CBO

Follow The Smart Money: Falling Obama Popularity And Political Rebuff Reflected In Stock Market Rise?

Kent Engelke is the chief economic strategist and managing director at Virginia-based Capitol Securities Management, and is one of the most quoted market experts in the country. His forecasts largely get it right. I get his daily Early Morning Commentary and today's had some compelling statistics that should alarm everyone. People, take heed. Using the stock market as the predictor it is, he asks why equities have experienced a rally of late. He posits a theory that investors think socialized medicine will not occur. He cites President Obama's own economic team's warnings of financial disaster if the deficit is not reduced substantially. (Of course, they always say that and spend and tax and print money anyway.)

But take this with more than a grain of salt:

The 2009 fiscal deficit was an astounding $1.4 trillion as spending increased from $3 trillion to $3.5 trillion while tax revenue fell from $2.5 trillion to $2.1 trillion. The debt is now at $12 trillion and is expected to grow by another $9 trillion over the next decade. [Dow Jones]

CBO is estimating spending on Medicaid and Medicare will grow over $700 billion over the next 10 years while health care legislation is conservatively estimated to add another $900 billion to the deficit. [Dow Jones]

But most alarming is this:

Incidentally and as per the Organization of Economic Corporation and Development today 42% of U.S. GDP is comprised of federal, state and local spending. Wow! We all know the efficiency of the government.

Mr. Engelke doesn't pontificate political often in his writings, so a letter devoted almost exclusively to our current situation is remarkable. He also notes that since the Obama administration, by general agreement (and even Saturday Night Live) "is steep in hype but low in accomplishments" and asks rhetorically whether the stock  market rally suggests "a backlash in government spending, perhaps even a reduction, because the President’s approval ratings are plummeting?"

According to the Rasmussen Report:

40% strongly disapprove of the president’s job performance. 27% strongly approve. Overall 47% approve of his actions while 53% disapprove, the second lowest ratings for this President. Fifty four percent oppose health care legislation while 42% approve it.

When a normally non-plussed and widely respected market strategist and economist goes to this length, something is up. The stock market often is an indicator of things not only financial, but societal, technological and political, among other trends. Looking at it strictly from a personal stock-holdings point of view doesn't paint the entire picture. You know what they say: Follow the money. Especially if it's smart money. Expect political changes shortly.

Virginia News Stand: October 8, 2009

Annotations & Elucidations  The Late And Washington Post Poll Edition

The big news was from the Washington Post this afternoon, when it releases its latest poll showing all three Republicans — Bob McDonnell, Lt. Governor Bill Bolling and Senator Ken Cuccinelli — leading their respective races for governor, lieutenant governor and attorney general by nine points. The other big news today concerning the statewide races is that Cuccinelli's opponent for attorney general, Democrat Delegate Steve Shannon, tried to emulate his gubernatorial ticket mate Creigh Deeds in question dodging (see Tertium Quids below). Who does it better? You watch. You decide.

Other than that, the debt is at third world levels, the CBO says BaucusCare is nearly as expensive, the Supreme Court hears a religious liberty case, and a more ineffective "jobs programs" is on its way. The good news is that we have some superior insights from Larry Kudlow, Michelle Malkin, Bobby Eberle, Michael Barone and Lisa Fabrizio on ObamaCare, his Olympic flame-out and political weakness, and how to create real and plenty jobs.  

News:

McDonnell Widens Lead in Virginia Governor's Race (Washington Post)

WaPo Poll: McDonnell, Bolling, Cuccinelli all +9 (Tertium Quids Blog)

Explicit 'Banned Book' Infuriates Virginia Father, Leads to School Review (FoxNews.com)

Democrats beg Deeds for positive message (Norfolk Virginian-Pilot)

Democrats vowing to hold strong in fight for governor (Northern Virginia Daily)

Deeds avoids Obama, embraces Warner (Washington Times)

Videos Highlight Dueling Images (Washington Post)

Meanwhile, at the AG Debate . . . (Tertium Quids Blog)

Delegates candidates speak at Henrico forum (Richmond Times-Dispatch)

Contrasting Candidates Enter Final Month In Race For House Of Delegates (Harrisonburg Daily News-Record)

Hurt will seek GOP nomination to challenge Perriello (Richmond Times-Dispatch)

National News:

Sharp debate at high court over cross on US land (AP/GOPUSA.com)

CBO: Budget deficit triples to record $1.4T in 2009 (AP/GOPUSA.com)

Health bill would cost $829B, cover 94 percent (AP/GOPUSA.com)

Bill increases spending on food stamps, nutrition (AP/GOPUSA.com)

Lawmaker: Cost of presidential copter tripled (AP/GOPUSA.com)

Obama huddles with Democratic leaders over jobs (AP/GOPUSA.com)

Commentary:

The Mundell-Laffer Solution (Larry Kudlow/GOPUSA.com)

Weak Himself, Obama Draws Strength From Bush (Michael Barone/GOPUSA.com)

O-lympics (Lisa Fabrizio/GOPUSA.com)

Couldn't the 'Men in White Coats' Just Take Obama Away? (Bobby Eberle/GOPUSA.com)

Spin Doctors For Obamacare (Michelle Malkin/GOPUSA.com)

Obama's 'No I in Team Syndrome (Bobby Eberle/GOPUSA.com)