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Buttner Can't Corral All Her Bulls and Bears

Reported by Judy - November 11, 2006 -

One of Brenda Buttner's "Bulls and Bears" got loose from his pen Saturday (Nov. 11, 2006) and disagreed with Buttner's "question" about the effects of the Democratic midterm election victories. Tobin Smith dared to say leaving Iraq could be good for stocks and that Democrats probably won't raise taxes.

In a typical Buttner move, the host of "Bulls and Bears" had opened her show with a question that tried to tie movement in the stock market to an action by Democrats or Republicans. Regardless of the actual wording of the question, Buttner's questions have only two correct answers. If the question is premised on something Republicans did, then the market will go up. If the question is premised on something Democrats did, then the market will go down.

All the players know this, and it's usually up to Pat Dorsey, of morningstar.com, to take the middle position and say things like earnings drive the stock market, not George Bush's statements. But Dorsey was on vacation this week. Without him, there would have been no argument. So Tobin Smith, of Changewave Research, stepped forward to provide the creative drama in stunning fashion. He disagreed with Buttner's premise, declining to forecast a stock market disaster if Democrats succeed in forcing a change in policy in Iraq.

"It’s hard to make a case that it (Iraq) would ever be secure, No. 1. Number 2, the vote said this, we’re not going to be spending another trillion dollars and draft 250,000 Americans to go over and try to make something secure that has basically fallen into an abyss," he said.

"So guess what. I think it’s good for stocks. We’re not going to pull out tomorrow, but we’re going to say, you know what, you’ve got to start solving your own problems, Iraq. We’re not going to put $9 billion a month into babysitting a civil war. I think it’s good for stocks."

Luckily, Buttner was there to provide "balance" to such heresy, noting. “Sounds like a cut and run strategy, huh?”

Her next panelist, former major league baseball player Lenny Dykstra, failed to provide her much backup. He seemed to side with Tobin Smith, saying the U.S. is not going to pull out, but instead will have a "game plan" that calls for training Iraqi troops for four weeks and keeping a special forces team on the side.

Said Buttner snidely, Dykstra's comments were "more of a plan than the Democrats have."

Buttner finally found somebody who knew the script in advance. Gary B. Smith of Exemplar Capital conceded that Americans will be happy in the short term if the U.S. military leaves Iraq.

"It's going to be a pop in the market," he said.

"Then it’s going to dawn on, first the terrorists and then on us, that we have no stomach for these unconventional wars. Hey terrorists, have at it, because whenever things get a little sticky, we’re going to pull out. That’s going to embolden the terrorists. There’s gong to be attacks over here, and I’ll tell you what, goodbye U.S. stock market. It’s going to hurt the economy. It would be terrible if we don’t transition Iraq the correct way."

Scott Bleier, of hybridinvestors.com, backed up Gary B. Smith. "I can't wait to hear the Democrats' plan," he said. "They ran an election complaining about Iraq without a plan for victory and they know and everybody knows you can’t just withdraw and leave it the way it is, so if we did that, the market would suffer because confidence would suffer, period. End of story."

Tobin Smith countered that the U.S. is not leaving immediately but over a period of years. The vote was a statement that, "there are limits to what the American people will spend and there are limits to what we can do and these guys got to solve their problems. We can’t solve their problems for them. They've got to solve them. I think that’s good for the market."

Democrats did not put forward a specific plan, he said, "because there is no instant solution."

Guest panelist Bob Froehlich, of DWS Scudder, tended to side with Tobin Smith regarding the impact on the market of a U.S. change in strategy in Iraq.

"I think at the end of our day there are more important issues that are going to drive our market, that have always driven our market, than short-term events," he said.

"Wars come and go. There are other more definitive issues."

Next Buttner moved on to whether Democratic control in general was good or bad for Wall Street.

Gary B. Smith followed Buttner's lead and attacked Democrats. "Once this honeymoon of bipartisanship is over, the Democrats will show their true colors. Their true colors are this: They hate big business, they hate Person A making more than Person B, they hate not being able to dictate everything from oil prices to drug prices, they want big government because they know better. And you know what, the way they now have the Senate and Congress, they’ll probably get their way and you know wha? We’ll be living the European dream in a few years ... with high unemployment, but maybe we’ll all get six weeks of vacation. It’ll be perfect.”

Again Tobin Smith stuck up for Democrats, insisting the new members are not extremely liberal. "These Democrats are not the Democrats you just demonized. … These guys are fiscal conservatives," he said, adding raising taxes is not on their agenda.

What was Tobin Smith up to? I guess him to be one of those Republicans uncomfortable with the right-wing's alliance with evangelicals. Based on the ribbing he constantly gets, his lifestyle does not seem to fit the evangelical style, to put it politely. Furthermore, he has been a big promoter of alternative energy because he sees the potential for investors there, and he expects Democrats to finally push through the funding for such programs that languished under Republican rule. And he dropped a comment a few weeks back about having been at a Democratic fund-raiser.

So I think his comments were more than filling in for the missing moderate Dorsey. I think he sees business opportunities opening up under Democrats and doesn't want to talk his way out of them with too much partisanship.