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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Tobin Smith, ChangeWave Research editor; Scott Bleier, HybridInvestors.com president; Adam Lashinsky, Fortune magazine senior writer; Patricia Powell, Powell Financial Group president
Trading Pit: Senator Hillary Clinton (D- NY) is shown leading in a recent poll over top Republicans Senator John McCain and Rudy Giuliani. How would the stock market react to President Hillary Rodham Clinton?
Gary B: No! Other than Barack Obama (D, IL), she's one of the most liberal Senators in Congress. And liberal Senators have one agenda: redistribute wealth so that everyone is on perfectly equal footing.
Tobin: The new Hillary sounds a lot like her husband, and since she won’t try to privatize healthcare this go round, she’s GREAT for the market.
Scott: President Hillary would definitely be bad for stocks. Health care and other sectors would suffer greatly on the expectation of massive government regulation.
Pat: She probably won’t be bad for stocks. But hey, they hated Bill Clinton too, and I seem to remember some decent returns in the 1990s.
Patricia: The market won't care, unless there is a Democratic majority in both houses. Then, watch out for an economic tsunami!
Adam: Who could possibly argue against eight more years of a Clinton stock market?
Huge CEO Bonu$e$: Great for Stocks & Market?
CEO bonuses are bigger than ever. The chief of Goldman Sachs (GS): 53 million bucks.
Morgan Stanley's (MS) boss: a cool $40 mill. Even Toll Brothers’ (TOL) bigwig is getting more than $17 million and its stock is down almost 50% in the past year and a half! Are these big bonuses are good for America and the market?
Tobin: The big money is going to the Wall Street execs and it is purely based on profits. So it this is not bad news for stocks and the country.
Adam: Soak the rich.
Pat: The size of bonuses/pay packages make the headlines, but they aren't the real issue, since some highly paid CEOs deserve every penny they receive. The problem is that most don't deserve it. The real issue is the structure of exec comp, not the size of anyone's pay package. Exec pay should be clearly linked to long-term shareholder value, but all too frequently, pay packages are determined by subjective factors.
Gary B: These big bonuses are good. It shows that free enterprise rules. The only people who should be unhappy are the shareholders if they're not being enriched.
Patricia: When it comes to compensation there is no shame in the corporate boardrooms. There are very few great CEOs, who make a difference and few are worth the kind of bonuses being given.
Scott: Over the top compensation is obscene and disgusting because managers don’t create anything unique. It represents the epitome of an overheated and overvalued market, and may just be a sign of an impending market top—just like in the year 2000.