Florida Agenda

By RICHARD K. CLAYCOMB

In a recent piece in the Florida Agenda (August 15, 2012, “The Consequences of Run-Amok Liberalism,” by Jason Otero), a gay Republican stated that Democrats have done nothing to address the economy. Let’s look at the facts:

• Provisions in the “Cash for Clunkers” program—which allowed Americans a tax break only if they bought autos made in the U.S.A.—was blocked by Republicans. The number one auto brand purchased under that program was Toyota, the majority of which are made in Japan.

• President Obama’s stimulus package had provisions that encouraged Americans to buy American-made goods, to help create jobs. Republicans blocked that provision.

• That stimulus package has pulled the U.S. out of the Great Recession. Republicans repeatedly attempted to block it, and now claim the stimulus has failed.

• Republican President George W. Bush started wars in Iraq and Afghanistan. Over a trillion dollars in taxpayer money has being spent for those wars and to rebuild the infrastructures in those countries destroyed by American bombs. America’s infrastructure is in sorry need of repair. Republicans repeatedly block job creation bills designed to make those repairs.

• Republicans say we can’t afford health care for uninsured Americans, and attempted to block legislation which would result in job creation in the health care industry to provide for uninsured Americans.

• Republicans attempted to block loans to the auto industry—now being repaid—which if not made, would have resulted in job losses during a time the U.S. continued to shell out financial aid (not loans) to other countries. The revived American auto industry has been hiring new workers because of an increase in sales of American-made cars.

Otero said the younger generation doesn’t care who gets married: But look up the ages of the young men who killed Matthew Shepard. He wrote we should work on the economy, stop trying to give gays the right to marry, and make abortion illegal again. Hitler took away the rights of gays, and ordered their extermination, while the majority of Germans supported him because he promised jobs. Criminologists in the 1970s predicted that America would become a police state to handle rising crime. Legalized abortion allowed women living in poverty the option to not have unwanted children.

Many of those born into poverty turn to crime because of the lack of jobs in communities at the poverty level.

Republican President Ronald Reagan ignored the AIDS crisis, resulting in an epidemic number of dead gays across America. If you’re a gay Republican, you belong to a political party that includes people who would like to see you put away in camps or exterminated. If you’re a gay Republican, you follow a political agenda that makes money more important than the teachings of the major religions, including Christianity, so you really shouldn’t complain about losing friends in the LGBT community because of your political beliefs, as Otero complained, since the majority of mentally-balanced people don’t want to associate with people who don’t practice what they say they believe.

By GENE INGER

Though I was among the very few who predicted the liquidity and credit crisis, as well as it morphing into an “epic debacle” in 2007 just before the highs; the rebound of the past year has been so persistently controlled that valuations are extended once again. That might mean that those feeling overly comfortable about the rally, and just taking-off for the gay cruises or other venues, might feel the expense more than they think if equity valuations behave in the weeks ahead as we are projected fairly likely.

If one had to define the greatest risk, it’s probably not the fed’s “thread the needle” or impossible resistance against budget cutting by Congress that shapes this New Year. Rather, it’s the overall debts, deficits, toxic assets that aren’t yet unwound, and what, for sure, is a looming crisis involving two things: the states and localities that have no means of funding their shortfalls; and evidence that what has been a (Goldman Sachs) follow the leader spin about absurd earnings levels and multiples in the next year, means that a “reversion to the mean” is going to take place.

Even if conventional wisdom is right about the third year of a presidential cycle being in the upward direction, that doesn’t mean volatility fails periodically appearing prior to a further upward effort. If during such volatility geopolitical events (terror, nuclear war in the case of North Korea or Iranian-sparked surrogate attacks) or anything else, then of course the nascent recovery will capitulate with the stock market. Gold won’t drop terribly far after the hype phase ended as expected.

All of this brings up another issue that is tantamount to 2011: if China and others are busy accumulating gold on concessions, and China and Russia are trading now with their own currencies instead of the dollar, what happens if they are not participants in size at our refunding treasury Auctions? Much of our debt was foolishly rolled-over in the past year with short-to-intermediate duration paper. As the Fed only controls the “funds” rate, they can do little to prevent higher rates. Thus, that alone exponentially will increase US debt/deficit levels, because of the higher interest to be paid on the nation’s debt. It will do so regardless of Congressional Budget trimming or new citizen demands.

What we enter isn’t the inflation people talk of, nor the deflation we rightly forecast in 2007; but it can become sort of a “hyperstagflation,” where prices for necessities in life rise persistently over time (gasoline, food, utility rates, taxes where they can get them, while pretending not to be making it tougher for citizens).

It also means concurrent low-to-moderate wages against a background of higher daily-living expenditures. It is a toxic combination that is very hard for a government that hates cutting government, to address. As government workers on a federal, state or local basis are laid-off, the unemployment rate worsens. This, along with continued malaise in housing in most areas, and lack of trade policies that make sense, leave a treacherous investment climate.

What to invest in for this intractable “new normal” situation that polarizes our Nation? We hate picking single stocks, not because it’s silly, but because it’s not diversified. You can take an ETF and look at the best stocks in that ETF and cull them out for an individual investment. We did that by emphasizing Chevron (NYSE: CVX) last year on the pullback, and a small stock that doubled since mentioning: Western Refining (NYSE: WNR).

We speculated in Pure Bioscience (NASDAQ: PURE); a tiny but potentially disruptive antibacterial play, that has just gotten clearance from the EPA for “food processing contact use” as well as a unique marketing deal with a Dallas firm that formerly did the largest LBO ever (Mary Kaye cosmetics) and with a head of that operation who was Avon’s largest shareholder at one time. So after the two years of frustration, we suspect an inflection point is finally coming in 2011-’12.

Then there’s another still depressed stock that merits a look; one that earned me the nickname of “Mr. Micron” back in the ’90s. Since Micron has about $3 billion cash, and is in overall stable condition, I think it’s relatively undervalued in the 7- 8 range.

So if we have to pick a stock to add to the ones we’ve mentioned earlier in this yearly review, let’s make it Micron Technology (Nasdaq: MU).

This is not a year to be delusional, pretentious or over-the-top superficially fabulous.

If that can be done affordably it’s fine; but nobody should be using credit for anything, and debt should be eliminated.

Photo: Mayor Gary Resnick Courtesy, southfloridagaynews.com

By BOB KECSKEMETY

While small in size, Wilton Manors, with its 13,000 residents, is large in the minds of the LGBT community, making the city one

of the most desirable for the community to work, live and visit. It’s estimated that 40 percent of the city’s residents are gay and lesbian.

Wilton Manors Mayor Gary Resnick is one of the three gay/lesbian commissioners to sit on the board, putting the LGBT community in the majority. However, Resnick, as well as Tom Green and Julie Carson, has always put the city first for all residents regardless of sexual orientation.

“When I walk around talking to the residents, one of the common threads of our conversation is that they like the communications I was maintaining,” said Resnick, who has served on the city commission for more than a decade. “The residents of the city, though they might not come to city commission meetings, really like to know what’s going on in their city and most of them are pretty well informed.”

Resnick laid out plans for his vision of the future of Wilton Manors.

ECONOMIC DEVELOPMENT

Resnick, along with the help of city commissioners, to focus on economic development — but not just on Wilton Drive.

“Things are going to start turning around a little bit,” said Resnick, “but it’s not going to be like it was in the early-2000s for a while. We need to be proactive in attracting businesses to our city.”

There are several planning and zoning issues that need to be addressed, like valet parking and clinics that prescribe pain killers to their patients. Some of these plain clinics, Resnick said, are immediately adjacent to residential neighborhoods and he feels the city has to enact rules as to where they can be located. He also feels there needs to be more separation between some commercial enterprises and residential areas, feeling that there needs to be more of a separation between businesses that would produce a lot of traffic and noise and the neighboring residential areas.

He also plans to streamline the permitting process, allowing people to fill out the forms and pay the fees online and be able to track the progress of the permits through the various departments.

”It’s something that we didn’t have to focus on very much, because a few years ago we didn’t have to do much to attract businesses to our city,” said Resnick. “But now we have to make sure we’re seen as a very business-friendly and residentialfriendly community.”

PARKING

Resnick says there are now more parking spaces on Wilton Drive than there were in the past even with the addition of the new City Hall. However, there is a problem with locating additional parking areas since the city does not own enough land to provide additional parking and nothing is readily available at an affordable price as he doesn’t want taxpayers footing the bill. There is still a possibility of a public/private parking project on the site of the old City Hall.

Unlike other municipalities, Wilton Manors, he explains, is a nighttime destination. Most cities charge for parking during their peak daytime hours and do not charge for parking at night. In Wilton Manors, it’s just the opposite.

PUBLIC SAFETY

Last autumn, Wilton Manors was rocked with a scandal involving their then-Police Chief Richard Perez, who subsequently resigned his position. An interim police chief has been appointed until a permanent replacement is found.

Resnick feels that the city’s police department functions very well, though there is need for improvement.

“We need to concentrate on keeping police in the field, crime solving and our detective functions, and we might be able to restructure to eliminate some of the administrative functions and put the resources where it does the best for the community — on the streets,” he said.

The city recently received a federal grant to add an additional police officer to its force.

RECREATION

Overall, Resnick is pleased with the city’s Leisure Services (parks and recreation) department and the popularity of the city’s parks, but he would like to see the services expanded at the city’s Island City Park, which has become popular, and Mickel Field, a facility that Renick says is underutilized.

The city’s tennis program, which he wants to beef-up, has lost participants to Oakland Park’s new facilities and Fort Lauderdale’s Holiday Park.

EVENTS AND FESTIVALS

Resnick feels that the city has learned it needs to have a larger role in the festivals and events, large and small, gay and straight. Events like the canoe race and holiday events need to be turned over to a professional promotion company, he said. There is greater concern about the larger events that draw 20,000 to 30,000 people, which he would like to see handled by a company which is financially viable and can produce some revenue for the city.

TWO-LANE INITIATIVE

A new Wilton Drive task force was organized and has already held several meetings. This task force is looking over the feasibility of the plans laid out in early 2010 by Wilton Manors Main Street (WMMS). This new task force consists of business owners, residents, a member of WMMS and other city officials.

Resnick said that the task force is looking at issues such as public safety, parking, traffic flow, cost and feasibility.

ECONOMY

Resnick says that the economy will remain a challenging issue for the city and it will need to cut expenses and try to avoid cutting jobs or laying off city employees.

Resnick wants to increase tourism to the city as it is already a major LGBT destination. The International Gay and Lesbian Travel Association is planning a large convention in Fort Lauderdale this year and he is looking forward to creating events for the conventioneers to bring attention to Wilton Manors. He also feels that Wilton Manors needs a hotel located within the city limits.

He feels the city needs to be more aggressive in negotiating contracts because residents have made it clear that they can not afford to pay higher taxes or fees. He says that if there’s another sharp decline in property values, the city will have to make corresponding cuts in services and expenses. “It’s going to be very challenging in the next couple of years,” he said. Resnick is adamant about not raising taxes.

By Gene Inger

With demand for money very low, it’s no surprise that Americans have a case of Elvis Presley’s “suspicious minds” when talking of a recovery in the economy. And, most of the buying that is currently going on originates in professional circles and exits quickly if need arises. The simple explanation as to why the market’s rally should advance is the Federal Reserve’s action. But, it should be noted that just the ability to push prices unrealistically higher doesn’t mean that growth automatically follows. For three years we warned to “corral the wagons” and be defensive with respect to excess risk, as the ‘epic debacle’ called for in May of 2007 would be a very long-term process. As we contended that for the last several months, not as an explanation for cynicism about the purported economic improvements, it is at least gratifying to hear the Fed seemingly admitting in plain English that we were right. The “fix” was in and they did do this.

While many Americans are benefiting by improved prices in their mutual fund and all sorts of retirement plans, there is a looming downside to be pondered: a bond bubble will eventually be pricked, and someone will say ‘ouch’. Higher rates will be equated with a realization that economic recovery is taking hold, as will potentially surprise investors, with mostly selling of stocks, almost ironically because the economy is recovering. It’s almost like getting a lap-dance; if a stripper is showing full frontal nudity, there’s not much left to the imagination once you enter the supposedly privileged environment of a private performance. This market has been foreplay in a sense, and once we spike into a “top,” we should see a buying “climax.”

The American dream has become a “rental;” home ownership is like wandering into a dark room where you don’t know what will be lurking around the corner. That’s been a nightmare for those who didn’t listen to our warnings back in the bubble’s froth during 2005- 2006. The housing market is now more attractive, but getting a deal closed isn’t easy, and there is a probability of housing prices generally continuing to decline for at least a year or two, not only because of inventory, but because of what’s in the shadows yet to hit.

 A true “deal” is a deal in any economic environment, but that often means paying cash or obtaining seller financing. Furthermore, nobody in their right mind should even consider measuring prices of condos or houses in terms of declines from the peak as that peak bubble was an anomaly likely never to be seen in our lifetimes again. There are few closings in some portions of the market because most sellers are still unrealistic. With the economic collapse and job insecurity and now the “mortgage- gate” crisis, which has by no means peaked, you might need pricing to drop another minimum of 10 to 20 percent.

As we look to 2011, it seems that the emerging American trend of saving, of avoiding tendencies to be attracted to glitz or conspicuous consumption, are newly engrained just as it was in our grandparents’ generation after going through another depression era. This is now the fourth year that I’ve argued to get out of debt, don’t use debt and owe zero to anyone.

This is toughest on youngsters who have student loans set up on salaries they anticipated but won’t exist as they graduate.

The good news from this debacle is that it will be uphill for the youth, who have time on their side. The bad news is that this projected recovery will take so long that the established elderly who thought they were solid may never recover to where they were, while the vast middle-aged crowd of white collar workers laid off will find it very difficult to get rehired again.

Bottom line: we are one headline away from a shot-across-the-bow of this market; so while it’s fatiguing if concerned and risky if you’re not, it is an orchestrated upside move that is “at risk” of reversing from a slight provocationalmost like the hottie you are sure wants to meet you, let’s you buy drinks for hours, then leaves with someone else, which sort of crashes your night.

The Nation went through a transformation into something less than the power that we were. Now we must go through a redirection of that transformation, which is a lengthy process as we warned. It will also restore balance and stability – in time but not on a dime. It’s like meeting your newest love interest; don’t expect too much too fast. And as usual, don’t assume the top’s not out there, or that the bottoms are all behind.

 Gene Inger provides expert market opinion via several Internet videos daily, focused on trading and economics. For more information, visit www.ingerletter.com.