Illegal Immigration

Illegal immigration, a growing problem or a helpful hand?  As of 2008, the U.S. is estimated to have around sixteen million illegal aliens comprising roughly 5% of the population.  Over the past few years, this has been a very controversial issue both within Congress and society at large.  The term ‘illegal immigrants’ is most commonly used to refer to immigrants from Mexico, Central, and South America who sneak across the border in the hope of a better life.  They aspire to the American dream where they hope for a better lifestyle and more income to support their extended families back home.  Many come, not just because of America’s economic appeal, but also to escape abject poverty, unemployment, and oppression.  Proponents of amnesty for illegal immigrants ask how can we deny them access to the American dream and our principles of universal liberty.  They argue it’s a matter of compassion and enabling more diversity.  Opponents argue that the cost burdens are devastating, that we must follow the rule of law and cannot be selective about which laws we choose to enforce.  They ask, at what point do we say stop?

Although many Americans still don’t consider illegal employment a serious offense, its economic impact has elevated this issue to the national stage.  An objective analysis weighing the benefits against the true costs may likely show that illegal immigrants constitute a net drain on the U.S. economy – although a definitive analysis or conclusion remains elusive.

The negative impact of illegal immigrants and their drain on the U.S. economy is significant.  U.S. News & World Report recently reported in November, 2008 that the U.S. Federal Government’s annual expenditure for aid to illegal immigrants totaled twenty-two billion dollars for welfare, two billion on food assistance programs, and two and a half billion on Medicaid.  According to proceedings from a 1997 meeting of the House Judiciary Subcommittee on Immigration and Claims, “Through other violations of our immigration laws, Mexican drug cartels are able to extend their command and control into the United States. Drug smuggling fosters, subsidizes, and is dependent upon continued illegal immigration and alien smuggling.”  These drug cartels account for 80% of the supply of methamphetamines in the U.S.  Furthermore, additional hazardous effects include illegal drunk drivers and murderous illegal aliens who have claimed over nine thousand American citizens’ lives in just the last year alone; plus, criminal gang activity has ballooned as a result of the influx of illegals.  According to the Los Angeles Times, 60% of Mexican gang members in Los Angeles are illegal immigrants.  Are these really the kind of individuals or refugees we should be allowing to immigrate into our country?

The above-mentioned issues do not even begin to quantify the huge negative impact of illegal aliens on a whole host of social services and the associated hidden costs.  This has created a crisis of unprecedented proportions in our social institutions, especially schools and medical facilities.  They have contributed to an erosion in the quality of education by straining the coffers and resources of local school districts.  Medical emergency rooms are closing all over the country, having been bankrupted by the huge influx of illegal aliens who are unable or unwilling to pay for services.  They drive on public roads, send their children to public schools and engage in a host of activities, all of which drain social service coffers and cost the government money.  Many doubt that whatever taxes illegals may pay in the form of sales or unclaimed social security benefits can begin to cover the net drain they incur on social services.

On the other side of the equation, it is clear that illegal immigrants also bring some benefits to American society.  Advocates for illegal immigration claim that illegals keep the economy growing by filling low-wage jobs many Americans won’t do.  The Wall Street Journal reported in 2005 that illegal immigration is positive to our economy and that they generate a net economic benefit.  The Journal reported that, in a $13 trillion economy, illegal immigrant accounted for about 1% of total economic activity, which would mean that they would contribute about $13 billion.  Also, they make contributions toward social security that often go unclaimed, pay sales taxes, and keep the real estate market propped up in remote areas where renters are hard to find.  George Borjas, Professor of Economics and Social Policy at Harvard University, contends that illegal immigration has a more beneficial impact on the middle and upper classes, yet hurts the lower class because it takes away jobs.   Granted, this is only one study, but Borjas claims African Americans are hurt the most since they lose jobs that are filled by illegal aliens.

This raises the question as to whether the U.S. economy truly needs illegal immigrants to fill jobs Americans won’t do and whether we are doing more harm to our society by allowing an influx of illegal cheap labor to take away jobs from the poor.  With unemployment at 6.1%, a seven-year high, would American citizens perhaps consider taking all these lower wage jobs?  Illegals take $18.1 billion a year in wages away from America citizens.  In order to determine if illegal immigrants are beneficial to the overall economy, one must balance the total taxes they pay and labor savings they provide against the real total cost and opportunity cost of all the services they consume as well as economic losses derived from their associated criminal activity.  Unfortunately, there is no definitive answer and a comprehensive objective analysis remains elusive.

Large corporations and the agricultural industry are the primary advocates for doing nothing about illegal immigration and the resultant stalemate.  This is because they are huge beneficiaries of cheap illegal labor that in turn ensures their continued positive profit margins.  It is a truly propitious scenario for employers:  depressed labor costs, an abundant supply of workers who don’t demand benefits, and the avoidance of unions and labor laws.  Huge windfall profits by companies exploiting illegal laborers have resulted in outspoken officials such as Tennessee Senator, Bill Frist and Arizona Governor, Jane Napolitano stepping up and pushing for corporations to be held accountable for their actions.  For example, Wal-Mart paid $11 million in 2005 to settle a federal investigation that found hundreds of illegal immigrants hired by Wal-Mart’s cleaning contractors.  The largest crackdown in U.S. history occurred in 2006 at Swift meat processing plants when the federal government raided their plants and arrested 1,300 illegal immigrant employees.  The problem is that not enough advocates are taking on corporations.  Most recently, Democrat Harry Reid decided to cripple his party’s ability to vote on several amendments that would help legalize illegal immigration and alleviate the burden of illegal immigrants on taxpayers.  This type of stubbornness in Congress is indicative of the mentality that pervades the entire government resulting in almost no progress while the corporate and agricultural sectors continue to reap the benefits.

It’s important to understand the underlying causes of America’s illegal immigration problem.  Mexico, Central and South America are in a state of economic and/or social disarray and immigrants flee not only economic hardship but also civil war, repression, religious persecution, genocide, and dictatorships.  U.S. groups have accused Mexico of collaborating to facilitate even more illegal immigration into the U.S.  For example, over the past several years, Mexico has produced over 70,000 maps marking roads and water tanks for people illegally crossing the border.   However, according to Mauricio Farah of Mexico’s Human Right Commission, “The only thing we are trying to do is warn them of the risks they face and where to get water, so they don’t die.”  Other cases have been found in the Yucatan State of Mexico, where the government produced educational materials on how to stay under the radar once in America, including tips for finding free health care, enrolling children in school, and how to send money home.  Ira Mehlman of the Federation for American Immigration Reform says, “This is really the way they keep their corrupt system afloat, by sending their excess workers to the United States and getting billions of dollars in remittances every year… so, for them, this is a worthwhile investment.”

A primary cause has been the broad-based failure of the Mexican government to fulfill commitments to its own citizens as well as to the United States.  Mexico promised to invest billions in roads, schooling, sanitation, housing, and other infrastructure to support border factories, which would manufacture goods for America.  This plan was part of the North American Free Trade Agreement and was intended as a way to reduce illegal immigration and help the Mexican economy.  Instead, China was able to out-flank Mexico in terms of manufacturing goods import into the U.S.  With such a corrupt government, it is unclear whether Mexico will ever be able to revive its economy sufficiently and offer its people the opportunities similar to those they receive in America.  As a result, millions of immigrants continue to cross the borders and this number will only continue to grow annually.  The Pew Research Center reported that, at current rates, it is projected that by 2050 white American citizens will become a minority and the Hispanic population will become the majority, with two thirds coming directly from illegal immigration.  Eventually, all sides will have to come together and agree on a comprehensive solution that will be able to benefit all.

The U.S. Federal Government has been unable to commit to any form of comprehensive prevention measure that will halt illegal immigration.  If the government continues to offer free benefits, it is human nature for people to take advantage of them.  Compounding the issue are cities such as San Francisco or New York that promote themselves as ‘sanctuary cities’ providing safe haven and a multitude of no-strings benefits for illegal aliens.  Practical solutions must eventually be developed to address this conundrum.  One controversial issue is the Mexican-U.S. Border fence.  In 2006 Congress authorized partial funding mandating the construction of 700 miles of fences and barriers along the border.  The fence will be composed of three staggered walls, guard posts, radar sensors, and active working guards at a total cost of $1.3 billion dollars.  But will it really provide the solution?

Other advocates say the U.S. must remove the magnet that attracts illegals and propose that, if you dry up the source of the problem and eliminate the free benefits, the flow of illegal immigrants will be drastically reduced.  They argue that, by removing the core attraction, a significant proportion of illegals would eventually leave the country by attrition.  This would directly target corporations that supply jobs and would go a long way toward removing the magnet.  Putting stricter restrictions on these companies and making it a felony to hire illegals would create a strong incentive for immigrants to apply for citizenship.  Eliminating free benefits for illegals will send many of them back home once life in the U.S. becomes much more difficult.  Those who choose to gain citizenship through proper, legal channels will be granted all the freedoms and benefits that are granted to legal residents and U.S. citizens.  This raises another major component that many people believe must be addressed as part of a comprehensive immigration policy:  a practical guest worker program.  It’s not enough to simply enforce the borders or dry up the magnet of illegal corporate/agricultural employment.  These must go hand-in-hand with a fair and efficient guest worker program that still results in providing the immigrant labor resources needed while allowing them to pay their fair share of taxes, receive rightful benefits and to travel home as dictated by seasonal employment and personal family needs.

Unfortunately, the problem is multi-faceted and the solution will require a comprehensive approach.  It will be very difficult if not impossible to find a solution that pleases everyone.  Any viable solution will require addressing as many interests as possible, but must ultimately follow the rule of law and be in the best interests of the largest number of American Citizens.  So should our compassion outweigh legal justice?

Considering all the pros and cons of illegal immigration, does the end really justify the means?  What will happen to our society if millions of illegals are allowed to continue to colonize America?  Will such a transformation benefit society as a whole or lead to continued polarization and social degradation?

Illegal immigration: a looming crisis or economic necessity?  This perennial controversy continues to drive a wedge between factions in both Congress and American society.  A key factor is whether the United States should allow its borders to remain relatively porous and also continue public funding to provide social services to illegal immigrants.  Illegal immigrants originate primarily in Central and South America, driven by aspirations for a better lifestyle and income to support extended families back home.  They are in pursuit of the American dream and economic opportunity that is irresistible compared to the poverty, unemployment and oppression in their native countries.  Proponents of open borders frame it as a matter of universal human rights and compassion.  They insist American principles of ‘life, liberty and the pursuit of happiness’ are universal and dictate that we must not deny anyone who seeks to improve their lot in life, irrespective of legal status.  They also assert that illegal immigrants fill jobs Americans are not willing to do and make a positive contribution to the economy.  Opponents of open borders argue for aggressive policies to severely restrict illegal immigration.  They contend unhindered immigration is no longer practical in an over-populated world and increasingly limited resources.  They further argue that a true cost accounting of the total social costs incurred by illegal immigrants reveals a huge net economic drain that can no longer be sustained.  Left unchecked, this burden will become an albatross on the back of America’s already overburdened economy, not to mention the creation of what some view as unintended and profound social upheaval.

There is no absolute right or wrong in this debate and a significant faction of society will begrudge whichever direction evolves.  It is clear that a solid majority of the American populace support the enforcement of our existing immigration laws.  Fundamentally, it boils down to a debate between somewhat idealistic, compassionate human rights advocates versus a more dispassionate, practical-minded, rule of law approach.  After in-depth research and careful analysis, it would seem that the most fair-minded, logical and practical approach is for the U.S. to ultimately place the interests of its own citizens first and follow the rule of law by enforcing existing laws prohibiting illegal immigration.  American society cannot be selective on choosing which laws to enforce.  If a law is viewed as unjust or unpopular, the U.S. Constitution clearly allows for change; but, unless or until that occurs, existing immigration laws must be enforced.

It must also be reiterated that the debate is really not about immigration per se.  It is reasonable to assume that a vast majority of Americans are not opposed to systematic, controlled immigration.  Rather, the crucial element surrounding the entire issue is the illegal aspect of illegal immigration.  Advocates of illegal immigration when presenting their case to the public often overlook this key point.

As mentioned above, there are two sides of every issue.  Despite all the negative arguments leveled against illegal immigration, there is no doubt the U.S. derives some benefits — most notably in the form of cheap labor.  Advocates for illegal immigration claim that illegals keep the economy growing by filling low-wage jobs many Americans won’t do.  The Wall Street Journal reported in 2005 that illegal immigration is positive for our economy and they generate a net economic benefit.  In a $13 trillion economy, illegal immigrants accounted for about 1% of total economic activity, which would mean they contribute about $13 billion. (wsj.com)  Illegals also contribute towards social security that is often unclaimed.  They pay sales tax and keep real estate markets propped up in remote areas where renters are difficult to find.  However, despite these arguments the economic benefits do not outweigh the net drain that illegal immigrants impose on the American economy and American citizens in the form of lost jobs and huge social costs.

The U.S. population is currently comprised of roughly 5% illegal immigrants and this number is expected to grow dramatically.  The Pew Research Center projects that, by 2050, Caucasians will become a minority in the U.S. and Hispanics will comprise the majority, with two thirds of this growth deriving from illegal immigration. (pewhispanic.org).  Some economists maintain that this would decimate the American economy.  Illegal immigration will continue to have huge economic ramifications on our society.  U.S. News & World Report reported in November, 2008 that the U.S. Federal Government’s annual expenditure for aid to illegal immigrants totaled twenty-two billion dollars for welfare, two billion on food assistance programs, and two and a half billion dollars for Medicaid. (usnews.com)  The financial impact will only continue to grow almost exponentially as the projected wave of huge numbers of illegal immigrants continues unabated.  Although the current economic crisis may result in a temporary slow down, it will not deter the growth of illegal migration over the longer term because the U.S. economy is expected to remain relatively stronger than the economies of Mexico and Central America who suffer from systematic dysfunction.  Therefore, the incentive in those countries to find greener pastures will not go away any time soon.  This begs the imponderable question of where it all leads and when might the U.S. Government and/or state and local regulatory bodies finally be forced to take decisive action to halt illegal, uncontrolled immigration.

The above-mentioned fiscal impacts do not factor in the significant negative impact that certain factions of illegal aliens have on society as a whole.  Illegal aliens are a major component in the growing plague of gang-related warfare and drug trafficking.  This is not to say that illegal criminals are the sole cause, but their continued presence will accelerate the problem in a significant way.  According to proceedings from a 1997 meeting of the House Judiciary Subcommittee on Immigration and Claims, “Through other violations of our immigration laws, Mexican drug cartels are able to extend their command and control into the United States.  Drug smuggling fosters, subsidizes, and is dependent upon continued illegal immigration and alien smuggling.”  In fact, these drug cartels account for 80% of the supply of methamphetamines in the U.S.  Many of these drugs are being handled and trafficked through gangs, which have recently grown substantially due to the influx of illegals.  This number is shocking and many American citizens are confused as to why Congress hasn’t initiated any effective countermeasures.  The trafficking of drugs, culture of gangs is emboldened as their memberships swell from the continuous flow of illegal immigrants.  According to the Los Angeles Times, 60% of Mexican gang members in Los Angeles are illegal immigrants.  These gangs have become intertwined within schools throughout California, Arizona, and other border states.  They have wreaked havoc on the educational environment, impeding students’ ability to learn and creating an almost siege mentality by threatening the safety of every student, teacher or administrator.  In many cases these unruly immigrants are simply transferring antisocial behavior ingrained while growing up in poverty-stricken environments where fighting and petty theft was often the norm.  An additional threat from our porous borders is the increased likelihood of terrorist infiltration, making border control a national security issue.  Should the U.S. be so lax in screening immigrants and refugees and could it not do a far more effective job at filtering out criminal elements?

The most overlooked and misrepresented aspect of illegal immigration is its impact is socials services and associated hidden costs, especially on local governing bodies.  This has created a crisis of unprecedented proportion in our social institutions, especially schools and medical facilities.  As mentioned above, illegals have contributed significantly to the erosion in the quality of education, especially in Border States such as California and Arizona, by straining the coffers and resources of local school districts.  Medical emergency rooms are closing all over the country, having been bankrupted by the huge influx of illegal aliens who are unable or unwilling to pay for the services.  Illegals benefit from taxpayer-provided infrastructure in that they use public roads and transport, send children to public schools, receive welfare and engage in a host of activities, all of which drain social services and the government coffers.  The difference is that U.S. citizens and green card holders pay the full gamut of taxes that fund our social infrastructure.

Many advocate that the American economy could not function without a readily available, inexpensive immigrant labor pool.  However, no one has yet made an objective, comprehensive or decisive analysis substantiating this claim.  It is equally plausible that illegal immigration has cost Americans millions of jobs and significantly lowered the market rate for labor.  While cheap labor has obvious benefits, once the total economic and social costs are factored in, it is highly unlikely that the equation can be favorable to U.S. taxpayers.  With America in a severe recession, it can no longer remain indecisive on this issue.  With unemployment approaching the 7-10% range and the auto industry on the verge of bankruptcy, many researchers believe Americans are now far more willing to take lower wage jobs.  In 2007, the Wall Street Journal reported that illegals took $18.1 billion a year in wages away from American citizens. (wsj.com) With no income tax being paid, this has huge ramifications for government spending.  In California, illegals often deprive needy students from getting lower wage summer jobs.  The tradition of youth gaining real-life work experience via part-time or summer jobs has been significantly curtailed by the influx of illegal immigrants.  It is fallacious to assume that no Americans will ever perform low-paying or manual labor jobs.  The laws of the free market dictate that any labor vacuum will eventually fill these jobs, albeit at perhaps a higher cost.  After all, who worked coal mines a century ago, well before the availability of cheap labor from Mexico and South America?

Granted, these immigrants emigrate from countries in a state of economic and social disarray and they are often fleeing civil war, repression, religious persecution, genocide, or dictatorships.  However, even the U.S. super power has very real limitations in its ability to absorb refugees and/or fund every tragic situation around the world.  Compassion must be rooted in economic reality.  The U.S. is indebted to China for trillions of dollars and can no longer justify paying for non-American citizens no matter how dire their situation may be.

A fundamental problem in curtailing illegal immigration lies with the ineffective enforcement on employers, especially large corporations and the agricultural sector that are the primary beneficiaries of cheap illegal labor to ensure continued positive profit margins.  It is a truly propitious scenario for employers:  depressed labor costs, an abundant supply of workers who don’t demand benefits, and the avoidance of unions and labor laws.  Unfortunately, it is affecting everyone else’s paycheck with higher taxes and dwindling resources.  These huge windfall profits by companies exploiting illegal laborers have resulted in outspoken officials such as Tennessee Senator, Bill Frist, and newly appointed Homeland Security Director, Jane Napolitano, stepping up and pushing for corporations to be held accountable for their actions. For example, Wal-Mart paid $11 million in 2005 to settle a federal investigation that found hundreds of illegal immigrants hired by Wal-Mart’s cleaning contractors.  The largest crackdown in U.S. history occurred in 2006 at Swift meat processing plants when the federal government raided their plants and arrested 1,300 illegal immigrant employees.  The problem is that not enough advocates are willing to take on corporations.  Most recently, Democrat Harry Reid decided to cripple his party’s ability to vote on several amendments that would help legalize illegal immigration and alleviate the burden of illegal immigrants on taxpayers.  This type of stubbornness in Congress is indicative of the mentality that pervades the entire government, resulting in almost no progress while the corporate and agricultural sectors continue to reap the benefits and American taxpayers ultimately pay the consequences.  Polls clearly show that the majority of the American populace wants change; yet, unfortunately, the government has been unwilling to support comprehensive reform.

The U.S. Federal Government has been unable and/or unwilling to commit to any form of comprehensive prevention measures that will halt illegal immigration.  If the government continues to offer free social benefits to illegals, it is only human nature for people to take advantage of them.  Advocates of immigration reform say the U.S. must remove the magnet that attracts illegals.  They propose that, if you dry up the source of the problem by cracking down hard on those who knowingly employ illegals and eliminate free social benefits, then the flow of illegal immigrants will be drastically reduced.  They argue that, by removing the core attraction, a significant proportion of illegals would eventually leave the country over time by natural attrition and that the whole argument about what to do about the millions of illegals already here is really just a red herring.  Certainly, this would force some illegals into a black market existence, but the total net reduction across the country would almost certainly make it worthwhile.  Eliminating free social benefits for illegals will also result in many returning back home once living an illegal existence in the U.S. becomes much more difficult.  Enforcing existing laws and imposing stricter restrictions by making it a felony to hire illegals would quickly remove the magnet attracting illegal immigrants.  Immigration policy must implement existing tamper-proof biometric identity verification technology such as E-Verify and enable data base comparisons across multiple regulatory bodies.  Perhaps most importantly, putting a few high-profile CEOs in prison on felony charges would send a strong signal to all parties that the U.S. is serious about immigration reform.

Those who choose to gain citizenship through proper, legal channels will be granted all the freedoms and benefits that are granted to legal residents and U.S. citizens.  This raises another major component that many people believe must be addressed as part of a comprehensive immigration policy:  a practical guest worker program.  There is no doubt that the U.S. economy, especially agriculture, can benefit from a ready source of immigrant labor just so long as it’s done in a controlled, systematic manner.  It’s not enough to simply enforce the borders or dry up the magnet of illegal corporate and agricultural employment.  These must go hand-in-hand with a fair and efficient guest worker program that still results in providing the immigrant labor resources needed while allowing them to pay their fair share of taxes, receive rightful benefits and to easily travel home as dictated by seasonal employment and personal family needs.  The models for successful guest worker programs already exist in places like Australia, with Indonesian immigrant, and Germany, Turkish immigrants.

The illegal immigration issue in the U.S. is complex, but it can indeed be resolved in a fair-handed manner that addresses most everyone’s concerns.  However, this will require compromise and sacrifice and, most importantly, a grass-roots movement among American voters to pressure both the government and corporate sectors to finally invoke the law and implement real change.  The challenge is multi-faceted and the solution will require a comprehensive approach.  Any comprehensive immigration policy must address three basic areas in tandem:  1) Close the borders; 2) Enforce/strengthen laws making employment of illegals a felony, including hard prison time for CEOs who are found guilty; and 3) implement a viable guest worker program that allows for the free flow of labor resources in a systematic, controlled manner.

Ultimately, the U.S. Government must follow the rule of law and serve the best interests of the majority of American citizens.  An ideologue mentality and utopian compassion cannot be allowed to overwhelm the rule of law and the very real economic threat to the U.S. which will result if nothing is done.  Considering all the pros and cons of illegal immigration, we can no longer justify the means.  What will happen to our society if millions of illegals are allowed to continue to colonize America without paying their fair share?  The majority of intellectuals on this issue agree that such a transformation would lead to continued polarization and social degradation.  The only viable solution is for the U.S. to adopt an effective comprehensive immigration reform that incentivizes immigrants to seek U.S. citizenship or some form of alternative legal status.  If the U.S. wants to perpetuate it ideals of life, liberty, and happiness it must finally take a clear stand on effective immigration reform.

In “The High Cost of Cheap Labor,” Steven Camarota, Director of Research for the Center of Immigration Studies in Washington, D.C. discusses illegal immigration’s total impact on the U.S. and, in particular, it’s negative impact on the federal budget. He is renowned for testifying in Congress and is widely published on the subject of the political impact and economic cost that illegal immigration is extracting on the United States. He is a persuasive advocate for this issue and wrote this article to engender the support of the American People for his position. This article analyzes both the direct and indirect costs illegal immigration has imposed on the local and federal levels.

Illegal immigration has been brought to the national stage over the past decade due to the vast influx of illegal immigrants and, as Camarota contends, their net drain on the U.S. economy. Camarota makes a compelling and passionate argument, supported by numerous facts, that illegal immigrants consume far more resources, welfare, Medicare, and federal aid than they produce for the economy and are therefore a huge net fiscal drain on our society.

Steven Camarota maintains that many preconceived notions about the so-called positive fiscal impact of illegal households turn out to be incorrect when examined more closely. He supports this position using a myriad of charts and facts to refute what he believes are generally accepted myths that over inflate the economic contribution of illegal immigrants. Camarota’s goal in this article is to persuade readers to adopt his compelling views on how the government should deal with the controversial issue of illegal immigration. The article is very fact driven and he supports each claim; however, his biased view does come into play throughout the article. His objective is to make the reader aware of the enormous fiscal drain and to become an advocate for his proposed solution. Based on his extensive life experience with this topic, Caramota is adept at pointing out specific problems and issues in a compelling manner. One of his key points is that illegal immigrants incur enormous hidden social costs. For example he states, “The U.S. pays illegal immigrants around $2.5 billion a year in Medicaid, $2.2 billion in food assistance programs, and they incur costs of $3 billion in the form of other federal aid, federal prisons, and the court system.” Camarota begins his article by pointing out in no uncertain terms the very negative consequences of illegal immigration. At its conclusion, he does a deft job of expanding on his premise and informing the reader as to what he believes is the true extent of the problem.

Camarota proposes an immediate, short-term solution whereby amnesty would be granted to all illegal immigrants. He explains, “Our estimates show that amnesty would significantly increase tax per household revenue by 77% ($3,200); however, it would still not offset the $8,200 per household of benefits they receive.” In Camarota’s opinion, this short-term solution would grant them citizenship, afford them the right to work in the U.S. legally and send money back home as well as paying more in taxes and abiding by the rule of law. While not the ultimate solution, he believes this amnesty approach would provide some immediate economic relief and would help create a more constructive path toward a more comprehensive, long-term solution.

Camarota concludes the article by also offering a straightforward longer-term solution: close the borders and enforce the law. He states, “If we are serious about avoiding the fiscal costs of illegal immigration, the only real option is to enforce the law and reduce the number of illegal aliens in the country.”  He explains that the government needs to be more proactive by enforcing existing laws. He further contends that, if illegal immigration growth continues unchecked, the U.S. will soon become unable to support its future population.

Upon reflection, I tend to agree with Camarota’s premise and his proposals. He wants the government to act more quickly by granting an immediate amnesty to all illegals thereby making them citizens and resulting in their paying more taxes. He supports these arguments based on the net benefits that will accrue to the country and also, of course, the assumption that his facts are correct. He also makes a plausible case for a long-term albeit controversial solution that entails closing the borders and enforcing existing immigration laws.

In my assessment, Camarota would be very satisfied with this article. He presents strong factual support in a very persuasive manner and will likely shift many readers’ opinions on the illegal immigration dilemma. The strengths of this article lie in Camarota’s ability to support his premise that illegals are a huge liability and that we are paying a very high cost for cheap labor.

If there is a weakness or shortcoming in Camarota’s article, it is his unwillingness to acknowledge or present a balanced view for the other side of the argument. He includes numerous examples illustrating how illegal immigrants have had a negative fiscal impact on our country, but never balances this argument by listing any of the positive contributions they make. Such a biased approach may serve to reinforce the views of a reader who already shares Camarota’s position. A more critical objective reader would benefit from a more balanced presentation of the facts. Omitting the contra-facts can serve to weaken the argument and Camarota would achieve greater credibility with a more objective discussion to persuade the reader based on the factual merits of his position. He has clearly done his research with punctual examples such as, “Illegal aliens impose about $26.3 billion in costs on the federal government and only pay $16 billion in taxes which equal a net deficit of $10.3 billion.” Incorporating facts and opinions from other experts or journals would enable readers to reach their own informed conclusions and not be swayed solely by Camarota’s points of view.

Camarota relies heavily on the argument that the total contributions of illegal immigrant do not offset their consumption of resources and the high cost they impose on American society. He attempts to enlist negative sentiment toward illegal immigrants by dwelling on the dramatic negative impact they have made on the American economic landscape. Camarota also assumes that his readers are concerned only about the economical impact of illegal immigration. He does not acknowledge the human rights aspect nor discuss the compassionate views of many Americans who propose amnesty on the basis that we should not deny them access to the American Dream and our principles of universal liberty.

With such a controversial issue many people may agree with Camarota simply due to the fact that, in today’s extremely difficult economic environment, the U.S. no longer has the luxury to support non-citizens who are here illegally. His goal was to shift a preconceived notion that illegals are beneficial to the overall economy and I think he succeeds in that endeavor. In the final analysis and, in spite of his one-sided approach, I believe Steven Camarota will ultimately gain the support of his readers due to his convincing presentation of the facts.

July Results

What Worked?

For Stocks on Wall Street, July provided to be once again a disappointment. Due to my travels in London I was harmed from putting full forth all my effort to promote the website. Stocks on Wall Street had a total earnings of $380.40 for the month of July and this is how it broke down. As for Subscribers I reached 103 and my Twitter account has jumped to over 10,000 Followers all reaching my campaign goals. RandomChatter was the only one that missed its target totaling only 987 Members.

Google Adsense: $298.79

Commission Junction: $131.61

Private Advertisements: $0

Total April Income: $430.40

Registered Subscribers: 103

Twitter Followers: 10,000

RandomChatter Users: 987

Top 10 Posts

1. China’s Inflation Worries Build: Still Bullish Though

2. Foster Wheeler: A Stock You Can’t Miss Out On

3. Despite Recent Slowdown, I Remain Bullish on Oil

4. How to Choose a Brokerage Account? Do’s, Don’t, and Deciding What Type of Investor You Are

5. ObamaCare Causing Problems in Democratic Party

6. NFL Taking Stance on Fundamental Problem

7. IPO’s on the Rebound

8. Where to Invest? Here’s the Top 10 Brokerage Accounts

9. What is Twitter’s Future? The Business Side of Twitter

10. Apple Big Run Might Be Coming to an End

Results from this Month’s Research Reports

SHORT: Baidu (BIDU) ↑1%

U.S. Corporation (USG) ↑16%

Foster Wheeler (FWLT) – 7/16/2009 ↑15%

C.R. Bard (BCR) – 7/10/2009 ↓1%

Total Monthly Gains ↑31%

What to work on?

My goal for the month of August is to have my earnings exceed $450. Yes that was my goal for last two months but since I did not reach it I look to target it again. I have strong feeling I will be able to accomplish this as I will be completely free for the whole month of August and can put forth my full effort. I look to continue to test out the different publisher and affiliate programs and help narrow down to a consistent set of solid advertisers. Commission Junction is my new favorite as it is proving to be quite profitable. I am still looking to add a solid group of private advertisers to pay for permanent ads rather than the pay-per-click Google Adsense Ads I currently use.  If anyone is interested check out the Advertising Section.  Another factor I want to continue to increase is the user subscription. Currently I have 103 signed up users for the monthly newsletter, I hope to have over 120 followers by the end of May. The next Social Network I want to expand is my Twitter account, currently I have over 9,000 Twitter followers, by the end of the August I wish to have 11,000+. Finally the last thing I hope to grow is my Finance Forum and General Discussion Board, RandomChatter, currently there is 900 registered users, I want to increase this number to 1000+ users by the end of July.

Goals

Monthly Income: $450+

Subscribers: 120+

Twitter Followers: 12,000+

Random Chatter Users: 1,050+

Overall

All in all, again I am excited with the progress the site has made and look for it to grow in the coming future. To help me out, please keep subscribing to Stocks on Wall Street, follow me on Twitter, and register for Random Chatter. The more help the better and I look forward to provide incentives to users in the coming future who complete all three.

April Results

For Stocks on Wall Street, April was a very profitable month. In total earnings jumped as I monetized my blog with an array of Ads moving away from the Adsense only campaigning I had been using before. Overall, Stocks on Wall Street had a total earnings of $419.25 for the month of April and this is how it broke down.

Google Adsense: $419.25

Private Advertisements: $0

Total April Income: $419.25

What to work on?

My goal for the month of May is to have my earnings exceed $435. I look to test out the different publisher and affiliate programs and help narrow down to a consistent set of solid advertisers. In the next coming months, I would also like to add a solid group of private advertisers to pay for permanent ads rather than the pay-per-click Google Adsense Ads I currently use. The next Social Network I want to expand is my Twitter account, currently I have over 2,000 Twitter followers, by the end of the May I wish to have 4,000+. Finally the last thing I hope to grow is my Finance Forum and General Discussion Board, RandomChatter, currently there is 715 registered users, I want to increase this number to 800+ users by the end of May.

Goals

Monthly Income: $435+

Subscribers: 65+

Twitter Followers: 3,000+

Random Chatter Users: 800+

Overall

All in all, I am very excited with the progress the site has made and look for it to grow in the coming future. To help me out, please subscribe to Stocks on Wall Street, follow me on Twitter, and register for Random Chatter. The more help the better and I look forward to provide incentives to users in the coming future who complete all three.

More signs of governmental control of the economy comes at the hand of General Motors (GM). The Auto Maker has received an ultimatum from the government to file for bankruptcy by June 1st. After giving roughly $14 billion in federal aid GM has failed to shed bad assets and the government is forcing their hand in hope that GM can restructure and still save its Brand name and not allow the company to go under. One proposed plan is to launch a new separate company which will purchase all remaining “good assets” from GM. As for the bad assets they will be liquidated over the next several years as part of GM’s bankruptcy sale. This option would greatly reduce the size of GM’s company, yet currently is the only logical option as currently the company has no means in being able to sustain itself successfully for the next several years. As for investors within GM I would stay away. GM is still on shaky grounds with many unanswered questions. First I want to see a strong restructured business plan that provides a confident long-term outlook. They need a way to shed bad assets and keep good assets in hand which is why I applaud the plan mentioned as it will do that in a clear-cut format. I know I have been a basher of the American Auto Industry but I actually hope GM can make a successful comeback. The company has to have a new motto and build off next generation cars and move away from the large trucks and SUVs they have been producing the last several decades. GM needs to become a much smaller company as well. Part of their problems were they became so large, with so many weak links that when it all crashed it was to late to fix the problem. With proper management their is no reason that GM can’t make a stable comeback the question now would have to be when.

This week two IPOs who have altered the education market are set to make their debut on the U.S. markets. The two companies are Rosetta Stone Inc. and Bridgepoint Education Inc. whose deals have created the busiest period for new stocks since August. Bridgepoint the online college seeks $216 million and is schedule to list on the New York Stock Exchange under the symbol BPI. Rossetta Stone, the self-study foreign-language software, aims to raise $106 million and will to list on the New York Stock Exchange under the symbol RST.  Both these companies are young, technology-centered, and very fast-growing. The business models set in place have key revenue drivers in scalability, the ability to add new customers at low cost. This is a key indicator tech investors always look for in young upcoming companies. As for the outlook for each company, Bridgepoint, it is less expensive to enroll new online students than in a traditional classroom-based setting. These lower costs will allow Bridgepoint to price its courses attractively, so it can grow its student base rapidly. As for Rosetta, the fact that its language courses don’t rely on translation means that the software can be expanded to different countries with minor alteration. As of right now most of its sales are made directly through its call centers and Web sites, limiting expense. Rosetta Stone has gained visibility through advertising and its kiosks in airports and malls. In recent times, revenue rose by 52% and earnings were up in 2008 to $13.9 million. A weaker economy and slower airport and mall traffic could affect its results, but it still delivered a strong fourth quarter in 2008 so I look for them to continue to grow. One reason I have strong long-term outlook for Rosetta Stone is that only 5% of its sales are made overseas. This leaves large room for growth, especially now when more and more people are learning dual languages to succeed in the global economy. Yes these companies are launching during slow economic times yet due to the recent market rallies I expect them to do quite fine with high possibility of posting double digit gains in debut.

Even during good times, economies are often changed dramatically by political decisions. If you want an example look at South America over the last 30 years. In the U.S., Capitalism is always under threat and the threat is higher when the legislative and executive branches are both in the control of liberal Democrats, who are big admirers of the European system of high social welfare expenditures and “managed” or better, mismanaged capitalism. Unfortunately, currently with the new American political order, the Obama Administration we might see a stagnation of the sort that other managed capitalist economies like Japan and most of Europe have experienced. Being optimistic I hope the pioneering free enterprise spirit of the U.S. can quickly reassert itself. Putting the recession aside, the big long-term problems of the country are a bankrupt social security system which we can thank FDR and bankrupt Medicare and Medicaid systems which we can thank LBJ. This is not to say that Republicans are faultless. However most of the time it is dangerous to have both the legislative and executive branches firmly under the control of the same party, whether Democrat or Republican. The reason we founded the system of separation of powers was to make sure this did not happen. Politicians like power and spending generates power. Democrats and Republicans like to spend money; they just disagree on where the expenditures should go and who it should go to. Democrats like social programs. Republicans like defense expenditures, energy, and farm subsidies. Although the economy is likely to suffer from high unemployment rate and low profits reports from corporate American, the market has already incorporated all this bad news into prices of the shares. In the real economy the pain of a recession may be spread out over several years, but investors bear the full expected impact as soon as the market sees it coming. Expect markets to rise rapidly faster than the economy imporves. Current times are a perfect example. This means there is no reason to be gloomy about our current investment prospects. Prices may continue to fall, but only if the news turns out to be even worse than the market expects. We are equally likely to be surprised by good news that pushes prices back up. It is impossible to forecast how prices will evolve, but we believe the market is currently offering investors unusually high expected returns as compensation for this uncertainty.

Goldman Sachs (GS) reported today that they are considering making a multibillion dollar share offering to investors as a solution to paying off the $10 billion government loan. The announcement could come as early as next week and though Goldman executives haven’t determined the size of the offering, it is expected to be at least several billion dollars. Goldman Sachs, which is due to report its quarterly earnings on Tuesday, is one of several recipients of the U.S. government’s Troubled Asset Relief Program investment and plans to repay the money as soon as possible. The Obama Administration however is resistant towards the idea making an ultimatum that the money will not be accepted. This ideological system Obama is employing makes no sense, why would he not want to not only receive back taxpayer money but also help prove that the banking industry is stabilizing? In my opinion, I believe the government is scared to accept the TARP money as it will be a clear indicator of which banks are successful and which ones will continue to struggle. To add to this news reports of Wells Fargo strong earnings shows that some banks are coming around and ready to be self-sufficient and no longer need government officials patrolling the trading floors. Goldman Sachs has proved its value as it has almost doubled its share value in 2009. As for earnings next week I expect Goldman to follow in a similar path as Wells Fargo and report stronger than expected 2009 earnings, especially among the Prop. trading desks.

Stocks rose Thursday to their highest levels in the past two months after Wells Fargo (WFC)  surprised analysts and the market with an early profit report that blew past analysts’ expectations. The profits were a thanks to a strong pickup in its lending business.  The Dow Jones industrial average jumped nearly 250 points as a result of the strong earnings forecast. Investors have been uncomfortable with the banking industry yet Wells Fargo’s report Thursday that it expects first-quarter earnings of $3 billion provided an encouraging sign that a deep freeze in borrowing activity may finally be thawing. Wells Fargo said it benefited from its January acquisition of Wachovia and an increase in mortgage applications.  This proves stronger confidence for the banking industry and shows that it soon could become stabilized without the help of the federal government. Keep rising Wall Street.

Despite early morning indicators pointing towards a downturn in markets optimistic news from the homebuilders spurred the markets to rise. Stocks rose slightly on Wednesday after news of government aid for some life insurers and a merger among homebuilders spurred optimism that offset a quarterly loss from Alcoa (AA). More good news followed when the government announced that it is shoring up life insurers. To go along with this Bed Bath & Beyond Inc (BBBY) reported a better-than-expected profit providing optimism for consumer spending. Life insurers, whose capital base has been diminished by the markets, have met requirements for government funds. Wall Street took this optimistic news positively as for one it shows we could be closer to the bottoming of the housing crisis.  Personally I believe the housing market will fall a little further. We still need to shore up the credit lending before the American people start rushing out to purchase a home. Other industries to watch are Technology. This is an industry which could bump from the better than expected consumer spending reports. Companies such as Apple (AAPL), Microsoft (MSFT), Research in Motion (RIMM), and Dell (DELL) are all companies who should benefit and could see a bump in share prices.  Good to hear more optimistic news swirling around Wall Street as it has been a rough ride so far with many people believing the light at the end of the tunnel is hindsight for once.

Wednesday markets look like they will follow the recent trend and will we see a third consecutive day of U.S. indexes going lower. Amid all this crisis investors have lost faith recently with many U.S. companies to continue to report dismal earnings to go along with crude oil falling below $50 a barrel to $48. We saw the first sign of what should be weak earnings forecasts to come when Alcoa (AA) reported bad earnings sending there share price lower and causing concerns about whether the company has enough private equity on hand. Asian indexes are down with little faith in earnings reports for U.S. companies. Looks like another bad day on Wall Street.

So what does everyone think about the Congress passing a bill to allow the government to step in and arbitrate disputes over wages. Thus, the government is setting a wage above what the firm is willing to pay. This is tantamount to the government setting a wage floor, which we know from economics which will lower corporate profits and increase unemployment.  We know that if corporate profits are decreasing in the future, the equity markets, which represent the total expected future corporate profits discounted back to the present, will decrease in expectation. The stock market is a leading indicator. Thus, if Congress passes the union bill, equities will fall (holding everything else constant).  Since when does the government have the power to control the economy? Recent Barack Obama has denied any willingness to accept TARP money from Investment Banks such as Goldman Sachs. Hence these companies are now unable to hand out those ridiculous corporate salaries and move on with day-to-day operations. My theory was we would fix the banking Industry not control it. Look at our economy, the two main industries, Auto and Financials are governmentally controlled. We are slowly shifting over to european socialism and are becoming what we would call a controlled economy.

Monday Markets demised despite the plethora of indicators pointing towards another rally. Asia markets has spurred interest in crude oil yet American investors were not interested and sent crude oil prices down along with Gold. Reason behind this is the news that many energy, metals, and agricultural contracts have been pulled back. However the question arises if they have concerns why is Gold going down? Usually among times of economic depression, gold is seen as an investor safe haven against inflation. So does this still mean investor our optimistic about the markets and overall economy? Personally I would shy away from any huge investments currently until we some sort of set back after the ridiculous gains that came in during the March Madness rally. Expect for April to be a rough month with many large U.S. companies set to report some with little long-term optimism to offer. Though like it’s said April showers bring May flowers.

The U.S. has the second highest corporate tax rate in the world, even after you factor in various corporate deductions and tax loopholes. We should lower our corporate tax rates to make the U.S. more competitive and in line with the international market. It’s really very simple common sense: You don’t raise prices in a tough environment as some in Obama’s Administration propose. Raising corporate tax rates will only serve to choke off business and discourage growth and production. Consider this IRS experiment conducted in 2005. Overseas foreign earnings have been taxed at 35%. In 2005, the IRS cut the corporate tax rate on foreign earnings to 5% for one year. Result: The IRS brought back $386 billion in new money and generated $18 billion in new tax revenues. The year before — with 35% rates in force — almost nothing was brought in. This really is not a left/right issue. Rather, it’s simply a fundamental competitive issue. Lesson learned: The U.S. is better off luring capital back home than forcing it. Recent coverage of the G-20 going after tax havens and pressure to increase U.S. corporate tax rates are yet more examples of how current populist backlash is mutating tax policy in bad directions.

All indicators point towards another rally in the markets tomorrow. This is great news for investors as many economists believed that the jobs report and news of the increasing unemployment rates would send the markets down come monday. So what changed? First Asian markets are exploding right now with the Hang Seng up 3.11% and the Nikkei 225 up 1.27%.  HSBC was the big winner with the stock skyrocketing after news that the company raised billions in capital. European Index also jumped on the news all of which are up at least 1.5%. To keep the good news rolling the dollar has strengthened against all major currencies. One strong market play for the upcoming year is the Oil Industry. I see the U.S. corporate oil companies reporting strong earnings this upcoming week which shall help be another sign of economic recovery and sustain crude oils two month rally. Adding to investor optimism were comments from U.S. Federal Reserve Chairman Ben Bernanke that the central bank’s strategy to ease America’s financial crisis through billions of dollars in aid and other measures was starting to pay off. Many analysts have warned investors that markets have been driven hire by large institutional investors who were forced back into stocks after sitting on the sidelines most of the year. Some could add “anxiety investing” into the equation with people buying in desperation not to miss out on the rally. If any signs of weakness were to come out in the likes of bleak economic data or weak company earnings we could see the overall investor optimism start to decline. Many analysts are scared with the rapid rise in the markets saying the news does not justify the returns we are seeing. Personally, I agree and would add caution in current markets as soon the weakness of the economy will strike back to reality. Back to a lighter note I would agree with trying to play the markets at the start of this week as confidence and asian markets should push stocks higher. If oil too can report impressive earnings then rallies could extend for the rest of the week. Good news on Wall Street is what I like to hear but just make sure to watch your risk and not get burned if this rally were to end.

How far the pendulum should swing with regard taxing the rich to subsidize the poor is a never-ending controversy.  While exact percentages vary depending upon the source, there is no doubt the wealthy pay a disproportionate share of taxes in the U.S.   Some estimates suggest 10% of U.S. taxpayers contribute 60% of the taxes collected, 30% pay 37%, and 20% pay 4%.  Others put the percentages wealthy taxpayers pay even higher.  Few question the need for those who are better off to pay a higher proportion to help those in need or to provide a social safety net.  The debate centers around what truly constitutes real need and where you draw the line on who is truly deserving of social welfare.  Many folks (particularly in California) never seem willing or able to grasp that, without fair incentives for those who truly drive the economic engine of growth — and, by the way, who also pay the bulk of the costs — you end up removing hidden subsidies that a large part of the populace have become overly dependent on.  The U.S. has evolved into a culture of entitlement and an addiction to welfare that will be difficult and painful to ever reverse.  I, for one, believe the following tax parable cuts to the chase.  I’d be interested in seeing a thoughtful counter to this parable.  

 
A TAX CUT PARABLE - Every night, 10 men met at a restaurant for dinner. At the end of the meal, the bill would arrive.  They owed $100 for the food that they shared.  Every night they lined up in the same order at the cash register.  The first four men paid nothing at all.  The fifth, grumbling about the unfairness of the situation, paid $1.  The sixth man, feeling very generous, paid $3.  The next three men paid $7, $12 and $18, respectively.  The last man was required to pay the remaining balance, $59.

He realized that he was forced to pay for not only his own meal but also the unpaid balance left by the first five men.  The 10 men were quite settled into their routine when the restaurant threw them into chaos by announcing that it was cutting its prices.  Now dinner for the 10 men would only cost $80.

This clearly would not affect the first four men.  They still ate for free.  The fifth and sixth men both claimed their piece of the $20 right away.  The fifth decided to forgo his $1 contribution.  The sixth pitched in $2.  The seventh man deducted $2 from his usual payment and paid $5.  The eighth man paid $9.  The ninth man paid $12, leaving the last man with a bill of $52.

Outside of the restaurant, the men began to compare their savings, and angry outbursts began to erupt.  The sixth man yelled, “I only got $1 out of the $20, and he got $7,” pointing at the last man.  The fifth man joined in. “Yeah! I only got $1 too.  It is unfair that he got seven times more than me.”  The seventh man cried, “Why should he get $7 back when I only got $2?”   The nine men formed an outraged mob, surrounding the 10th man.  The first four men followed the lead of the others:  “We didn’t get any of the $20. Where is our share?”  The nine angry men carried the 10th man up to the top of a hill and lynched him.  The next night, the nine remaining men met at the restaurant for dinner.  But when the bill came, there was no one to pay it. 

Despite the optimism seen on Wall Street after four straight positive weeks, reality struck back with the analysis report of March unemployment rate. In March alone, U.S. employers cut 663,000 jobs raising the U.S. unemployment rate to the highest level since 1983. This news is a big damper on the overall thoughts that the Economy was beginning to stabilize. The fact is that the unemployment crisis will only continue to worsen. The downturn, which started in December 2007, appears to be on track to surpass the two longest recessions since the Great Depression. Expect the unemployment rate to rise and pass 10% in the next coming months. Most recently notable companies like Disney (DIS) and AT&T (T) have announced large job cuts. U.S. officials are counting on the government’s fiscal stimulus package to start kicking in by the second half of the year. Hopefully that will be a big enough stimulant to lead a resurgence in the job companies and allow companies the flexibility to take on large staff. Production is starting to pick up as well which could be another stimulant. This jobs report was a shock as most recently most signs pointed towards an overall stronger global economy. In the U.S. alone, an increase in housing demand and a rebound in consumer spending after sharp declines since the fall fueled some hope that the economy may be approaching its bottom. Economists generally expect job losses to continue through most of the year, with a firmer recovery starting in early 2010. Friday’s job report showed that every sector of the economy shed jobs, except for health care. My thoughts are that we are still in the heat of this economic crisis and the release of the jobs report was that slap in the face Wall Street has needed the past month. In March and the beginning of April people acted as if economic levels were normalized with free will trading on the open markets. This report should affect Wall Street and should end the continued positive gains leading into next week.

China Life Insurance Co. Ltd. (LFC)

China Life Insurance is a leading provider of individual life insurance products in China.

What I Like

With LFC share price currently at $53.05 its shows the company is on an uptrend when valued against the 50-Day Moving Average, which is $45.72. With a 52-Week High of $69.25 (May 08) and a 52-Week Low $33.45 the stock has seen the share of volatility that the markets have experienced. I foresee LFC rapidly expanding much like China is and grasping a larger portion of the market share as more Chinese individuals begin to purchase Life Insurance. With the increase of China’s individual GDP the amount of individuals who will be in need of Life Insurance will double offering LFC a golden opportunity. One thing China has is money right now, which they are willing to spend and boost the Chinese economy. Look for LFC to be a player and take in large amounts of capital as they continue to expand. Daily Volume is above 100,000, which is the threshold in which I set. The thing I like about LFC is it is still quite unknown and sheltered which makes it a great time to buy. As China continues its economic dominance more and more investors will be pursuing Chinese stocks and LFC will be one to benefit. It is only 6% institutionally held. Wait until the Hedge Funds find out about this stock, the share price will soar.

What I Don’t Like

Return on Assets 1.76% and Return on Equity 15.88% are lacking yet as Individual Insurance Sales begin to normalize with the strengthening of the overall global economy I look for these numbers to rise.

Overview

Overall LFC is a strong Chinese company with mass potential. There still have a large untapped market among the Chinese population, which makes it a very dangerous stock. LFC gets my BUY rating all the way up to $55. I foresee the stock ending the year at around $62-$64. Make sure you don’t miss your chance to ride the Chinese markets.

How ambitious is Google?  These guys act like nothing can stop them and the truth is that nothing can.  In the past few weeks they have outlined some large projects which will revolutionize the tech industry.  Google Voice which will offer free phone service to anyone.  Google Music a revolutionary new free music downloading system which splits ad revenue to pay Music Labels.  Now there are attempting to buy Twitter.  Reports say the deal is in late-stage negotiations. For those of you who don’t know what Twitter is you are missing out.  Twitter is the hottest thing on the web as it is a microblogging service that lets you type short messages for everyone to view.  Twitter takes the idea of blogging and shakes it up. Instead of  users writing long, time consuming blogs, Twitter allows you to write one or two sentences and move on.  The problem with Twitter is there is no way to search it.  This is where Google could make this idea explode. Currently Google is an amazing search tool in which the world dependents on however there is no way for people to Google Search what people are thinking and discussing.  For instance how do you search what people are thinking about the NCAA Tournament or the G20 summit without going to a variety of blogs.  Google could deliver real-time search for people to discover what is the buzz.  This could be Google new growth engine and an unbelievable revenue stream.  The deal is being handled under close doors so no one nows the full extend of details yet I say $1 billion would be a good price point for both parties.  Facebook did try to buy Twitter for $500 million last year and was unsuccessful yet I believe Google is in better position due to the fact that they can help Twitter more than anyone.  Twitter right now is missing a business plan and any successful way of making money.  They will eventually use advertising obviously yet how they tie it in will be interesting without spamming the site.  I feel the problem with Twitter is there sense of direction.  If its not properly managed it could just fade out similar to MySpace.  However if they join up with Google it will become the next great thing. Its bursting with potential which makes it such a hot commodity. Everyone wants it as Microsoft is another party pursuing an acquisition yet I believe Google is such a strong candidate due to the resources they have which could turn Twitter into a word we use in daily life like Google.

For all Twitter users or readers who are rushing to sign up please follow me:

Click Here

Success.  This is a word we can derive from the G20 meetings.  Going in I had my concerns with whether or not anything would be initated as summits usually are not the place for Financial Regulations to be set.  Times started off turbluent with the French President Nicolas Sarkozy threatening to walk out of the summit if his plan for tighter global regulations wasn’t adopted.  For Sarkozy ultimatums are not the smartest way to go especially when he is going up against the heads of much larger nations. In the end, however Sarkozy left satisfied with the G20 taking a step in his direction.  Going back on the idea of what was accomplished I think the big winners from the Summit where the smaller nations.  The $1 trillion dollars will help credit flow and revive the economies of these small nations who are unable to create their own money supply by printing money.  This contribution will help global liquidity and help the currency-crisis countries trade credit.  As for the U.S., I believe there was much anger directed towards us, since we are the one who created this problem.  The U.S. will not benefit as much from the money as we are such a large nation with so many needs yet every penny helps.  I agree with tighter global regulations as long as it doesn’t come at the expense of a list of restrictions on the U.S.  We need to regulate the economy and watch over it, but not control it and pave the path it shall follow. The worst thing that could have come would have been global restrictions on the economy especially for the U.S.  Plus Foreign nations need to stop blaming the U.S. for this crisis. Yes we started it, however if you had an independednt economy that did not rely on the help of the U.S. it should have never affected you. A key note is the outlook from the general population after the summit.  I feel a sense of optimism and positive attitude towards the strength of the economy, something that did not exist a short while ago.  Times are still going to be tough with the unemployment rate at a 25 year high, major holes among the Financial and Auto Industries yet we have managed four straight weeks of Wall Street reporting positive gains.  Never has Wall Street seen such success since 1938.  Its crazy, idiocracy, the ups and downs we are seeing.  So reffering back to the word success I wold classify the G20 as a success.  The set of changes which are poised to happen will make a big impact on strengthing the global economy.  

Below is a interactive chart breaking down how the G20 nations stack up.

Click Here

Research In Motion (RIMM) posted surprisingly strong quarterly earnings today bumping the share price up. RIMM delivered a strong outlook as well, that signaled further growth despite the global economic slowdown as consumers embrace its newest BlackBerry smart phones. All this news send the stock up 21% in after hours trading. Currently, RIMM has a total of about 25 million BlackBerry subscribers, to go along with the millions of other users who own other RIMM supported smart phones. RIMM’s profit rose to $518.3 million, or 90 cents a share, in its fourth quarter ended February 28, from $412.5 million, or 72 cents, a year earlier. These results topped the expectations of analysts, which had been dampened by a profit warning that RIM delivered in February. Research in Motion has shown resilience against the adversity of the economic slowdown. The company is dominating and putting up unexpected strong earnings in times where they should be struggling. They have shown growth in many different fields which is unheard of for technology at the current moment. RIMM stated they plan to add 3.7 million to 3.9 million new subscribers in the next quarter. They added 3.9 million in the past quarter. Analysts had previously expressed concern about RIM’s ability to maintain momentum during the recession. If there are any concerns it would be to keep a close eye on operating expenses to make sure they can continue to succeed even if the economic downturn continues. I think RIMM has a large amount of growth as we should see the purchasing of smart phones increase as the unemployment rate decreases and the light of the tunnel seems closer. RIMM is a discounted great stock currently falling from over $100 in the past year. I would allow for some profit-taking in the markets tomorrow and then try and grab some shares.

ORCL Oracle (USA)

Oracle is a leading supplier of enterprise database management systems and business applications.

What I Like

With ORCL share price currently at $18.82 it shows the company is on an uptrend when valued against the 50-Day Moving Average, which is $16.49. With a 52-Week High of $23.62 (Aug 08) and a 52-Week Low $13.80 (March 09) it has seen its share of volatility. I think Oracle will continue to strengthen its market position and generate cash. Even though no company is immune to a global economic slowdown, Oracle’s large product portfolio and large revenue streams will allow it to continue to grow and be successful. Oracle is 60.2% institutionally held which is solid as you generally loom for a company to be between 30-70% institutionally held. Another solid number is the fact that the company is 22.83% held by Insiders. This shows faith within the company for success as they initiated many stock buy-backs in the past year. Oracle has shown steady revenue numbers returning 13.18% on assets and 26.15% on Equity. Daily Volume is above 100,000, which is the threshold in which I set. 19 analysts cover it currently which helps stimulate market interest. Even though it is a well-known company it still has room for growth, which is why I like it so much.

What I Don’t Like

Oracle the best of breed company for Systems Software however I foresee this industry weakening in the next several quarters. Companies might delay purchasing new software during these challenging times, which could hurt earnings. I still remain optimistic for sub-industries such as security and server virtualization software.

Overview

Overall Oracle is a very solid investment in current times. Yes there are concerns of a slowdown among the Systems Software industry though I think Oracle being the dominant company it is will be able to scrap through tough times and continue to put up solid earnings. Its current Fair Value Calculation is $25.70, which makes it undervalued by $6.88. I see the stock rising to levels of $24-$26 by years end. As a result I give ORCL the BUY rating for the upcoming year.

Solar stocks soared last week with China mentioning the S word. This word would be Subsidy and the news was taken with open arms as the many solar stocks closed up 40%+ as well as eight times the normal volume.  It is still a tentative plan and has no definite plans for a green movement in China though it is a great platform to build off of. Below is Motley Fools explanation if China’s plan.  A statement today from the Ministry of Finance announced that China is going to subsidize solar projects in excess of 50 kilowatts (kW) of rated capacity to the tune of nearly $3 per watt. According to Jesse Pichel of Piper Jaffray, that’s enough to cover at least 60% of the cost of installation, leaving only inverters and balance-of-systems costs to contend with.  The Chinese Academy of Sciences (CAS) has launched an initiative to boost the development of solar energy technology, in a bid to turn it into a major energy source in China by 2050.  A CAS official said that the academy had organized academicians and experts to make an action plan and will set up a platform to support scientific innovations involving solar energy.  The plan will be carried out in three phases, including “distributed utilization” by 2015, “alternative utilization” by 2025 and “large-scale utilization” by 2035, respectively.  This action plan aims to form value chain on technological innovation including basic studies, application studies and market research.  CAS experts said that China has a big potential for solar energy development. The duration of sunshine for two-thirds of its territory is more than 2,200 hours a year. It also has vast desert areas, where solar energy could be “harvested”. The best part of this plan is the how it shows commitment by the Chinese government to shift from the coal-burning plants that are polluting our environment to the Green Movement which the rest of the world is buying into. If this was any other country I would doubt the effectiveness, however one thing about the Chinese is when they want something done they get it done. There is no ifs, whens, or buts. So how will this shape up the markets? This makes the Solar Market a current buy and a bullish market. Currently the Solar Market has been a shaky one with its ups and downs in its short tenure. As for what Solar Stocks to buy the list is infinite all which will take a share of this momentum based rally. Long-term or Short-term I see Solar rising. So who will take the hit? Hearing this news I saw Short Coal as if China moves of it who in the world will be left dependent on it, no one, and when there is no demand, down go prices. The Solar revolution has finally come with China joining the ride so be ready.

This is a much debated topic in which many Economists can battle it out for long amounts of time. Some believe that it will be all over by Mid-2009, some by the end of 2009, others think it will be an extended recession that won’t end until past 2010. The question is who really knows? No one. One the recession will not be over until all Financial Institutions are put back into normal day by day operations. Personally I believe it still is far too early for anyone to predict when these turbulent times will end. The key is to see if the Obama Administrations initiatives end up being effect policy change. A resurgence in the housing market is a critical process and that relies on the banks effectiveness to begin lending. Currently with the LIBOR dropping consistently in the past three months it looks as if interest rates will continue to depreciate making banks less willing to lend money. Credit strains continue however we have seen the overall markets strengthen overtime. The Obama administration’s large stimulus package should add to aggregate demand in a timely way, complementing aggressive, often unprecedented, action from the Fed. It still is too early however to make any time table as of when the plan will work. I have many worries about the potential for near-term deflation or longer-term high inflation could not be dismissed out of hand but had self-correction mechanisms. Currently we are withdrawing excess liquidity in response to the Financial Crisis. One key aspect in which I believe we are failing the economy on is the constant bailouts and the unwillingness to apply personal responsibilities to companies failures. An ending quote from the British MEP applies perfectly to current times. “It’s that you’re carrying on willfully worsening our situation, wantonly spending what little we have left. You cannot carry on forever squeezing the productive bit of the economy in order to fund an unprecedented engorgement of the unproductive bit. You cannot spend your way out of recession or borrow your way out of debt.”

Wall Street sure saw a spark today igniting the markets to run on a 6.8% increase. This all coming after the Government and Federal Reserve released more details on their plan to purchase back $1 trillion in liquid real-estate assets. The goal is by removing devalued loans and securities from the banks balance sheets we will be able to help them start lending again and get credit flowing again. Obama stimulated this action with the goals of helping credit markets with have crashed. Obama feels that without the flow of credit small business will be unable to come back something that use to thrive in America. Questions still arise though on how the U.S. Federal Reserve’s plan to buy back toxic assets will pan out. Many still have stipulations on how this will affect the U.S. economy and whether or not private investors like Hedge Funds and Private Equity Firms will truly be interested in purchasing these toxic assets? Currently I am not feeling too confident in the plan. The Obama administration has already done everything possible to alienate Wall Street and large Financial Institutions that by asking them now to partner up shows tremendous hubris. I believe our economic policies our becoming far too left. The government has come to a very thin line with almost Nationalizing some of our largest Financial Institutions. We need to decide what kind of economy we want, a Free Market Enterprise or a Government controlled one. My biggest concerns however come amid how to value the assets to be purchased without turning the balance sheets of the banks that are to be acquired upside down. If the prices are too low, then the balance sheets will turn insolvent, and a wave of defaults will occur. If the prices are too high, the taxpayers and purchasers will get screwed. I want to know who will be able to determine the true value and if they mess up who is too take the burden for another faulty mistake? There has never been any historical precedence where a program like this worked so only time will tell. If you are wondering who benefits? The beneficiaries will be the large institutions Goldman Sachs, Morgan Stanley as well as large private equity firms. In the end we will ultimately need to see the full details on the plan before we can assess any value. At the end of the day though this will just put the Big Boys like Goldman Sachs back in position to rule the U.S. financial world.

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The Federal Reserve can no longer send the interest rates lower. Interest rates are now at the lowest rates since 1987 when Jimmy Carter was in power. This report is coming after the Fed announced it would buy back $300 million in U.S. Treasury Securities and Mortgage Backed Securities. Essentially the Fed is now printing money to raise the credit supply which will in return lower the long-term rates of mortgages and other loans. Shocked by the news, Wall Street shot up on Wednesday. Bernanke made a gutsy call in this case yet I see it paying off long-term and this is why. With the infiltration of credit into our society the housing market may have finally hit rock bottom. With signs that mortgage rates will stabilize Americans can go back to buying Houses something that we say an abundance of in the years preceding to 2008. Bernanke has also situated a way for Hedge Funds to buy up the less-toxic mortgage backed assets. This will help shift the burden off the government and allow for Wall Street to both help out the economy yet profit at the same time. The infiltration of these new policies along with the new mark to market account rules is just what the economy needed. This boost should continue to send the Stock Market roaring this week as the buzz around Wall Street has been all “Hi Hoes” as of late. Side effects of this move will be the weakening of the dollar. This however is not much of a concern as when the economy turns around so will the dollar. Be sure to take advantage of this market volatility in the next several days. As of late Banks have been strong Day-Trade or Short-Short Term (Less than 3 Days) plays. You should see similarity in Tech as I see that industry poised for a rally with the news of Cisco shifting to the Server business, Google with the launch of Telecom, and Apple who has a hidden agenda. Enjoy it while it lasts because who knows how many more positive days this market can handle.

With the Government calling for stricter regulation by the SEC on Wall Street, I am saying its pointless. The SEC will always be one step behind Wall Street for the simple fact is the bright Financial minds will always chose Wall Street over the SEC and Government for the money. Wall Street breeds innovation, if you were to shut down all current operations (Derivatives, Hedging, etc) they would only develop another way to make as they call it ‘Easy Money’. Just look we are only 10 years from the founding of Long Term Capital look where that brought us. Those who thought that the SEC needed to regulate the hedging of Derivatives must realize that Derivatives aren’t to blame. Derivatives are financial contracts, or financial instruments, whose values are derived from the value of something else usually an underlying asset such as commodities, equities, residential mortgages, commercial real estate, loans, bonds, an index, consumer price index. Almost anything can be used to underline the value of a derivative. The main types of derivatives you would see are forwards, futures, options, and swaps. Derivatives can be used to mitigate the risk of economic loss arising from changes in the value of the underlying. This activity is known as hedging. Alternatively, derivatives can be used by investors to increase the profit arising if the value of the underlying moves in the direction they expect. This activity is known as speculation. Most see this as something only Wall Street understands meaning that only Wall Street profits. One this is untrue, it is not a complicated process. I learned Derivatives in less than 6 months by reading knowledgeable. Anyways derivatives help free up capital, provide liquidity, and allowed markets to trade freely, something which benefits fall in line to everyone. The problem with derivatives last summer was no one understood the pricing on Wall Street. To add to the problem these transactions were taking place when underlying markets were unstable. If markets were not so shaky then the derivatives would have just matured or not been bought. Supply outgrew demand and since Derivatives were speculative they were the first markets to fail and first to blame.

American International Group (AIG) is paying out over $165 million in executive bonuses after a history breaking quarter. The funny thing is this record breaking quarter was for the worst 4th quarter losses in Corporate History, a whopping $61.5 billion. President Barack Obama said it straight up that this is “recklessness and greed” coming at the worst time, especially for a company who is currently running off $175 billion worth of tax-payer subsided money. It just doesn’t make sense how AIG executives and Derivative Traders warrant any bonuses. Damage control should be firing these “Executive Losers.” This is why Wall Street is so hated by the majority of the public. The antics banks pull are inexcusable, especially in current times when the unemployment rate is sky rocketing to new found levels. The average joe has no idea why these executives are getting paid ridiculous amounts of money for failing over all cylinders. Everyday Americans around the country work hard, meet their responsibilities without the benefit of government bailouts and multimillion-dollar bonuses. So how come from Main Street to Wall Street we aren’t all playing by the same rules? It was refreshing news to hear Barack Obama take a firm stance on this issue and make it a personal motive to reverse the lucrative bonuses. “How do they justify this outrage to the taxpayers who are keeping the company afloat,” the president said. Noting that AIG has “received substantial sums” of federal aid from the federal government, Obama said he has asked Treasury Secretary Timothy Geithner “to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole.” “This isn’t just a matter of dollars and cents,” he added. “It’s about our fundamental values.” These $165 million in executive payouts went out Sunday night and it was part of a larger total payout of $450 million. The injustice they are doing is something that needs to be looked at. If anyone in the bank had true character they would decline any bonuses wanting the money to be re-invested within AIG to help bring the company back to its old state. With lenders still lagging behind compared to the resurgence among banks, there are many holes in which we could find to patch up. Lending is a critical process in ending the economic crisis and unless we can manage/control the lenders we will never see any form of economic success.

For those of you Finance loving fans great news as I recently found out that 20th Century Fox is developing a sequel to Oliver Stone’s 1987 drama Wall Street. The studio has signed deals with the original producer and also the writer. Stephen Schiff script Money Never Sleeps will follow Gordon Gekko’s release from jail and entry into the exciting world of hedge funds. The project is being set-up as a potential starring vehicle for Michael Douglas. Oliver Stone is not expected to return as director. The original Wall Street was a fabulous movie with many classic lines such as ”Greed is Good.” “Lunch is for wimps.” “What’s worth doing is worth doing for money.” “If you need a friend, get a dog.” and some amazing speaches by Gordon Gecko. The first movie was a classic, one that ever trader, analyst, or anyone who works on Wall Street for that fact has memorized. Just hope they don’t tarnish Gordon Gecko’s image again as he is a true capitalist genius.

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With all the stipulation over the Banking Industry, many people are not sure how to play the industry. Some consider Banks to be bullish now that both Citi (C) and JPMorgan (JPM) announced that they have made a profit in the starting months of 2009. Others think that their is still far too many toxic assets on the banks books to make them a strong buy for another year or two. My belief is that if you want to invest within the industry then you need to go for the best of breed companies. In the Financial world, that only brings up one name Goldman Sachs (GS). Currently I am a big fan of Goldman Sachs as they have been able to avoid the large amounts of debt and toxic assets that the majority of other banks currently have. The company took on very little government borrowed money in fact they stated that they did not even need the injection of capital yet supposedly the Government force fed it to them. Anyways, the company plans to have it paid off by mid 2009 to allow the extravagant executive bonuses to continue. Goldman’s books look marvelous in current times and when you mirror them to other banks. I see a large room in growth for Goldman’s revenue when you factor in the long term the equity markets will rise profiting Goldman’s Proprietary Trading market which brings in the majority of the companies profits. Another are for growth I see is among M&A, Merger and Acquisitions. In current economic times with the credit crisis looming, there is a large group of companies who will have to make the decision to merge or be bought versus going bankrupt. Goldman is the gold standard when it comes to running M&A’s so expect them to get the majority of the jobs. The company is known for their culture of success and I can see that coming to life.

The Internet Mega-Giant Google (GOOG) looks to grow bigger claiming they are throwing off the gloves and will now take on the entire Telecom Industry. Google promises to offer users free calling and one-stop control over features such as text messaging, internet, etc. This new-line service is called Google Voice and it aims to not just take on Internet calling shops like eBay’s (EBAY) Skype and Vonage (VG) but also threaten Verizon (VZ), AT&T (T), Comcast (CMCSA), Time Warner Cable (TWC), and Cablevision (CVC). Google voice will be designed to allow users to check messages of several phone accounts, read voice messages converted to text, send text messages, call within the U.S. for Free, and access Google’s Free Directory. Mainly the goal is to bypass the Phone company altogether. Google’s big step is making John Chambers CEO of Cisco prediction 11 years ago correct. He stated that “As the majority of load on the network becomes data and video, voice will become free. First, it will commoditize, then, literally, it will become free.” When this statement was first said it shocked people as telecoms at the time were making great profits. Google still has some work to do with the service, for instance figure out how to make money off a $0 service. The Long-Term Outlook positions Google to be the next generation company and dominate any form of communication where its internet, email, or now phone. If this service can one day become successful then Google has paved the path to be an $1,000 stock. As for the competitors, they need to have a backup plan as why would anyone pay $100s a month to AT&T or Verizon when Google offers similar service for free. If they cannot adapt to the way the industry is changing the companies will be in for some tough times ahead.

Taking a break from the Finance world I just wanted to update all the readers on what I am currently doing. Most recently I have decided that I am going to Double Major in both Finance and Supply Chain Management. Supply Chain Management was a spur of the moment thing, but I realized that it will teach me instrumental tools in my valuation of companies. Another bonus was ASU’s Supply Chain Management Program is #3 in the nation. Recently I was one of the few Freshmen to get accepted into ASU’s Investment Banking Industry Scholars program. To gain admittance I had to go through a hard recruiting process. The program was recently featured in Business Week and the goal is to prepare students for the extremely competitive Investment Banking Industry. In the program we focus on networking strategies, stress interviews, information interviews with alumni working on Wall Street, ‘stock pitch’ presentations, and developing stock analyst skills via technical training seminars. It is a tough program which utilizes the most of my Financial skills and has dramatically raised my Wall Street IQ. The goal is to still become an Emerging Markets Trader for Goldman Sachs so currently I am doing anything to better my resume. Not related to Finance at all, but recently I became a Pledge at Sigma Nu Fraternity. I always felt I was destined for Greek Life and its a good break away from School, Homework, and the Falling Dow. Currently I am working on two new ventures. I am currently working on launching a Hedge Fund in either my Sophomore or Junior year of college. Some might see this as quite ambitious by my age, however I see age merely as a number not a limitation. In 2007, I raked in a one year return of 85.22% which would sit me nicely in the Top 10. This number would have beat out 99% of the Hedge Funds for annualized returns in 2007. Hedge Fund numbers were thrown off this year as Paulson & Co. had an annualized return of 589%. Anyways back to my point of starting up my own fund. This summer the majority of my research will be done and the construction of business plan, LLC license, etc. I have recently started an additional Brokerage account in which I am trading in based upon my newly acquired principles/rules of trading. These have been acquired from mentors, trial and error, my many failures in the past. I have strict rule in which I trade by now to reduce my risk. Name for the Fund is undecided, if you have any ideas please send them to me, I want it to Incorporate Hartje. As for StocksonWallStreet I have some big plans envisioned for the future. First I plan on switching out of Blogger to allow more access to readers and so I can offer more as well. No set time table on when this might happen but keep checking in everyday for new posts and market updates.

China was shocked this week by the 5% decline in the country’s Consumer Price Index. As a result, they are on a full fledged mission to bring that number back in 2009. The start was the investment of $2 trillion dollars. Now we know where the majority of that money will be going it is a better market indicator and we know how to play China now. First, the Chinese have managed to stabilize the commodity market. We have seen this in the increases of Freeport, BHP, Vale, Rio Tinto, and various other commodity firms. Other plays we have seen in China are the large infrastructure projects for telecom. This makes CHL, the world’s largest Telecom provider and the sole provider to China, a bullish play. They still have a large untapped market as many chinese people don’t use cell phones the same way we do in America. Other Chinese plays are Petro China (PTR) which is a large petroleum producer who is receiving much love from the Chinese investors. If you want a way to play all these then check out these two Chinese based ETF’s: PGJ & FXI. China is a bull market now so make sure you can ride the wave.

Don’t get hyped by the surge in the Stock Market. This is what is known as a “Bear Trap.” I base this after hearing the news that Wall Street announced that credit is tightening again. Unless we see a reversal in the credit lending this will be a short-lived equity rally. Whenever credit tightens that usually is a Red Flag indicator that tougher times are still to come. Banks are reluctant to lend as they have a lack of confidence in Obama’s administration policies, combined with unabated declines in the economy. This might come as a surprise after Stocks surged after CitiGroup’s CEO announced that the bank was profitable in the first two months of the new year and that its capital positioning was strong. News that the SEC might put the Uptick Rule into place also boosted morale. The Uptick rule requires a move higher in the stock before it’s shorted. So how to play these markets if the banks continue to tighten credit. First and foremost, don’t invest in any companies with serious amounts of debt or companies in need of capital. In current times cash based companies are king. Currently many Tech companies such as Google, Apple, Microsoft, and Ebay are cash kings. It is simple to research, just check any companies balance sheet and compare Cash on Hand to Debt. Obviously you want Cash to be higher than Debt. Constantly read about the credit market and check the Treasury bonds as they can be indicators of which way the market will swing. Once we see Capital Markets rebound then it will be a opportune time to buy companies waiting in line for capital to expand business operations.

At current times with Brokerage, 401K’s, and IRA Accounts being cut in half many people are wondering where or not their fundamentals for stock picking are right. Some might say Stock picking is blind luck using examples of the monkey experiment tested at Stanford and other occurrences. This would be a naive statement as in the long run unless you have a list of Rules in which you Trade by you will never be a winner. So the following are my own Rules of Trading in which I have complied from trial and error and both success and failure. The first rule and most important is Buy Damaged Stocks, Not Damaged Companies. Do your homework, research the company. Invest in best of breed companies and note that there is always a Bull Market somewhere. Right now that would have to be among Day Trading and Chinese Based Companies. Always leave 5-10% of your portfolio value in cash so your prepared if stocks drop to buy. When valuing a company always check the P/S. If the P/S is above 10 then the stock is momentum priced. Only buy Momentum stocks in a strong market, so in current times avoid it. Its okay to buy below 10, but a P/S between 3-5 is best. Below 2 reflects value priced stocks. Next indicator to check is the 50 Day moving average. Stocks are on a downtrend if it is below while they are on an uptrend if the value if above. Check the PEG Ratio and EPS to makes sure the company is making money. Look at the Balance Sheet to check for company debt and quarterly earnings. Its a good quota usually to not buy companies in debt unless they have reported major investment projects within their own company. For Daily Volume of a Stock make sure it is at minimum above 100,000. Above 1 million is the best. Makes sure the company is at least 30% institutionally owned. Also make sure there are at least 4 analysts following the stock as sufficient analyst coverage is necessary to create investor interest. Finally when researching stock you need to ask yourself a series of questions. First on the fundamentals you need to ask: What is the Companies Business? Is it sound? Is it growing? Price History: How much have other investor been willing to pay for the stock? Price Target: How much are investors likely to pay for the stock in the future? Catalysts: What catalysts will change investor perceptions of the stock in the future? Comparison: How does the stock compare to others in its industry? If you follow these simple steps and make sure that your company fits the quota then you will always find a winner.

This week, Barron’s came out with the list of the Top 10 companies/stocks for the next decade. Topping the list was Google (GOOG), a company that has dropped half its value since 2007, who was liked because of their large Growth opportunity in Online Advertising and lack of Debt. I to love Google and am a shareholder as they have a strong upper management that has been making strategic acquisition and cuts to better position the company for the future. The company has also shown resilience after putting up strong revenue numbers and gross profit in 2008. Other companies topping the list included Microsoft (MSFT) and EBay (EBAY). These two companies I am not as wild about but are boosted by Long-Term Growth Opportunities and Large Cash Holding. Other companies on the list included: Cerner Corp (CERN) Database Builder, Wynn Resorts LTD (WYNN) the Las Vegas and Macau Resort Giant, CVS Caremark Corp (CVS) the rapidly growing Pharmaceutical Retailer, Ace LTD (ACE) the Insurance Company, and Fernsa Latin America’s largest Bottler and Brewer. The most intriguing company on the list and one that I have full confidence in for the future is the Security Company EMC (EMC). EMC currently has a great PEG, P/E, and EPS which is supported by strong Long-term outlook. The company has continued to put up great revenue numbers and the balance sheet is looking great especially in current harsh times. Its supported by a high analyst ranking and is a steal at current times. Let it fall to $9 and then grab it.

The Dow is reaching decade long lows as we dropped below 6,600 in the past week. So the question is, how low can it go? Well there is no clear answer to this question. Michael Bloomberg believes we still have a far way to go and that markets could still decline up to 25%. Jim Cramer believes similar thoughts and that you need to focus on individual stock analysis rather than a market summary. So how should you act in these current volatile markets? First step is buy damaged stocks not damaged companies. Avoid the Auto Industry, Government controlled Banks, and any high priced consumer product. Know your limit and expectations for a company. For instance, if you are a Long-Term investor don’t check your stocks everyday as you’ll drive yourself crazy with the ups and downs we are experiencing in these markets. Once a week is all you should be doing and make sure you check on Mondays not Fridays so money isn’t on your mind all weekend. On the other hand, if you are trying to Day Trade these volatile markets or be a short-term investor, good luck. Just kidding, actually there is lots of money to be made as of right now with smart, strategic day trading. With such volatile levels the risk to reward ratio is at unquestioned levels. Make sure that you don’t get ahead of yourself and let the losses accumulate. Set a tight, strategic amount of money that you are willing to lose and play with it in the markets. In current market conditions, I believe the real gains will come from Day Trading and Short-Term Investments. Long-Term your money will be safe buying solid companies, however some of these results will not be realized until three to five years down the road.

Everyone dreams of one day living in a world occupied by an egalitarian society in a Utopian style of life.  After much thought I have come to the conclusion that this is a very optimistic, idealistic, train of though as the barriers in society hinder this from every happening.  An egalitarian society is something that everyone should have the right to, however the way everything works out it is a very difficult process to actually provide this lifestyle to the population.

Thinking on the broader spectrum about the effectiveness of an Egalitarian society I question whether it is even fair to the general population.  True equality is something that can never be handed out.  Not everyone is the same and as a result not everyone deserves to be treated in the same manner.  Take America as an example, yes we offer many Civil and Human Rights to citizens compared to the rest of the world however we are nowhere close to an egalitarian society.  I go by the motto that “you get what you put in.”  This applies in the aspect that those who try harder deserve more in return.  Why does a man who works for nothing and sits at home living off well-fare checks deserve the same competence as a single mother who is working two jobs?  Don Martin, researcher for the American Educational Research Association, recently studied anti-egalitarian societies and pointed out that if you do try to implement any form of equal system into society, how do you separate the go-getters from the slackers?

On the other side, an Egalitarian society does provide many benefits.  Equality is something we do like to provide to our people, as everyone should have the same opportunities in life.  The problem is where to you draw the line between communism and equality.  Plus how to you sort provide benefits to the hardworking people without offending others.  I believe true equality brings a lot more problems controversy compared to the way operations are being run now a days.  The great thing about our current society is that anything is possible.  We offer the opportunities and allow those who truly want it to achieve the inevitable. Maria Lepowsky, part of the Department of Anthropology at University of Wisconsin, did a detailed examination of Vanatinai, a small egalitarian island society off New Guinea.  Her thoughts on the society were that they were not conducive to a large group of people.  She says high levels of aggression among the people especially between the assertive individuals and the lackadaisical ones.  This reports back up my theory that you never will be able to satisfy the majority of the population and work out the disparity between those who want it and those who don’t.

Barriers that hold back the successes of an egalitarian society are the individual drive to succeed by people.  I think there are a lot of disparities between societies based on equality and egalitarian principles.  Currently America provides equality to all citizens.  Everyone has the right to an education, the right of speech, and are guaranteed the rights of life, liberty, and happiness.  It depends on what you do with that right which ends in your results.  An egalitarian society guarantees those rights at the same time guaranteeing that everybody lives the same life as each other and receives the same benefits no matter how hard they try.  As for egalitarian politics I think we have seen that our current system of policies can provide an opportunity to anyone.  For example, look at newly elected President Barack Obama.  For years, people have said that America would never have an African American President.  Barack Obama crossed all barriers and proved that theory to be wrong when he did the possible and won the 2008 Presidential Election.  In an egalitarian society, however Barack Obama’s chances would be limited as they even the playing field to make thinks equal for everyone.  The reason this would weaken Barack Obama’s chances are that his hard work would be negated to do the egalitarian principles. Marc Fleurbaey, publisher of the Law and Philosophy Journal, stated that a true economic and political egalitarian society would ruin the hard work ethic that many people posses.  I fully support this theory as when people are given something rather than forced to earn it their effort dramatically reduces.

On an ending note I believe that if you truly define the word ‘Equal’ it has unlimited definitions pertaining to each individual differently.  I believe an Egalitarian society actually reduces the equality and opportunities that people deserve.  Reiterating what I stated earlier it is closer to the form of a communistic society where everybody is exactly like one another.  This is a very debatable topic where not one answer is right however if you have to look at it with the perspective on how you would like to live your life.  I live my life to the fullest and want no holds on my life limiting my potential.  Others like to be organized into a society where there are told what to do and fall in line with everybody else.  America’s Democracy gives me all the opportunities I want in life as long as I work to earn them.  This quote I believe pertains great to this theory “Democracy does not guarantee equality of conditions – it only guarantees equality of opportunity.”

Much pressure was trusted onto Barack Obama’s shoulders before entering the White House and taking oath as the president of the United States.  On his hand was a failing economy leading into what could be a long recession, a looming war in Iraq, and little confidence in the government by the American people.  He campaigned hard on the values of change and his principles of prosperity, which will lead to positive changes among American society.  So after Obama was elected forty-fifth president much pressure was put on his inauguration speech and how he would portray himself as the savior for America.

“I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors.”  These opening phrases pay both respects to the past yet show faith in the future.  Analyzing the effectiveness of the I speech, I believe Barack Obama poised himself as a strong, confident leader who can truly change America.  He is not in denial of our struggles our country is facing.  We see this in his speech when he says, “Today I say to you that the challenges we face are real.  They are serious and they are many.”  We also see this when he states, “For everywhere we look, there is work to be done.”  One key insight however is how he describes how he will dramatically improve faulty industries in our America and governmental loopholes.  He addressed the fact that he is ambitious yet he still bodes confidence in saying “For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.”  Barack voids out all heavy details as it still is a cherish occasion but he provides the rare gleam of hope and the shining light at the end of the tunnel for the majority of America.

Throughout the speech I love the way Obama transitions between past and future.  He addresses how we got from place to place and how far this country has come since it’s founding.  He cherishes the men who fought and died for us; from Gettysburg to Normandy he says their line of duty is bigger than any individual ambition.  Barack also addresses confidence for the future and what greats things our country still has to offer.  This was crucial for me, in today’s lifestyle we are so pessimistic about everything.  America is a country flourished with opportunities, yet many Americans never seem to respect this.  Growing up in India I have first hand experience to see that we don’t have these same opportunities trusted in front of us and we have to work twice as hard to get the same chance.  The American dream is not something destined to you rather something you have to earn.

Hope for the youth and providing them the resources to succeed is necessary.  Barack Obama stresses several key morals and principles of life throughout his speech, which have me in awe.  My favorite quote is “Our journey has never been one of short-cuts or settling for less.  It has not been the oath for the faint-hearted – for those who prefer leisure to work, or seek only the pleasures of rich and fame. Rather, it has been the risk-takers, the doers, the makers of things – some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.”  One key factor in his speech is the difference reaction I have to it from now when I read the text to back then when I watched it on the television.  I believe the television coverage might have overshadowed the true content and the power of this speech.  Reading it first hand, you discover the power in the choice of words and how he truly describes himself as the man ready for the difficult job at hand.

Intertwined within this speech is everything ever imagined.  Analyzing the speech you truly see how perfect it is and as it addresses all critical issues offering both an answer and a solution to the problem at hand.  The main goal out of Obama’s speech is to create unity among Americans.  “We are a nation of Christians and Muslims, Jews and Hindus, and non-believers.  We are shaped by every language and culture, drawn from every end of this earth and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united.  America must play its role in ushering a new era of peace.”  It is a building block for the future roles this new generation will play in our society.

Religion is the holy theologies that cause great bonds of unity and separation among the world. It is the choice of the individual on what they shall follow, whether they become a Christian, a Jew, a Hindu, a Muslim, or agnostic. The controversy that has been spurred up recently is whether or not religion should be taught in Public schools to the youth. Such a controversial subject could have such different ramifications on the individual. For some, religion could unite oneself and give them a whole new perspective on life and a new following on how they base their decisions. For others, it could cause more disparity between them and the world resulting in persecution and being tormented by their peers. Despite these disparities, I think religion and multiculturalism are constructive subjects that should be taught in the public education system to the youth, as knowledge is the key to understanding.

The fact that religion is such a controversial subject is why most education programs try to avoid it. They believe that is causes too much animosity and hostility among the students. Currently we have many religious battles going on worldwide. The Iraq war has many religious roots as Osama Bin Laden had hatred towards American ideals of life and religion. Israel and Gaza are currently battling over religions and where the holy land truly resides. I think these problems could be solved if we were to teach the youth religion at young ages. Knowledge could be the key to solving theses problems. If one could understand both points of view it would go along way to improving international relations and having the world work in better unison.

Ignorance is the biggest problem among religion and often leads to religious persecution. We live in such a diverse world where every culture and race have different ideals, some of which society find hard to bear. For instance, the United States and the Middle East have clashed over the way we live our lives. America is a country full of freedom and rights especially towards women. In the Middle East, women are second class citizens and treated very differently as they are not given the same opportunities. Due to these differences, some people within these cultures hate each other and the disparity between both cultures. The solution to this problem is educating the youth on worldly cultures. Teaching the youth about these different cultures and why they support different ideals of life could combat this problem and allow for a more united world. As we continue throughout time, countries around the world are going to have to rely on one another more and more. To be successful among society you need a worldly perspective and to be able to understand a colleague or peer’s culture.

To help combat this problem, I do agree that schools should have Multicultural weeks and provide students with the resources to learn about religion and other cultures. Understanding ones culture is very personal and often a tough topic to grasp. However, if done it can pay big dividends when communication among people around the world. Another question is why are so many kids religions when they have never learned the fundamentals of that religion. Currently I believe parents are one of the biggest forces for children learning religion and committing to one. Growing up, I was able to see firsthand that friends of mine with religious parents would often conform to the same religion as their parents. Often young children are pushed to follow their parents ideals and don’t have much of a say. This is another reason why I do agree with schools pushing for students to learn about religion through programs before they commit to an individual one. Every person should have the choice of which religion to join, and should not fall in line with the social norms handed down by their families.

So with all the benefits religion brings to society why should it not be allowed to be taught in the public school system? Many people think that the answer is that religion despite the benefits it brings to society it also causes discrimination, and hatred to others. These effects are all something we try to have our children avoid in school. Religious persecution has gone on for all of time and is something that will continue to impact our lives. The roots of religious persecution come from ignorance and people being uneducated about other religion’s ideals and beliefs. This being the counter argument is not substantive enough to stop us from teaching multiculturalism and religion in the public education system. Discrimination can come from anything race, what you look like, who you associate with. Kids are constantly made fun of for wearing glasses, to not liking girls, so religion will not be the only justification for kids teasing each other. In fact, through education and religion classes students might gain more respect for one another after learning about what roadblocks these cultures had to go through to get to where they are now. I have firsthand experience, as I grew up in Hong Kong where the way of life is completely different compared to American Society. As a result, I adapted to other cultures and showed respect to them despite disagreeing with some of their ideologies. Understanding how another person thinks and what reasons he bases his decision around can go a long way in today’s society. The world is becoming more and more in unison where we will have to rely on each more often. This will only be possible if we can get along and understand each other’s culture. To fix this problem the only option is to offer the youth the resources to discover religion and understand the difference between all the various cultures around the world.

Answer is No. It is possible for non-licensed individuals to give advice on stocks and even collect a fee for doing so as long as they do not break the regulations set out by FINRA (it is even possible for someone unlicensed to actively manage funds and charge others for this service as long as they meet several requirements as well as managed less than a total of $25,000,000 in total assets for other people). However, as Dusty stated, taking advice from anyone (regardless of if they are licensed or not) should be done cautiously and only with doing your own homework (spend time learning for yourself from reliable sources (actual documented facts, not the words of an “advisor” or the source of the investment) the financial (look at the books and actual SEC reported data), market (does the business make sense and seem logical), and management details (experience, skills, track record, etc.) about the investment prior to making a move). The problem however with someone who is unlicensed doing this, is that due to their lack of education or licensing they are probably taking a big risk (lawsuits) if others utilize faulty information reported to make bad investments, thus it can be a very risky proposition to provide such services anyways.

The other day I was forwarded an article dated from September 30, 1999. The article was on Fannie Mae’s policy change to make it easier for lower income families to get admitted for a loan. A prominent figure in this article was how the company was receiving pressure by the Clinton Administration to make such a change. Researching this topic i have also found out that the Clinton’s even threatened to take away tax benefits to the Loaning Giant if such an initiative was not put in place. Ultimately, the Fannie Mae had to take on the risk as the tax benefits alone would have crucial effects on the companies profits which at the time were very strong and it was a popular stock among investors. So now going back in time was Clinton even that great of a President or did he just sway the media with his words of wisdom and charisma? Those of you claim that Clinton was the main contributer to economic growth during the times. In this case, I disagree and would give more credit to the Republican controlled Congress who ruled for six out of the eight years. Congress lowered the capital gains rates which spurred economic growth. Congress helped fund the boom among Internet companies. Many of Clinton’s detractors have a selective memory on what he actually did. For example, many blame Clinton for not killing/capturing Osama Bin Laden as he pretended to order cruise missiles to attack Afghanistan with the purpose of distracting people from his sex scandal. Another claim to fame that Bill takes credit for is making America a safer place and reducing crime as a whole. Well for anyone who has read Freakonomics, they know that this is untrue as the biggest factor in reducing crime within America was Roe vs Wade which allowed many crack babies to become unborn along with children of teens. As time goes on we slowly see more and more faults within Clinton. Clinton benefited from being in office during a time of peace and economic prosperity. He didn’t screw that up to much yet his lack of principled leadership left many people disappointed. As I dug down more within my research I read more and more about how the Democrat’s deal with Economic affairs and the results. They are shocking, if you go back in time you can see the disparity in economic growth when there is a Democratic controlled Congress versus a Republican controlled Congress. First example, is the current Housing Crisis and Credit Crunch in which was started by a Democratic President Clinton and contributed to by the Democratic Congress the past eight years. In 1990 we had a mini-recession caused by an increase in production costs and again at that time there was a Democratic controlled Congress. Furthermore 1979 the Iranian Revolution caused a sharp increase in Oil Prices which led to a WorldWide Energy Crisis. Tight monetary policy by the U.S. led to inflation and the end of the Jimmy Carter era. Keep going back we have 1973-75 the Oil Crisis and the Crash of the Stock Market as a result of OPEC quadrupling Oil Prices. Again at such times the Democrats controlled Congress. Back in 1960-1961 another recession took place during the Kennedy administration when again there was a Democratic Controlled Congress. Finally in both 1957 and 1953 we had various recession where again the Democrats controlled the Government. See the correlation? Ever since the 1950s every recession has come at the hand of a Democratic controlled government. On the contrary during times of a Republican controlled Government is when we have seen the largest increaser in GDP Growth. For example, the prosperous times from 1994-1999. The growth from 1978-1981. The problem is currently we have a Democratic Controlled government with the liberalist senator ever, Barack Obama in charge. It is my guess that any resilient form of economic growth will not be stimulated in the next four years. For one, we are failing to effectively distribute the Stimulus package to have long term economic benefits. Too many handouts are being made which is nice but not practical during harsh times. When you have money in the bank is when you become generous but currently we don’t as we have a $1.75 trillion dollar debt. The Bush Administration tarnished the Republicans image when in reality it was the Democratic controlled Congress that supported and initiated many of the failures. It will not be until the next election where we truly see the benefits Republicans provide to the Economy and I hope that time around the U.S. votes accordingly.

Anyone with aspirations of making a good living in America please pay up? This is the straight forward statement that Obama delivered when addressing the nation on the current Fiscal deficit and his plan to cut the $1.75 trillion dollar debt. As it will go any couple making over $250,000 a year can expect to have substantially increased tax rates to help cover pay for the lower income families tax cuts. Now my dream of being a Goldman Sachs Trader will cost more than i thought with Federal tax rates rising from 35% to 39.6% for High-Income families. Plus my other goal of starting a Hedge Fund is shot as well as now all Hedge Funds will have to pay Income Tax Rates not Capital Gains Tax Rates on profits. That is a substainal number and the Obama Administration expects $28 billion tax revenue from just the Hedge Funds alone. Don’t be surprised if we see the outsourcing of Hedge Funds with many located outside the U.S. to save the tax breaks. For normal investors, expect to see your Capital Gains Rates rise from 15% to 20%. This I believe is an awful proposition. The increase in Capital Gains hurts no one more than the Middle Class. The High-Income are not affected as they have the capital to allocate resources outside of the U.S. to save on tax breaks. The Middle Class however, does not have this option. Another option they do not have is to stop investing. The Middle Class thrives of the Markets as it is their opportunity to grow their 401k’s to a level which will offer retirement and the chance to send their children to college. Obama clearly didn’t educate himself on this situation and should have a sit down with Mitt Romney and be explained why he should cut the rates. Mitt Romney was the one who proposed the plan of Zero Capital Gains Rates for the Middle Class during the election. In this case he classified the Middle Class as families earning less than $200,000 annually. This would apply to 95% of American citizens. The simple fact is nothing would stimulate the economy and markets more than reducing capital gains rates and this is why. Capital Gains play a unique role in fostering economic activity, especially by entrepreneurs in high-technology areas. Many economists even believe that the optimal tax rate is 0 percent. So why not lower them temporally? Temporary capital gains cuts would to nothing than induce investors to sell assets not stimulate new investors. However, a permeant cut would provide incentives for people to sell long-held unproductive assets and reinvest in prospering industries. Many government officials are also scared of the possibility that Markets would fall if we cut the tax rate. This is false as cutting capital gains rates will cause asset values and the stock market to rise. Lowring capital gains rates increases the price of stock and other assets and the stock markets reflect the collective action of people looking forward. For example, in 1997 the Fed cut the top Capital Gains tax rate from 28% to 20% and markets responded with an 8% increase. Currently companies are also being screwed over as many receive double taxation on both Capital Gains and Income Taxes. For example, say McDonalds earned $100, the Fed takes $35 in corporate taxes leaving $65 which is distributed to investors and then taxed at 20%. That takes another $13 leaving $52 to investors and $48 to the Government. These companies are still exposed to a tax on dividends. Capital Gains taxes are structured so poorly that it is no wonder the economy would rise without them. They are not even adjusted for inflation which in current times could cause some problems for most investors. So the last complaint that everyone has is that the Government cannot afford large and permeant capital gains taxes. This is untrue as improving economic growth increases federal tax revenue from many sources (Property Taxes, Income Taxes, Corporate Taxes, etc) The government’s goal is to not act like a business trying to maximize tax revenue. The goal should be to enhance economic growth and raise only as much tax revenue as needed.

General Electric (GE) announced today that they will cut their dividend 10 cents down to 31 cents a share. This is due to the companies lack of revenue and lack of cash on hand. Compared to other companies GE is still in quite a favorable decision. They are endorsed by Warren Buffet who bought a large amount which is always a good sign. Despite having a terrible 2008 Fiscal year they are in a position to improve dramatically in the next coming years. With Obama’s support they could be the catalyst company to lead the new wave of the reformation in the Energy Sector. Obama loves American companies and would be more than happy to give GE such an opportunity. With the stock price currently at $8.95 i would take the time in watching this stock. If it slips in the upcoming weeks pull the trigger as it is at such a discount (52 WK High $38.52) yet has such potential to improve in the coming future. Watch it and if you are like me and think Energy is a new up and coming American industry then pull the trigger.

Today U.S. Banks reported a loss of $26.2 billion in the past three months. This is the first time in the past 18 years that U.S. Banks had reported a loss. Losses were directly correlated to the Housing and Credit Crisis. Looking on this situation we should see a complete upheaval of our banking system. As of the end of 2008, the FDIC reported that there were over 262 banks in the U.S. Expect this number to drop as many small banks will get bought out by Larger Institution to keep afloat. The system needs changing however as the fundamentals in place are lacking any structural guidance that gives me confidence for the future. First lending out money needs tighter regulations on who gets what amount of money. Trailer Trash loans can no longer take place. Obama’s plan just came out so it will be interesting to see what he has envisioned for the Financial Markets. I am about to go read it and then i will write an in-depth analysis on what effect it will have. Stay Tuned.

The Obama Administration stated today that they intend to provide $900 million in aid to help rebuild Gaza after the Israeli incursion. This is great to help with foreign relations but the question I have to ask is do we have the money? With companies going Bankrupt daily and the Government’s debt rising up can we afford to be handing out cash to foreign nations. In the past, America has been very generous to foreign nations giving spreading billions of dollars across the third world nations. However never in a time of crisis has America seen any help back. When we were hit by Hurricane Katrina no one donated money. It seems as if our help is not appreciated just expected and now we need to start looking out for ourselves. Plus we are now causing a controversy as we are supposed to be backing up Israel in their fight to stay in the middle east yet now we have made it a bigger problem. I like Obama’s idea of improving foreign relations but in current economic times we cannot justify the means.

With the markets continuing to fall investors have been worried with what the outlook for the economy looks like and if we are really helping out the Economy with the Stimulus. After reviewing the situation today i feel so far the Obama Administration has let us down in what he promised would be a resurgence in the economy. The Stimulus Package has not had the impact that many once thought it would. I equate this to the misuse of funds. Currently the Government is giving too much to taxpayers for temporary brakes than actually fixing the problem. The $1,000 tax breaks, unemployment benefits, etc are great but long term it won’t help us out. Tax Payers need to bear through tough times and we should be giving that money to Banks and to emerging industries such as Healthcare, Pharmaceuticals, Energy, and Technology. By giving money to Tax Payers we are pretty much just trying to keep them happy so when things to get wore they can’t complain that they received no aid. By helping out the banks we can allow them to return to normal day by day operations which will in turn allow for an increase in economic growth by the way of new small business and the expansion of current ones. Currently with the limited available capital it is hard for many small companies to get their foot down along with big companies who have been unable to expand due to limited funds. Investing in up and coming industries is another key aspect as those are the factors which will be the driving forces of the economy in the future. They will offer job stability and a resurgence in America’s world dominance. Yes tax payers help but in the long run a economic comeback will have a much larger effect. If Economic Levels return, jobs will be back, Retirement Account values will increase, consumer spending will comeback which is what the Stimulus should have been focusing on. I partly blame the liberal thinking in the sense that they are always looking to please the majority and help out the poor. In this case though they will not be offering the lower class any aid. Giving them an $1,000 stimulus check will give them short-term help but what happens if the economy never rebounds and that person will never get his Construction job back from say Caterpillar. As we continue with the distribution of the money for the Stimulus i hope to see Obama focus on fixing the banks, which he has done, along with developing new industries for America’s labor. It looks like we have lost the Auto Makers so we need something to propel us into the next century. For those receiving the checks temporarily this will help but in the end you will be paying the money back through taxes, program cuts, etc. All investors also have to realize that debt is one of the worst things a company can have so in this case the government is taking on more and more debt just to please the American people. In times of crisis it is often the decisions that don’t please the majority which are most effective. Obama is a very popular president so far and i wonder if that plays into his ideology of giving back to the people rather than fix the problem. I hope to see him step up as a leader and make the tough decisions in which a President has to make to better us all.