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Farrell: Obama Hectored, Ignored and Restricted?

Admittedly it was an article in the Wall Street Journal, Rupert Murdock's Wall Street Journal at that, a paper not necessarily a great backer of President Obama, that described the President's recent trip by saying he was "hectored about economic policy, largely ignored on human rights, and restricted in his efforts to reach out to the ordinary Chinese." Even the NY Times called the trip "friendly, but fruitless." These are not words any of us want to read when referring to our President.

The axle that is health care reform, and around which Washington is wrapped, threatens to scuttle the Presidents domestic agenda while he frustratingly tries to reach out to foreign allies (or non allies as the case may be). Again referencing the NY Times from over the weekend, several articles dealt with the stagnation in Washington.

There is increasing pressure "to respond to voter anger over joblessness and Wall Street bailouts." (Watch for growing support for a financial transaction tax to get back at Wall Street). Health care overhaul "appears less important to voters than finding solutions to economic woes." Democratic pollster, David Beattie, says "The 2008 election wasn't about health care. It was about the economy."

With the Senate about to embark on weeks of contentious debate about the latest health care proposal, the administration might try to follow through on the recent favorable publicity the stimulus program has received. A banner headline in Saturday's NY Times (you would think I read nothing else this weekend) proclaimed the "Consensus Views the Stimulus as a Worthy Step."

No less a respected economist than Mark Zandy, chief economist of Moody's Economy.Com, and who has consulted more with Republicans (some view them as the modern day Pharisee's of Biblical scorn!) wrote "there was a considerable amount of hand-wringing that (the stimulus) was too small and I sympathize with that argument. The stimulus is doing what it was supposed to do- it is contributing to ending the recession."

Moody's estimates that every dollar spent on additional infrastructure means "$1.57 in economic activity. General aid to states carries a $1.41 bang for each Federal buck. Even more effective are increases for food stamps ($1.74) and unemployment ($1.61), because recipients quickly spend their benefits on goods and services." Interestingly, Moody's estimates that temporary tax cuts cost more than the stimulus they provide.

The administration may stay laser focused on health care reform, but the electorate wants economic reform (29 states just reported joblessness rose last month) and Wall Street retribution. Look for a change of agenda. We do have midterm elections in 2010!

The current issue of Business Week Magazine highlights a company called Stereotaxis(buy rated, recent price $3.83; 52 week range $5.19-$2.30). The article describes the "computerized system used in minimally invasive cardiac arrhythmia surgery." The Niobe system uses computer screen images to steer catheters and wires through blood vessels. Siemens ( not rated) and Philips (not rated) are marketing partners and Johnson and Johnson (not rated) provides the catheters.

Mimi Pham of Soleil/Healthco Research rates the stock a buy with a price target of $7. Mimi believes there will be a ramp in new orders for the Niobe technology the next few quarters, and that she believes "investors remain skeptical of the value add of the Niobe technology, and a ramp in new orders would give investors more confidence in the market opportunity". She doesn't expect earnings for the company soon and is basing her price target on five times her anticipated sales volume for 2010. Reports are available.

Verigy ( buy rated; recent price $9.68; 52 week range $13.46-$6.14) is a manufacturer of semiconductor test and measurement equipment. Nick Tishchenko of Analyst Investments has a buy rating. The company reported better than anticipated results last week losing ($.12) with the consensus expecting a loss of ($.20).

Management of Verigy raised revenue guidance for the January quarter to a range of $105 to $115 million and a loss of between ($.02- $.09). Street expectations were for a larger loss in the order of ($.14). Nick thinks the company returns to profitability by the second fiscal quarter and has a $14 price target. The stock presently trades below its tangible book value of $10.69 and it has $5.12 net cash on its balance sheet. Reports available from your Soleil salesman.

And because I love coaches, I pass along that Shelby Metcalf, basketball coach at Texas A&M, recounted that he told a player who had received four F's and one D: Son, looks to me like your spending too much time on one subject. And boxing promoter Dan Duva on Mike Tyson going to prison- "Why would you expect him to come out any smarter? He went to prison, not Princeton."

Also, Bill Peterson, a Florida State football assisitant said, "You guys line up alphabetically by height. And you other guys pair up in groups of threes and line up in a circle." Problem is they did!

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