ÿþ<html> <head> <meta http-equiv="content-type" content="text/html;charset=iso-8859-1"> <title>OnlineColumnist®.com: Putin Punishes Georgia</title> <meta name="generator" content="Adobe GoLive 4"> <style type="text/css"> .style2 { font-size: large; font-weight: bold; font-family: Arial; } .style3 { height: 69px; } .MsoNormal {} h1 {margin-bottom:.0001pt; page-break-after:avoid; font-size:12.0pt; font-family:"Times New Roman"; font-weight:normal; text-decoration:underline; text-underline:single; margin-left: 0in; margin-right: 0in; margin-top: 0in; } .style4 { font-size: x-large; font-weight: bold; } </style> </head> <body bgcolor="white" vlink="black"> <center> <table cool width="624" height="2719" border="0" cellpadding="0" cellspacing="0" gridx="16" showgridx gridy="16" showgridy> <tr height="79"> <td width="133" height="118" rowspan="2" valign="top" align="left" xpos="0"><a href="aboutdiscobolos.html"><img height="110" width="62" src="images/discobolos.logo.transp.gif" border="0"></a></td> <td width="7" height="118" rowspan="2"></td> <td width="482" height="79" colspan="2" valign="top" align="left" xpos="140"><img height="75" width="450" src="images/banner.GIF"></td> <td width="1" height="118" rowspan="2"></td> <td width="1" height="79"><spacer type="block" width="1" height="79"></td> </tr> <tr height="39"> <td width="182" height="39"></td> <td width="300" height="39" valign="top" align="left" xpos="322"><a href="aboutdiscobolos.html"><img height="14" width="267" src="images/divisionofNEW.GIF" border="0"></a></td> <td width="1" height="39"><spacer type="block" width="1" height="39"></td> </tr> <tr> <td width="624" colspan="6" valign="top" align="left" xpos="0" class="style3"> <table border="0" width="100%" bgcolor="black" cellspacing="0"> <tr> <td> <table border="0" width="100%" bgcolor="#99ffcc" cellspacing="0" cellpadding="4"> <tr> <td align="center"> <div align="left"> <a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> HOME</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> &#8226; <a href="articlesindex.html">ARTICLES</a> &#8226; <a href="books.html">BOOKS</a> &#8226; <a href="teflon.html"> THE </a><a href="teflon.html">TEFLON</a><a href="teflon.html"> REPORT</a> &#8226; <a href="mailto:letters@onlinecolumnist.com"> REACTIONS</a> &#8226; <a href="aboutdiscobolos.html">ABOUT DISCOBOLOS</a></strong></font></div> </td> </tr> </table> </td> </tr> </table> </td> </tr> <tr height="2"> <td width="133" height="2">&nbsp;</td> <td width="489" height="2576" colspan="3" rowspan="2" align="left" xpos="133" content valign="top" csheight="2573"> <p class="style2">Wall Street&#39;s Message</p> <p><b><font face="Arial,Geneva,Helvetica">by John M. Curtis</font></b><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b><a href="books.html"><br> </a></b></font><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b> (310) 204-8700</b></font></p> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><i>Copyright March 3, 2009<br>All Rights Reserved. </i></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p> <p class="MsoNormal"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span class="style4">&nbsp;S</span>ending the White House a loud message, Wall Street rejected President Barack Obama s $3.55 trillion budget, concerned that Washington s new liberal agenda will only make a bad situation worse.<span style="mso-spacerun: yes">&nbsp; </span>While it s tempting for Democrats to continue bashing former President George W. Bush, he s not entirely responsible for today s economic mess.<span style="mso-spacerun: yes">&nbsp; </span>Barack must seriously stop listening to House Speaker Nancy Pelosi (D-San Francisco) and Senate Majority leader Harry Reid (D-Nev.), both can t get beyond past partisan bickering.<span style="mso-spacerun: yes">&nbsp; </span>Barack ran on a platform to end Washington s partisan dysfunction, preventing the two-party system from functioning as the framer s intended.<span style="mso-spacerun: yes">&nbsp; </span>Wall Street s devastating meltdown is not only based on bad economic news:<span style="mso-spacerun: yes">&nbsp; </span>It s based on perceptions of whether the two parties can fix the problem.<span style="mso-spacerun: yes">&nbsp; </span>Pitched battles don t bode well for economic recovery.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Baracks recent budget frightened investors concerned about growing deficits.<span style="mso-spacerun: yes">&nbsp; </span>Democrats may wish to launch long overdue programs but current economic conditions require the White House to tamp down its own expectations and wish list with what s best for the economy.<span style="mso-spacerun: yes">&nbsp; </span>Financial markets don t want to hear about explosive government borrowing and spending, during a time of economic upheaval.<span style="mso-spacerun: yes">&nbsp; </span>All can agree on more stimulus but all don t agree on launching costly new government programs, like national health care, global warming initiatives and dramatic changes to the tax code.<span style="mso-spacerun: yes">&nbsp;&nbsp; </span>Barack &amp; Co. need to go back to the drawing board, scale back spending plans and focus right now on fixing the nation s broken financial markets.<span style="mso-spacerun: yes">&nbsp; </span>New revelations about more losses at AIG should remind the White House that there are other priorities before funding costly new programs.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Wall Street will express welcomed relief to White House overtures to scale back unrealistic spending.<span style="mso-spacerun: yes">&nbsp; </span> Barack shouldn t waste his time and credibility connecting an overhaul in the health care system to today s financial meltdown.<span style="mso-spacerun: yes">&nbsp; </span>When he spoke Feb. 25 to a joint session of Congress, he could have reassured Wall Street about his commitment to deal with exploding budget deficits.<span style="mso-spacerun: yes">&nbsp; </span>Proposing a $3.55 trillion budget with $1.75 trillion deficit shocked Wall Street into its recent selling frenzy, taking the Dow Jones Industrial Average to the lowest point since 1997.<span style="mso-spacerun: yes">&nbsp; </span>Instead of new spending plans, Barack should have talked about fiscal discipline by his White House and the rest of the government.<span style="mso-spacerun: yes">&nbsp;&nbsp;&nbsp; </span>Pushing national health care now as important as it is was bad timing given the continued hemorrhage in financial markets.<span style="mso-spacerun: yes">&nbsp; </span>Showing restraint would have reassured investors.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>No one knows for sure how low the Dow can go.<span style="mso-spacerun: yes">&nbsp; </span>Collapsing more than 50% since its Nov. 2007 high of $14,000, the Dow now stands at 6,763, dropping nearly 300 points.<span style="mso-spacerun: yes">&nbsp; </span>Wall Street will continue to slide when it perceives the White House as barking up the wrong tree.<span style="mso-spacerun: yes">&nbsp; </span>While Wall Street insider Tim Geithner leads the Treasury, it won t give him a pass without showing some common sense.<span style="mso-spacerun: yes">&nbsp; </span>It s not common sense to go on a spending spree of well-meaning programs when financial markets remain in chaos.<span style="mso-spacerun: yes">&nbsp; </span> As bad as things are, they cans still get worse, and get a lot worse, said Bill Strazzullo, chief market strategist for Bell Curve Trading, expecting the Dow and S&amp;P to bottom out around 5,000 and 500, respectively.<span style="mso-spacerun: yes">&nbsp; </span>While no one can predict a bottom, there s little expectation that markets can recover past worth.<span style="mso-spacerun: yes">&nbsp; </span>Without another asset bubble, there s scant chance of markets rapidly bouncing back.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Barack s $3.55 trillion budget stunned investors, knowing full well without full implementation that the deficit could top $2 trillion.<span style="mso-spacerun: yes">&nbsp; </span>No one believes newly minted Budget Direct Perter Orszag s can shrink the shortfall by 50% during Barack s first term.<span style="mso-spacerun: yes">&nbsp; </span>Nose-diving another 300 points, the Dow hit 6,763, a bottom not seen since 1997.<span style="mso-spacerun: yes">&nbsp; </span>Without the dot-com bubble of the late  90s, the Dow would have never hit its peak in March 2000 of 12,500, nor, for that matter, would it have peaked at 14,000 in Nov. 2007 without the latest real estate bubble.<span style="mso-spacerun: yes">&nbsp; </span>Investment and Depository Banks, government agencies Freddie Mac and Fannie Mae and AIG Insurance were decimated by reckless derivative trading that went bust when the real estate bubble popped.<span style="mso-spacerun: yes">&nbsp;&nbsp; </span>Vital protections like the Depression-era Glass-Steagall Act were reversed in 1999, leaving the banking industry vulnerable to risk.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Wall Street craves common sense judgment on the part of the new administration. <span style="mso-spacerun: yes">&nbsp;</span>Instead of getting fiscal restraint, they got profligate spending promising to explode the deficit and threaten economic recovery.<span style="mso-spacerun: yes">&nbsp; </span> Wall Street needs the White House to recalculate the budget, scale back grandiose plans and demonstrate it s serious about controlling government spending during this time of fiscal crisis.<span style="mso-spacerun: yes">&nbsp; </span>Once the fiscal crisis has passed, then it s time to propose whopping new spending programs.<span style="mso-spacerun: yes">&nbsp; </span> The economy definitely has deteriorated since November, said Sean Sinko, head of fixed income management at SEI Investments.<span style="mso-spacerun: yes">&nbsp; </span> It s just the fact that we haven t seen signs of improving or stabilizing, per se, which is adding to the morass in the market. <span style="mso-spacerun: yes">&nbsp; </span>Stability comes from a sober White House not intoxicated with power, promising a spending binge but mindful and cautious about taxpayers money.</p> <p class="MsoNormal"> John M. Curtis writes politically neutral commentary analysing spin in national and global news.&nbsp; He&#39;s editor of OnlineColumnist.com and author of <a href="books.html"><i>Dodging</i> <i>The Bullet</i> </a>and <i> <a href="books.html">Operation Charisma</a>.</i></p> </td> <td width="1" height="2576" rowspan="2"></td> <td width="1" height="2"><spacer type="block" width="1" height="2"></td> </tr> <tr height="2574"> <td width="133" height="2574" valign="top" align="left" xpos="0"><img height="172" width="111" src="images/johninframe3.jpg"></td> <td width="1" height="2574"><spacer type="block" width="1" height="2574"></td> </tr> <tr height="1" cntrlrow> <td width="133" height="1"><spacer type="block" width="133" height="1"></td> <td width="7" height="1"><spacer type="block" width="7" height="1"></td> <td width="182" height="1"><spacer type="block" width="182" height="1"></td> <td width="300" height="1"><spacer type="block" width="300" height="1"></td> <td width="1" height="1"><spacer type="block" width="1" height="1"></td> <td width="1" height="1"></td> </tr> </table> <table border="0" cellpadding="0" cellspacing="2" width="597"> <tr> <td><font size="1" face="Arial,Geneva,Helvetica"> <hr noshade size="1"> </font><a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> Home</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> || <a href="articlesindex.html">Articles</a> || <a href="books.html">Books</a> || <a href="teflon.html">The Teflon Report</a> || <a href="mailto:letters@onlinecolumnist.com"> Reactions</a> || <a href="aboutdiscobolos.html">About Discobolos</a></strong></font> <div align="left"> <p><font size="1" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">This site designed, developed and hosted by the experts at</font><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"> <a href="http://www.cmeonline.net" target="_blank"><img height="30" width="138" src="images/cmelogoANIM.gif" border="0" align="absmiddle"></a></font></p> </div> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">©1999-2005 <a href="aboutdiscobolos.html"> Discobolos Consulting Services, Inc.</a><br> (310) 204-8300<br> All Rights Reserved. </font></td> </tr> </table> </center> </body> </html>