I've been away for two days helping my daugther move, so I have missed much of the back and forth about the debt ceiling debate. to tell the truth, I have not missed much. Indeed, in the last week, what seems to have happened is that the level of confusion has just gotten higher and higher. We are now two weeks away from Obama's drop dead date for default with no apparent resolution in sight. Things like the Gang of Six plan keep popping up at a point where there is almost no chance of such a complicated plan being reduced to writing and getting passed within the remaining time. Indeed, the most likely outcome is that we will shortly see some sort of short term compromise that will allow for more talk.
One thing that has been made clear, however, is who is and who is not a responsible person when it comes to governing. For example, I saw Herman Cain on the Sunday talk shows telling the world that there is no need to raise the debt ceiling. That is just nonsense, an Cain either knows that or is an ignoramus. Sure, there may be additional time in the days after August 3 when the debt ceiling does not have to be raised, but that is a matter of a few weeks, not unlimited time. Talk like that of Cain or Bachmann is irresponsible in my opinion. Similarly, the Obama rant about vetoing short term solutions and suddenly going for the "big" deal after months of Obama pushing for increased spending and a "clean" debt ceiling increase is also irresponsible. Rather than posturing for the election, the president ought to be leading. Hopefully, Obama's disgraceful performance will help see to it that he loses in his bid in 2012.
Wednesday, July 20, 2011
Sunday, July 17, 2011
Is News Corp a Bargain?
For those of you who have missed it, there is an enormous uproar in the UK over the hacking by reporters at the News of the World into the cell phones of celebrities and others in the news. The controversy simmered for months while the issue was whether or not phones of celebrities had been hacked. Then a few weeks ago, all hell broke loose when it came out that the phone of a young woman who had been murdered had also been hacked. It was as if the dam had finally been broken. News Corp. which owns the News of the World shut that paper down and accepted the resignation of a number of key executives. Then News Corp. abandoned its bid to take over the entire B Sky B satellite broadcast system in the UK. Today we learn that the head of News International Group in the UK was arrested (although it was for things she had done as the editor of News of the World). Rupert Murdoch, chairman and controlling shareholder of News Corp. is to be grilled by a parliamentary committee in London this week.
More than all of the actual news that has come out, there is an endless stream of gloating by Murdoch's enemies. These folks are revelling in Murdoch's pain. Many see it as a chance to hurt News Corp. for years to come. Even in the USA, where there has been not even a scintilla of evidence that News Corp. has acted improperly, there have been congressional calls for investigations as well as media figures coming close to melt down in joy at the travails of News Corp.
While all this has happened, the stock of News Corp. has sunk on the market. So the obvious question arises: is News Corp stock a bargain at the moment? My answer is no.
There is no question that the value of the News Corp. properties is there. Indeed, based upon the normal multiple among media giants like Time-Warner or CBS, News Corp. stock should be much higher than it currently is. But this is not a time to look at the normal multiple. right now, no one outside the company knows if there is any problem that will surface with regard to the activities outside the UK. Certainly, the enemies of News Corp. entities like Fox News are legion. Soros funded Media Matters exists solely to wage war on Fox News. Needless to say, Media Matters seems to be having daily excursions into ecstasy as it contemplates the possibility that Fox News somehow hacked cell phones like those crazies at the News of the World in London. Indeed, for groups like Media Matters, the truth here matters less than the the chance to conduct a massive guilt by association attack on Fox News.
It is these enemies and the fact that they now have a smidgen of wrongdoing by News Corp UK subsidiaries that leads me to stay away from the stock. Oh, and do not forget to add in that there is the undying hostility of the Obama administration towards News Corp. There are just too many Obama bureaucrats who would love to hurt Fox New and News Corp. whether or not there is any basis to act.
I have been a shareholder in News Corp for well over a decade. For a long time, it was the largest media holding in the portfolio. That changed last week. I no longer consider it prudent to hold the stock. There is just too much risk injected into the company by the events in the UK.
For those of you who do not mind higher risk, the value of the company's assets are still there underpinning the stock. For those of you who do not want to worry about what the next headline says, I would stay away.
Disclosure: I am long News Corp. stock, but have reduced holdings in the portfolio by over 85% from the high. I expect to divest completely in the near term if the scandal does not move towards a quick resolution.
More than all of the actual news that has come out, there is an endless stream of gloating by Murdoch's enemies. These folks are revelling in Murdoch's pain. Many see it as a chance to hurt News Corp. for years to come. Even in the USA, where there has been not even a scintilla of evidence that News Corp. has acted improperly, there have been congressional calls for investigations as well as media figures coming close to melt down in joy at the travails of News Corp.
While all this has happened, the stock of News Corp. has sunk on the market. So the obvious question arises: is News Corp stock a bargain at the moment? My answer is no.
There is no question that the value of the News Corp. properties is there. Indeed, based upon the normal multiple among media giants like Time-Warner or CBS, News Corp. stock should be much higher than it currently is. But this is not a time to look at the normal multiple. right now, no one outside the company knows if there is any problem that will surface with regard to the activities outside the UK. Certainly, the enemies of News Corp. entities like Fox News are legion. Soros funded Media Matters exists solely to wage war on Fox News. Needless to say, Media Matters seems to be having daily excursions into ecstasy as it contemplates the possibility that Fox News somehow hacked cell phones like those crazies at the News of the World in London. Indeed, for groups like Media Matters, the truth here matters less than the the chance to conduct a massive guilt by association attack on Fox News.
It is these enemies and the fact that they now have a smidgen of wrongdoing by News Corp UK subsidiaries that leads me to stay away from the stock. Oh, and do not forget to add in that there is the undying hostility of the Obama administration towards News Corp. There are just too many Obama bureaucrats who would love to hurt Fox New and News Corp. whether or not there is any basis to act.
I have been a shareholder in News Corp for well over a decade. For a long time, it was the largest media holding in the portfolio. That changed last week. I no longer consider it prudent to hold the stock. There is just too much risk injected into the company by the events in the UK.
For those of you who do not mind higher risk, the value of the company's assets are still there underpinning the stock. For those of you who do not want to worry about what the next headline says, I would stay away.
Disclosure: I am long News Corp. stock, but have reduced holdings in the portfolio by over 85% from the high. I expect to divest completely in the near term if the scandal does not move towards a quick resolution.
Let's add a few number to the mix
In the last few days, I have been writing about the despair among Democrats with regard to the Obama re-election campaign. They see the economy heading in the wrong direction and they also see no way for Obama to change that. Indeed, it is looking more likely that the economy will weigh down on Obama throughout 2012. As a result, some Democrats have started acting out with silly claims like the debt ceililng debate is really racism, or the GOP intentionally is trying to destroy the economy. The American people see these claims for what they are, the rantings of a few desperate people. But the question still remains, how do the American people see the actions of the president with regard to the debt ceiling debate.
In the last week, the debt ceiling issue has crowded out nearly all other news. Obama has held three press conferences in the last ten days, when he had previously been holding such conferences about every six months. Day in and day out we see Obama on the TV screen telling us how he is the adult in the room, the only one who truly wants to cut spending, the great budget balancer. So, has that campaign been working? The polls all say no. In the last two weeks, Obama's aproval numbers have tanked. Right now, all polls that question likely voters find more disapprove of Obama than approve of him. Even when the poll sample comes from "adults" (which means that even those who are neither registered nor likely to vote are included), only one recent poll finds Obama with a positive rating of more than 1%. The trend is also important. Two weeks ago, Obama's ratings were much higher.
So, the constant barrage of Obama's message about his serious committment to deficit reduction (which only a fool would believe) has not had a positive effect on the electorate. Indeed, when Obama keeps talking about how much he is willing to agree to but refuses to give even one detail of what he would accept, it becomes clear to most people that the man is not serious.
In the last week, the debt ceiling issue has crowded out nearly all other news. Obama has held three press conferences in the last ten days, when he had previously been holding such conferences about every six months. Day in and day out we see Obama on the TV screen telling us how he is the adult in the room, the only one who truly wants to cut spending, the great budget balancer. So, has that campaign been working? The polls all say no. In the last two weeks, Obama's aproval numbers have tanked. Right now, all polls that question likely voters find more disapprove of Obama than approve of him. Even when the poll sample comes from "adults" (which means that even those who are neither registered nor likely to vote are included), only one recent poll finds Obama with a positive rating of more than 1%. The trend is also important. Two weeks ago, Obama's ratings were much higher.
So, the constant barrage of Obama's message about his serious committment to deficit reduction (which only a fool would believe) has not had a positive effect on the electorate. Indeed, when Obama keeps talking about how much he is willing to agree to but refuses to give even one detail of what he would accept, it becomes clear to most people that the man is not serious.
Well, There you have it!
Reuters is quoting Secretary of State Clinton as calling the reaction by the Assad government to the uprising in Syria "troubling". That alone ought to be enough to get Assad to resign. Imagine! Hillary says Assad is troubling!
On another note, the various factions of the opporsition in Syria met in Istanbul today and formed a National Salvation Council. That is another way of saying that the opposition has reached the point where it is forming a government in exile. My guess is that it will not be in exile for all that much longer.
On another note, the various factions of the opporsition in Syria met in Istanbul today and formed a National Salvation Council. That is another way of saying that the opposition has reached the point where it is forming a government in exile. My guess is that it will not be in exile for all that much longer.
Reality 1 -- Al Gore 0
In a very important article in Forbes, Patrick Michaels of George Mason University points out that for the last fifteen years there has been no discernable warming of the Earth according to the data released by the University of East Anglia. East Anglia, of course, is the principal source of worldwide temperature data in the global warming debate. Even more important than the lack of warming is the fact that we really do not know why the warming has stopped. There are many explanations, to be sure, but none of them has be capable of being demonstrated to be correct. Indeed, the current favorite of the environmentalists, that cooling is the result of particle emissions from China, is taken down very well in Michaels article. (For those of you who want to read the article, just click on the title to this post.) If you look for the simplest explanation for the temperatures, however, it is this: the global climate is simply not correlated to the level of carbon dioxide emissions. In other words, Al Gore and his friends were wrong.
So here we are. We have watched a decade go by with global warming (and then climate change) as a major issue. Countries have crippled their economic growth in service to a theory that carbon dioxide emissions have to be reduced. Indeed, in the USA we just barely avoided that disaster and the Obama EPA may still spring it on us. Al Gore has made hundreds of millions of dollars going around as the prophet of the green movement (although he should be better known as the profit of the green movement.) To paraphrase Winston Churchill, never in the course of human history have so many avoided being destroyed by so few.
Let's hope that Al realizes that he has lost and that he slinks off back to the bog he came from.
So here we are. We have watched a decade go by with global warming (and then climate change) as a major issue. Countries have crippled their economic growth in service to a theory that carbon dioxide emissions have to be reduced. Indeed, in the USA we just barely avoided that disaster and the Obama EPA may still spring it on us. Al Gore has made hundreds of millions of dollars going around as the prophet of the green movement (although he should be better known as the profit of the green movement.) To paraphrase Winston Churchill, never in the course of human history have so many avoided being destroyed by so few.
Let's hope that Al realizes that he has lost and that he slinks off back to the bog he came from.
More proof of Desperation among the Democrats
Yesterday, I wrote about how the Obamacrats were beginning to look desperate. Specifically, I pointed to the charge from a Democratic Congressman that the Republican position in the current debate over the debt ceiling was motivated by racism against a black president. Today, there is more evidence of desperation. Martin O'Malley, the governor of Maryland is charging that the Republicans are intentionally trying to sink the US economy in order to win against Obama in 2012. The charge is crazy and, if it came from another source, I would just ignore it. O'Malley, however, is both a governor and the head of the Democratic Governors' Association. So let's look at the charge.
First of all, what O'Malley really is worried about is that the economy is so bad that it may well sink Obama's re-election campaign, an event that would likely take down with it a number of other Democratic office holders. The GOP already holds the majority of governors and state legislative bodies. A decline there for the Democrats would be truly a big problem for that party.
Second, O'Malley realizes that, as they say, "Obama owns the economy." In the beginning of his term, Obama was the president whose slogan was "It wasn't me! I didn't do it." Obama spent years blaming Bush for everything that went wrong. Now, however, after almost three years in office, the condition of the economy is all Obama's. Very few voters are going to say to themselves that things were bad when Obama took office, so they will give him a pass for not making things better. Most Americans recognize the hand Obama was dealt, but they judge him on how well he played the cards he got. On that score, he is doing very poorly. Most polls find that under 40% of Americans give Obama a passing grade for his handling of the economy.
Third, even aside from the perceptions of voters, there are the actual facts. Obama's big economic moves like the Stimulus, the oil drilling moratorium, the Dodd-Frank Law, the push to strengthen unions, the attempts to raise taxes, the constant stream of new regulations, the failure to do anything to help restart the housing industry and many more have led to the current condition of the economy. The poor results achieved by Obama are clearly bad enough that he is losing to a generic Republican by 8 points in the latest polls.
Fourth, there is little that Obama can do to change the economic trajectory by November of 2012. The usual Democrat playbook of massive spending and massive deficits is already in place, and it has had no real positive effect. There is no way that the country would or could stand for an increase in spending; even Obama says he is against that. The next standard prescription for helping increase economic activity is a tax cut. Obama is not going to go for that option; instead, he is pushing for tax increases which will have the effect of slowing economic growth. (One would assume that O'Malley knows that, but hey, you never know.) The Federal Reserve has already lossened monetary policy to the greatest possible extent. It has even just printed extra cash and pumped it into the economy. In short, if the economy turns around by November of 2012, it will have to do so on its own, and the portents are not looking good for Obama.
Fifth, the Obamacrats need to find a way to avoid the blame for the terrible economic conditions. Yesterday it was to blame racism. Today, O'Malley is blaming evil political calculations. O'Malley wants Americans to believe that the GOP is so venal that it would undermine the US economy just to win office in 2012.
The real truth is that O'Malley's ploy is a loser. Sure, there a millions of folks out there in the country who will believe that the Republicans would intentionally undermine the economy for their own political gain. The key, however, is that all of those voters were already going to vote for Obama. Anyone who is prepared to believe that a party would intentionally damage the country in order to get an advantage, has to think very poorly of that party to begin with. These are not folks who would ever vote for the GOP. On the other hand, there are also millions of swing voters who will be turned off by this new attack. Instead of looking mature and sensible, O'Malley makes the Dems look like a bunch of conspiracy theorists. That is not the image that the Dems should want to cultivate.
We have now seen the one-two punch of the racist and conspiracy rants from Democrats who should know better. If they keep it up, they will just drive large numbers of independents away from the Obama ticket. The truth is that the Obamacrats are showing their desperation about the economy.
First of all, what O'Malley really is worried about is that the economy is so bad that it may well sink Obama's re-election campaign, an event that would likely take down with it a number of other Democratic office holders. The GOP already holds the majority of governors and state legislative bodies. A decline there for the Democrats would be truly a big problem for that party.
Second, O'Malley realizes that, as they say, "Obama owns the economy." In the beginning of his term, Obama was the president whose slogan was "It wasn't me! I didn't do it." Obama spent years blaming Bush for everything that went wrong. Now, however, after almost three years in office, the condition of the economy is all Obama's. Very few voters are going to say to themselves that things were bad when Obama took office, so they will give him a pass for not making things better. Most Americans recognize the hand Obama was dealt, but they judge him on how well he played the cards he got. On that score, he is doing very poorly. Most polls find that under 40% of Americans give Obama a passing grade for his handling of the economy.
Third, even aside from the perceptions of voters, there are the actual facts. Obama's big economic moves like the Stimulus, the oil drilling moratorium, the Dodd-Frank Law, the push to strengthen unions, the attempts to raise taxes, the constant stream of new regulations, the failure to do anything to help restart the housing industry and many more have led to the current condition of the economy. The poor results achieved by Obama are clearly bad enough that he is losing to a generic Republican by 8 points in the latest polls.
Fourth, there is little that Obama can do to change the economic trajectory by November of 2012. The usual Democrat playbook of massive spending and massive deficits is already in place, and it has had no real positive effect. There is no way that the country would or could stand for an increase in spending; even Obama says he is against that. The next standard prescription for helping increase economic activity is a tax cut. Obama is not going to go for that option; instead, he is pushing for tax increases which will have the effect of slowing economic growth. (One would assume that O'Malley knows that, but hey, you never know.) The Federal Reserve has already lossened monetary policy to the greatest possible extent. It has even just printed extra cash and pumped it into the economy. In short, if the economy turns around by November of 2012, it will have to do so on its own, and the portents are not looking good for Obama.
Fifth, the Obamacrats need to find a way to avoid the blame for the terrible economic conditions. Yesterday it was to blame racism. Today, O'Malley is blaming evil political calculations. O'Malley wants Americans to believe that the GOP is so venal that it would undermine the US economy just to win office in 2012.
The real truth is that O'Malley's ploy is a loser. Sure, there a millions of folks out there in the country who will believe that the Republicans would intentionally undermine the economy for their own political gain. The key, however, is that all of those voters were already going to vote for Obama. Anyone who is prepared to believe that a party would intentionally damage the country in order to get an advantage, has to think very poorly of that party to begin with. These are not folks who would ever vote for the GOP. On the other hand, there are also millions of swing voters who will be turned off by this new attack. Instead of looking mature and sensible, O'Malley makes the Dems look like a bunch of conspiracy theorists. That is not the image that the Dems should want to cultivate.
We have now seen the one-two punch of the racist and conspiracy rants from Democrats who should know better. If they keep it up, they will just drive large numbers of independents away from the Obama ticket. The truth is that the Obamacrats are showing their desperation about the economy.
Saturday, July 16, 2011
The Left Rebels -- (yeah right)
Accrding to a news story on the wires, a liberal group has delivered a petition signed by 200,000 people who say that they will not work for or contribute to the Obama re-election campaign if there are any cuts to entitlements. The Group, the Progressive Change Campaign Committee, appears to be the current manifestation of the "who cares if we have the money" trend on the left. Maybe they could gather outside Obama headquarters in Chicago and chant "No changes or no hope".
I find it amusing that these folks actually think that they will prevail in the debate. Sure, there may be no changes now to entitlements, but that will only last until the money runs out. I guess their plan for that eventuality is to emulate the Greeks who have had a series of violent protests over the possibility that changes reducing government benefits might take place. I wonder where they think the money for the entitlements will come from. Even if there were an 80% marginal tax rate on those making over $250,000 (who are those pesky millionaires and billionaires according to Obama), there still would not be enough money to close the deficit.
In any event, maybe there will be a Green candidate who can take the votes of these folks from Obama. If that happens, then they will be doing their country a great service.
I find it amusing that these folks actually think that they will prevail in the debate. Sure, there may be no changes now to entitlements, but that will only last until the money runs out. I guess their plan for that eventuality is to emulate the Greeks who have had a series of violent protests over the possibility that changes reducing government benefits might take place. I wonder where they think the money for the entitlements will come from. Even if there were an 80% marginal tax rate on those making over $250,000 (who are those pesky millionaires and billionaires according to Obama), there still would not be enough money to close the deficit.
In any event, maybe there will be a Green candidate who can take the votes of these folks from Obama. If that happens, then they will be doing their country a great service.
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