Stimulate This

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0StZd9y2rCY

 

President Barack Obama said his $787 billion stimulus bill “has worked as intended” as he pushed back against Republican criticism that his recovery program has failed to rescue the economy.

 

“It has already extended unemployment insurance and health insurance to those who have lost their jobs in this recession,” Obama, who is traveling today in Ghana, said in his weekly Saturday radio and Web address. “It has delivered $43 billion in tax relief to American working families and business.”

 

<Excerpted-Click on the link at the top to read the rest of the story>

There are a few key elements to address with this issue: Unemployment, the stimulus, stock markets and the Fed.

 

The Usurper in Chief is LYING.

 

If our great messianic wannabe is actually telling the truth about our economy, we would be able to establish that the economy is IN FACT taking a positive turn. Well, I’m, sorry to say that it is not. The numbers of jobs that have been created are FAR overwhelmed by the numbers of jobs lost. It is simple math.

 

America has been overwhelmed with the number of unemployment claims the last two plus years. Just this month (the week of 8/13/10), this number of NEW unemployment claims topped out at over half a million people. The latest jobless claims report suggests that hiring remains weak. In a healthy economy, weekly claims usually fall below 400,000.

 

I wish I could believe ANYTHING that came from the Usurper in chief.

 

Unfortunately, we can’t. None of us can. What was it, July? The Usurper in Chief came out for a press conference and stated that the stimulus is working? And again this week Slow Joe announced that the “Stimulus worked (http://bit.ly/c8prUd)!” when he revealed a 50 page report of roses and fluff about how the stimulus is working to save our economy.

 

If this were the case, if this were not just some propaganda that the White House is spewing forth to influence voters or appease the masses, we would see two big things NOT happening right now.

 

We would NOT see the Dow Jones Industrial Average hit below 10000 (9,985.81 on 8/26/10 at closing) for the first time in several weeks. All that rallying that was going on? Well, it wasn’t enough to support peoples’ hopes that out economy was improving.

 

As quick and dirty as I can make this, here is a brief explanation of how this works.

 

• As consumer confidence improves, so does the investing in companies (producers) and spending on products.  
• People invest in companies they think are going to make money. 
• As consumers buy, a product there is a certain profit margin attained and thus the companies make money.  
• When these companies make money, they split up the take and then shareholders can make money. The more profit that companies are making, the larger the amount of money its shareholders receive at the end of the year. These are called dividends. 
• The greater the potential for dividends increases the price of the stock. Now keep in mind that several other factors go into account with this but it is a VERY basic idea for most people to get.  
• If consumer confidence falters, they stop buying as many products or services. Right? This can potentially decrease the profits shareholders would receive, making them want to sell that stock and buy something else. OR, they would want to sell those stocks before the stock prices drop making the shareholders lose money when they actually sell. This drives the price of the stocks down.

 

Consumer confidence is built typically on how much disposable income you have. This is the money you have in your pockets to spend on nonessential items, such as computers, cars, toys, expensive clothing, etc. As jobs go away, so does consumer confidence because you no longer have the extra money to buy things. This meaning that as JOBS go, consumer confidence follows, as does the price of stocks. It is a fragile cycle, constantly playing off each other.

 

Now how does the FED come into play here? Well, Mr. Ben Bernanke, the Chairman of the Fed has the power by simply saying things are going to get better or worse, that MANY of us go out and spend money when HE says. This is regardless of how the economy ACTUALLY turns out.

 

Banks lend more, we spend more, and money increases “velocity.” Velocity is an economics term that no one cares about. Anyway, even though we were told to spend more, and an attempt was made to convince us that the economy was bouncing back, the jobless rate keeps increasing.

 

SOOOOOO….

 

No one cares that Ben Bernanke SAYS things are getting better because we have eyes. So we don’t spend money.

 

All in all, this has led us to where as of today; When Bernanke said the Fed was prepared to make a “major new investment” by buying up some of our government’s debt if the economy worsened considerably (http://yhoo.it/a1SgfR). The goal in buying more debt would be to lower interest rates and convince us to SPEND MORE MONEY.

 

Unfortunately, with the jobless rate increasing, the FED sees unemployment growing to over 10 percent potentially into the teens by late next year. This only decreases consumer confidence and makes us hold onto our money.

 

So it is after the market has closed today, and what am I looking at? The DOW closed 1.6 % (+/-) higher today.

 

Why?

 

Well, Benny Boy said that things look like they’re going to take a positive turn in about a year and a half and there are more sheep than people in America today. Unfortunately, for us Benny Boy, we’re on the brink of a double-dip. If we end up falling into a second recession, we may not entirely survive it AND we’ll have the load of pork and nonsense - called the stimulus bill - that the Usurper in Chief spent last YEAR that was SUPPOSED to have “saved us.”

 

Benny Boy, stop filling our heads with nonsense and setting us up for more problems. If we start spending our nest eggs and disposable incomes as a GAMBLE that was based off what you told us, well, our ruin is on your hands. Readers, take the time to SEE what is happening, and think about what will happen if you spend too much of your cushion and you are part of the lucky 13% December 2011 who has no home, no job, no car. All because some bigwig was trying to manipulate the system with declarations.

 

He says spend, I say no.