Stock Market Falls as Debt Ceiling Inches Closer

As the country moves closer and closer to default on Aug.2, Wall Street and other large investors are beginning to get nervous. Just one week ago, the notion that congress would default on its debts was unthinkable. Most investors didn't believe default by the U.S. government was even a remote possibility.

Now, as the prospect of defaulting on its obligations becomes more and more of a possibility, the stock market investors are beginning to react. In the last four days, the stock market has declined 3.3%. That is a pretty significant decline considering that the U.S. Stock market has only gone up about 7.5% for the whole year.

Keep in mind that Wall Street investors are a jittery, cautious bunch. In general, most investors will sell their investment if there is significant reason to believe that their investment is in trouble. And trouble is what we have in Washington right now with the Tea Party making any compromise impossible. That is why the stock market has declined in the last few days. I think we will see an even greater flight away from U.S backed securities as investors turn toward gold as the week goes on.

I hope I am over-analyzing the data and overreacting to the new reality that the U.S. Gov. may actually default. I hope the stock market doesn't continue its plunge and that congress reaches a deal in the next few days. And most of all, I certainly hope that many of the dire predictions regarding the consequence of a U.S. default from economists all across the spectrum are overly catastrophic and that the U.S. will not go into another recession.

John McCain said it right when he said that we as a country can bicker and argue about the role and size of government, but we shouldn't put at risk the credibility of the United States. There are more responsible ways of reducing government spending. This sort of political gridlock needs to stop for the good of this country's citizens and the good of the U.S. reputation abroad.

Bach-mania - The Bubble Before the Burst

Bachmann has been a virtual gift to the media and both conservative and liberal talking heads. She has provided a flare of entertainment and intrigue to the 2012 race that no other candidates have accomplished.

However, in my opinion, all that flare and media attention has done more harm than good to Bachman's image. Bachmann is slowly setting herself up, (or perhaps the media is setting her up), to be the next Sarah Palin.

A recent article discusses Bachmann's laundry list of gaffes and mis-steps thus far in her campaign, and believe me there have been some major ones. I am afraid that Bachmann is becoming more of a sideshow rather than a serious candidate.

It is certainly possible that Bachmann will ride this bubble of media attention to a victory in the Ames Straw Poll next month, or perhaps even an Iowa caucus victory. But with Rick Perry poised to enter the race, Bachmann stands to loose much of her base to the Texas Governor. In my view, Rick Perry will swoop in and steal Bachmann's thunder, and in the end, it will be a contest between Romney and Perry. A Romney-Perry ticket sounds pretty good to me these days.

Michele Bachmann Leaves Her Church

The new darling of the religious right, Rep. Michele Bachman, has now left the Lutheran church she attended for over a decade.

Bachmann's move appears to be politically motivated due to the timing of her departure from her church. Ms. Bachmann quit her church one week after announcing that she was running for president. Prior to Bachmann's departure from her church, she had been receiving increased questioning on a controversial doctrine of her church which states that the pope is the anti-christ. This doctrine is, understandably, offensive to many Catholics. And Catholics make up a major voting block of the religious right, a group Ms. Bachmann hopes to win over in her presidential campaign.

Some questions come to my mind after reading this new development from Ms. Bachmann. Can someone become the favorite candidate of the religious right when that candidate just left their own church? One would assume that the religious right prefers someone how is a religious and church-going person.

Another question: The timing of her departure from her church also sends a message that she quit her church for political aspirations. Will the religious right accept Bachmann, or any candidate for that matter, who quits their church for political gain?

Other candidates have downplayed their religious affiliations recently in order to win approval from a skeptical public. Jon Huntsman, when asked about his Mormonism, said "Well, I am not a very religious person," and " I believe in truth from many religions." Newt Gingrich joined the Catholic church not too long ago for reasons we can only speculate.

Mitt Romney, on the other hand, has not backed away from his religion despite undergoing extensive criticism. Even to the point of delivering a major address during his last campaign about his religious affiliation. Romney's refusal to back away from his religion stands in stark contrast to many of his rivals for the Republican nomination.

A troubling question emerges as we read about the many candidates who seem to be playing games with their spiritual and religious convictions. Will the religious right notice or care if a candidate leaves something that should be sacred to them in order to win approval from the public? Will backing away or quitting one's religion actually be a benefit? Or will the American public appreciate a candidate who adhere's to their religious conviction even when it is not particularly popular to do so?

Michele Bachmann

Since Michele Bachmann came on the scene not that long ago, she has risen in popularity and become a top tier candidate for president. Bachmann's poll numbers have risen rapidly in Iowa as well as the nation overall.

I believe that most of her popularity rise is short-lived and a temporary bounce from her recent announcement that she is getting in the presidential race. However, I must say that i am somewhat alarmed by republican voters' willingness to jump onto the Bachman bandwagon. After all, Bachman has only been on the national scene for 4 1/2 years. Does anyone really believe that 4 1/2 years is adequate preparation to be president of the United States?

As an example of Bachman's inexperience, she has repeatedly argued that there is no need to raise the debt limit. Bachman believes that all the talk about the dangers of not raising the debt limit is just "smoke and mirrors."

I think Bachman is completely in error on this point. Many authoritative sources have projected the dire consequences of not raising the debt limit. Among those sources are National Treasury Secretary Tim Geitner, Federal Reserve Chairman Ben Bernanke, the gov. of China, Moody's Rating Agency, S&P Ratings Agency, hundreds of large U.S. companies, AARP, and the list goes on and on. It's obvious to me that not raising the debt limit would be catastrophic.

Ms. Bachman doesn't realize the absolutely fundamental bedrock that the U.S. government bonds play in the business and investing world. One of the first and most basic fundamentals of all investing is that the safest investment in the world is a U.S. bond. The U.S.'s ability to pay its debts is, and should remain, unquestionably sure. To put in question this bedrock of international business and investment, is to shake the foundations of the financial world as we know it.

This is why I believe that electing Michele Bachman, a novice, would not just be a political mistake, it would be a reckless and dangerous mistake. It takes a long time to learn what one needs to know in order to be POTUS, and Michele Bachman simply isn't ready.

The "Huckabee Primary"

An interesting article at Politco this week discusses a phenomenon going on right now called "the Huckabee Primary." The article asserts that many of the candidates for president are trying to capture the "Huckabee voters" by cozying up to evangelical/religious voters and trying to appear as staunchly socially conservative as possible.

It is an interesting contest that we have in American politics where politicians do their best to appeal to voters' religious sensibilities. But the part of the article that I thought was most interesting was how splintered the evangelical voting bloc is this time around.

This election cycle, there are many staunch social conservatives and religious darlings. With so many social conservatives in the race, the possibility of a divided social conservative base is a very real possibility. Last election cycle, there was really only one candidate, Mike Huckabee, who fit the bill. But this time around there is Rick Santorum, Michele Bachman, Tim Pawlenty, and others (perhaps Sarah Palin) who are fighting for the Huckabee voters.

With so many candidates in the race who are trying to appeal to the religious voters, I think that a divided voting bloc among religious voters is the most likely outcome. So just like how a moderate, John McCain, won the nomination last time due to Huckabee and Romney dividing the conservative base, Romney stands to benefit from a divided evangelical/religious base this time around.

Mitt's Fundraising Strategy

The response from the press on Romney's fundraising for the last quarter has been lukewarm (despite the fact that Romney raised more money than all his rivals combined). But I believe that the response to Romney's numbers is just the way Romney wants it.

Romney's objective during this portion of the campaign is to lay low, and not attract too much attention to himself. His fundraising numbers fulfill that goal. He had nothing to gain by blowing his competition out of the water by an insane degree. His rivals fundraising numbers were dismal. Romney knew he could save some of his fundraising for the following quarter.

I am surprised that so few in the press are counting the money raised by his Super-Pac, which totals three times the amount of most of his other rivals. I think Romney diverted some of his fundraising to his Super-Pac in order to make his numbers look lower.

There is a danger in coming out too strong, peaking too early, and distancing yourself from the pack too much at this stage in the race. Romney knows this and is taking proper steps to keep as low a profile as possible.

The Money Race

The first quarter of fundraising for the GOP presidential candidates has officially ended. And now it is time for the great "reveal" where the candidates release their totals to the public. So far only three candidates have released the total amount of money raised by their campaigns, and it is fair to say that the totals are disappointing. None of these candidates reached their fundraising goals.

Tim Pawlenty - 4.2 million. His goal for the quarter was 5 million.

Jon Huntsman Jr. - 4.1 million. However, 2 million of that money was given by Huntsman himself.

Herman Cain - 2.46 million. Not a lot of money for a presidential candidate.

All of these numbers seem even less impressive when one considers that the Ames Straw Poll this August will cost the candidates about $2 million just to participate. So that leaves very little money left in the bank for other campaign expenses.