TigerSoft's
              Comments on Political Economy
           Using Tiger's Insider Trading Charts

       
by William Schmidt, Ph.D. (Columbia University)  - Creator of Tiger Software
                             
Tiger's Daily Notes
           
  http://tigersoftware.com/news_updates_to_tigersoft_blogs_.htm 

                                    Tiger's Regular Blogs   
                                         http://tigersoftware.com/
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                   It is not possible to follow the stock market closely without
       developing strong views about how the stock market, the government
       and the American economy all inter-relate.   Federal Reserve action is
       a key component.  So are what Congress makes into law and how
       the President leads the country. 

       Readers will want to look at out Insider Trading Charts to see who
       is gaining and who is losing in the corporate struggle to gain from
       the distribution of benefits owing to shifting governmental decisions
       and laws.  These are discussed daily at www.tigersoftware.com
       and

       On August 12th, 2010, the Tiger Hotline was again very critical of
       Obama lack of leadership.  Time is running out.   He must stop
       representing the big banks and do more for average Americans,
       or the economy will get much worse and the deficits will exhaust
       the Treasury.


              "The FED Will Do Its Best To Prop Up The Market,
          but America Badly Needs Presidential Leadership


        My sense is that monetary policy is wholly inadequate to bring a recovery. 
         It is like pushing a string.  As American incomes drop, aggregate Demand falls. 
         With higher levels of unemployment looming businesses defer new investments
         and even lay off workers or replace them with lower paid workers overseas.  The rich
         could certainly be taxed at a much higher rate to pay for badly needed public works
         programs.  High frequency program trading does nothing productive socially. 
         It should be heavily taxed.  Marginal tax rates were much higher in the 1950s and 1960s
         for very high incomes.  Growth was not prevented.   American infrastructure is falling
         apart.  We are not keeping up with many other nations.  Unless the economy turns
         around, the US Treasury will surely be exhausted completely.  Then it will be too late. 
         The IMF will impose strict austerity conditions.

        "Growth is what is needed now to shrink the budget.  Putting the 25 million
         unemployed people back to work would bring jobs, growth and modernization of
         infrastructure.  Inflationary? Deflation is the problem now.  Obama says none of these
         things.  Yet he is called a "socialist".   He is so easily cowed and bullied.  His political
         opponents see him as a wimp and they will keep on bullying him.

        Sadly, Obama is no FDR, who immediately began vast  publics works' programs
        in 1933-1934 and did not hesitate to take on the biggest Wall Street banks.  Like Obama,
        FDR was called a "socialist",   even as the New Deal saved capitalism from itself.
        FDR's fireside chats on the radio gave new hope to the 25 million without work. 
        The result was his party spectacularly increased its hold in Congress in the first mid-term
        Elections of 1934, despite what the pundits in the news media of the day predicted.
       Only in 1937, when FDR started again listening to bankers who demanded that he cut back
        government spending, did the stock market go into its 48% "second dip" .  It was only in the
        1938 election, that anti-New Deal Republicans and Democrats started to gain back seats in
        Congress. 

        Obama is now starting    to talk of budget balancing in the middle of this gathering
        Depression.  In doing so, he risks another 1937 Crash.  And it makes no political sense,
        at all, assuming he has read the history of the New Deal.   

        By contrast, Obama offers no real vision, except to say, "I saved the banks".  Blaming Bush
        offers no vision.  But that is all his handlers let him say,  Now, 18 months into his Presidency,
        he appears too spineless and too treacherous in the way he has treated his supporters
        to even trust, much less inspire.  Who knows what is in his heart?  He seems unable to deal
        with the current economic mess.  Maybe, Wall Street owns him completely.  His chief
        economic appointments are a;; very close to Wall Street: Summers and Getithner
        and on down.  The most charitable interpretation is that his educational background is
        badly flawed. 

        Obama seems completely ignorant of macro-economic alternatives to the Fed's
        bank-friendly monetary policy.  He avoids all references to the political and economic
        history of the New Deal.  We are left thinking he is just a fast-talking political wheeler-dealer
        who still thinks he can fool people with empty rhetoric.  I think that there is a reason
        Obama has never released his college transcripts.  Either he did not study economics
        or he did very poorly in them if he did."
          
                                                Here is a section on the New Deal from our
                                    DAILY COMMENTS ON THE NEWS
                          and EARLIER TIGERSOFT BLOGS
                                             8/11/2010
  
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                           Wall Street's "perverse incentive structures" guarantee another crisis
                           "
Excessive pay on Wall Street, which Black says is the biggest culprit of the financial crisis"
                           The Financial regulation reform utterly fails to deal with this, Obama's rhetoric not withstanding.

                          Fed takes action as economy sinks further

                         What the Fed says:  "it would spend a relatively small amount of money -- about $10 billion a month,
                         economists estimate -- buying government debt. The move is designed to drive interest rates on
                         mortgages and corporate borrowing at least a little lower and help the economy grow faster."

                                           Peerless DJIA Chart - August 10, 2010  from TigerSoft Hotline
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                        VERY BEARISH. I think, are Bernanke's ramarks that he wants the FED to buy
                        US Treasury instruments.  The strong implication is that he will backstop them when the
                        Chinese start to sell their huge holdings. He may have meant well, but Bernanke's comments are
                        most
unreassuring.
Are the Chinese selling already?   Is he preparing us for that contingency?
                        Is the prospect of the Chinese dumping US debt instruments big part of why the Dollar has turned
                        weak.    TigerSoft's Closing Power leads its price trends.  Currency traders should be using
                        TigeerSoft.    10 years of Closing Price charts are available for $125 on the British Pound, Japanese.
                        Closing Power's downtrend should be respected for now.  Get TigerSoft and see our rules for
                        trading our Professional Closing Power.

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                                                                         DEFLATION

                        Is the pace of economic recovery so slow that no one will borrow to buy a house at 4% or
                        build a US factory?.  The Fed is getting desperate.  It is "pushing on a string".  Monetary policy
                        is not the answer.  Fiscal stimulus and federal public works programs are the only solution.
                        But Obama's financial advisers are hopelessly beholden to big banks and fearful that the right
                        wing radio chorus will scream "socialism".  So an FDR like New Deal with massive public works
                        programs is not even talked about. 
  

            
REAL NEW DEAL HISTORY

wpe1A2.jpg (9562 bytes)      WPA - Works Progress Adm. 

                    WPA was the largest employer in the country until WWII.

                    "The goal of the WPA was to employ most of the unemployed people on relief until the economy recovered. Harry Hopkins testified to Congress during January 1935 why he set the number at 3.5 million, using Federal Emergency Relief Administration data. Estimating costs at $1200 per worker per year, he asked for and received $4 billion."

                    "largest New Deal agency, employing millions to carry out public works projects, including the construction of public buildings and roads, and operated large arts, drama, media, and literacy projects. It fed children and redistributed food, clothing, and housing. Almost every community in the United States had a park, bridge or school constructed by the agency, which especially benefited rural and Western populations. Expenditures from 1936 to 1939 totaled nearly $7 billion.[1]...Created by order of President Franklin Delano Roosevelt, the WPA was funded by Congress with passage of the Emergency Relief Appropriation Act of 1935 on April 8, 1935. The legislation had passed in the House of Representatives by a margin of 329 to 78, but was delayed by the Senate.[1]...Headed by Harry Hopkins, the WPA provided jobs and income to the unemployed during the Great Depression in the United States. Between 1935 and 1943, the WPA provided almost eight million jobs.[2]
        (Source: http://en.wikipedia.org/wiki/Works_Progress_Administration )

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      WPA mural in Cincinnati.  Now at airport.  See more WPA murals.
    
New Deal/WPA Art Project


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      BLUES MUSIC HISTORY PROJECT -  

              Robert Johnson lives because WPA people recorded his music for the Library of Congress...
     
Eric Clapton has called Johnson "the most important blues singer that ever lived" He was ranked fifth "
      in Rolling Stone's list of 100 Greatest Guitarists of All Time.[4]   Eric Clapton described Johnson's music
      as "the most powerful cry that I think you can find in the human voice." In two takes of "Me and the Devil Blues"
      he shows a high degree of precision in the complex vocal delivery of the last verse: "The range of tone
      he can pack into a few lines is astonishing."[49
            Listen to him...
                       http://www.youtube.com/watch?v=Yd60nI4sa9A
                       http://www.youtube.com/watch?v=3MCHI23FTP8
          
           FDR's
New Deal Music        WPA Blues   That Man on The WPA
              "The Federal Music Project of the WPA was keeping singers and musicians alive" and performing
in the middle of the Depression.
"
The most concerted broadening of musical education and performance came from the federally sponsored WPA Federal Music Project (FMP). Like other artists, musicians were devastated by the Depression in the early 1930s. Headed by Nikolas Sokoloff, the FMP, founded in 1935, sponsored radio broadcasts and musical-education classes and commissioned work from composers such as George Antheil, William Schuman, and Elliot Carter. The FMP funded an index of American composers from colonial times to the present and sponsored folklorists traveling through the South. Between 1935 and 1939 some seven thousand musicians worked for the FMP in twenty-eight symphonies, ninety small orchestras, sixty-eight brass bands, and thirty-three opera or choral groups. The FMP sponsored African American composers and had a hit with The Swing Mikado, Gilbert and Sullivan done to African rhythms in Chicago and New York in 1938 and 1939. Music spread and flourished despite decreased economic activity    Music in the 1930s



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Civilian Conservation Corps (CCC)
               1933-1942
               "
As part of the New Deal legislation proposed by President Franklin D. Roosevelt (FDR), the
                  CCC was designed to provide relief for unemployed youth who had a very hard time finding jobs
                  during the Great Depression while implementing a general natural resource conservation program on
                  public lands in every U.S. state, including the territories of Alaska, Hawaii, Puerto Rico, and the U.S. Virgin
                   Islands. The CCC became the most popular New Deal program among the general public, providing jobs
                   for a total of 3 million young men from families on relief.[1] Implicitly the CCC also led to awareness and
                   appreciation of the outdoors and the nation's natural resources, especially for city youth.[2] The CCC was
                   never considered a permanent program and depended on emergency and temporary legislation for its
                   existence.[3]   ... During the time of the CCC, volunteers planted nearly 3 billion trees to help reforest America,
                   constructed more than 800 parks nationwide that would become the start of most state parks, developed
                   forest fire fighting methods and a network of thousands of miles of public roadways, and constructed
                   buildings connecting the nation's public lands.[5]"
                          (Source: http://en.wikipedia.org/wiki/Civilian_Conservation_Corps "

wpe1A4.jpg (6911 bytes)   Tennessee Valley Authority
           Est. May 18, 1933.

           "
Tennessee Valley Authority (TVA) is a federally owned corporation in the United States created by congressional charter in May 1933 to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley, a region particularly affected by the Great Depression. The enterprise was a result of the efforts of Senator George W. Norris of Nebraska. TVA was envisioned not only as a provider, but also as a regional economic development agency that would use federal experts and electricity to rapidly modernize the region's economy and society.

TVA's service area covers most of Tennessee, parts of Alabama, Mississippi, and Kentucky, and small slices of Georgia, North Carolina, South Carolina, West Virginia, Indiana and Virginia. It was the first large regional planning agency of the federal government and remains the largest. Under the leadership of David Lilienthal ("Mr. TVA"), TVA became a model for America's governmental efforts to modernize Third World agrarian societies.[1]

"the agency was given authority to enter into long-term (20 years) contracts for the sale of power to government agencies and private entities, to construct electric power transmission lines to areas not otherwise supplied and to establish rules and regulations for electricity retailing and distribution. TVA is thus both a power supplier and a regulatory agency.

Today, TVA is the nation's largest public power company, providing electric power to over nine million customers in the Tennessee Valley.  ( http://en.wikipedia.org/wiki/Tennessee_Valley_Authority )

wpe1A5.jpg (6840 bytes)      Grand Coulee Dam
      In 1933, President Franklin D. Roosevelt authorized the dam as a Public Works Administration project, and Congress appropriated funding...It is the largest electric power-producing facility[5] and the largest concrete structure in the United States.[6] It is the fifth largest producer of hydroelectricity in the world, as of the year 2008.
(
Source: http://en.wikipedia.org/wiki/Grand_Coulee_Dam )   

                                                                      

                                    DOES OBAMA KNOW ANY ECONOMIC HISTORY?

                        Obama seems so utterly ignorant ot the economic history of the New Deal. He never mentions
                        FDR, even though the challenges were similat for both Presidents.  We know that he studied
                        Political Science and International Relations at Columbia.  Having gone to Columbia myself,
                        I can say, it would be quite easy for an undergraduate to major in international relations
                        and learn relatively little about macronomics or economic history.  Why does he speak so
                        little of this time in his life?  Why does no one remember him?  Obama has refused to release
                        his college transcripts. 

                                  "Federal law limits the information that Columbia can release about Mr. Obama's time there.
                              A spokesman for the university, Brian Connolly, confirmed that Mr. Obama spent two years
                              at Columbia College
and graduated in 1983 with a major in political science.
                              He did not receive honors, Mr. Connolly said, though specific information on his grades
                               is sealed".

                        As a result, Obama gives only hollow economic speeches full of rhetoric, but showing a pathetic
                        understanding of alternative economic policies that might be argued applied in a period of
                        chronic high unemployment and high deficits.  Not surprisingly, Obama is completely dependent
                        on advisers who are repeating the same mistakes that the Japamese did in the 1990s, thnking that
                        monetary policy and very low interest rates would make a difference. he studied political science
                        and international relations at Columbia.
          
                        At best, we are risking the experience of the Japanese.  At worst, if fiscal spending is curtailed,
                        we are risking a 1937-1938 Stock Market Crash, when FDR backslid towards fiscal austerity
                        and balancing a budget with 20% still unemployed.,.

                                 See TigerSoft's Blog "The Limits of Monetary Policy" February 5, 2008
                                 "A Deflationary Spiral Is The Biggest Danger Now" October 23, 2008
                                 "Lessons of Japan Stagnation: 1990-2003"   February 25, 2009
                                         "The Real Obama Will Protect Wall Street, not Main Street"     

                                                  From FDR's 1932 Innaugural Speech

   A "...host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.

And yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered, because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply.

Primarily, this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True, they have tried. But their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit, they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They only know the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy, the moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days, my friends, will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves, to our fellow men.

Recognition of that falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, and on unselfish performance; without them it cannot live.

Restoration calls, however, not for changes in ethics alone. This Nation is asking for action, and action now.

Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing great -- greatly needed projects to stimulate and reorganize the use of our great natural resources....

We must act. We must act quickly.

And finally, in our progress towards a resumption of work, we require two safeguards against a return of the evils of the old order.
There must be a strict supervision of all banking and credits and investments. There must be an end to speculation with other people's money. And there must be provision for an adequate but sound currency.