China Confidential
Monday, September 15, 2008
Forecast: No-Drill, Doom-and-Gloom Democrats Will Fail to Capitalize on Current US Economic Problems
Dateline USA....
Amid the sudden collapse of 158-year-old Lehman Brothers, the fire sale of 94-year-old Merrill Lynch, and fears about the future of insurance giant AIG, which is desperately seeking capital to stay afloat or sell itself, there is light at the end of the tunnel. This reporter's forecast: contrary to the doom-and-gloom scenarios of gleeful, no-drill Democrats, the US economy and the US financial industry will come out of the current crisis and down-cycle just fine. Here's why:
1. John McCain will be elected President. Barack Obama's attempts to exploit the economic issue by blaming McCain for Wall Street's woes will backfire as voters come to understand (a) that Obama's tax-and-spend policies would deepen and prolong the recession and possibly bring about a full-fledged depression; (b) that Obama's mysterious past and Muslim extremist ties and associations disqualify him from being the country's commander-in-chief; (c) that Obama's anti-energy energy policy would increase rather than decrease dependence on foreign oil, raise energy prices, and cripple the economy--because energy is the lifeblood of a country--while producing relatively few jobs; and (d) that Obama is actually a tool of the shrinking, stand-alone investment banking business in terms of his stupid, slaveish support for Al Gore's catastrophic carbon taxation and penalization schemes aimed at creating yet another giant speculative bubble--namely, a projected, trillion-dollar-a-year carbon credit trading industry.
2. A McCain administration will streamline and reform the regulation of the financial services industry. This long-overdue effort, which will establish McCain as the modern-day Teddy Roosevelt, will effectively be assisted by the continued consolidation of the industry. Basically, there will be larger but fewer banks. Commercial banks will buy investment banks. Mid-sized banks will largely vanish because they won't be able to compete with the big banks. Credit standards will be tougher without restricting the economy. On the contrary, the excesses will end, the excesses of borrowing, greed, and exotic financial instruments--the derivatives and the derivatives of derivatives--which serve no useful purpose apart from enrichment of handfuls of out-of-control hedge fund operators and rogue and borderline rogue traders.
3. Influenced by Sarah Palin, McCain's energy policy will put America back to work. Domestic oil and gas and coal and nuclear power development will create good jobs with benefits and security for hundreds of thousands of citizens--and provide the basis for the revival of America's industrial might and productive capacity.
The new king of Wall Street, Kenneth Lewis, the CEO of Bank of America, which is buying Merrill Lynch in a seemingly risky but actually brilliant stock deal, has it exactly right: 2009 will be a rough year, housing prices will continue to decline, but the clouds will begin to part in 2010 and the skies will steadily brighten thereafter. At the end of the day, the American economy, like BOA, will be "a thing of beauty" and the envy of the world, as Lewis likes to say.
Words of Wisdom
But the ugly wound on our planet that is Tehran's deranged regime can't be allowed to fester much longer. A nuclear-armed Iran may just try to act on its threats to raze Israel. And it will certainly try to bully intimidated nations in the Middle East and elsewhere.
Diplomacy can be effective if both sides are rational. But when outlaw governments are in control, as in Tehran, diplomats' failures turn up as legions of battlefield corpses. Sometimes a short burst of force is the only way to ensure a long spell of peace.
-"Answering Iran," Editorial in Investor's Business Daily, Sept. 12, 2008
Monday 15 September 2008
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