The Online Investing AI Blog

President Obama upset some business folks when he basically said… you didn’t build your business.

In fairness, here’s what he said:

“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen,” he said. “The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”

So, he could be referring to the roads and businesses. In other words, businesses do not build the infrastructure necessary to allow their companies to bring in raw materials and send out completed products, or however else they conduct their operations.

But he’d still be misguided, for a few reasons–and perhaps it’s semantics.

If what the president is saying is that businesses did not build the roads, then he is only partially correct. Money from businesses in the form of taxes did indeed pay for those roads and bridges. Businesses partnered with government to create infrastructure.

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Business Strategy, Internet, Investing, Money, Online Investing AI business, government, gratitude, Obama, politics, Success

Image courtesy Creative Commons

Conservatives, who tend to favor the market, often make the  case that they’re better investors and their policies are better for the economy. Liberals say they’re better investors because they are more globally aware than conservatives. They say they distribute wealth and that’s good for the economy.

So, who is right?

Neither.

To become the complete investor, you have to shrug off all  ideologies. When you trade or invest, ideologies can cloud your judgment.

Here’s how it works:

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Great Books, Investing, Money, Online Investing AI, US Economy books, conservative, covel, emotions, Investing, liberal, Obama, politics, trading, trend following

The current administration has made it very clear that it is committed to helping the economy as much as possible. The trillion dollar bailouts have had a measurable effect, and most people think that the recession is over. Although the short term effects of the stimulus have been realized, many people are wondering about what happens after the effects have worn off.

More Failed Banks

This article from Reuters describes nine bank failures that occurred in just one day. The government has successfully increased spending and prevented a depression in the short term, but what about the real health of the economy? As bank failures reach record highs, do we need to be concerned about whether the entire system will collapse?

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Investing, Money, Success, US Economy bankruptcy, banks, economy, government, inflation, Obama, US

Recently, as the stock market soars, there has been a large amount of news about how well the economy is doing. They say that the housing market has hit bottom, and that the economy is recovering. However, this article by the Associated Press is about how unemployment is rising.

Regardless of what the newspapers say, it is important to look at the fundamentals that drive the economy. The government has created massive band-aids to prevent a depression, and they seem to have worked. But it is important to understand the difference between a recovery and a temporary band-aid.

What effect will the band-aid have?

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Money, US Economy bailout, CNN, debt, deficit, dollar, economy, foreclosure, housing, media, Money, Obama, spending, unemployment, USA Today

The United States has had a free ride for the last 100 years. Every country in the world held the dollar as its reserve currency. That means that there was more demand for the dollar than for any other currency. The massive natural resources, growing economy, military dominance and overall desirability of America made it possible to establish the dollar as the common measure of value throughout the world. In addition, until Richard Nixon took us off the gold standard, the dollar was redeemable for gold.

The net result of all this is that America has been able to print as much money as it wanted. Deficit? No problem. We’ll just print more money. All the countries around the world will hold the dollar, and there is no limit to the amount of debt they will buy. No money to pay back the debt? No problem. Just print more money.

What’s happening now?

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Investing, Money, Success, US Economy Bush, change, china, debt, dollar, india, Investing, Money, Obama, Success

Lately there has been quite a bit of good news about the economy. The stock market is up. Housing sales volume is up. Corporate profits are up.

But I don’t think the economy will improve any time soon. The collapse in the housing market touched off the crisis, and I don’t think the housing market will get better soon. With rising unemployment, there are still way too many sellers. And, the majority of adjustable rate mortgages have yet to readjust. That will happen in the next two years. Therefore, over the next two years the housing market will be flooded with still more foreclosures.

What about another bailout?

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Money, US Economy crisis, economy, housing, Money, Obama, unemployment

It’s quite surprising that the most popular post we’ve had to date is about the possibility of a depression in 2009. I wrote that post at the end of last year, when this whole economic crisis is just getting started. Since then, the economy has steadily deteriorated. I wonder if more and more people are getting the idea that we could have another depression in the near future.

Notice that the title of today’s post is about the next depression. Many so-called financial experts on TV say, “I have never seen anything like this. We’re in uncharted waters.” This just means that they are clueless. There is nothing uncharted about depressions. In fact, a depression happens, on average, once every 80 years. There is no question that we will have another depression. The question is, will it be this year, or in another year?

Over the last few days, the stock market has rallied in a big way. Does this mean that the financial crisis is over? Absolutely not. There is nothing but bad financial news these days. And, the effects of layoffs, the falling stock market and bankrupt businesses is just beginning to have its effect. Besides that, it’s pretty obvious that the housing market will continue to fall quickly.

The chart of a stock or financial market index is nothing more than the sum of human emotion over time. Many people who think that they are financially educated, and have gone to college or sport MBAs believe that the price of the stock depends on fundamental values such as PE ratios. Although these fundamentals have some bearing on the stock price, there are other factors that are far more important. The most powerful factor that contributes to the valuation of the stock is human emotion.

Imagine a train going downhill, and the brakes are broken. How can you possibly stop it? It has so much momentum, and it’s so heavy, it is hard to imagine how much force is required to get it to stop. Our economy is quite similar. It has already generated so much momentum that it will continue to go down.

Is Obama going to be able to save us? Personally speaking, I don’t think so. However, the good news is that every individual has the power to save themselves. Each person can choose to drift along the river of financial loss, or take control of their ship and improve their financial future.

If you think this economy is all bad news, then consider this: in every economy, there are ways of making money. Here’s a recent post about some ideas about how to profit in the current falling economy.

Investing, Money, US Economy 2009, bankruptcy, depression, economy, finances, housing, layoffs, Obama, recession, stock market

After reading a wonderful post over at the aptly named Pimp Your Finances, the author noticed that he would not benefit from the stimulus bill. Why? Because he did what he was supposed to do. He didn’t get into credit card trouble. He didn’t overextend himself by buying more home than he could afford. He made sure he did an outstanding job at work, so he didn’t get laid off. So, where does that leave him? With no benefit from the stimulus.

So that got me thinking. The stimulus bill is really helping people who mismanaged their finances. It’s great to help people who are having challenges, and I support that 100%. And, it raises an important question. Is giving away money without any education really going to help on an individual level?

Maybe it’s a stupid idea, but in addition to helping people financially, I think they should get help through education. Perhaps there could be an online class that could help people to increase their income. And, it would include entrepreneurial training. People could be shown how easy it is to set up a blog and generate revenue from advertising. Or they can learn how to sell stuff on eBay. Or, even how to buy foreclosure property and make money in the process.

There are a million ways to overcome any financial challenge. It would be really great if Obama will stimulate people’s minds as well as giving money away. Opportunities are unlimited. Especially today, where anybody can set up a blog or website and make more money than they could in a full-time job. Perhaps we can use this financial crisis to create a better financial future.

It would be really great if we could get the mainstream media to promote this idea. Television may not be the most empowering media available, but it’s probably the most widely consumed in America. What if big names like Trump, Obama and Hilton could create television shows that inspired people to start their own businesses?

It doesn’t take a lot of money to start a blog. In fact, it takes zero dollars. It doesn’t take a lot of money to get Internet access. It’s cost less than cable television. It doesn’t take a lot of money to buy a laptop. It costs much less than a plasma TV.

Or, what if in order to receive a stimulus bill funds, the recipient would have to do something to improve their financial future? Maybe could they could take an online class on how to start their own business? Perhaps instead of just giving money away, we could help people invest in themselves so that their financial future will be brighter.

Business Strategy, Investing, Money, Success, US Economy economy, entrepreneurship, free money, Obama, stimulus

As I wrote about in a previous post, Obama has taken massive action in the first few days of his administration. That is really outstanding. He has already distinguished himself as being different from most politicians, and is already starting to follow through on his hundreds of campaign promises in a big way.

All that is wonderful. The problem is that America is in financial trouble far deeper than most people imagine. So far, the government is spending about $800 billion to help the economy. Consider this: Social Security has $10 trillion in liabilities. That is over 10 times as much as the recent economic stimulus package. What radical changes is Obama going to make to solve this huge problem?

Besides Social Security, we have an even bigger problem: Medicare. Medicare has liabilities of $62 trillion! So, adding these two liabilities together, we need 100 times as much money as the government is spending already! How is Obama going to solve this unbelievably challenging problem?

Unfortunately, most Americans are not even aware of the problems of Social Security and Medicare. They blissfully assume that the government will take care of them in the future. But I suggest you, that ignorance is not bliss. There will come a day in the near future when these benefits will be significantly reduced or disappear altogether.

Most people don’t want to deal with the fact that our government has put the country hopelessly in debt. We are soon coming to the point where we will not be able to make payments on the national debt, and the entire structure of the American economy will change radically. I just hope that Obama can find some way to solve these daunting problems.

Money, US Economy financial crisis, Medicare, national debt, Obama, social security

After making a few posts about “politicians” and how America’s problems are too big for one president to solve, it’s time to recognize the wonderful steps Obama has taken in the first few days in office. I’ll admit that I was skeptical about Obama being different from most politicians who make promises during their campaign, during their term do little that they promised to do, and then make excuses at the end.

One of America’s greatest challenges besides the economy in the coming years is going to be terrorism. I don’t think it’s possible to achieve peace through killing, and war seemed to be the top agenda item for the W. administration. Now Obama has taken action to clean up the mess.

In this article, Obama is described as going on Arabic television to start to find a common ground between America and the Muslim world. It seems to me that most Americans want peace, and Obama has taken a big step forward to achieve it. It’s only been a few days, but great job so far!

And the same holds true true for the economy. Not everyone may think that Obama is doing the right thing to help the economy, but he sure is doing a great job of following through on his promises. I’m not 100% sure that he’ll be able to turn the economy around in the short-term, but it is great to see that we have a president that is actually honest, tells the truth, and has some sense of integrity.

It’s been said that in politics, the worse of a job you do, the higher up you go. And I think that may be true at times. But it’s also been said that God does not give us a challenge without giving us the skills to overcome it. Is it possible that this country’s challenges are the greatest in the last hundred years, and Obama has the skills to overcome them?

Success, US Economy Arabic television, Muslim, Obama, politics, Pres.