rightcoastconservative

Listen to the outcry! The politicians have now decided that Standard and Poor is to blame for the near term financial chaos. Those evil folks at S&P should not have downgraded US debt (or not used the "process" that they used to downgrade US debt). These are the same politicians who complained when the rating agencies were late to the party in the 2007-2008 crisis. Many of of these politicians blamed the rating agencies as contributors to that crisis, when they failed to downgrade weak debt. So....damned if you do, damned if you don't. What does this tell you? It tells you that politicians (and central bankers) are looking for someone to blame for their own mistakes. In both cases, the same facts prevail. Government created the current crisis just as surely as government created the 2007-2008 crisis. Politicians, who are mainly to blame, look for others to blame. This "shoot the messenger" strategy is followed by both US and European politicians and ...

The S&P downgrade of US debt from AAA to AA+ comes as no surprise to anyone but Treasury Secretary Geithner who, as recently as a week ago, declared that there was "no chance" of a downgrade. Has he been living in a cave? Did he listen to the rating agency executives' testimony to Congress two weeks ago? Geithner has no credibility if he is surprised by the downgrade. He is either an idiot or he is uninformed (perhaps both). The markets were certainly aware that this outcome was on the way. S&P had said, weeks ago, that unless $ 4 Trillion of credible debt reduction was accomplished and soon, the downgrade was highly likely. So, you have to wonder what the deal is with Geithner? Is this the guy advising the President and setting Administration policy. It's one thing to have crackpot views, which seems rampant in this Administration. It is quite another thing to be uninformed and incompetent. Geithner should step down and let someone who, at the very lea...

Today's employment report is marginally better than the market anticipated, showing 150,000 plus additional private sector jobs for the month of July. That number would be anemic, historically, for an economic recovery number. You need nearly 250,000 a month to put a dent into unemployment. The fall in the rate from 9.2 to 9.1 occurred only because so many folks gave up looking for a job and thus are no longer counted among the unemployed. But, that said, this morning's number was not disastrous, just merely discouraging. Unfortunately, this is as good as it gets. That's the sad state of affairs for the US economy. We now face stagnation for a generation (or possibly generations) until economic policy does an about face (which it might not do).

We are now reduced to bemoaning the obvious fact that governments are powerless to do anything about the current economic trauma. Why do we think this way? Governments have never had any real power to spur economic growth. Mostly, governments just get in the way. But, over the years, a largely ignorant media has trumpeted the idea that governments are the solution to economic problems and much of the public now looks to government to solve their economic problems. Gradually, it is sinking in that government may be the problem, not the solution. It is appealing to look to government to solve all problems -- provisions for old age, health care, education, whatever. But, government solutions to these problems sap the vitality of the economic system and the energy of its citizenry. Folks stop saving; students quit taking education seriously, citizens overeat...why not? We are all victims. It's not our fault, says the media. Let the government rescue us from ourselves! Only indi...

Public Mutual recently launched two local funds. One is an equity growth fund, while another one is a bond fund. Public Islamic Treasures Growth Fund (PITGF) seeks to achieve capital growth over the medium to long-term period by investing primarily in small and medium sized companies , which comply with Shariah principles.   The fund will invest in Shariah-compliant securities with market capitalization of up to RM6 billion at the point of purchase or companies which form the bottom 30% of the cumulative market capitalization of the market which the stock is listed on at the point of purchase. The fund will focus its investments in the domestic market with equity exposure ranging 75% - 98% of its NAV. To achieve increased diversification, the fund may invest in selected foreign markets if the returns are assessed to be promising. Another SUKUK fund in the selves? Meanwhile, Public Sukuk Fund (PSKF) seeks to provide annual income through investments in sukuk and Islamic money mark...

It is surprising that anyone is surprised. There has been a dramatic cultural shift in the western economies toward the view that businesses are little more than vehicles for exploitation. Go to the movies. How are businesses portrayed? Read a John Grisham novel. Is there ever a portrayal of a businessman or woman, who isn't essentially a purveyor of evil? We have been inundated with the cultural view that we all need to be activists to support various causes. Only greedy companies, like "big oil" and other fatcats stand in the way of progress. The end goal? Everyone now has "economic" rights -- health care, food, housing, retirement, higher education, etc., etc. There is no end to what we are all entitled to. This is the consistent message of our media and our modern culture. Who pays for all of this? That, of course, is the question that never gets asked. Now, reality is setting in. There is no one out there to foot the bill. Rich folks? Is that...

There is no doubt that Keynesian policies work sometimes. Tax cuts and federal spending, in some circumstances, can be intelligent policy. The problem we face as a country is that this is not one of those times. Our current economic malaise is driven by micro-economic considerations, not macro-economic considerations. The failure to understand the source of our problems is a failure common to politicians of all stripes. The problem is too much government interference in the everyday operation of small business. Over the years, the Congress and virtually every President have piled legislative mandate upon mandate on the backs of small businesses who would like, if they could, to expand their businesses and hire more employees. But, how do you do that if the cost of an employee is a multiple of what you actually pay that employee? That is the heart of our current problem. Our competitors in the global economy, excepting Europe and Japan, do not face the same obstacles in their cou...