With gasoline prices above $3 a gallon, why shouldn't 2008 be the most expensive U.S. election ever? Granted, the Federal Reserve is slashing interest rates as though there wasn't a drop of inflation in the economy. But according to CNNMoney, the candidates running for president this year are poised to raise $1 billion, 14% more than the $880 million they raised in 2004. That 14% more may be a good proxy for the rate of inflation to buy influence in the White House.
The companies with the most money are also giving candidates the most money. These include the following:
I was motivated to write this by a recent blog post by Jonathan Berr entitled, Iowa to Wall Street: Drop dead. In that post Jonathan made one assertion to which I take exception. Mr. Berr claims that the American voter is scared and that our fear shall rule the ballot box this coming November. With all due respect (and much is due) to Jonathan Berr, I must make this one assertion, it's not fear that we shall carry to the ballot box in November, it's anger. We as a public are very angry and we have every right to be mad as hell.
We're mad because we know that as major banks were writing off losses they brought upon themselves, they sold those debt portfolios to collection agencies and pools of lawyers who relentlessly chased those dollars until the cows came home. Yeah, it's a loss on the books but those debts are still real and collectible. Do they honestly think we don't know that?
We're angry because our government is silently allowing the sale of large stakes in major domestic financial institutions to foreign entities.
We're upset that our government is underwriting the foolishness of producing ethanol from foodstuffs for use in internal combustion engines when good sense tells us that ethanol should be made from waste and used at it's source for electrical generation.
We're mad as hell that we're potentially facing a government made up mainly of turncoat Democrats who sanctioned a war with their votes and now haughtily claim they were misled. They're liars or they're stupid... which is it?
While the race for Democratic nomination for president seems to be 67% wrapped up with Hillary Clinton getting the nomination, the Republican nomination is far from settled. According to Intrade.com, a betting site where you can bet on the outcome of the elections, Mike Huckabee has been gaining a lot of ground recently.
As a stock analyst, I can recognize a healthy, up-trending chart, and support for Huckabee has taken off in the last two months, from a 3% chance of the Republican nomination to a 12% chance of the nomination.
What if politics was like the stock market and you could buy politicians you like and sell the ones you didn't without envelopes of sequentially numbered small money orders in the same Chinese handwriting or cold cash hidden in the freezer?
For those rich enough -- they can buy a politician or two. The rest of us probably could rent a couple minutes of time with a big campaign contribution, and get lots of promises from a politician. Knowing the integrity of politicians and the value of political promises I am not sure how good of an investment politicians turn out to be.
Maybe you are one of the people smart enough to pick up a couple of bucks around the office at election time with bets on who is going to win. I have to admit I lost the last political bet I made. Good thing it was only a buck. What if there was a stock market where you could buy and sell shares in the candidates? The candidates would move up and down every day and those of us who are financial analysts could quantify the likelihood of people winning based on how bets are placed.
Now I am not into horse racing, poker or sports betting; but I do have to check up on the political bets every once in a while. With real money on the line there is a big incentive to be right. If you do not like the odds you can jump into the market and take the other side of the action. So what do the bookies think is going to happen in the coming election? Well it appears that Clinton is the favorite for the Democratic nominee with 67.8% and the Republican Rudy Giuliani leads the GOP with 35%.
This week Alan Abelson, in his Barron's, Up & Down Wall Street (subscription required) commentary on the upcoming IPO by the Blackstone Group there was much to be cynical about. In reviewing the lengthy 200+ page prospectus he chortled at the 30 pages listing all the risks of investing.
The most amazing of disclosures was this: "Our general partner and it's affiliates have limited fiduciary duties to us and our common unit-holders, which may permit them to favor their own interests to the detriment of us and our common unit-holders" Can they state it any clearer than that - this is all about our opportunity, not about yours!
Last Sunday I called readers attention to this in less blatant terms when I posted: Sunday Funnies: Blackstone looking for more green and raised many questions as to why they need to do a public offering now? While Mr. Abelson and I are cynical about this IPO, we are no more cynical than the managers of the Blackstone Group who are taking advantage of a what might be a frothy market place.
Mr. Abelson, who I find provides one of the richer reads each week has been very worried about the frothy market for over a year now and each week marvels at the overall strength of the market with very bearish undertones and outright bemusement awaiting it's collapse. On this perspective I cannot agree. Abelson is wrong - he will be right someday - but not today, and there are many reasons.
The mountains of cash in corporate coffers is higher than it has ever been since I have been investing over the last few decades.
Many largely capitalized companies have been building shareholder value for the last five years and their stock prices have been relatively stagnant. There is no froth in General Electric (NYSE: GE), Johnson and Johnson (NYSE: JNJ) or Microsoft Corp. (NASDAQ: MSFT) and furthermore even Google (NASDAQ: GOOG) which may be over priced, is a much greater bargain this year than last, while it's earnings have started to catch up to it's prolific stock price.
There are numerous companies in the market at fire-sale prices and all you have to do is look at my Chasing Value or Serious Money columns to find them.
Demand and opportunity in China, India, Russia, Brazil, and eastern Europe has never been higher and if it slowed to half the current level of GDP growth would be double that of the U.S.
Interest rates have been raised significantly over the last few years and are still at historic lows worldwide providing liquidity for investment and expansion.
The market did not shoot up over the last four years as it did leading up to the bursting of the bubble that preceded it and if the market weakens it will do so slowly not with a burst. We might get to a point where we see a droopy market but not a collapse of equities.
If you want to see a real frothy market take a look at campaign fund raising / financing / spending, and the like. Among the presidential hopefuls, Democrats Clinton, and Obama have exceeded the $25 million mark and Republicans Giuliani, McCain and Romney are all expected to reach about $20 million. Since there will be only one winner unlike the stock market, look for more collapsed dreams here than anywhere else. The real winner will be the advertisers and the media that will be relieving them of the funds. Perhaps that should have been another positive for the market - I should have singled out the media companies that are licking their collagen inflated lips.
Disclosure: I own shares of JNJ.
Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.
While the official results of the first money primary won't be posted until April 15th, the unofficial results suggest that Mitt Romney was the Republican winner and Barack Obama topped the Democratic pack. Does this mean that Romney and Obama will win their respective party nominations? Of course not -- but it does reveal some interesting competitive dynamics.
What is the first money primary? It's a media concoction that compares how much money the 2008 candidates raised in the first reporting period ending March 31st. And it determines winners based on two criteria:
How the candidate did relative to expectations; and
With gasoline prices above $3 a gallon, why shouldn't 2008 be the most expensive U.S. election ever? Granted, the Federal Reserve is slashing interest rates as though there wasn't a drop of inflation in the economy. But according to CNNMoney, the candidates running for president this year are poised to raise $1 billion, 14% more than the $880 million they raised in 2004. That 14% more may be a good proxy for the rate of inflation to buy influence in the White House.
I was motivated to write this by a recent blog post by Jonathan Berr entitled, 
While the race for Democratic nomination for president seems to be 
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