“The Worst President in My Lifetime”, Howard Davidowitz on Obama

President Obama is having a rough go of things lately. As noted here last week, for the first time in his presidency, more Americans disapprove of Obama (48%) than approve of him (45%), according to the latest WSJ/NBC poll. And 62% say the country is headed in the wrong direction.“The American people are right,” says Howard Davidowitz of Davidowitz & Co. A critic of Obama’s, from the start, Davidowitz refers to him as the “worst” President of his lifetime, even worse than of Jimmy Carter, based on: * — The War in Afghanistan: Davidowitz doesn’t see the point. As far as he can tell, after 7 years, hundreds of billions spent, and thousands of U.S. lives lost, the Afghans still can’t defend against the Taliban. Plus, the Afghan government is stealing billions in aid from the U.S. The WSJ reports, $3 billion in U.S. aid has been loaded onto planes by corrupt officials and flown out of the Kabul airport since 2007. “If they can’t be trained, if they’re stealing all our money, all our soldiers are dying. I don’t understand how any of this is logical,” proclaims Davidowitz. * — Out of Control Spending: Davidowitz thinks Obama has wasted time and taxpayer money pushing ‘Obamacare’ into law at a time when the debt-to-GDP ratio is expected to hit 62% by year’s end. “We’re going broke because of Medicare, Medicaid and everything else. He added another benefit, health-care. Can you explain that to me?” * — BP Oil Spill: “It could destroy the country,” he says. Davidowitz fears the continued loss of hundreds of thousands of barrels of oil per day will drive gas prices higher, further choking and already struggling consumer. Meanwhile, he questions why the President waited 50 days to contact BP executives. Davidowitz recognizes Obama was handed a difficult hand upon entering office, and admits the political system is dysfunctional. Actually, in the many times Davidowitz has appeared on Tech Ticker he’s rarely had a nice thing to say about any politician, regardless of party. What he’d like to see is a return to fiscal responsibility, lacking these days. “Ross Perot did a huge service to this country when he ran because all he talked about was the budget and what was going on and it forced Clinton to deal with it,” Davidowitz says.

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Howard Davidowitz says, U.S. Economy is a Complete Disaster

The U.S. economy is in shambles and Americans will continue to see high unemployment and lower living standards in the years to come, Howard Davidowitz tells Henry and Aaron in the accompanying clip. Davidowitz lays much of the blame for the economy’s woes at the feet of the Obama administration, which he calls “the worst of my lifetime.”Obama “Mr. Mass Destruction”Davidowitz says that the key to Obama’s success is his ability to sell his policies to the public. He can confidently read from a teleprompter and appear competent and in control, when in reality, “it’s one big bag of empty words,” Davidowitz says of Obama’s messages.Davidowitz contends that the President’s spending, including the health-care bill, is creating massive deficits that will take the U.S. years to dig itself out of. “He is Mr. Mass Destruction,” Davidowitz says of Obama. “I mean he is a human destroyer. This guy has spent his way into oblivion and we don’t have a budget. He is surrounded by a bunch of complete incompetents, led by himself. “Housing GloomAs far as the actual economy goes, Davidowitz’s chief concern is the strained state of the housing market, from which the bad news continues to pour in. According to Davidowitz, Americans are facing an $8 trillion negative wealth effect from the bursting of the housing bubble.”We’re talking about some serious money here,” Davidowitz exclaims. “I mean this is a complete disaster and that’s why we are going to have a double dip. We’re guaranteed a double dip in housing.”Small Businesses and UnemploymentDavidowitz says that the job market is also in ruins, noting for every new job there are six applicants. As a result of the intense competition for positions, employers can offer lower wages. Young people entering the work force today can expect to make less money in their lifetime than previous generations. Considering the majority of new jobs are created by small businesses, Davidowitz argues that new regulations governing loans to small businesses are only making matters worse — both for the entrepreneurs and the millions of people out of work.”We have this insane new regulation,” Davidowitz says. “Community banks will not even be able to fill out the forms. They’ll pack up and quit. They’re already underwater. Commercial real estate is still terrible.” The Future a Massive StruggleAsked whether he thought the U.S. would experience another Great Depression, Davidowitz said the coming years will look more like Japan today vs. the U.S. in the 1930s.People will be making and spending less money and the nation as a whole will be dealing with the consequences of the deficit, he says. “We are in a struggle, day by day it’s ugly. At the core, when we look at our debt, we are going to have to deal with it.”A few months ago, while other analysts claimed that the economy would continue to follow a V-shaped recovery path, Davidowitz seemed out of step by insisting the nation’s problems were still dire. Regardless of what you think of his message or style, Davidowitz’s doom and gloom outlook now appears much more credible.

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Paul Krugman Throws In Towel, Says We’re Headed For Another Depression

For the last several months, Princeton professor Paul Krugman has become increasingly agitated about what he feels is a disastrous mistake in the making — a sudden global obsession with “austerity” that will lead to spending cuts in many nations in Europe and, possibly, the United States.Krugman believes that this is exactly the same mistake we made in 1937, when the country was beginning to emerge from the Great Depression. A sudden focus on austerity in 1937, it is widely believed, halted four years of strong growth and plunged the country back into recession, sending the unemployment rate soaring again.In Krugman’s view, the world should keep spending now, to offset the pain of the recession and high unemployment–and then start cutting back as soon as the economy is robustly healthy again.Those concerned about the world’s massive debt and deficits, however, have seized control of the public debate, and are scaring the world’s governments into cutting back.Which fate is worse? It depends on your time frame.Cutting back on spending now would almost certainly make the economy worse, at least for the short run. Not cutting back on spending later, meanwhile (and Congress has shown no ability to curtail spending), will almost certainly keep us on a road to hell in a handbasket.The White House’s own budget projections show the deficit improving as a percent of GDP to about -4% by 2013. After that, however, even the White House doesn’t think things will get much better. After a few years of bumping along at about -4%, the deficit will begin to soar at the end of the decade. And thanks to the ballooning costs of Medicare, Medicaid, and Social Security–along with inflating interest payments from all the debt we’re accumulating–the White House expects the deficit to soar to a staggering -62% of GDP by 2085.What Krugman and his foes agree on is that that’s no way to run a country. And it’s time we finally faced up to that.In the meantime, we’ll continue to fight about what to do in the near-term. And Krugman thinks he has lost that war and we’re headed for another Depression.

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Robert Shiller: Double-Dip Recession Is Still Very Possible

We Went A Little Overboard

Double-Dip Recession

The economy still hasn’t escaped the possibility of a double-dip recession, says Yale economist Robert Shiller, who predicted the housing bust.

“We just went through a Great Depression scare,” he told Bloomberg.

“The Fed and the government took on extraordinary measures to prevent that,” he said. “But I think our confidence is still vulnerable.”

And confidence is the major driver of the economy, Shiller says.

He defines a double-dip recession as another downturn before the economy gets completely back to normal. “I think there’s a significant possibility of that,” Shiller said.

As for the stock and housing markets, they are still way down from their peaks, so it’s difficult to argue they’re overvalued, Shiller says.

“But we’re in this very questionable economy. So there is significant risk of further declines in both the housing and stock markets.”

Star economist Nouriel Roubini is worried about a double-dip too.

He told a recent conference that developed economies around the world will face that risk for years, thanks to exploding government debt burdens and persistent unemployment.

Meanwhile, economist Robert Reich said the United States is sliding into a double-dip recession because the labor market continues to deteriorate.

“The private sector added a measly 41,000 net new jobs in May. But at least 100,000 new jobs are needed every month just to keep up with population growth,” he recently wrote on his website. The average length of unemployment continues to increase, rising to 34.4 weeks, up from 33 weeks in April.

“Why are we having such a hard time getting free of the Great Recession? Because consumers, who constitute 70 percent of the economy, don’t have the dough,” wrote Reich, who served in three national administrations and was a secretary of labor under President Bill Clinton.

By: Dan Weil

Robert Prechter Says, “We Are On Schedule for a Very, Very Long Bear Market.”

MoneyBob NEW YORK (AP) — The Dow Jones industrials plunged below 10,000 Tuesday after traders dumped stocks on worries about the global economy and tensions between North and South Korea. The Dow fell about 190 points in late morning trading. It has fallen 1,346 points, or more than 12 percent, from its recent high of 11,205, reached April 26. The Dow and broader stock indexes all fell about 2 percent. Investors also exited the euro and commodities including oil and again sought safety in Treasury securities. Look out below!

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Faber and Mish – We’re Doomed and Washington Can’t Do Anything About It:

Washington is patting itself on the back for having orchestrated an amazing economic recovery. But Washington lawmakers are a delusional bunch of boneheads, say Marc Faber and Mike “Mish” Shedlock, editor of the Gloom, Boom, and Doom Report and investment advisor at SitkaPacific Capital Management, respectively.The economy is NOT recovering, they say, and the U.S. faces a depressing “eventuality” of either crushing deflation (Shedlock) or runaway inflation (Faber). The timing and type of this eventuality is uncertain, say the gurus, but they are certain it’s too late for America to change course.”It’s beyond repair — it’s too late,” to avert fiscal disaster, Faber declares.Mish agrees: “The day of reckoning has arrived. The question is how long it takes to play out.”This grim outlook doesn’t mean you’re helpless. Faber recommends individuals prepare for doomsday by buying gold, owning assets abroad and buying property outside of major cities.

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U Shaped or Double Dip – Economic Risks Are Rising

U.S. Growth Outlook:  Still Anemic and U-Shaped but Risks of a Double-Dip Recession Are Rising

by Nouriel Roubini

A slew of poor economic data over the past two weeks suggests that the U.S. economy in 2010 is headed for – at best – a U-shaped recovery. The macro news, including data on consumer confidence, home sales, construction and employment, actually suggests a significant downside risk even to the anemic 2.7% growth which RGE forecast for H1. With the positive effects of the historic levels of fiscal stimulus due to fade this year, the U.S. faces at best a 1.5% growth rate in H2, which looks too close for comfort to a tipping point of a double-dip recession.