Obama will Fail

unless he moves forward with vision and leaves the people stuck in the 80’s and 90’s in the dust.  The article in the link here, found in the new July Harpers magazine, sums up in a powerful way where we are now, some 150 days into his administration.  Recently we have gotten off the long-side of the market for a number reasons, many of which are cited in this articile.

A short recap of the Harper’s article in the “Skeptical Market Observer blog” says in brief:

The thesis of the article is that, in spite of his good intentions, President Barack Obama has not and may not be able, during the course of his mandate, to implement a substantial reform agenda due to strong entrenched interests.

Here are some excerpts of the text:

“Just as Herbert Hoover could not, in the end, break away from the best economic advice of the 1920, Barack Obama is sticking with the “key men” of the 1990’s. The predictable result is that, even as he claims to recognize the interlocking nature of the problems facing us and vows to solve them as a whole, the president is in fact abandoning most of his program, at least for the time being.”

“A major theme of Obama’s 2006 book The Audacity of Hope is impa­tience with “the smallness of our politics” and its “partisanship and acri­mony.” He expresses frustration at how “the tumult of the sixties and the subsequent backlash continues to drive our political discourse,” “

“Obama will have to directly attack the fortified bastion of the newest “new class” – the makers of the paper economy in which he came of age – if he is to accomplish anything. These interests did not spend fifty year shipping the greatest industrial economy in the history of the world over­seas only to be challenged by a newly empowered, green-economy working class. They did not spend much of the past two decades gobbling up previ­ously public sectors such as health care, education, and transportation only to have to compete with a reinvigorated public sector. They mean, even now, to use the bailout to make the government their helpless junior partner, and if they can they will devour every federal dollar available to recoup their own losses, and thereby preclude the use of any monies for the rest of Barack Obama’s splendid vision.”

http://harpers.org/media/pages/2009/07/pdf/HarpersMagazine-2009-07-0082562.pdf

As to the markets, The S&P and gold markets sold off towards their major support areas that we mentioned on June 17th, 870 on the S&P and 915 on Gold.  We think that eventually these support areas will fail but we have the Fed meeting and the end of the quarter to deal with now.  Likewise T-Bonds and the dollar were relatively strong but have not blown through the breakout levels of 118-10 on September T-Bond futures or the 82.40 level on September Dollar Index futures.  As such we have cut our total net positions in the portfolios to the point that we are basically neutral, around 6 percent net short at the close yesterday.

As to portfolio performance, yesterday we made new highs for the year and new all time highs on all the portfolios.  The Aggressive Portfolios is up 33.5 % and the EMA ETF Fund is up 14.2 % for the year to date.  

The EMA ETF Fund Nav was  1180 at yesterdays close.

8:29 AM CDT 

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