Folks, as you know I used to be the president of a division of a German bank. During my tenure at Commerzbank, I met and befriended a number of portfolio managers all over in Europe, many of whom I still keep in regular touch with. I value their perspective no matter what, and their points of view have become even more valuable over the last several months when European capital flow has been driving the markets.
I mentioned a few weeks ago both on the show and on Kudlow how the president’s speech in front of the United Nations was a missed opportunity to display strong American leadership and bestow some much-needed confidence back on the markets. I also pointed out that it was right after that speech that the market really took a turn, and that a lot of that selling pressure was coming directly from Europe. So I decided to tap into my network and get some more answers.
By and large, their reactions were very similar. And they weren’t so much surprising as they were disappointing. The U.S. had always been a global leader, they said, and whether or not they always agreed with our decisions, it was always understood that we were doing the things a leader needed to do. When they had a problem, the U.S. had always been there for them. That is no longer the case. We used to be the dog, and Europe was the tail. But thanks to weak leadership in Washington, that dynamic has shifted. Anymore, we seem to wag according to Europe.
This president’s dangerous lack of fiscal responsibility and the anti-business, anti-job-creation, anti-growth policies he continues to insist upon have not only crippled Americans, they’ve crippled America itself. As Vice President Cheney pointed out on yesterday’s show, the elitists and career politicians that my fellow Chicagoan has chosen to surround himself with include advisors and cabinet members who seem to lack a basic understanding of economics and the mechanics of what drives capital.
Make no mistake: the entire world watched as the president stood in front of the United Nations and completely missed an opportunity to assure the entire world that the U.S. is not only still in charge, but also in control. And if you don’t believe that we’re still feeling the impact of that missed opportunity, think again. Several of my European portfolio-manager friends have told me in as many words that the speech continues to linger in their mind, and that this American weakness has played into their market strategies.