This blog post originally appeared on RealMoney Silver on March 8 at 8:01 a.m. EST.
"He cannot wait much longer. The rise in credit-card rates, as well as the drop in consumer confidence, home sales and bank lending, all foretell more suffering ahead for those who don't work on Wall Street. But on these issues the president, too timid to confront the financial industry backers of his own campaign (or their tribunes in his own administration) and too fearful of sounding like a vulgar partisan populist, has taken to repeating his health care performance. "And so leadership on financial reform, as with health care, has been delegated to bipartisan Congressional negotiators poised to neuter it. The protracted debate that now seems imminent -- over whether a consumer protection agency will be in the Fed or outside it -- is again about the arcana of process and bureaucratic machinery, not substance. Since Obama offers no overarching narrative of what financial reform might really mean to Americans in their daily lives, Americans understandably assume the reforms will be too compromised or marginal to alter a system that leaves their incomes stagnant (at best) while bailed-out bankers return to partying like it's 2007. Even an unimpeachable capitalist titan like Warren Buffett, venting in his annual letter to investors last month, sounds more fired up about unregulated derivatives and more outraged about unpunished finance-industry executives than the president does." -- Frank Rich, " The Up-or-Down Vote on Obama's Presidency," New York Times op-ed column (March 6, 2010)Notwithstanding the tendency of TheStreet.com's readers to the right to hiss and TheStreet.com's readers to the left to cheer Rich's always left-leaning words, his weekend op-ed reminded me of how much political and economic factors have worked in favor of the bulls over the past several months.
- Political: As stated by Frank Rich, the president's initiatives, especially his centerpiece health care legislation, are moving backwards, and, as is typical, gridlock is being celebrated by investors.
- Financial and Economic: The benefits of monetary and fiscal stimuli have successfully thwarted an unprecedented credit crisis and, in many areas, have led to an improving or stabilizing economic recovery. For example, though the housing market remains moribund, retail sales seem to be on the mend. In addition, the residue of that policy has not yet yielded higher inflation and has provided a value-enhancing backdrop of still-low interest rates.