Leadership or lack thereof is without a doubt one of the biggest problems in America today. Yesterday, one of the biggest news items in the market was the continued collapse of the Aubrey McClendon's image as business maverick and celebrity CEO to a guy that maybe saw himself above it all. The nerve of and vision of an old school wildcatter McClendon and Ward started Chesapeake Energy (CHK) with $50,000 in capital and ten employees. They revolutionized horizontal drilling and went after unconventional reservoirs. The stock was the stuff of legends climbing to $65.00 in June 2008 from $2.50 in January 2000. The shares got slammed to $15.64 by February 2009 and have been up and lately (really) down since.

All kinds of news is coming out about dealings with the company that includes a billion dollars in loans, perhaps self dealing with a personal hedge fund on the side and now McClendon is dropping the CEO title. Wall Street loved this guy. I loved this guy. A Horatio Alger story that allows everyone to jump on the bandwagon and make a fortune is what America is all about. But there is a cautionary tale here about the celebrity CEO. This stock has been on a rollercoaster the last few years, due in part to changing dynamics in the natural gas industry but also in part due to the high-jinx of McClendon whose behavior raised a few red flags. As this market continues to move higher you have to beware of how to deal with the celebrity CEO.

Before I get into the nuts and bolts of how to navigate being long stocks with a celebrity at the helm, I want to point out part of this story is a narrative I've written about often. People in power letting us down to the point where we are so disgusted even a cohesive game plan wouldn't work. Government and corporate America are losing face at breakneck speed in this country. I think the rub on business is not fair but it is the result of the non-stop campaign by socialists from the White House down pounding away in a bald-faced effort to snatch their wealth.

Who Do You Trust?

In the Edelman Trust Global Barometer Survey (a must read for any business owner) the credibility rating for corporation and government plummeted. The good news is people are beginning to have more faith in people, beginning with the man in the mirror.

This is a global survey but the themes are mostly the same. In America, of those surveyed on the statement: "% who do not trust them to tell truth."

> Business Leaders 33%
> Government leaders 55%

Check out the nations where people express trust in their government- China (76%), UAE (68%), Singapore (67%), India (65%), Indonesia (63%), Mexico (63%) and Netherlands (61%). These are nations with strong growth, low debt and bright futures. There aren't a lot of people demanding others to pay their bills, including college which used to be considered an investment and privilege and is now being politicized into a burden akin to harsh and unusual punishment.

Check out the nations where people express low levels of trust in their governments- Sweden (49%), United States (49%), South Korea (44%), Poland (44%), UK (41%), Ireland (40%), France (40%), Germany (39%), Spain (37%), Japan (34%) and Russia (32%). These are nations that were once glorious but now can't come to grips with tough decisions that might suggest they are no longer great. So they keep the veneer shiny while the interior crumbles. America is in that mix but doesn't have to be if we would show guts and stop the takeover and dismantling.

The Man in the Mirror

I've said and written this many times but when those men from Mars finally do land and approach me and demand "take me to your leader" I will say "you're looking at him-what do you need?" I think more and more people are beginning to feel that way.

It's great that we are feeling better about ourselves and all we need now is to be able to hire ourselves or have the power to stop the larceny of government. In the end, the system was designed so we do have that power. Not as a collective but as concerned citizens exercising our rights. It's all about a nation that is as strong as its weakest link and all links understanding and accepting the challenge to give it their all.

This is the narrative, and it will not change; it will only become more defined and pronounced as we are reminded how it's better to do stuff with others rather than alone. The real question is do we trust everyone to give their all or only share in the rewards of those that outperform. A boat filled with rowers should move faster than one with only a single rower where those extra rowers don't provide any effort and end up being deadweight. Not only does that boat move slower it might even sink.

I'm on top of this everyday because this is the most important election of my lifetime as it means the nation could be ready to become something it never was and something that has never been successful.

Today's Session

Stocks are edging higher on encouraging news on both sides of the Atlantic. Initial jobless claims in America saw the biggest week to week decline in a year coming in at 365,000. Once again it's all about the set-up; get us fearing the worst case scenario so we actually cheer the fact that this late in the recession/recovery 365,000 Americans are filling for unemployment benefits for the first time.

I sense that game is being played for tomorrow's jobs numbers, too. Yesterday Wall Street began to ratchet down its numbers and many see a print below 100,000. I would think the number is going to be above 150,000 and will be called a winner. It means the economy is rebounding, but it's a slow recovery and enough to keep the Fed in the mix.

Comments

Charles, the number does not matter as much as the "spin", the trend, and what reation there is longer term. What really matters is getting government off our backs. James Carley on 5/3/2012 9:40:41 AM

The number is massaged by the BOL to further the administration's image. It is virtually meaningless since it is always 'revised' later. Ray Brady, MD on 5/3/2012 10:09:07 AM

I can only give a wild guess about the jobs number, but I feel sure it will be revised significantly at least twice after it is released. Does it really matter what it is? I think not, because I believe most people believe it to be a manipulated number with a margin of error (or deliberate misstatement) of >50%. So, if is comes in anywhere from 90K to 170K, I think Wall Street will ignore it. It all goes back to what your essay of the day was about - the numbers have been proven as untrustworthy as the White House, and only a very huge miss (high or low) will have any credibility at all as an indicator of any future trend. Bob G on 5/3/2012 10:34:00 AM

My guess is around 120,000. However, any stronger number will be just a temporary bounce, and things will get worse from here. The market still looks weak to me and will retest the averages. Romney gains in public opinion could change things, but they have to be significant. We're all jaded now. Dennis Howard on 5/3/2012 10:36:15 AM

who knows, who cares...this is a stupid game that is really meaningless. What was "the jobs #" 3 months ago, what did it mean, what was the net effect?? Job numbers like most out of washington can't be relied on...all this idiocy is to create "VOL" for the high frequency boys...and everyone wonders where investors have disappeared to....THERES NOT A STRAIGHT GAME IN TOWN!!!! Ray Burke on 5/3/2012 11:08:03 AM

The numbers will continue to flounder like a fish out of water. The Street will pretend to ignore those numbers, but, at the same time, it will be concealing nagging doubt which will foster unstable behavior. z on 5/3/2012 11:21:17 AM

"...In the end the system was designed so we do have that power. Not as a collective but as concerned citizens exercising our rights..." Remember, our republic is based on the principal that we-the-people are the sovereigns. We hold all the power. We share some of those powers with governments which we institute to act on our behalf. The governments, local, state and federal, have only the powers we grant to them by our constitutions. Any time you think the government is doing something wrong or contrary to the will of the people, the government is probably over-stepping its authority. In the case of the federal government it is probably over-stepping its jurisdiction as well. It is up to we-the-people to bind government by the chains of the constitution. When our government acts beyond its constitutional mandates enumerated in 1:8:1-18, it usurps the rights of the people and puts us a step closer to oligarchy. Charles, I could write a book from just those two sentences excerpted from today's commentary. If only we, as Citizens, were not so dumbed-down, this would be a much different place and we wouldn't have to worry so much about the next bit of data to be released. George on 5/3/2012 11:26:17 AM

110,000. Jobs but I bet the unemployment rate drops due to people exhausting there 99 weeks of unemployment benifits and falling off the labor rolls. Greg Gridler on 5/3/2012 12:27:24 PM

109,000 jobs; Dow down 1.2. Patricia Flynn on 5/3/2012 2:49:15 PM

The real unemployment rate is around 10.9%. Now I know that is a more accurate percentage rate. But it's OK to lie to the American public. Bob Medkeff on 5/3/2012 7:35:00 PM

I agree with Patricia F. AND some of the stats where the people believe in their govt. perplexes me and is alarming in the 'bigger' pic, for example in China, what else do they know? In India, they run ads in the paper begging people to turn in corrupt government workers, the free countries have a healthy suspician of government, nothing wrong with that in my mind. Mr. Payne, I look forward to your words everyday! Thanks! Jeannie on 5/3/2012 11:51:15 PM

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