Jason Simpkins
Is This the Worst Congress Ever?
A growing body of evidence suggests that our current crop of representatives in Washington have, in fact, formed the worst congress… ever.
A new CBS News/New York Times poll last week revealed that 82% of Americans disapprove of the way Congress is doing its job – the highest disapproval rating since polling began in 1977. Just 14% approve of Congress' performance.
The poll comes on the heels of a debt-ceiling debate that was fraught with tension and absent of any real solutions.
Prior to the debt deal being passed last week, a USA Today/Gallup Poll in July showed that just 7% of Americans believed their representatives in Washington were negotiating in good faith. And two-thirds of respondents said elected leaders in Congress were putting their own political interests ahead of the country's interests – leaving U.S. taxpayers to suffer.
Sadly, Americans have gotten even more frustrated since a compromise on the debt deal was reached.
The CBS/NYT survey was taken on August 2nd and 3rd – immediately after the deal was brokered. It found that 68% of Americans disapprove of the way the Democrats handled the debt-ceiling debate, while just 28% approved.
Republicans fared even worse. Some 72% of Americans disapproved of their approach to the debt debate, while just 21% approved. Additionally, the majority of Americans (52%) say Republicans were too uncompromising. Comparatively, 34% say Democrats compromised too little.
Chinese Car Companies Racing to Produce a Global Champion
With Detroit a shadow of its former self and Japanese automakers sidelined by that country's recent disasters, Chinese car companies are racing to produce a global champion capable of competing with Western brands.
It's something that's long been talked about and something that Nissan Motor Co. (PINK: NSANY) Chief Executive Carlos Ghosn says could happen in just five short years.
"The Chinese government says this is a huge industry. We want to have a Chinese champion," Ghosn told Reuters. "It's logical. It's normal. We were expecting this."
Ghosn anticipates such an emergence will take about five years, but could happen even sooner if one of the major Chinese car companies acquires a mass-market auto brand from a foreign rival.
So who will this Chinese auto champion be?
A short-list of serious contenders includes:
- SAIC Motor Co. Ltd.
- Geely Automotive Holdings Ltd. (PINK: GELYF)
- Dongfeng Motor Group Co. Ltd. (PINK: DNFGF)
- BYD Co. Ltd (PINK: BYDDY, BYDDF)
- Chang'an Automobile Co. Ltd.
SAIC, and Chang'an are state-owned, which makes them difficult to invest in. But Geely, Dongfeng, and BYD are open to U.S. investors, with the latter backed by Warren Buffett. At the very least, these Chinese car companies stand to profit handsomely as China takes its place as the automotive capital of the world.
The Biggest Heist in History: U.S. Taxpayers Could Be On the Hook for Iraq's Missing Billions
For nearly a decade, U.S. military operations in the Middle East – Iraq in particular – have been criticized as a cumbersome and costly burden on the American taxpayer.
That accusation gained new credence this week when the Pentagon finally acknowledged that nearly $7 billion of Iraqi oil money might have been stolen.
And what's worse is that the U.S. taxpayer could end up paying for the mistake.
Following the March 2003 invasion of Iraq, the United States liberated, or seized, billions of dollars of assets from that country. But since Iraq had no banking system, the money – much of which came from Iraqi oil sales – was placed in an account at the Federal Reserve Bank of New York.
From there, large pallets of shrink-wrapped cash were periodically loaded into tractor-trailer trucks, driven to Andrews Air Force Base in Maryland, and airlifted to Baghdad. Some $12 billion of cash was flown to Iraq in the months following the overthrow of Saddam Hussein.
With Small Businesses Sidelined, the U.S. Job Market is Headed for a Double-Dip
After showing some improvement over the past year, the U.S. job market is now beginning a double-dip.
The reason is simple: The number of start-up businesses has hit its lowest level since at least the early 1990s.
Indeed, small businesses are the main drivers of job growth and no amount of stimulus can compensate for their absence.
For instance, between the recession that ended in late 2001 and the start of the most recent recession in late 2007, businesses that employed fewer than 500 workers added nearly 7 million employees, according to ADP payroll services. Larger businesses cut nearly 1 million employees in that period.
Hot Stocks: Why LinkedIn Is More than Just a "Bubble"
[Editor's Note: This analysis of LinkedIn Corp. follows the company's high profile public offering. To read a separate story about initial public offerings (IPOs) that appeared yesterday (Thursday) in Money Morning, please click here.]
LinkedIn Corp. (NYSE: LNKD) has had quite a ride since its initial public offering last week.
The stock surged 109% in its first day of trading to a peak of $122.70 a share, but has since tumbled back to close yesterday (Thursday) at $78.63.
Optimism about the potential for new-wave social media companies and a genuine thirst among investors desperate for a serious growth play drove LinkedIn's meteoric rise. But profit-taking and fears that the stock had entered "bubble" territory led to a quick drop.
China's Economy Continues to Ascend – But Watch Out for Speed Bumps
Everyone knows that China's economy is hot. The only question is whether it may be a little too hot.
China posted yet another quarter of stellar economic growth in the first quarter of 2011, with its gross domestic product (GDP) growing 9.7%. However, analysts are worried about some of the side effects that have accompanied that growth- namely soaring inflation and the emergence of speculative bubbles.
Inflation in China hit a 32-month high in March, and the country's real estate market is beyond scorching.
Policymakers in Beijing insist they have the situation under control, and they've been trying to rein in liquidity and curb speculation to prove it. That's why China's economy, accustomed to double-digit growth, is only expected to grow 8% to 9% this year.
Stocks Look to Shrug Off Dwindling Consumer Confidence
High prices for commodities last month sent consumer confidence spiraling to a three-month low, but that doesn't necessarily mean the stock market will suffer.
On the contrary, stocks over the past two years actually have performed remarkably well in the months following sharp declines in consumer confidence.
In the four prior instances since the start of 2009 in which consumer confidence fell by more than 10% in a month, the Standard & Poor's 500 Index rose an average of 7.2% the following month with positive returns every single time, according to Bespoke Investment Group.
That makes March's steep decline in consumer confidence somewhat easier to stomach. The Conference Board's confidence index fell 11.9% in March to a three-month low of 63.4.
Uranium Prices – And Producers – Are Poised to Rebound
Uranium spot prices and shares of uranium mining companies have plunged in recent weeks amid fears that the situation in Japan could deteriorate into a nuclear meltdown on par with Chernobyl.
Investors fear that the explosion and subsequent radiation leaks at the Fukushima nuclear power plant will force other countries to tighten restrictions, or worse, abandon their pursuit of nuclear power as an alternative source of energy.
But what if no such thing happens? What if the nuclear fallout in Japan remains relatively contained, and other countries around the world move ahead as planned with their atomic energy projects?
Pay to Play: What China's Rising Wages Mean for Investors
There's a sea change underway in China's economy – one that's evident in soaring prices, shrinking trade surpluses, and higher property values. And it's being driven by higher wages for workers that for decades have been grossly underpaid.
From the country's fast-growing urban centers to its frontier countryside, wages are rising rapidly across China.
China's 31 provinces boosted minimum wages by an average of 24% last year, according to Yin Weimin, China's minister of human resources and social security. Meanwhile, the average monthly income for migrant workers rose 13% to $256.89 (1,690 yuan).
Six provinces already have raised minimum wages this year, and labor shortages and government mandates will likely compel the remaining 25 to follow suit.
Investing in Sweden – A Cold Country with a Hot Economy
What comes to mind when you think of Sweden: Blonde hair, pale skin, and a pair of sullen blue eyes piercing through a whiteout – or an economy that grew 5.5% last year?
Too often, it's the former when it should be the latter.
Indeed, chances are you've never thought about investing in Sweden. But the country that is so often thought of as being cold – if it's thought of at all – is actually overheating.
The Swedish economy expanded by 5.5% last year, making it the fastest growing economy in Western Europe. Sweden's central bank, the Riksbank, was the first central bank in the European Union (EU) to raise interest rates. It has lifted its key repurchase rate five times since last July, squelching inflation.
The most recent hike came on Feb. 15 – a 0.25% increase that took the rate to 1.5%. And with the prospect of further rate increases in the short-term, the Swedish krona has risen to its highest level against the euro in 10 years.
Some manufacturers have warned that the soaring currency could undermine the country's export-led recovery, but the Swedish economy is still on pace to grow 4.4% this year.
Additionally, inflation remains low, unemployment is on the decline, and Sweden's national debt is lower now than it was in 2006.
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