Friday, July 30, 2010

Free Preview of CMV for August

Hello World,

Here is a free preview of the August issue of the
Contrarian Market View Newsletter. (Due to the format limitations of a blog, the actual newsletter is better looking.)

See the bottom for a free book offer with purchase of a subscription to the newsletter.

August, 2010
H. L. Quist's
Contrarian Market View

Market Overview

The anecdotal evidence of a deceleration in the US economy is, unfortunately, evident everywhere as outlined below. On May 18, 2010, CMV issued a 50% sell recommendation on all US equities and suggested that investors switch from being short bonds (TBT - higher interest rates) to going long (TLT - lower interest rates) to reflect the reversal in the direction of the economy.

On May 29, 2010 CMV issued a SELL on all US equities with the exception of FAIRX. The US equity market has become volatile with dissemination of bullish and bearish news on a hourly basis. Second quarter earnings remain positive which has buoyed the market but unfortunately driving your car while looking in the rear-view mirror doesn’t give you a proper perspective of what is ahead. And, it is dangerous. Despite the market rally in mid-July, CMV believes the indices will decline going into fall.

The Economic Cycle Research Institute is a reliable source of information to determine the direction of the economy. In March, 2009 the Institute reported that the economy was improving and based on their outlook CMV became fully invested in US equities on April 1, 2009 and the results were most favorable. They recently reversed their position indicating that there was a “sharp deceleration” in the economy. They were right at the bottom and CMV now buys into their current outlook.

The Baltic Dry Index (BDI) is an index that measures the daily rate for a ship that carries dry bulk goods such as grain, coal and iron ore. Through July 16, the index has declined for 30 consecutive days and nearly 55% from its May 26th peak of 4209. The index is now under 2000 and the chart looks like a path of a sinking ship. The index is lower than at the bottom of the recession in mid-2009. The BDI is thought to more accurately reflect the usage of raw materials as opposed to the trading and speculation in commodities. Some experts say that the BDI doesn’t reflect the fact that there are more ships and increased capacity rather than declining demand. Conversely, Chinese exports of finished goods are booming again. Will their goods go untouched on the shelves of US retailers? A picture that CMV will continue to follow but take the BDI as an indicator of decelerating demand — worldwide.

The US bond market remains a reliable indicator of the future economy. The two year Treasury Note reached an all-time low yield of .56% this month. The 10 year Note reached a 2.89% low. Bond traders acknowledge that these notes are priced for a recession. “Business Insider” reported on July 22nd, that the US 10 year bond rate is substantially correlated to the fall of the Euro and if the European crisis abates, the 10 year could shoot up to 4%.

Another major barometer is the housing market (see page 6 for additional information). Across the nation, home sales are deteriorating, inventories of unsold homes are piling up and builders are scaling back construction. June new starts dropped to a seasonally adjusted annual rate of 454,000 homes — down from a high 1.47 million in 2006. Ironically, it was housing that dragged down the economy at that time and now it’s the economy that is negatively impacting housing. New starts had been increasing each month for the past 12 months until this reversal in June. There is a pyramid food chain that derives its sustenance from housing. This reversal will impact manufacturing, the trades, retail and other sectors of the economy.

In November, 2002 prior to his appointment as Fed head, Ben Bernanke made his most remembered speech when he said that there would never be a depression in this country because: 1. We could drop $100 bills from helicopters and 2. The Fed has at its disposal a new technology called the printing press. True to his pronouncement eight years ago, that’s exactly what “Helicopter Ben” is doing. He said July 21, 2009, in his testimony to Congress, “We remain prepared to take further policy actions as needed to foster a return to full utilization of our nation’s productive potential in a context of price stability.”

Since 2002, the Fed has promoted anything but a stable growth economy.

Perhaps his most candid comment came when he said, “If the debt continues to accumulate and becomes unsustainable...then the only way that can end is through a crisis or some other very bad outcome.” The stock market sold off sharply in response to these words but miraculously recovered the next day. The Fed head knows what’s ahead and he’s now on record so that he can refer back to that day and say, I told you so. As CMV has reiterated over and over, this massive amount of debt is unsustainable. Any trend that is unsustainable must come to an end and it will end badly. This inevitable outcome is cast in stone because there are those in power whose goal is to destroy capitalism — unless these collectivist architects of change can be constitutionally removed from power.

Financial Reform ?

The Financial Reform Act, otherwise known as the Dodd-Frank bill, is now law and comprises 2300 pages which will unleash the most massive wave of financial rule-making since The Great Depression. Lawyers estimate that the law will require no fewer than 234 new formal rule-makings by 11 different federal agencies. The SEC (Securities Exchange Commission) whose regulatory failures did so much to contribute to the meltdown on Wall St. and allowed Bernie Madoff to craft his ponzi scheme, will write 95 new rules. Maybe the new bill should more appropriately be named the “Doddle-Frankenstein Bill!”

One thing this growing bureaucracy will most certainly not do is reduce the uncertainty that now plagues American Businessmen and Women. Of 1600 CEOs surveyed according to the WSJ, 87% said the “federal government doesn’t understand the challenges confronting American companies.” And, these are companies that are sitting on almost $2 trillion of cash that are unwilling to invest in people, equipment and expansion faced with this uncertainty.

The WSJ editorial of July 14, sums up the bill introspectively:

“...the biggest financial players aren’t being punished or reined in. The only certain result is that they’re summoned to a closer relationship to Washington in which the best lobbyists win, and smaller, younger firms almost always lose.”

D-F couldn’t have been passed without the vote of Scott Brown of Massachusetts. A nice vote of thanks to Tea Parties who were responsible for Mr. Brown’s upset victory last fall. How soon money corrupts principle.

Onerous provisions of the bill will be discovered daily. Starting in 2012, businesses will be required to file hundreds of millions of new 1099 forms with the IRS for every purchase of goods that exceeds $600 a year for any vendor even when that vendor is a major supplier. Think of the massive burden this will put on sole proprietors and small businesses and the expansion of the IRS bureaucracy to handle the filings. And, as the Daily Bell reports, gold and silver purchases which are not now reported, could ostensibly have to comply with the new rules. The Federal Government is desperately seeking revenues and this is just the first act.

It has just recently surfaced that effectively hidden in Obamacare is a Real Estate Transfer Tax of 3.8%. Starting in 2013 those with incomes over $200,000 will be subject to this tax on profits on the sale of their primary residence or investment properties. This new tax will also apply to investment income and dividends. Call it what you want — a medicare tax, an excess profits tax or whatever. It is part of the scheme to redistribute wealth. Maybe, just maybe, there won’t be any profits to tax.

The Ghosts of 1938

Most stock market watchers recall the crash of 1929 and its aftermath but perhaps few would recognize the similarities (and anomalies) to the current crash that began in June 2007 and intensified in September 2008.

From October, 1929 to June 1, 1932, the S&P 500 had lost 86.2% from its top. From those 1932 lows, the S&P rallied 177.31% by 1937 but was still down 61.7% from the 1929 peak. What most investors probably don’t recall from history is that in 1937 a “recession within a depression” occurred and by 1938 a second crash took the S&P down to a loss of 90% from its 1929 high.

Donald Luskin, the chief investment officer of Trend Macrolytics, Ltd. who provided this bit of market history ,then traced the rally that began in March, 2009 to the current date. From the 2007 highs the S&P plunged 56.8% and the index rallied 79.9% in the next 14 months leaving us 24.7% from the 2007 high before the May 2010 reversal. The worrisome aspect of this analogy should be quite apparent to the observer. Both markets had precipitous declines followed by a sharp rally of a similar pace and magnitude. The question is — will the US market duplicate its past of 80 plus years ago? And, what happened in 1937 that caused the second downtown?

Luskin says that the Roosevelt Administration made a number of critical policy mistakes. The Fed raised the banks reserve requirements tightening credit and increasing interest rates. New taxes were initiated to pay for the then new Social Security program. In addition, the government, concerned with deficits cut spending. The big mistake however, was that FDR mounted a “anti-business” campaign and, though not mentioned by Luskin, income tax rates for the wealthy exceeded 70%. Sound eerily familiar?

Another historical analogy. Henry Morgenthau Jr., FDR’s Secretary of the US Treasury, said in 1939:

“We have tried spending money. We are spending more than we ever spent before and it does not work...After eight years of this administration we have just as much unemployment as when we started...and an enormous debt to boot!” — Henry Morgenthau, Jr. testifying before Congressional committee, May 9, 1939.

That is where the USA will be in 2012. Our Hope is Not in “audacity” — It’s in “frugality.”

Robert Prechter, President of Elliot Wave International, predicts that the Dow will fall to 1000 from its present 10,000 level. Richard Russell, (Dow Theory Letters), who has substantially more credibility with CMV than Prechter, is calling for a monstrous decline ahead and he was a teenager in the thirties.

On the other end of the spectrum there was Harry Dent, who, in 2000, wrote a best seller “Dow 36,000" and has authored a number of books since then attempting to ameliorate his absurd forecast. (You can buy a used copy of “Dow 36,000" on Amazon for $0.01 but it is hardly worth the price.)

Where between these extremes does CMV stand? At present, the economy is sharply decelerating. The Keynesians in control in Washington will put on a full court press again to stimulate the economy and consumer spending while at the same time plotting to destroy capitalism. What could possibly result from this bi-polar strategy? CMV’s best guess, at this point in time, is an INFLATIONARY RECESSION.

The Re-Emergence of High Risk Lending

(The Last Rodeo)

It had to happen. Consumer spending is almost 70% of the nations’ Gross Domestic Product (GDP) and with consumer sentiment as measured by the University of Michigan plummeting from 76 at the end of June to 66.5 in early July, the handwriting was on the wall. Consumers were into withdrawal. Those that had jobs and income were saving money (4% in June) and paying down debt. Those with minimum wages or unemployment benefits or lousy credit couldn’t contribute to the great credit-driven US economy. It was as if an urgent command came down from above to the banks:


Shirley Davis is a 66 year old retired phone company administrator who lives in Brooklyn, New York, owes $33,000, earns only $2,414 per month and filed for bankruptcy in June, 2010. Just prior to filing, however, she received a letter from Capitol One Financial Corp. offering her a credit card despite the fact that the company had sued her in 2006 to collect a $4,470 debt on a card from the same bank! The letter said, “At some point we lost you as a customer and we’d like to have you back.”

In another case researched and authored by Ruth Simon and Jessica Silver-Greenberg, that appeared in the Arizona Republic on July 15, 2010, Melissa Peloguin of Bolingbrook, Illinois, reports that she has received no less than six credit card offers since she and her husband have emerged from bankruptcy in June — a month ago.

Sub-prime lending is alive and well and expanding exponentially. Ameri-Credit Corp, (AMC) who is exclusively a sub-prime auto lender, has indicated that new car loan originations could reach $900 million in the quarter ending June 30th, as opposed to $175 million a year ago. You could surmise that a large percentage of these loans were to borrowers who turned in the keys to their previous auto within the past couple of years. Most readers will not recall that it was sub-prime auto lending in the early 1990s that was the precursor of the surge in sub-prime mortgages 10 years later.

On July 22, 2010 General Motors announced that they were acquiring AMC for $3.5 billion to bolster their lagging sales. Readers should recall that their former financing arm, GMAC, failed and cost taxpayers $17 billion. Now that GM is controlled by the US Treasury and the UAW, the goal is jobs and benefits and not repossessions. That will be the concern of taxpayers (listen to my streaming radio podcast on Gabcast of July 23, 2010).

Kathleen Day, a spokeswoman for the Center for Responsible Lending, said her group is “seeing banks re-enter the sum-prime market at a steady clip and make loans to borrowers who don’t have the ability to repay. This is the “last rodeo” folks. In CMV’s opinion this is the beginning of the last credit and spending binge before a massive global debt contraction unfolds.

There are also signs of positive and creative lending. Sam’s Club has just announced that they will offer up to $25,000 in loans to small business owners who are members. A smart way to attract new customers. Check this out if you qualify. Chase bank has a radio ad going now that offers a .5% discount on (per new employee hire) loans to businesses tied directly to new hires up to 3 new employees and bonus discounts for additional criteria for a total 2.0% discounted rate.

The principal sector for new lending is, of course, real estate. Fannie Mae, now under control of those same government financial wizards who bankrupted the largest home lender in the US, and now bankrolled by taxpayers, announced a new program for first time home buyers that requires a down payment of only $1,000 or 1% of the loan amount. Morgan Stanley and Citigroup are back in the HELOC business — home equity loans. They’re offering home equity credit loans up to $2.5 million.

Unfortunately, according to a close friend and client who has been in the mortgage business for over 30 years, residential financing today resembles 1981 (except for the interest rates). Lenders other than the government are determined to find reasons not to make new loans. 30 year fixed rates are at 4.37% and 15 year at 3.875% but very few applicants qualify. Institutional sources who normally provide the capital for jumbo loans don’t take their orders from Washington — yet. A change in their underwriting will be market driven, not by executive order.

There has been a sign of a change in loan modifications, however. A client of CMV has been negotiating with their home lender for a year. They had worked out a “trial period” for a new loan and made seven payments versus the required three. A few weeks ago they were informed by the lender (a bank) that they had no record of receiving any of the seven payments! Frustrated and at the boiling point, they didn’t know what to do. Unexpectedly in the week of July 12th, the bank called and said, “I think we can do your loan now,” What changed? Was some agreement or compromise reached between the banks and the authors of Financial Reform to expedite all loan mods? Are the lenders being financially incentivized (additionally) to modify these loans? Only the Shadow (Government) knows! Since March 2009 there have been 1.3 million applications for loan modifications but 530,000 have been canceled making the program to date, a failure.

CMV has a sense (but no anecdotal evidence) that something big is about to happen in the residential market to address the massive foreclosures and shadow inventory problem, further aggravated now by a decelerating economy. Will Fannie, Freddie and FHA be restructured to make direct loans to those that are underwater with taxpayer money? Will a new Federal agency be established to purchase vacant homes? Could we see cash payments made to homeowners to pay down their loans? Sounds absurd, doesn’t it? During The Great Depression almost 50% (by 1934) of all residential mortgages were at risk of foreclosure in the US. Most of the states passed laws to provide permanent or temporary moratoriums on foreclosures. In this era of “Big Brother” government with the intent on the redistribution of wealth, there is no limit of programs that could be proposed to address what is one of the most critical issues of our time. CMV believes that it’s a crisis that won’t go to waste.

Here’s the bottom line. In order to head off DEFLATION and to inflate the value of fixed assets, there has to be a financial medium — LENDING. The combination of increased consumer demand, quantitative easing and devaluation of the US dollar will, you guessed it, create a temporary, but devastating INFLATIONARY BOOM and BUST. CMV rejects the strategy but recognizes the opportunity to profit from it.

Note: If CMV can be of assistance to you in addressing any of these issues call (602) 840-4117 or e-mail

Free Books Offer! Click here to subscribe to the CMV monthly newsletter for one year - only $99.00 AND receive a copy of The Aftermath of Greed: Get Ready For The Coming Inflationary Boom andHow To Profit From The Coming Inflationary Boom and Avoid the Next Crash, Free with free shipping - This free book offer is open to US residents. Both books are shipped to a single address. Please remember to include your mailing address to receive the books when clicking on the link.

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-- H. L. Quist

Saturday, July 3, 2010

Free Preview Of CMV for July

Hello World,

Here is a free preview of the July issue of the Contrarian Market View Newsletter. (Due to the format limitations of a blog, the actual newsletter is better looking.)

See the bottom for a free book offer with purchase of a subscription to the newsletter.

July, 2010
H. L. Quist's
Contrarian Market View

Market Overview

Amidst the rioting and chaos of the G-20 meeting in Toronto, President Obama was attempting to convince the Europeans that they should resort to a new round of Keynesian deficit spending. Somewhat surprisingly, the Euros have had their fill of stimulus and more debt and they now sense the light at the end of the tunnel is a train that is about to leave the track. The EU contributes 20% of the world's GDP. Higher levels of debt and slower growth are a formula for a train wreck and the Euros are desperately trying to minimize the damage. They now acknowledge that their Socialist Economic Model has failed, but the Captain of our ship is resolute. Damn the torpedoes and charge, charge, charge ahead.

As CMV has well-documented, John Maynard Keynes was a fraud and his economic model failed in the 1930s Great Depression, in the 1960s Great Society, and the Carter Malaise of the 1970s. History, hopefully, will soon record the final demise of the Keynesianism model after the Obama administration's "New Deal II" ends. Then the survivors can drive a stake into this blood-sucking Keynesian Dracula whose promise of an ever-lasting nirvana has drained all the source of capital from the system.

CMV has often compared the 1980-1982 deep recession to the 2008-2009 time period. After significant tax cuts in 1982 the US GDP grew as follows in comparison to 2009-2010:

First QT 5.1%
Second QT 9.3%
Third QT 8.1%
Fourth QT 8.5%

Third QT 2.2%
Fourth QT 5.6%

First QT 2.7%
Second QT ?*

*The Second Quarter GDP and Corporate Earnings should be positive reflecting the momentum prior to the reversal outlined by CMV in the May issue. The Second Half of 2010 could be negative given events stated in July's CMV.

Americans were told by President Obama that government spending would produce a "multiplier effect" and that $1 of spending would produce $1.50 of growth. Not only has there been no real growth the multiplier has been negative. The Federal debt has now ballooned to over $13 trillion and the budget deficit is so alarming the President has ordered that there will be no budget for Fiscal Year 2011 until after the November elections. His Budget Director, Peter Orsag has resigned, possibly fearing the worst. The President's strategy? Raise income taxes and initiate a Value Added Tax (VAT)! Look for negative GDP numbers in 2011 if he is successful.

Here are some notable economic statistics and trends for June:

Consumer Confidence 52.9
Personal Savings 4.0%
Purch. Mgrs Index 59.0
Construction Spending -0.7% (est)
Payrolls -125,000
Unemployment 9.5% *
Factory Orders 0.5%

Previous Period
Consumer Confidence 63.3
Personal Savings 3.8%
Purch. Mgrs Index 59.7
Construction Spending 2.7%
Payrolls 431,000
Unemployment 9.7%
Factory Orders 1.2%

* Unemployment rate fell because 652,000 people gave up searching for a job and are not counted
as unemployed.

CMV's conclusion looking forward near term is:

Deficits and Debt will rise exponentially
Lower Nominal GDP
Lower Capital spending and Risk Investment
Increasing Dis-inflationary Pressure
Continued Loss of Confidence in the President and Congress

With the Fed funds and discount rate near zero the only course of action available to this administration is to tax, print money and devalue the dollar. The result? Massive inflation and the prospect of hyperinflation after the "Double Dip" Recession.

Financial Reform

Hidden in all the clamor over the rush to prevent another financial crisis in the future is the neglect to recognize how we got to this point in the first place.

After the stock market crash of 1929 and the start of the Great Depression in 1930, the suffering American public demanded an investigation into the cause of the financial collapse. After several attempts to find the always elusive truth, an assistant attorney for New York County, Ferdinand Pecora, was given broad subpoena power to call witnesses and he called the key Masters of the Universe to testify. The hearings exposed a wide range of abuses by the banks and their affiliates of underwriting speculative securities to pay off bad bank loans as well as "pool operations" to support the price of bank stocks. As a result, Congress passed the Glass-Steagall Banking Act of 1933 to separate commercial and investment banking so that banks could no longer deal in all forms of securities. In addition the Securities Act of 1933 and the Securities Exchange Act of 1934 were also passed as a watchdog for speculation that had run amok. Glass-Steagall kept the banks out of high risk trading until its repeal on November 12, 1999.

Who was the strongest proponent of getting the banks back into the highly leveraged and speculative game? None other than the nation's number one banker-in-chief, Alan Greenspan, who insisted that the banks had to have the ability to trade and expand their derivative positions. The bill to repeal the Act was co-sponsored by Phil Gramm (R-Tx) and Jim Leach (R-Iowa) and signed by President Bill Clinton. It's CMV's opinion that the collapse of our financial system would NOT have been near as severe if commercial banks had not participated in trading highly leveraged subprime debt and derivatives.

So here we are 77 years later in search of a solution to the same problem. By the time that you read CMV the Financial Reform Act of 2010 (the Dodd-Frank bill) probably will be law.

Will it be a cure-all? No.
Will it give more power to the government to seize or liquidate a financial institution? Yes.
Will it limit the power of the banks to make risky investments and limit trading of derivatives? Yes.
Will it limit economic growth? Yes.

But the perception (amongst investors and bankers) is that these institutions will be able to navigate around the law successfully which is evidenced by the fact that when an agreement was reached the shares of bank and brokerage stocks were up 2.7% on a day that the market was flat. CMV forecasts that the new law will be tested within the year.

Conspicuously absent from the discussion about the new law was the collapse of Fannie Mae and Freddie Mac. It's no wonder given that the key player in reform, Barney Frank, was the point man in the failure of the "evil twins." It was Frank's insistence of increased quotas for subprime loans and his aiding the cover-up of the "cooking of the books" at Fannie that has burdened the US taxpayer with what will become a trillion dollar black hole. Reform should include the banishment of all of those in Congress who played such a critical role in the collapse.

The Business Roundtable

The Business Roundtable (BRT) is an association of chief executive officers of leading US corporations now chaired by Ivan Seidenburg who is also the CEO of Verizon. The BRT had allied itself with the Obama Administration very early in the game even supporting Obamacare, climate change legislation and other issues that normally big business would have condemned. You may recall that The Myth Buster spoke disparagingly about the "sellout" by General Electric, Wal-Mart, Pfizer and others who were seeking "sweet heart deals" from the Administration in exchange for their support of the President's policies. The BRT has now discovered (surprise, surprise) that they've been played for a "patsy."

In a speech delivered recently to the Economic Club of Washington, Seidenburg said that he had become "somewhat troubled by a disconnect between Washington and the business community." Apparently the BRT realized they had been had when the House passed a $14 billion tax on companies that operate overseas! In response, the BRT fired off a 54 page report describing literally hundreds of "actions and decisions" that Washington has taken to hurt the economy. The BRT may have discovered finally that they are not only a target for additional tax revenue but they are capitalist dinosaurs who could become extinct in a collectivist state.

Companies represented in the BRT have a cash horde of $1.5 trillion in their coffers. Few of these companies are willing to invest this capital in new equipment, expansion and new hiring given the "uncertainty" in Washington. "Double Dip" is not a treat at Baskin-Robbins.

The Man Who Would Be King

This was a 1975 movie starring Sean Connery as Daniel Dravot, Michael Caine as Peachy Carnahan, and Christopher Plummer as Rudyard Kipling.

Your writer has often used popular movies, myths and fables to poignantly illustrate the folly and fallacies of political characters. It is particularly enjoyable to read another writer's use of this technique at such an appropriate time. Bret Stephens, writing for the Wall St. Journal (Global View) effectively compares Barack Obama to "The Man Who Would be King."

Taken from Rudyard Kipling's short story this film feature a young Sean Connery as Daniel Dravot and Michael Caine as Peachy Carnahan, two trouble-making soldiers of the British Raj (circa 1860s) who set out on an insane and improbable adventure to become kings in a remote section of Afghanistan. (An area that could easily be the hideout of Osama bin Laden today.) Their mission was as improbable as that of Mr. Obama. Stephens says of the President:

"...his parents improbable love; his own improbable journey; America's improbable hope; ...yet Mr. Obama would never come near the White House had his story been any more probable."

Carnahan and Dravot endear themselves to the villagers in Uneb by leading them to military victories over their hated enemies. In one scene that your writer vividly recalls from the movie (after 35 years) Dravot takes an arrow directly in his chest while leading his rag-tag army of Kafiristanis. He neither falls nor does he bleed from his probable fatal wound. The ignorant natives believe that Daniel must be a God since he doesn't bleed and they fall on their knees and hail him as their king. Seizing the opportunity Daniel tells the natives that he is the son of Alexander the Great and is then endowed with all the gold and riches left by Alexander in 328 BC. What he didn't reveal to his new faithful was the steel armor that protected him under his flowing native robe.

Peachy and Daniel, however, ultimately exhibit the frailties of mortals. Ego, greed, and lust drive Daniel to demand a bride who then proceeds to bite the king on his neck and he bleeds. The priests rant, "neither God nor Devil, but a man!" and the ruse is revealed. It didn't matter that Peachy and Daniel were successful in bringing order and justice to the warring tribes. Gods are held to a different standard.

Stephens says:

"Just so in what was the cult of Obama. He was supposed to stand above partisan politics as the ultimate uniter. He was supposed to eschew the temptations of executive privilege and authority, as a believer and in the sanctity of the constitutional principle. He was supposed to make America beloved again in the world, as the embodiment of a biracial, transcultural identity. He was supposed to make the oceans recede and the planet heal, as a champion of environmental good sense."

"No mortal politician would have been expected to fulfill even a fraction of these promises and by that measure Mr. Obama has not disappointed. But it says something about the expectations that Mr. Obama once evoked that he should now be crucified on his Cross of Hope."

In a bit of irony, Peachy was caught by the monks who then crucify him. After surviving for a day, the monks cut Peachy down and he makes it back to civilization with Daniel's head and his crown still intact.

Stephens concludes his piece cryptically:

"When its (Obama's political career) history is written, the marvel will be how quickly he seduced a nation and how quickly he lost it. There really is no marvel at all. He is, or was, the man who would be king."

The Audacity of Hope is not only fading it has, as this writer forecast in his last book, become the Mendacity of Hope. As the Nation awaited the President's message from the Oval Office to address the oil spill, expectations were that he would be "royal" and demonstrate that he was a man in charge. Instead, the man who would be king was robotic, awkward and unsure of himself. His body language foretold a pending doom. The left suddenly choose to begin to distance themselves from the exalted one.

The Huffington Post: "Profoundly under-whelming...A feeble call to action." Robert Reich (former Secretary of Labor) "Vapid...a man who had electrified a nation in prior speeches had this time put it to sleep."

Just as the Business Roundtable Executives have come to their conclusions, small business owners and ordinary Americans believe that the President's objective is to destroy capitalism and replace the Nation's business model with collectivism.


Since January 1, 2010, the CMV Recommended list has tracked the S&P 500 both registering a 10% gain by the middle of April and declining to a -5% return at the end of May. With the sharp decline in the S&P 500 at the end of June however, the CMV has appreciated 3% while the S&P 500 index has fallen 8%. CMV expects this divergence to widen. If you need assistance or advice given the potential for a Major Market decline, please call (602) 840-4117.

Free Books Offer! Click here to subscribe to the CMV monthly newsletter for one year - only $99.00 AND receive a copy of The Aftermath of Greed: Get Ready For The Coming Inflationary Boom and How To Profit From The Coming Inflationary Boom and Avoid the Next Crash, Free with free shipping - This free book offer is open to US residents. Both books are shipped to a single address. Please remember to include your mailing address to receive the books when clicking on the link.

-- H. L. Quist