THE MEDIA SHOULD BE RECALLED!
FORECASTS & TRENDS E-LETTER
IN THIS ISSUE:
1. Only Bad News, Where’s The Good?
2. Iraqis Desperately Want Us To Stay.
3. Bush’s Approval Ratings Turn Higher;
4. The Economy Rebounds & Jobs Rise.
5. Are You Making What The Markets Make?
Have you noticed how the media has a definite negative spin, especially when the Republicans are in control? Good news is under-reported, if at all, while bad news is the focus of the day. While you may not have heard it, we have had a lot of good news in the last couple of months: good news in Iraq, good news in the economy and good news in the stock markets. Hopefully, you’re having a good year in your investments.
Meanwhile, it looks like the constant Bush bashing is wearing thin – his approval ratings have rebounded. Along that line, there are some surprising facts about the California recall election. Maybe we should have a recall election for the media!
Liberals On How Bad Things Are
To hear the gloom-and-doom crowd and the media liberals tell it, things are just awful these days in America, and it’s all the fault of the Bush administration. As an example, let me paraphrase a few liberal columns in the online editorials this week: Bush was wrong to go to war in Iraq; Saddam was not a dangerous threat; still no WMDs have been found; the post-war rebuilding effort in Iraq is a disaster; the request for another $87 billion for Iraq is outrageous; we should just get out.
And on the domestic front: the economy is barely limping along; it’s a jobless recovery; consumer confidence is plunging; the spiraling deficits are totally the fault of the Bush administration; the next recession is right around the corner; Bush’s ill-advised tax cuts for the rich should be immediately repealed.
And there’s more: the White House is paralyzed as a result of all the criticism; turf wars are everywhere in this administration (CIA, Pentagon, NSC, etc.); the leak of a CIA operative’s name; heads are sure to roll; the first should be Karl Rove, followed by Don Rumsfeld and others; Americans should banish the Bush administration in November next year.
And on and on it goes.
But Now For The Rest Of The Story
While the Bush administration has made its share of mistakes, and should be criticized accordingly (as I have done from time to time in these e-pages), what about the good news? Why doesn’t the liberal media report the positive things in America today? The answer is, the good news doesn’t fit their agendas. But then, this is nothing new, at least when the Republicans are in control. And in this case, specifically, they despise George W. Bush, even more it seems than conservatives loathed Bill Clinton.
This week, we will look at some of the good news in recent months and weeks.
Iraqis Stun CNN/Gallup Pollsters
It is no secret that the CNN organization leans more than a little to the left. Their columnists, reporters and news anchors have consistently criticized the Bush administration for the “ill-conceived and ill-advised” war on Iraq. In their latest effort to criticize, CNN/Gallup sent a team of pollsters to Iraq to engage the Iraqi people. What they didn’t know is, they were in for a big surprise. They reluctantly released the following results on Monday.
72% of Iraqis polled said they want the US military to remain in their country. 84% said they believed if the US were to pull out now, the country would fall back into tyranny.
What more needs to be said? Sure, the US and the Bush administration have made some mistakes in Iraq, but the people there have now spoken decisively.
Bush’s Approval Ratings Rebound
Let’s stick with CNN again. In September, CNN/Gallup reported that Bush’s approval rating had plunged from 59% to 50%. The media was all over that and similar polls. It was all but assured that Bush’s approval rating would sink into the 40s. You will recall that there were widespread rumors that Al Gore, and even Hillary Clinton, were considering jumping in the presidential race if it looked like Bush could be defeated.
Well, in the latest CNN/Gallup poll released yesterday, Bush’s approval rating rebounded to 56%. Zogby, which had Bush below 50% a month ago, now reports he is at 55%. CNN’s latest poll on the 2004 election has Bush 53% against the hypothetical Democrat (more on the Dem’s race below).
In California, Arnold Didn’t Win - Davis Lost
The media had a conniption (read: hysteria) over Arnold Schwarzeneggar’s landslide victory over Gray Davis. The spin was (and I emphasize was) that Arnold didn’t really win; it was merely widespread backlash against Davis. The media argued that this meant that incumbents everywhere, and especially George Bush, were vulnerable. Yeah, right!
Post-election analysis proves otherwise, in shocking numbers. For example, depending on whose numbers you read, 17%-19% of African Americans voted for Schwarzenegger, and another 6% voted for Republican Sen. Tom McClintock. Even more amazing, a stunning 30% of Hispanics voted for Schwarzenegger, and 9% percent voted for McClintock, despite Democratic Lt. Gov. Cruz Bustamante’s candidacy and Schwarzenegger’s promise to deny drivers licenses for illegal immigrants. Exit polls also showed that more women voted for Arnold than Bustamante.
Top this off with the news that half of all union voters went Republican, too, most of them for Mr. Schwarzenegger. When pollster John Zogby looked at the exit-poll numbers, he was shocked: “Democrats ought to pay attention to these numbers because the unthinkable has happened…Hispanics have crossed over to the GOP in large numbers, 25 percent of Democrats voted against Mr. Davis, and 19 percent of African-Americans,” Zogby said. “Those are terrible numbers [for Democrats] in a 50-50 nation.”
The media has gone all but silent on the issue. Surprise, surprise.
The Democratic Wanabes Revisited
As long as I’m on the subject of politics, let’s briefly revisit the field of Democratic presidential hopefuls. While this might seem like a departure from the list of good news that is out there, I believe the constant Bush bashing from these wannabes is backfiring on them as I will discuss below.
There are currently still nine contenders in the race, but only five have any shot at winning. Expect the rest of the group to drop out soon. Here are the latest CNN/Gallup standings released on Monday for the five frontrunners: Clark (18%), Dean (13%), Lieberman (13%), Kerry (11%) and Gephardt (10%). If Clark or Dean wins Iowa and New Hampshire in late January, I would look for Kerry and Gephardt to drop out shortly thereafter, leaving only three.
Unless something significant happens, this race probably comes down to Dean versus Clark. While the latest polls show Clark ahead on the national scale, Dean is still comfortably ahead in the polls in both Iowa and New Hampshire. Should he win these two early primaries, I would look for him to vault ahead of Clark in the national polls. This assumes, of course, that Clark doesn’t do himself in sooner with his own missteps.
Dean remains the big surprise. He has broken all democratic fundraising records (even Clinton’s during the same period) and shows no sign of slowing. Dean is an unapologetic liberal ideologue who seems to genuinely believe what he says. He is the darling of the Hollywood elite and the champion of the anti-Bush, anti-war nominating base.
Yet Dean scares the party’s leadership to death. They believe, and perhaps correctly so, that he is too liberal to be elected, and that he will make great fodder for the Bush campaign. What will be most interesting is to see the tactics the Dem leadership uses to try and shoot down Dean’s juggernaut. They may be successful, but I, for one, would not count Dean out at this point. (Remember, there may be some in the party that privately want Dean to win the nomination and lose to Bush in 2004.)
As note above, the Democratic hopefuls have all resorted to non-stop Bush bashing, rather than concentrating on their respective policy positions. This is no doubt a part of a grand scheme advanced by the party leadership. It seemed to be working during the summer. However, I get the feeling this constant Bush bashing is starting to wear thin on the American people and even among some of the Democratic faithful.
This may have played a part in Schwarzeneggar’s landslide victory in California. If it keeps up, it may also play into President Bush’s favor next year.
Now back to the more tangible good news…
“Jobless Economy” Creating New Jobs
It has been my consistent opinion (and that of my best sources) since late last year that the US economy would surprise on the upside this year. It has. After growing only at a rate of 1.9% in the 1Q, the economy rebounded to a 3.3% annual clip in the 2Q. The Index of Leading Economic Indicators has risen for five consecutive months, which strongly suggests that the economy accelerated more in the 3Q.
Most economists expect the economy grew by 4-5% in the 3Q. That report will be out later this month. I am now hearing numerous estimates of 5-6% for economic growth in the 4Q and in early 2004.
There is also encouraging news on the labor front. The Labor Department reported last week that new filings for unemployment benefits fell to an eight month low. The latest report showed that a net 57,000 jobs were added in September. Temporary-help agencies took on 33,200 additional workers in what should be a sign of broader-based hiring to come.
As I have reported often over the last year, new jobs are one of the last components of the economy to turn around after a recession. This is especially true this time around as productivity gains have increased significantly over the last few years, in addition to jobs moving outside the country.
The bottom line is, the economy is recovering much better than the media would have us believe.
Stocks Hit 16-Month Highs
The Dow Jones hit a 16-month high on Monday, with the Blue Chip index gaining 17% for the year. The Nasdaq Index is up 45% for the year. So far, 3Q earnings reports have exceeded expectations, generally speaking. Since I recommended moving back to a fully invested position in equities just before the war in Iraq began, the Dow Jones and the S&P 500 Index have gained apprx. 25%.
Thanks to the gloom-and-doom crowd, millions of investors who bailed out of stocks in 2002 and earlier have not gotten back in these markets. There is still a mountain of cash sitting on the sidelines earning next to nothing and looking for an opportunity to get back in. Pullbacks or “dips” have been limited since the markets bottomed in March.
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Wishing you profits,
Gary D. Halbert
Forecasts & Trends E-Letter is published by ProFutures, Inc. Gary D. Halbert is the president and CEO of ProFutures, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, ProFutures, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.