The Honeymoon Is Over: Gauging the Market with an Obama Presidency

by: C.S. Jefferson November 07, 2008 | about stocks: BHP / CHK / CLNE / CME / ENER / FCX / FSLR / GE / ICE / LDK / LVS / MA / NDAQ / NYX / RIO / SPY / STP / TAN / V    

C.S. Jefferson

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Congratulations, Barack Obama on your Presidential victory. Thank you for restoring our trust and belief that votes do matter. Democracy is alive and well.

Having said that, put the party hats away and the champagne on ice, because America is in for a sober awakening. It is clear that the incoming Obama administration must not wait until the traditional inaugural swearing into office to put a mandate forward. Our country’s economy cannot afford the luxury of a post-election honeymoon period and extended jubilance or celebratory cheer.

I would thoroughly expect within the next several trading sessions and, perhaps, as early as today’s public address, the President-elect will not only display to the markets his newly assembled economic team but, hopefully, a formal announcement of deferring all capital gains tax raises due to hazardous and systemic risk to macro-economic conditions.

A suspension of any campaign promises to raise capital gains is absolutely necessary in a time of great economic crisis. If you want to shear a sheep, you better feed it and allow it to grow first. Wall Street is starving for stability and news of real encouragement to create an underlying bid in the market. Any potential tax raising is detrimental to economic recovery.

While the future of Main Street and Wall Street are inexorably tied like a perpetual loop, punitive decision making such as taxes will only curtail private capital injections and increase the liability of government bailouts to maintain liquidity in the markets and underlying economies of the world.

We have had two successive major sell offs in the market since the election has finally concluded, fast tracking a retest on October lows. While the cynic in me would think, strategically, it would make sense for a Democratic administration to sit on the sidelines and let the markets wash out completely before assuming power, I would hate to think that such political calculations would place party interest before country.

There is not a single moment to waste, time is of the essence and the risk of allowing assets to deteriorate further closing out the year could risk irreparable damage and, unnecessarily, forestall any possible hope of recovery for the economy in 2009.

Good things have been put in place by Fed Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson that have not yet fully met market expectations. But they need a chance and considerable time allotment to work effectively.

Yesterday it was reported that the Fed has assumed over 2 trillion dollars on its balance sheets and continues to be the lead purchaser of commercial paper that is absolutely necessary for corporations to fund payrolls and operations with short-term debt instruments. This is a record that will probably be broken again, which makes the heavily politicized Treasury TARP plan look like a pittance of $750 billion by comparison.

There is no backing out now, it’s too late for all that nonsense because the only option is muddling forward. So if the spigot is open then let the money flow, after all, it’s only paper anyway, right? Deficits only matter if the confidence and stability of our own economy is gone and no one is willing to buy our Treasuries and debt. And the only way to effectively pare down a burgeoning deficit is to have a thriving economy with sustained job growth and rising asset valuations. Reinflation of the economy is the only answer, once things are better then you can reduce spending and talk about deficits.

All this enormous liquidity being pumped into the global financial system along with coordinated rate cuts predicates its success on if, and only if, there is a seamless transition between the outgoing and incoming administration. If the markets continue to interpret mixed messages, everything that has been going well to induce a recovery will simply be all for naught.

One thing that did disturb me in what was quite a brilliant victory speech was the mention that issues we face in our economy and nation may take more than one term in office. I’m sorry, but the American people no longer have the patience for inaction by policy makers to drag out the change we voted for.

While mainstream media will characterize the Democratic victory as historical in the context of superficial barriers being broken, the truth is that it was more of a referendum on the Republican incumbent party and wide scale frustration by the American public.

More than anything, this election proved and allowed American citizens to trust that their votes really do count. And I tend to believe that people will be more motivated and inspired to vote their conscience in future elections.

No matter who is in office, people are starting to believe they have the power to not only put candidates in office, but the power to remove them from office if they fail to deliver on promises. If there is no stability in the underlying economy within months of inauguration, not just the stock markets, people will not only be disappointed, but even angrier watching retirement savings, 401(k)s, pension funds and the most precious asset for most Americans, the home, deteriorate further.

It is only a couple of years until the mid-term election, so the consequence and repercussions of not creating real economic stimulus will be substantial. All of this liquidity that is being pumped into the system will begin to flow on the back end of things and it may, ironically, benefit a Democratic administration and Congress by early 2009. This is if, and only if, they don’t do things that undo or actually stifle investment and economic growth.

TRADING THE  OBAMA ELECTION

A substantially bad job report is expected today. If such impending news is countermanded by a welcome announcement from a new Obama administration on suspending any potential raises of the capital gains tax, there is a very probable rally due to occur that may actually be sustainable.

In addition to such, it is also equally important to display a competent advisory panel that inspires trust and confidence in the markets. Showcasing all your heavy hitters means nothing unless they can hit the ball out of the park, and you can only get that home run if you step up to the batter’s box and swing.

While I am hopeful of such an announcement to allay and calm fears of nervous investment houses, we still have skittish and manic-depressive behavior by fund managers trying to game the market. Volatility has turned strategy from long-term investment into day trading instincts that are reactive as opposed to proactive.

I would reiterate buys I’ve mentioned in previous articles for the long-term on commodities with high dividend yields such as BHP Billiton (BHP), Freeport McMoran (FCX) and Vale do Rio Doce (RIO). It may sound contra-indicative to recommend a global growth play amid this worldwide recession but, as I’ve mentioned before, you are being paid to wait until they ignite a staggering economy.

Despite the commodity collapse and fall in petroleum prices, Obama’s win will be good for alternative energy. No question, the time for true energy independence has finally found the political will to back it up into policy. You have to have solar exposure in your portfolio.

Solar was a heavily traded sector and ridiculously overbought during the crude manipulation of several months past and, certainly, fund redemptions have absolutely contributed to selling pressure in this sector, knocking valuations down to more reasonable levels.

Despite some early anticipation of this trade and bounce off recent bottoms, select solar companies still remain below tradable expectations. It’s not too late but there is no reason to rush out and chase, only buy based on company specific selection because there are too many that seem less competitive going forward.

Energy Conversion Devices (ENER) is probably one of the best plays out there. This is no start up company that lacks a credible track record like some other fly by night solar companies. Headquartered in Michigan, this diverse company structure not only leads with some of the premier innovation in thin film solar, but its ovonic battery division is well positioned for integration with the very next generation of hybrid, fuel cell and emission free cars.

Suntech Power (STP) is probably one of the better solar companies in China along with LDK Solar (LDK). First Solar (FSLR) is heavily traded but the beta in this stock makes it too risky for the average investor and, in my opinion, makes it extremely difficult to actually gauge a safe entry and exit point. I would prefer to recommend ENER and STP over this choice. Additionally, the solar ETF (TAN) is also one among many solar ETFs to hit the market as a broad based play.

Natural gas is a domestic winner and the T. Boone Pickens plan is a viable conversation starter to get politicians committed to energy independence as a matter of urgent political will. Clean Energy (CLNE) is, interestingly enough, a bargain with Pelosi, the Speaker of the House having personal investments that make it likely she has a committed bias toward this company in particular.

Chesapeake Energy (CHK) is cheap enough to buy, either with development of liquified natural gas as a viable transportation energy source, or as part of a buyout and consolidation in this industry. And don’t forget wind turbine power makes even General Electric (GE) look compelling as a conglomerate, especially if you consider it pays a hefty dividend yield.

Payment processors are the only stocks of the financial sector I would invest in right now. The exchanges such as Chicago Mercantile Exchange (CME), New York Stock Exchange (NYX), Nasdaq (NDAQ), and, perhaps, Intercontinental Exchange (ICE). Also, the two credit card companies of Mastercard (MA) and Visa (V).

All of these aforementioned are, to me, worthwhile holds as long-term investments, despite the prospect of a sustained and enduring recession or not. For those that are more interested in short-term trades and look to fade the market, it may be more prudent to trade ETFs on the indices instead. The S&P 500, DJIA and Nasdaq can be bought long or short with options on shares of the ETFs if you want to create leverage with defined risk exposure, limited to the premium paid for the derivatives.

SPY, SSO, QLD, are examples to play the upside. SDS, QID, DXD are ways to play the downside. Keep in mind, and I hate to confuse anyone, if you play the options you can take either direction in the market on any long or short structured ETF position, depending if you are using puts or calls and, whether or not you are buying long or writing short.

Personally, and I recommend options only for experienced investors with higher risk tolerance, utilizing a “strangle” of both out-of-the-money long calls and long puts on index ETF options is not a bad way to maximize the effect of volatility.

If you feel inclined to actually gamble, look at Las Vegas Sands (LVS). I bought some speculative positions when it was recently trading in the 4 dollar range. It bounced all the way back to 15 before coming down to today’s levels. If you look at the put options, of which I own against my shares, they are trading with the idea of LVS going into bankruptcy. It could happen, we shall see, but I think it’s an interesting speculative play.

And by speculative, I mean no more than 1-5% of your entire portfolio. This is a trade, not an investment. Please, do not over-extend yourself on a risky position like this. I am very reluctant to recommend plays like this because people have to know this is playing with fire. If you have less than $100,000 in your personal portfolio, buying 100 shares under $1,000 won’t make or break you. Expect and fully anticipate it can go to zero, but snatching a quick 100-200% return, or even a 10xbagger down the road is not out of the realm of possibility.

But if the temptation of high returns undercuts risk discipline, then you’re asking for it if you exceed a position of more than $1,000, or more than 1-5% of a total portfolio allocation.

The success or failure of LVS seems to hinge on capital injections, but I tend to believe someone is watching this closely for an acquisition if they are unable to meet and fulfill credit requirements. Ironically, as a person that doesn’t like to gamble, I am making a bet on a casino. Since you must treat it as a bet, it can be no more than the total amount you can afford to lose.

DISCLOSURE: Author holds long positions on BHP, FCX, RIO, STP, ENER, NYX, NDAQ, MA, V and LVS.

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This article has 30 comments:

  •  
    Nov 07 08:33 AM
    I don't think we'll see energy independence with Obama's presidency. He has too many political debts to repay now. His energy policy is very fragmented and full of pander to special interest groups (i.e. Coal, Corn Ethanol, UAW, etc.). A complete energy policy would include: finding new reserves (until the 40-50 yr transition to renewables is complete), conservation and alternative energy. So far Obama's policy barely addresses any of these categories and his energy plan is full of sub-optimal proposals:

    1) Gap and trade of emissions solves nothing and how do you police
    compliance.
    2) How does swapping sweet crude with sour crude in the SPR solve anything?
    3) Raise CAFE standards 4% per year. A good idea, but remember it was
    Clinton and Gore (Mr. Climate change) that introduced the light truck exemption clause that made CAFE impotent in the first place.
    4) Windfall taxes for oil companies. This is brilliant, oil exploration and production is very capital intensive. Why would oil companies invest in new infrastructure to find new reserves if they will be penalized for making a profit on a risky venture ?
    5) His pandering to UAW includes unions opening up the NAFTA agreement with Canada. What he fails to see is that Canada has the upper hand this time around. If his negotiations include cutting Canadian jobs, Canada can turn around kill the energy clause which guarantees that 60% of Canada's oil and gas production output is sold to the USA. Canada has plenty of other suitors like China and India that would gladly step in and buy from the 60% allotment. This would leave USA being even more susceptible and at the mercy of nations hostile to the USA (Venezuala, Saudi Arabia, Russia, etc.)

    I hope I am wrong, but with oil prices hovering at the $60 mark complacency has returned and energy independence is on the back burner. It will only take center stage when it is too late and oil has surpassed the $200 mark.
    Reply | Link to Comment
  •  
    Nov 07 09:08 AM
    C.S.- what about SunPower, they use c-Si and in huge volume - their kicker in bifacial [ability to use backlighting - reflected or diffuse]. They achieve this by photolythography [CY - as in etching circuits] to apply BOTH + and - pickups on the backside. Since the metal is very narrow, the exposed Si enables the additional PV conversion. This is all opposed to other wafer users who place one pickup on the face of the wafer and the other on the back. SPWRA is a long time player in PV and well fixed in CA with commercial and utility scale customers. The CA defeat was for an extension, thus doe not effect mandatesfor the near future [2012]. Isn't LDK a bif supplier to SPWRA?
    Reply | Link to Comment
  •  
    Nov 07 09:24 AM
    long oil, your comment on obama pandering is a bit extreme. obama has a good mind and he understands the urgency with which the world must address global warming. when considering your investments consider that global warming is widely understood to be threatening life on the planet. the economic cost of not investing in alternative clean energy is overwhelming. what is the cost of losing food stocks and a viable environment?
    Reply | Link to Comment
  •  
    Nov 07 09:44 AM
    Clinton said it best-"It's the economy, stupid."
    Reply | Link to Comment
  •  
    Nov 07 09:44 AM
    You said:

    "One thing that did disturb me in what was quite a brilliant victory speech was the mention that issues we face in our economy and nation may take more than one term in office. I’m sorry, but the American people no longer have the patience for inaction by policy makers to drag out the change we voted for."

    There are 55 million Americans who did not swallow the Obama Kool-Aid. Speaking for myself, I can only hope his statement is the truest one uttered by him in at least 21 months. He promised more than he could payoff, but the pandering got him the votes he needed to get elected.

    But to be fair, the only difference between him, the Democrats collectively, and the Republicans collectively is the speed with which they will bankrupt the nation and confiscate our individual wealth through monetization of the ever increasing debt.

    "We cannot borrow our way into prosperity."
    Reply | Link to Comment
  •  
    Nov 07 09:59 AM
    "And the only way to effectively pare down a burgeoning deficit is to have a thriving economy with sustained job growth and rising asset valuations." The Bush administration certainly did a good job of paring the deficit.
    Reply | Link to Comment
  •  
    Nov 07 10:10 AM
    The economy is going to supercede everything else for at least for the next two years, so don't bother buying solar stocks just yet. I'm with longoil on American complacency; wholesale gasoline (before fed and state taxes) is approaching $1.30/gallon, I doubt anyone will want to finance alternative energy projects at these low prices.

    Don't get me wrong, I think the US should have a national energy policy that concentrates on investing in alternative energy, but we don't have the money to fund it right now.
    Reply | Link to Comment
  •  
    Nov 07 10:18 AM
    C.S. Jefferson-
    I know a lot about the gaming industry and I don't think you know what you are talking about when you say LVS could go into bankruptcy. Sheldon Adelson is one of the richest men in the world and he owns 70% of the company. His financing is all but in place. The new casino he is building in Singapore that will open in 2010 is being financed with help from the Singapore government. The Macau casino which is the largest in the world is making money big time. Yes LVS is making money, but their debt is high with all the building they're doing. In the next couple of years the price of this stock will be in the 500. range. The biggest gain will be in 2010 before the opening of the Singapore casino. You're correct on one point however and that is: NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE, NOT EVEN IN REAL ESTATE.

    Dan Kowkabany
    Reply | Link to Comment
  •  
    Nov 07 10:30 AM
    I am with LongOil. I hope Obama! is successful, for all our sakes, but I fear he is a suntanned version of Jimmy Carter. Obama! is about to find that there is no longer a "present" button in the Oral, er Oval, Office. He will have to chose from among only Hobson's Choices. It is going to be an interesting four years. I only hope we survive it.
    Reply | Link to Comment
  •  
    Nov 07 10:49 AM
    DAN KOWKABANY:

    I think you should read the author's position over because he is LONG LVS !!! You don't buy shares in a company because you think it's going to tank or go bankrupt!

    The author stated that the "put" options are pricing the stock for bankruptcy and that he own puts against his long position in LVS for protection.

    I think the author made it clear that he thinks its a speculative bet and just doesn't want people to foolishly invest more than they can lose
    Reply | Link to Comment
  •  
    Nov 07 12:37 PM
    The author glosses over the point tht with a 15% approval rating for Congress, almost all incumbents got reelected.

    The big point of the day is whether Obama will allow Pelosi to be the leader on economics - with her approach to the auto industry and her call for a quick new stimulus package. An optimist would hope that he hired Rahm Emanuel to keep her in line, and that he will not allow her to fill the vacuum.
    Reply | Link to Comment
  •  
    Nov 07 12:49 PM
    iNVestorUnrest:

    Thank you for bringing that point up. Yes I did read it correctly, but I felt that if he puts an call option or put on LVS and it goes up rapidly, and it is a very volatile stock then he is going to make a few bucks, but miss the big run. I must repeat this is not a company operating on a shoestring. Thanks again.

    Dan Kowkabany
    Reply | Link to Comment
  •  
    Nov 07 01:05 PM
    My take on Capital GAINS Tax is that the new Administration should Tax Day Traders ie Parasites, and a penal rate, say 70% and Tax investors who invest in companys for the Long Term should be taxed at a Much lower rate say 10%
    This would discourage Market Manipulaion by the Greedy Day Traders who continually take profits out of the system and pay very small Taxes.
    Long term investment are what is needed so people can plan for their retirement with confidence
    Reply | Link to Comment
  •  
    Nov 07 01:21 PM
    RIGHTINSANFRANSISCO--

    INTRIGUEING MONIKER. your comments are sound and important points.


    AUTHOR OF ARTICLE--

    excessive bravado and "peach fuzz" showing.

    "energy independnce" in this world/time is an OXYMORON. suggested reading-"gusher of lies" by robert bryce. 2008 publication, publicaffairsbooks.com
    Reply | Link to Comment
  •  
    Nov 07 05:18 PM
    This Bud's For You said:

    "There are 55 million Americans who did not swallow the Obama Kool-Aid." Speaking for myself, I can only hope his statement is the truest one uttered by him in at least 21 months. He promised more than he could payoff, but the pandering got him the votes he needed to get elected.

    But to be fair, the only difference between him, the Democrats collectively, and the Republicans collectively is the speed with which they will bankrupt the nation and confiscate our individual wealth through monetization of the ever increasing debt.




    If you didn't drink the Obama KoolAid did you drink the McCain KoolAid? Or just not vote? Or go with a third party candidate that does nothing but appease your inner self as they will never win and have no power base once in?

    Especially since you said the only difference is how fast either will get to the same spot and that Obama won because he pandered. And McCain wasn't?

    So did you vote at all? If so, McCain? Obama? Third party?

    Your statements would imply that it's useless to vote for either or any, yet if you don't vote then you have no point to complain. Yet you then attack Obama... interesting.
    Reply | Link to Comment
  •  
    Nov 07 05:25 PM
    I find it interesting that commentators, whether on financial blogs or on CNBC or on Bloomberg, are asking what Obama has to do to bolster the stock market. Is it the market that drives the economy or is it the economy that drives the market?

    It seems kind of selfish that investors aren't first asking what is good for the country. It would seem that a strong vibrant nation would naturally promote a strong market.

    As Bubba once said, "It's the economy, stupid. "

    Reply | Link to Comment
  •  
    Nov 07 07:13 PM
    And yet the dumb shit didn't seem to know what the meaning of "is - is".
    And I don't know why some of you are blasting the author - he makes it very clear what he is doing and cautions the hell out of anybody that be be dumb to blindly follow his strategy. Sure is to easy to identify the Obama fans - you are starting to sound like losers already. You all blamed Bush for the financial crisis but obviously it's a matter of record who was responsible.
    You blamed Bush for the problems which got Obama elected and it's apparent as he falls on his ass he will have tp continue blaming Bush for everything he won't be able to do. That will get old soon.
    Reply | Link to Comment
  •  
    Nov 07 10:29 PM
    "One thing that did disturb me in what was quite a brilliant victory speech was the mention that issues we face in our economy and nation may take more than one term in office. I’m sorry, but the American people no longer have the patience for inaction by policy makers to drag out the change we voted for.

    While mainstream media will characterize the Democratic victory as historical in the context of superficial barriers being broken, the truth is that it was more of a referendum on the Republican incumbent party and wide scale frustration by the American public."


    THAT IS THE TRUTH. It would be a mistake for Democrats to think they have a free pass to do what they want and not take shared responsibility for the last few years in Congress
    Reply | Link to Comment
  •  
    Nov 07 10:46 PM
    I don't see why people are making this a political party argument

    I didn't vote for Obama because I'm a hardcore republican along with the other 50 million people that voted Mccain. It's not like we are a minority. Maybe it was a blowout by the electoral vote but it was only 3 million votes total that separated the popular vote.

    but McCain said it best for the people to s upport our Presidents and I support Obama because he's the leader of our country now.

    I don't think the author is makeing a biased statement he just wants accountability. So Democrats can't pretend they had nothing to do with bad policy and loose lending standards that created this mess.

    I know a lot of Republican friends that voted for Obama out of disgust for the way the economy has been handled but I know they won't vote for him again if the Dems think they can sit in office and not solve the crisis or think they can have a free pass for four more years...
    Reply | Link to Comment
  •  
    Nov 07 11:09 PM
    bill d,

    One doesn't have to be an Obama fan to blame George W. Bush and the Republican party. The election results soundly reflect America's discontent with our government's domestic and foreign policies.

    The important question is whether Americans can put aside partisanship and work together to solve the many challanges we face as a nation. Unfortunately, I don't think we can. We are so polarized and we are so suspicious of those who have different views and opinions that we cannot move forward. As a nation, if we used our shared strengths and common beliefs as a foundation to solve our problems, we might get something accomplished.

    Until we stop listening to those who would divide us (the Linbaughs, Moorer's, Hanity's, the Hollywood elites, and most importantly, the self-serving politicians), we will be at each other's throats and get little or nothing done. It really is a tragedy that so few people can so inflame, polarize and divide a nation.
    Reply | Link to Comment
  •  
    Nov 08 02:15 AM
    Are you insane!!! Do you really think "HE" will save us? If anything he will ruin this country, and the FREE market. Have you heard one word that makes you think he favors a free market? Help business, small, or large? Everything I've heard scares me more than when I was 8 years old, and watched the Cuban missle crisus everyday on TV, and had Atom bomb drills at school, and thought we were going to be in an Atomic war anyday. When I read on the Etrade news " Wall Streets choice is Obama too" I couldn't understand how people that trade in a free market, and invest in stock in the hopes of making a profit, knowing that Obama wants to raise the capital gains tax, could print such garbage. I only hope I am wrong.
    Reply | Link to Comment
  •  
    Nov 08 02:46 AM
    Good on ya xsuddensam! Good on ya.

    The Pepsi-Coke metric has been and will continue to be one of the substantial contributors in the undoing of a once great country.

    Reply | Link to Comment
  •  
    Nov 08 10:33 AM
    You know, everyone, I think this is a very good article actually. It doesn't matter who you voted for or even if you are naive enough to believe Obama is a solution to all the problems.

    Free markets? You had free markets and look where that got us? 40 to 1 leverage? Everyone using fake appraisals to spend more debt? No REGULATION!!

    Read the author's other article on $60 Trillion Nightmare of CDS. That's a shining example of what happens when you just allow Wall Street to have free markets and ZERO REGULATION!

    The point is what are you going to do if you are trading the market? Walk away? Quit? Refuse to participate?

    I think what people don't want to admit is that this problem was brewing since the Clinton administration in the 90's and finally popped under Bush. So there is no one side is better than the other.

    Wall Street can't play games with job numbers or hide the problems of the economy anymore. someone has to fix it and the one difference is that Democrats are expected to fix it for their own political survival.This is why people feel optimistic because they know Dems won't be in office long if they don't help middle America.

    Remember JIMMY CARTER?
    Reply | Link to Comment
  •  
    Nov 08 11:46 AM
    C.S. Jefferson would hate to think that Obama would put the political interest of his party before country. In my opinion Obama will make decisions based on the following crtiteria: 1) does it help Obama 2) does it help Obama 3) can he blame his oponents and 4) will it help Obama adva
    Reply | Link to Comment
  •  
    Nov 08 11:49 AM
    #4 should be, will it help Obama advance his Marxist agenda.
    Reply | Link to Comment
  •  
    Nov 08 12:10 PM
    " suspension of any campaign promises to raise capital gains is absolutely necessary in a time of great economic crisis. If you want to shear a sheep, you better feed it and allow it to grow first. Wall Street is starving for stability and news of real encouragement to create an underlying bid in the market. Any potential tax raising is detrimental to economic recovery.

    While the future of Main Street and Wall Street are inexorably tied like a perpetual loop, punitive decision making such as taxes will only curtail private capital injections and increase the liability of government bailouts to maintain liquidity in the markets and underlying economies of the world."



    That was a positive panel of economists we saw in yesterdays conference. I think with a jump in the market they know that Obama is not out to ruin the stock market and will most likely be a moderate when it comes to our economy.

    But as quoted if you want to shear that sheep you better feed the street first and give them want they want or there wont be any taxes to tax back!
    Reply | Link to Comment
  •  
    Nov 08 01:46 PM
    Yes is is a matter of record who damaged the economy.
    When Reagan was elected the federal deficit was $1 trillion.
    It's now $10 trillion, with all the additional $9 trillion coming under the past three Republican administrations.
    The election was not just a repudiation of Bush. It was a repudiation of Reaganomics, which has had over 25 years to prove itself. It has failed 80% of Americans.
    The savings and loan scandal, and the current mess with credit markets is the result of Republican policies.

    According to a study by the Pew Foundation, between 1983 and 2004, the top 1% got 33% of the growth in wealth. The next 4% got over 25% of the growth for a combined 60% or so. The bottom 80% of us got only 11% of the growth. A middle age worker today makes 12% less than his father in real buying power. Union membership has been cut in half. Meanwhile corporate executives make 10 time as much as in 1978, as compared with their workers.
    Regressive tax schemes have never worked and never will.
    I also question the claims that Reananomics created vast amounts of wealth. What created the growth in wealth (which all went to the top 20%) was the revolution in technology. -computers, biotech, internet, telecommunications etc.

    Afraid of windfall taxes for oil companies? Since the estimated tax credits and subsidies for oil and gas is $84 billion annually, I think this is a non issue. Last year's democratic proposal to take $21 billion from oil company tax credits and apply d them to alternative energy would have only amounted to 1% of oil company profits.
    Of cou