Home > Uncategorized > MEMBERS OF THE BUSINESS COMMUNITY EXPLAIN WHAT OBAMA IS DOING WRONG

MEMBERS OF THE BUSINESS COMMUNITY EXPLAIN WHAT OBAMA IS DOING WRONG

Barack Obama wants to use $30 billion from TARP funds to banks to lend to small business, and he is purposing another $100 billion to “stimulate job growth”.  But these measures hardly promise to make a dent in the 4 million jobs that the nation has lost this year.  And with increases in taxes, regulation, and CPI on the horizon, many lenders will not want to lend and many firms will still not want to hire.  The answer to ending unemployment is not more government spending, it’s less government obstruction.

Joe Mcalinden, chair and CEO of Catalpa Capital points to confidence as a major factor in how the economy performs.    When asked what Obama can do to help the job situation he replied  “tone down some of the anti-business rhetoric, maybe stop calling people fat-cats.  Instead, start commending people for starting business, creating jobs,and put a positive spin on the role of entrepeneurs.”

What saved the American economy from “The Second Great Depression” was American private sector’s innovation and work ethic. 

Costco Wholesale brought in $72 billion in sales last year.  Fortune Magazine ranked it the number ones speciality retailer three years in a row.  Costco, the fifth largest retailer in the world, gets about 75% of its operating income from its $50 year memberships. 

People come back to Costco because the prices are always low and the shelves are always shelved. 

The retailer turns over its inventory almost once a month!  During the banking crisis, many companies were unable to get loans to restock their inventories.  But Costco’s superior cash conversion cycle insulated it from the immediate impact of the credit crunch.  Motley Fool reports:

This enables the company to buy some of its inventory on the vendors’ payment terms instead of using its working capital. Costco’s outstanding cash conversion cycle has run one to three days over the past few years. By comparison, a more traditional retailer like Macy’s usually takes at least 70 days to convert its inventory to cash.

This business model produces significant free cash flow — about $575 million in fiscal 2008. Costco also has a strong balance sheet, with $3.1 billion in cash and only $2.2 billion in debt.

The recent market slide-off took Costco’s typically expensive price down to a level lower than we’ve seen in years. It’s trading around $59 a share. Investors who snap up shares now will be greatly rewarded as the market wakes up to reality.

This company could easily be worth $80 per share — and that’s a conservative estimate! Some scenarios show the stock climbing as high as $124 a share“.

Congressman Van Hollen insisted that “you gotta believe in the tooth-fairy if you belief” that the stimulus was not responsible for economic growth of 2009. 

Well, we do not belief in the tooth-fairy or the stimulus’ role in the recovery. 

We believe  in the talent and toil of the American people.

Advertisements
Categories: Uncategorized
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: