Psycho-Fiskal Market Report:
Noel Sheppard posts this fascinating analysis of Presidential Products in America, and the upcoming Big Sale!
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How Low Can Democrat Stocks Go?
Last week was certainly a bad one for shares of Democrat companies. From Tuesday’s drubbing of Lieberman Locks, to Thursday and Friday’s hammering of Appeasements “R” Us, the Standard & Poors Democrat Index reached a low not seen since before the Dubai Ports World merger fell apart in March.
This left many market-watchers wondering whether the rally in these stocks that began with the collapse of Miers Supreme in October 2005 was really the start of a new bull market in this group, or just another dead Democrat bounce in an ongoing bear market.
By Friday’s close, investors around the world were asking themselves two questions:
• Will this recent Democrat sell-off that began in June with revelations of money problems at Jefferson Freezer and Reid’s Sporting Goods continue through November, and, if so…
• Will this set up a final catastrophic decline in all of these shares that forces the breakup of the entire industry?
In reality, this would not be the first time this has occurred, as a similar corporate restructuring transpired in 1824. At the time, this sector was referred to as the Democratic-Republicans. In that year’s quadrennial presidential sale, only the DRs offered products to the public, as the Federalists by then had all gone bankrupt.
With no clear industry leader, the DRs actually marketed four presidential candidates in 1824, which so confused consumers that there was no constitutionally accepted winner. After much haggling and debate, the nod was given to John Quincy Adams even though Andrew Jackson received the most electoral and popular votes.
As a result of this industry crisis, the Democratic-Republicans began a multi-decade restructuring that eventually ended in an ATT-style divestiture into the two political sectors we have today. This struggle culminated in years of Republican dominance that began with the introduction of the world-renowned company Honest Abe’s in 1860.
If past is indeed prologue, the same sector-wide meltdown could be occurring today by the Democrats leading to a similar breakup. The current struggle has already taken out one industry stalwart, Lieberman Locks, which as recently as 2000 was considered the second-strongest company within the sector.
Unfortunately, deceptive marketing practices by the likes of MoveOn.org and Daily Kos have undermined consumer confidence in Lieberman’s products, so much so that the famed lock producer is shifting its entire business plan.
On top of this, the failed al Qaeda takeover of key players in the airline industry Wednesday exposed chinks in the armor of the less security-minded companies in the sector. Undoubtedly, the incorporation of a 9/11-style al Qaeda flight plan throughout the airline industry would make the products offered by the liberal Democrats much less appealing. In fact, had this failed takeover attempt occurred prior to Tuesday, it is likely that Lieberman Locks would never have fallen so out of favor with investors.
As The Wall Street Journal reported Friday, this failed hostile takeover:
“…takes some of the wind out of the sails of the [Democrats’] resurgent liberal wing, said Michael O’Hanlon, a military analyst.”
Similarly, Appeasements “R” Us’s huge drubbing on Thursday and Friday after the al Qaeda failure offered additional evidence of the possible changing fortunes in this sector. With consumers likely now more interested in the security products offered by the Republicans, sales by Democrat companies could plummet in the coming months.
The New York Times agreed with this assessment reporting Friday that following this airline industry event:
“…the nation needs tough Republican [products] to protect Americans from threats from abroad.”
The financial website Bloomberg supported this view:
The unraveling of [al Qaeda’s hostile bid] may bolster the Republican [corporate] strategy of presenting their [products] as best equipped to confront a dangerous world.”
Republican bigwigs echoed such sentiments, with people like Ohio Life and Casualty Chairman Bill Bennett claiming that Democrat companies are no longer making:
“‘…the very types of [products] that helped the British thwart [al Qaeda’s attempted airline takeover].’”
And, Tom Reynolds, CEO of Buffalo Wings, was quoted by the Associated Press Friday as saying:
“‘Democrats are stone-cold guilty of engaging in a reckless and irresponsible pattern of neglect for the security of our citizens.’”
Taking almost an ostrich approach to recent events, Democrat CEOs “attacked Republicans as failing to improve airline security” according to the Times. Harry Reid, the owner and founder of Reid’s Sporting Goods, affirmed such sentiments claiming that the failed al Qaeda takeover:
“…demonstrates the need for the [Republicans] to change course…and ensure that we are taking all the steps necessary to protect Americans at home and across the world.”
Even the least savvy of investors would recognize that such statements clearly ignored the realities of the current marketplace. After all, it is indeed Republican corporations, working with British concerns, which blocked the al Qaeda airline industry takeover. The fact that Democrat CEOs appear to be missing this is further indication of the chaos in the industry.
All of this leads analysts to believe that the Democrats are heading for an internal showdown between companies like Lieberman Locks which are still manufacturing security products, and those like Reid’s Sporting Goods that no longer offer handguns and rifles to their customers.
If Lieberman Locks’ more aggressive approach proves successful in the important November sales period just three months away, with less security-minded Democrat companies losing even more market-share to Republicans, an industry shakeup is almost inevitable. At that point, other more security oriented concerns like Clinton Paraphernalia could split from the Democrats, prompting a divestiture like what began in 1824.
As Clinton Paraphernalia has been an industry leader since first appearing on the market in 1991, its aggressive husband and wife executive management team have shown that they are willing to do absolutely anything to assure their success.
If Lieberman Locks and Republican sales continue to surge through November 7, Clinton Paraphernalia will have to further separate itself from the liberal business practices of the Democrats. This could lead other security-minded companies like Bayh.com and Biden Safe to dissociate themselves from the Democrats as well.
Whether the Democrat industry is going the way of the VCR manufacturer is not known yet. However, the rally that began in October 2005 seems like a distant memory, and any further loss in market-share between now and November 2006 could prove fatal for a business-model that three decades ago was sweeping the nation like Disco music and polyester suits.
Noel Sheppard for the Psycho-Fiskal Market Report