Varchild hands Pres. Obama his 100 Days Report Card
After listening to Jim Cramer turn his "Hallelujiah" button into a turbo button full of praise and jubilation for Obama's progress in his first 100 days.....which seemed entirely based on share prices and not on the fundamental realities of the corporations behind those share prices....
This is the real truth.... The real Obama Report Card to end all Report Cards.....
Let's do this based off of Jim Cramer's list of stocks he used to track Obama's Progress:
1) CAT: In the first 100 days, Caterpillar hasn't hired anyone as Obama claimed the C.E.O. would hire right away after the passing of the 700+ $Billion Stimulus bill. The company is suffering under massive declines in the order for Cranes and infrastructure projects, despite the infrastructure spending in the bill.
The reality is that only about $60 Billion has been spent out of the bill as Federal Bueracracy marches forward at a pace that would make a Sloth jealous.
Sure, Caterpillar's share price went northward. It went up. The company is going to survive. But, there doesn't seem to be much hope for Caterpillar to be on the growth path until 2010 at the earliest. I have to give Obama a C-....It would be a C+ if Obama actually spoke the truth about the impact of the stimulus bill being almost insignificant to this company's bottom line.
2) BAC: Jim Cramer wants to talk Share Prices? Sure... 78% or so price jump was nice... But what about the 20% price drop after the share price hit $11.50? It trades Pre-Market this morning as low as $8.10 due to the fundamental Credit Card and Loan Debt causing the bank to require additional capital from the Federal Government.
Can we give an A+ raiting here when the Regulators in charge of Obama's policy decisions are demanding that Bank of America accept more Capital infusions from the Treasury?
Jim Cramer thinks so. But Varchild believes until we are out of the woods....At best.. You can't give Obama anything here beyond a C.
3) JPM: JP Morgan is in much better shape than Bank of America so why are the FEDs refusing to accept the re-payment of the TARP? Sure, there are similar issues with JP Morgan as with Bank of America when it comes to credit card / loan default rates and unsafe capital ratios.
But, Jamie Dimon's confidence in his company partnered with the confidence of shareholders...(Something that is clearly missing with shareholders of BAC) make me have more confidence in JPM's future than BAC's future. JPM's balance sheet is better and JPM did not go back to the FEDs...TWICE....for TARP cash...unlike BAC.
So.. I gave BAC a C rating... I'll give JPM a B
4) GE: It seems the GE Capital Crisis is no longer a crisis. I have faith in this company's resiliancy to recover their earnings from their heavy equipment sector selling like hot cakes.
That sector is on the growth path....Other sectors are FLAT, and Zero Decline is a blessing in this economy. Only GE Capital and GE's television network's advertising decline seem to be the problem areas.
Those 2 problems don't seem to make GE a bad investment....the company is strong enough to stay on a growth path inspite of having 2 underperforming parts. Therefore, I have no trouble with my rating here.
5) GM: Unfortunately, FORD was not part of the Cramer....Obama....Report card system. General Motors is...and they are still under the Government's teat. This automotive company's future even if their latest attempt to avoid bankruptcy gains approval from their bondholders, is simply a disaster.
Now...Had GM been sent through the process of Bankruptcy months ago and we were sitting here analyzing the prospects of GM's growth through their strongest, selling, brands.... (BUICK = China).....And if we didn't get informed about the death of Pontiac..Which I thought was GM's stronger brand....I mean...Maybe I'm wrong to attribute Pontiac with Ford's Taurus....But...I can't think of any American GM brand for Cars that is more accepted by automotive buyers as well as more recognizeable....More American.... Than Pontiac.
Because of the death of Pontiac.....Obama's refusal to let GM get fixed in Bankruptcy Court... And the massive uncertainty surrounding GM that has left this company reduced to 100% un-investable, JUNK Credit, JUNK Stock status..... My rating?
This report card is pure honesty... .It shows improvement in most stocks...and thus it recognizes improvement in most sectors. Don't get me wrong...a C is reasonable for a President's first 100 days.
We got: 1 A, 1 B, 1 C, 1 C-, and 1 F
It definitely could be a whole lot worse.... But certainly...This isn't a Report card deserving of the Hallejuia button...This is not deserving of some sort of "Pre-mature Congratulations."
This is a report card showing significant problems in 3 out of the 5 stocks.
This is high time Investors realize that this really does represent the deterioration of America's economy and how much effort it takes to go from a C rating to an A.....There's lots of work Obama has to do to fix this mess... I just hope he realizes that Government Dependancy isn't the answer to Any Private Industry's problems. They simply delay the solution.
So... Pres. Obama's G.P.A is: C- not Robert Gibb's G.P.A. B+