King was helping black union workers in Memphis, who were shut out of the union for years, and consequentially earning substantially less than their white co-workers earned. Martin Luther King, Jr. fought for a chance for everyone to get into the game and to have a chance at the brass ring…he did not advocate taking what is not earned. However, here we are in an environment where liberal economic policies focused on taxes, regulations, and picking winners and deciding losers, which have failed miserably.
This is a perfect time to admit this stuff; it sounds better and even fairer on paper, but has never worked in history, and has been an anchor on America this time around, too.
Instead, we are hearing how people with AIDS find themselves there, not from unsafe sex and reckless behavior, but because of greedy corporations. You cannot make this stuff up. Nevertheless, you cannot laugh it off either, it is a battle cry to grab the pitchforks and torches, and loot the ‘haves.’
“If you ever want to see just how corporate interests are allowed to rise above the interest of the people and of justice, look at the global AIDS pandemic.”
- Jennifer Flynn
Managing Director, Health GAP
The Robin Hood movement is another piece of a larger puzzle, much like Michael Lewis’ HFT scandal. The scandal is having the desired effect on the public. Yesterday, Charles Schwab released an incendiary statement calling HFT a “cancer.” The founder of the eponymous discount investment firm made a few critical points:
“High-frequency traders are gaming the system, reaping billions in the process and undermining investor confidence in the fairness of the markets.”
“Technology has been a central part of that positive story, especially in the last 30 years, with considerable benefit to the individual investor.”
The public and media will pick up on the first statement, and one will hear it in political campaigns this fall, but not before it debuts in a speech from President Obama. The second part will never be told or acknowledged. In 1999, an investor buying 100 shares of Cisco would pay up $0.75 (the difference between the bid and ask), but today it would be $0.01. I am no fan of HFT, but know it is the latest scapegoat for all that is wrong with America.
HFT is not insider trading; it is not stealing from small orders, but it is ridiculous and it is something the industry should have handled a long time ago.
The Bottom Line
People that want high wages for low-skilled jobs that want to punish the rich to line their own pockets, think that corporate income statements are a part of the public domain, are not honoring Martin Luther King Jr. These people are not honoring America, or those that made it the greatest nation in the world. Stealing has never been right, even in nations where only royalty and their buddies have all the opportunities. Robin Hood is a myth; America is a dream come true – let’s not make it a nightmare.
It is interesting that so many naysayers are predicting a market crash, even as one is occurring right now. Momentum stocks slipped into panic mode, with many giving up humongous gains for the year over the past few weeks. And it is amazing how fast and how hard they have come down. It is the kind of meltdown, which the doomsday crowd has envisioned for the entire market for the last few years. The good news is the giant crashes have not sparked widespread panic…in fact; even the curmudgeon crowd is not paying attention (they want the Dow to lose 30% to 40%).
Money has largely rotated into safe names. I am not sure how long this pattern holds up, but at some point, investors are going to see FB, AMZN and PCLN as buys. In the meantime, we have a stock market crash and the cult of doom is missing all the fireworks.
The all-important jobs number is out, showing a nonfarm payroll gain of 192k for March, modestly below the 206k consensus, while February was also revised up from a gain of 175k to 197k. The unemployment rate held flat at 6.7%. Encouragingly, the unemployment rate stayed flat while at the same time those ‘not in labor force’ actually declined by 331k, an indication of people regaining faith in the job market.
All of the month’s gains came from the private sector, with the government showing zero net change in jobs. Interestingly, the single strongest sub-sector gain came from employment services with a gain of 42.0k; perhaps a sign of businesses gearing up for even more hiring. Foodservice was also a standout with a gain of 30.4k. Total retail jobs showed a gain of 21.3k and construction was up 19k. Manufacturing had a weak showing, however, at -1k jobs.
The results were pretty decent all around, and it’s enough to make the market open solidly green.