’s right to know the details of these payments, particularly if it is the taxpayers’ money on the line. Fleming revealed to the office that BofA threatened so sue him for giving out information about the bonuses. In a letter to be sent to Bank of America, more data will be demanded. In response, a spokesman for Bank of America said in a statement: “Bank of America has continually offered to provide the information the attorney general is seeking if he would agree to an appropriate confidentiality agreement. He has continually declined. Bank of America does not believe the attorney general needs the freedom to place private, personal information in the news media in order to conduct his investigation and determine if laws were possibly broken.”

David Markowitz from Cuomo’s office sent the following letter to the NY Supreme Court Justice:
Cuomo's Letter Regarding Bank of America and Gregory Fleming

Publish at Scribd or explore others: Court Filings Business & Legal gregory fleming andrew cuomo

I don’t know what to make of this whole fiasco with Bank of America and their desire that things be kept confident. Do they fear that revealing more information will result in a more intense public anger? Is there more about Ken Lewis and his “good deal” to know? Does he fear that he would actually be scrutinised even further and perhaps even be found out that in fact he knew about these things all along? Does he fear further demolition of the BofA stock? This issue has now become a tad like soap opera. I’d be very much interested to see how all this unfolds.

Tax till you drop!

Obama’s ambitious budget was released last week and it instantly drew criticisms particularly from the business world. As wide as this budget covers, here’s why:

1. $636bn income in 10 years from limiting tax hikes, and exemptions broken down into:

• $338 billion will be coming from the expiring tax hikes implemented during the Bush administration
• 179 billlion from reduced taxed deductions made by the affluent; the 35% tax deduction will go down to 28%
• $118 billion to be received from raising capital gains tax; the current 15% rate will be raised to 20%

2. $24 billion in new revenue will be from taxing hedge fund and private equity managers at income tax rates, when it is currently treated as capital gains

3. Over 10 years, his government is also expecting a stream of $646bn from cap-and-trade emissions taxes.

4. Other plans include:

• $61 billion from repealing the last-in, first-out (LIFO) method of accounting for inventory
• $210 billion will be from international enforcement, reform deferral, other tax reform

According to one congressman, this whole budget will be a net tax increase of 1.4trillion.

Okay, let’s give credit that there will be tax cut benefits to 95% of households but taxing the remaining 5%, which probably accounts for far more than the former in tax revenues collected by the government, especially in these hard times, is not the wisest of ideas. Geithner and the rest of the Obama gang argue that these tax proposals will not be imposed until 2011, which is still 2 years from now. Yet given the kind of wealth destruction that has happened and is continuously transpiring, the plan just doesn’t make sense. If they see taxation as the only means of raising revenues, that is still perhaps be the last idea they need to tap into within the next four years, or until the economy is back to normal.

Some say it is rare that we see a president who keeps his promises. But it’s not something that calls for a celebration. For someone who has promised so much during his campaign and lifted the spirits of perhaps every single citizen, liberal and conservatives alike, his decision to make his budget all inclusive- from the economy to the highly troubled health care system- is a bit out of this world. While I understand that American health care needs to fixed, I don’t understand why it has to be juxtaposed with the financial crisis. With four years in the oval office, how about moving it to next year when things are better? We shouldn’t even let one thing slip: that the $630bn health care fund will be partly funded by the humongous and despicable tax hikes that will be imposed upon the affluent. Point 1, universal (read: government-controlled) health care system here they come. Point 2, higher taxes… seriously? Point 3, I’m sorry but this is seriously looking like a socialist system. Sadly, the mandate and hope given to him by the people is making things look a little bit better, masking the vileness of it all.

I’ll try not to make this an issue of class warfare as some have claimed (if at all I managed to stay away from that in the previous paragraph) but, admittedly he’s done quite a heck of a job instilling confidence in the American populace. But when things are in a standstill, and the bigger problem is not so much the public as it is the lack of confidence by the investors, the financial system, and the businesses, I see that the solution does not rely on the group whose spirit Obamas has successfully (or not?) lifted- the general public- but on those that fuel the growth of the economy. Maybe the financial/banking system has caused all this, maybe the investors have lost confidence in that system, and maybe the businesses have suffered lots already from that erosion of confidence but at this moment, I believe it is these groups that need to be helped not necessarily at the expense of the rest of America. The whole point is, the kind of policies that are needed now should not be solely focusing on policies that only aim to help the public. Rather they also need to include policies which don’t scream anti-capitalism, anti-business, anti-investing. Unfortunately, that is not what the liberal government that is in Washington at the moment.

Since Obama was inaugurated in January, the major indexes have plunged more than 20%. One cannot say that it’s purely based on the continuously declining state of the economy. After all, he’s perhaps the most urgent of all the actors- aiming to create solution as fast as he can to save the US from further destruction. If this is true, and I believe it is, it means that the markets are telling us only one thing: there is something (so) wrong with the policies that are coming out of Washington. Obama is perhaps the most charismatic president to emerge in America’s politics, I’ll give him that, but apparently that charisma is not working well with the investing group. It doesn’t matter how much hatred the people have towards Wall Street or every other financial institution out there because unless something pro-capitalism, pro-business, and pro-investing comes out of the Capitol, I’m not sure how America can once again shine- looked up to by the rest of the world.