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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital; Tobin Smith, ChangeWave Research; Eric Bolling, FOX Business News; Pat Dorsey, Morningstar.com; Stewart A. Alexander, Socialistparty-USA.org, and Faiz Shakir, AmericanProgress.org.
Dow's Best 4-Week Gain Since 1933 Despite Bad Economy; What's Going On?
Matt McCall, Penn Financial Group: I'm as bullish as can be. I think this is one of the great buying opportunities of a lifetime. Investors have realized over the past couple of weeks that we're not going into a depression. Thus, their outlook for the future is more positive and they're buying up stocks again. Many recent economic indicators show we may have bottomed out,
Gary B. Smith, Exemplar Capital: I think the economic fundamentals stink right now. But there's clearly a move going on right now, and investors are trying to get in on it--they don't want to miss out on it. I'm long right now because the market is showing it's much easier to go up than down under the current circumstances.
Tobin Smith, ChangeWave Research: There is a case to be made that the recession is at its trough. That's what the market is responding to right now. To a degree though, investors are also short-covering their investments. We still have to see the markets go higher if we're to know if investors are buying real stocks for real reasons.
Pat Dorsey, Morningstar.com: The fundamentals of the economy are not as good as some one month numbers would show you. What still really worries me is the credit markets. Loan-rates are still extremely high. In order for there to be a clear sign that the economy is recovering, those loan-rates need to come down. Until then, I'm not convinced we're out of the woods.
Protesters Bash Capitalism; Would We Be in "Dark Ages" Without It?
Tobin Smith: Europe would be in the dark ages without capitalism -- it's what rebuilt the continent after World War II. It's easy to kick the U.S. when it's down, but what a short memory on the part of the Europeans. The government taking control of businesses and dividing wealth amongst the people is no solution.
Stewart A. Alexander, Socialistparty-USA.org: Look at how much ordinary citizens have lost in terms of savings, income, jobs -- we're losing everything. It's time to give working people a break and right now the system is not giving them a break at all. The problem in this country is working people taking one step forward and two steps backward. Right now, workers are giving up all the gains they've made in the last 15 years.
Matt McCall: What about the 20-year boom that took place before this recession? Capitalism has created a tremendous amount of wealth and jobs. You can't condemn it based on an economic recession that's come after years of growth and development.
Gary B. Smith: The U.S. has been the greatest wealth creator in the history of mankind. Look at our country's standard of living in almost any income category compared to the rest of the world. Most poor people in this country own two cars, a color TV, a computer, and a telephone. The poor in this country are better off than the poor in any other country.
States Smacking Middle Class With Hidden Taxes; Are They Crazy?
Matt McCall: This is very counterproductive. The last thing to do in the middle of a recession is raise taxes. These taxes affect everybody, and the states are trying to sneak them in there without anybody noticing.
Faiz Shakir, AmericanProgress.org: President Obama has provided tax cuts for the middle class. If you're talking about tax increases on cigarettes, the revenues from that tax go to healthcare for children. States and President Obama are trying to pay for the services the government provides.
Tobin Smith: This is nothing more than a liberal wish list for to strengthen the nanny state. They'll raise taxes on items they don't want you purchasing, like cigarettes and alcohol, in an attempt to be social engineers. They're under the impression they know better than the consumer.
Gary B. Smith: States have two options--they can tax citizens or cut services. The problem is that if states want to cut services, they have to cut state workers, most of who are unionized. States will not take on the unions. It's easier for the state to soak citizens.
Pat Dorsey: No one gets elected by promising to cut services. States always overspend when times are good and never save money for a rainy day. If politicians don't do it this way, they don't get re-elected. They don't think long-term.