President Obama's observation that US equities are currently a good buy, as measured by price-to-earnings ratios, is getting mixed reviews this morning. While his inherent optimism is seen as a badly needed tonic, many are noting that historically it has proven dangerous for presidents to encourage investment in particular asset classes. Notably, the coverage is almost evenly split between reports stating that Obama is working diligently to project optimism, and those, like one from CNN's The Situation Room last night, which maintain Obama is "seeing economic gloom all around him." NBC Nightly News reported, "It's a rare day when a president hands out stock tips. But that's exactly what...Obama seemed to do today, advising Americans the time was right to buy low." ABC World News also said Obama "seemed to suggest to investors that they should buy." Obama was shown saying, "Profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you've got a long-term perspective on it." The Politico says, "The challenge for Obama is that the stock market could still decline substantially, in which case his comments could become an embarrassing reminder of bad judgment. And of course any voters who follow his advice today and lose money won't be pleased." Mark Knoller, writing for CBS News.com's Political Hotsheet, says, "It sure sounded like President Obama was sending a buy signal to investors today but his spokesman says not really. 'I guess I didn't read into it as much as many people may have,' said Press Secretary Robert Gibbs. ... Realizing that the president shouldn't be giving advice to investors, Gibbs tried to laugh it off. 'I will ask him if he's got any particular tips for you,' he said. 'Maybe I should have cornered him and gotten a few of my own.'"
The Wall Street Journal says Obama "made his first direct attempt to boost equity prices." The Journal adds that "after weeks of emphasizing the economic morass he was inheriting, the president segued sharply to declarative statements of optimism. At the White House Tuesday, he used some of the most confident language yet." At the same time, another Wall Street Journal article interprets Obama's comments in a different light, saying he "echoed the bleak assessment of private economists who warn the U.S. is likely to fare worse this year than expected." The Los Angeles Times reports, "The president's words did little to inspire Wall Street. ... Still, from the president to the secretary of the Treasury and the chairman of the Federal Reserve, senior policymakers insisted that the economy would eventually post a robust recovery." According to the Washington Post, "Words weren't enough to end the raft of bad news yesterday."
Jim Cramer, at the beginning of CNBC's Mad Money, reported that President Obama "actually said it was a good time to buy stocks," and added, "Given that it was Obama who knocked the whole darn thing down, he might have some inside information that he's done enough damage for now. ... Obama is clearly not a day-trader-- although he could make a killing on the short side with his radical agenda." Former Democratic Rep. Harold Ford, appearing on MSNBC's Hardball with Cramer, said, "I happen to agree with Cramer's points, his larger thrust, the point he is trying to make to this Administration." Larry Kudlow, host of CNBC's The Kudlow Report and, according to The Politico, a potential GOP Senate candidate in Connecticut, opened his show last night complaining about the Administration's talk "about taxing the rich, raising taxes on private investment funds and raising taxes on offshore corporate revenues. That is more war against investors and businesses in the worst bear market recession in memory. It's an extraordinary stupid performance, to be honest with you."
The Washington Times reports that Carnegie Mellon's Allan Meltzer "refuted Mr. Obama's characterization of the market as fluctuating. 'The stock market has not been 'up and down' since January 20. It is mostly down substantially. And it falls especially on days when the administration announces its plans and proposals." James Pethokoukis, in his blog for U.S. News and World Report, says, "Week after week, investors have looked at stimulus plans, bank rescue plans and housing plans and taken little or no confidence from them." Dick Morris, in his column for The Hill, notes that "in the last five months, according to the Federal Reserve Board, the money supply in the United States has increased by 271 percent. ... The inevitable result will be double-digit hyperinflation."
Is Obama "Cooking The Books?" According to the AP, "After being accused for weeks of being too negative about the economy, Obama recently has shifted to a more positive tone." But "some lawmakers challenged the administration's predictions for such a speedy recovery. The budget forecasts that the economy, as measured by the gross domestic product, would shrink by just 1.2 percent this year and then snap back and grow by a solid 3.2 percent in 2010, followed by several years over 4 percent. That's more optimistic than most private forecasts, and comes despite a new government report showing the economy contracted by 6.2 percent in late 2008, far more than the 3.2 percent drop first reported." GOP Rep. Kevin Brady is quoted as saying, "It looks like somebody's cooking the books."
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Federal Reserve Board Chairman Ben Bernanke testified before the Senate Budget Committee on Tuesday, where he is reported that have offered general support for President Obama's approach to the Federal budget. The New York Times reports Bernanke "tacitly endorsed President Obama's call for huge increases in spending and trillion-dollar deficits over the next couple of years, saying the economic crisis required aggressive action." Bernanke's "comments were reminiscent of the support that his predecessor, Alan Greenspan, gave to Mr. Bush's call for tax cuts in 2001."
CNN's The Situation Room reported that "stocks fluctuated as" Bernanke and Treasury Secretary Geithner "warned lawmakers they may have to soon spend even more than the $700 billion they've already passed to rescue the financial industry. That is not what lawmakers wanted to hear."
Republicans Accused Of Hypocrisy The Washington Post's Steven Pearlstein criticizes the "Republican politicians and talk-radio bullies who are trying to pass themselves off as born-again deficit hawks. These are many of the same folks who saw no problem running up record deficits in the middle of an economic boom by pushing through the biggest tax cut in history, increasing entitlement spending, and waging a terribly long and costly war." The Washington Post's Harold Meyerson writes, "Give conservatives credit for their consistency: They attacked Roosevelt as a socialist as they are now attacking Obama, when in fact Obama, like Roosevelt before him, is engaged not in creating socialism but in rebooting a crashed capitalist system."
CNBC's John Harwood, on CNBC last night reported that a new NBC News/Wall Street Journal survey shows President Obama "has a 60% approval rating," while "just 26% disapprove of his job performance." But in a "real opening for Republicans," 61% "worry more that government will spend too much than that government will spend too little." NBC Nightly News said Obama's approval rating is "considered pretty surprising, given all the bad news he's had to impart to Americans since taking office."
The Wall Street Journal notes there are "also early warning signs showing risks if his plans don't show progress. The president's support, while still deep, looks increasingly partisan as Republicans move away from him. Americans have more confidence in the president himself than in some of his initiatives, such as the economic stimulus package, and have some hesitation about his plans to raise taxes to expand health coverage."
In another segment of NBC Nightly News, NBC's chief White House correspondent Chuck Todd said another "number stuck out -- the direction of the country. 15-point jump from a month ago. 41% tell us the country's heading in the right direction, 44% say the wrong track. That may not look like a good number but it's a huge jump."
And Todd also cited "amazing numbers for a new First Lady," a "sixty-three percent positive rating." Todd added that "what makes it more remarkable, six months ago, you and I were talking at the Democratic Convention, [speculating that] she might be a liability if she's not careful. She's no liability."
British Prime Minister Gordon Brown was dealt what some sources report was a snub by the White House on Tuesday. CNN's The Situation Room reported Brown "is wounded at home and wanted a full-fledged news conference to stand beside a popular new leader. Instead, Brown got a more low-key meeting in the Oval Office." Brown "desperately needs...Obama to help Great Britain deal with the financial crisis," but President Obama "pointedly did not make any promises about a 'global new deal.'"
The Hill says "British media characterized the structure of the Obama-Brown meeting -- which did not include a press conference afterward -- as a 'snub' to the prime minister, who was the first European leader to meet with Obama." The New York Times reports "the British leader seemed undaunted by the comments of Robert Gibbs, the White House press secretary, who said last week that the visit would be an occasion to renew the 'special partnership' between the two countries, a slight shift in language that had some Britons saying that Mr. Obama might be pulling back from the closeness that had developed between President George W. Bush and Tony Blair, Mr. Brown's predecessor."
Dana Milbank, in a Washington Post column titled "No Colgate Moment, Indeed," writes that "Brown kept a stiff upper lip as he sat in the Oval Office yesterday as Obama, skipping the usual words of welcome for his guest, went straight to questions from the news services. Brown didn't get to speak for six minutes, after Obama had already answered two questions."
Obama, Brown Pledge Economic Cooperation A number of media stories (including stories in the network newscasts) mentioned the President's meeting with Prime Minister Brown only to report in depth on Obama's comments to reporters about the stock market. The substance of the meeting itself, while largely overshadowed by stories about the economy, is nonetheless covered in today's major newspapers.
The Washington Post reports the President and Prime Minister "emerged promising close cooperation to address the global economic crisis." The Wall Street Journal reports that the two leaders "both face enormous challenges with the global economic downturn," but while Obama "retains the nation's confidence just five weeks into his term, Mr. Brown is feeling the pressure of a restive electorate," so Obama "worked to give his visitor a boost." The AP, New York Times and AFP also report on Brown's visit.
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In the race to replace former IL5 Rep. Rahm Emanuel, now the White House chief of staff, Cook County Commissioner Mike Quigley (D) won the Democratic primary yesterday, the Chicago Tribune reports, making him the prohibitive favorite to win the general special election in the heavily Democratic seat. The Chicago Sun-Times adds Quigley took 22% of the vote, followed by state Rep. John Fritchey, 18%; state Rep. Sara Feigenholtz, 17%; Alderman Patrick O'Connor, 12%; and physician Victor Forys, 11%. The New York Times adds Quigley "will face the winner of the Republican Party primary, Rosanna Pulido, and a Green Party candidate" next month.
Roll Call reports, "Shunned by Senate Democratic leaders and his state party, embattled" Illinois Sen. Roland Burris (D) "is riding out the storm over his own shifting explanations for how he was appointed by" former Illinois Gov. Rod Blagojevich (D), though he "could arguably spend the next year and a half in the chamber as a political outcast." In a similar report, the AP says that Burris "seems to have weathered the storm" as fellow Democrats "are no longer demanding his resignation."
The Minneapolis Star Tribune reports that in the Minnesota Senate race yesterday, Norm Coleman (R) said "that the three judges hearing the U.S. Senate recount trial will have to ponder whether they'll be able to decide who won the election," but the St. Paul Pioneer Press reports, "Election law experts say ordering another election is not within the judges' purview - a position strongly adopted by" Al Franken's (D) attorneys.
The AP (3/4, Blood) reports that Los Angeles Mayor Antonio Villaraigosa (D) "easily claimed a second term Tuesday in an election that could be a rehearsal for a run for higher office" with unofficial returns showing he took 56 percent, topping the 50 percent required to avoid a May runoff. The Los Angeles Times reports that Villaraigosa yesterday "deflected questions about whether he planned to run for governor: 'I'm celebrating the confidence that the people of Los Angeles have shown.'"
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The AP reports that a Marist College poll of 1,045 registered New York voters conducted Feb. 25-26 shows that New York Gov. David Paterson (D) has an approval rating of 26%, "the lowest" for any New York governor "in 30 years, even worse than Eliot Spitzer after he was named in a prostitution investigation." In a blog posting, CNN reported that the survey showed Rudy Giuliani (R) leading Paterson 53%-38% in a hypothetical general election match-up, while the New York Post adds the survey also showed state AG Andrew Cuomo (D) leading Paterson 62%-26% in a hypothetical Democratic primary match-up.
The Richmond Times-Dispatch reports that a Public Policy Polling survey of 647 likely Virginia Democratic primary voters conducted Feb. 28-March 1 shows Terry McAuliffe leading the Democratic field in the race for Virginia governor with 21%, followed by Brian Moran (D) with 19%, and state Sen. Creigh Deeds (D) with 14%, with 46% percent undecided.
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Jay Leno: "Nice to see you all here. ... You're so lucky you live in California," because there was a "huge snowstorm" in "Washington, DC." In fact, they are "calling it the city's biggest snow job since that stimulus package."
Jay Leno: "Actually, there were some optimistic words today from the Federal Reserve Chairman Ben Bernanke," who "told Congress the recession might end this year." Unfortunately, Bernanke "also said" pro football's "Detroit Lions could win the super Bowl and Paris Hilton could get an Oscar. So I don't know. He's a little out of there."
Jimmy Fallon: "Here's some good news. Barack Obama announced he's bringing home troops from Iraq. That's right. Unfortunately, he couldn't get them direct flights home. They have a two-year layover in Afghanistan."
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