Tuesday, November 6, 2012

Live Election Tracker

As the first exit polls start trickling in, readers can keep track of the live action with the following handy maps, selected from various websites. As a reminder, exit polls are about as predictable as any other polling 'data point' based on +/-4% error margin sampling, which in turn is virtually every data point used to feed Garbage In, Garbage Out "predictors", "simulators" and other "black boxes" which forecast the future with triple digit "accuracy." Simply said, in an election in which the margin of difference in the key electoral states (not to mention the popular vote) is far narrower than the error rate, take everything you have heard about the final outcome and burn it, or sell it and buy several Stat 101 credits at the local community college.

The Good, The Bad, And The Ugly Election Night Drinking Games

While some believe tonight is critical to the future of our nation - and well could be - we believe some will need placating as the results roll across the bottom of their screens and are manipulated in an ever-increasing multitude of 10-dimensional holographic charts that we fully expect to work incorrectly at some point. To fulfil that 'need for numbing', we have found three drinking games of varying suspected quantity that we hope will prove useful. From simple and stand-alone, to team-based and punish-your-friends focused, we believe there is a fair-and-balanced approach here for everyone.

Four Elections And A Market Myth Funeral

Once upon a time there was a myth that the equity market can only go up, year after year, with the average annual return according to such esteemed counting institutions as Ibbotson, at 10% or more. Then, we got the November 7, 2000 presidential election, which took place when the S&P was 1432. Fast forward to today, skipping the second and third elections in the interim, and going straight to today's fourth presidential election. The closing S&P today? 1428. We have now had four presidential elections... and a funeral - that of the "stock market always rises" myth. But wait, it gets worse. The numbers above are nominal. When adjusting for the real purchasing power lost in the past 12 years, whose best indicator in a regime in which CPI data is constantly fudged and manipulated, is the price of gold, one can see that 3 presidential elections later, the S&P 500, when priced in gold terms, is now 83% lower. In other words, how is that wealth effect working out for you? And where will the stock market be in another 3 presidential elections in either nominal or real terms? One can only hope that Japan is not prologue...

Election time in the USA/Change of the guard also in China/poor PMI numbers from Europe/Poor factory orders for Germany/Greece has 2 day national strike/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 37 minutes ago
Good evening Ladies and Gentlemen: Gold closed up $29.90 to finish the comex session at $1714.10.  Silver responded in kind rising by 91 cents to $32.01. Last night, Lemetropolecafe reported that the physical demand for gold and silver were going through the roof. Today that demand transferred over to the comex as paper gold and silver skyrocketed. The polls seem to indicate that Obama will win

Kodak retirees lose health, welfare benefits

Eric De Groot at Eric De Groot - 1 hour ago
The loss of health and welfare benefits across corporate America is an all too familiar story for most. Today's economic battlefield doesn't recognize yesterday's paradigms, boundaries, or capabilities. The trend below will only worsen once Chinese brands establish themselves in the minds of the global consumer. Those that think this is impossible should unplug from the matrix and... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Electile Dysfunction - Market Just Couldn't Keep It Up

The early day surge in stocks and commodities (and sell-off in bonds) managed to get S&P 500 futures up to their 50DMA and the pre-NFP levels (which coincides with Bernanke's Bottom). Volume surged on the way up there and once hit we faded all the way back to VWAP (surprise!) retracing the knee-jerk spike as no news was discounted back out (and equities reverted to where risk-assets in general had been waiting). Commodities followed a similar path up but held on to their gains - especially Gold. Somewhat worryingly (given their dominance in fund holdings) for the market, GOOG and AAPL were both red. Today seemed much more about algos and technicals than about election bets - especially given the somewhat anti-consensus moves early on - and on the basis of that, the fade into the close suggests risk-reduction was the game plan for the big boys, even though we end the day in the green in the major indices (with Financials unch from QE3). The USD is practically unchanged on the week with stocks and commodities up and TSYs down.

The Little Picture: The Six Most Important Counties

Overwhelmed by the information overload? Drowning in a sea of demographically sliced-and-diced exit-polls from every polling booth in the nation? Have no fear, Citi has created the ultimate election night cheat-sheet of the bellwether-est counties in the swing-est states. As they note, over the past three elections, these counties' vote totals have been very close to the statewide results, and they've picked the statewide winner each time. This makes them early indicators of the electoral vote winner in their states. Whether a Sun Belt growth county, an exurb, a middle class university area or a Midwestern farm community, all these areas are representative of key demographic groups wooed by both the two parties over the past decade.

Meanwhile... In Cupertino

  While the equity market is blissfully holding its no-news gains, everyone's favorite hedge fund hotel just hit the lows of the day... Having tested up to the 200DMA, AAPL is now leaking back under Friday's closing VWAP... Need moar channel-checks and $1111 analyst price-targets on TV stat!

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Bain Capital's Hedge Fund Prices Second CLO As Credit Bubble Simmers

We will have much more to say on the grandiose return of CLOs in the next few days (those who were not in high school during the peak of the credit crisis, so most of today's "traders", recall these peak credit bubble contraptions quite well) but for now we just wanted to bring to our readers' attention that yet another $625 million CLO has just priced, this time from Sankaty, courtesy of Morgan Stanley. Anyone needing confirmation that the credit bubble is back with a bang, need look no further than the table below.  We look forward with amusement once the confused peanut gallery, aka CTRL-C/V majoring "financial media" (where even the somewhat more qualified are about to be "synergized" following news that the FT is pushing hard with a sale), realizes that Sankaty is Bain Capital's $20 billion credit affiliate hedge fund, especially if the election goes for Romney, and goes all aflutter googling what a CLO is and what it means for the flood surge level of liquidity in the market (but, but, Bernanke is printing it all for the children... and housing).

Election 2012: How The Winner Will Destroy America

Of all the hollow and uninspired elections that this country has suffered through over the past several decades, one might think that at some point long ago the American public would have finally struck a plateau of disenfranchisement; that we could sink no further into despondency, that there is a saturation limit to the corruption of our voting process.  Unfortunately, there has been no such luck.  We have to say that in all honesty we have never seen more people gut jumbled and disgusted with our electoral system than we have in 2012. In 2012, it will not be about voting.  It will not be about “winning”.  It will not even be about getting to the next election.  It will be about survival. We're sorry to say that the idea that one man will do less damage than the other is a na├»ve sentiment.  Democrat?  Republican?  Obama?  Romney?  The crimes and calamities wrought will be exactly the same.  Take a look into our crystal ball and see the future.  Here is how the winner will destroy America.

The Inefficient (And Delayed) Market Ramp Explained

While little makes sense any more in the New Bizarro Market normal, Dow Jones believes it may have stumbled upon one "reason" for the stung like a bee 11:30 am market ramp. Markets proved once again that they are far from the paragon of efficiency that so many prefer to proclaim - bending their movements to the headline of the day to prove one's point. Today was a perfect example. Efficiency at its best...Total no news = 10 S&P points

"State Dismissed" - The Hourly Guide To Tonight's Electoral College Closing Times

T minus 7 hours. That is how long until both all important Florida and Ohio polls close. As previously explained, whoever gets these two states will almost certainly carry the election, which means that by 8pm Eastern, the marginal votes will be in, and shortly thereafter one after another media organization and network will begin calling both these two states, and the election, for either the Democrats or the GOP (at which point the litigation and recount demands can begin). The complete guide to the closing times of the polls in assorted East to West states, together with their respective seats in the electoral college, is shown below, although it is likely that long before California polling is even concluded the next president will already be known.

In The News Today

Jim Sinclair’s Commentary

Choose wisely. It would be easier if there was a wise selection



Jim Sinclair’s Commentary

No matter who is elected we are going to get very wet.


Jim’s Mailbox

Hi Jim,
Everyone forgets Bernanke has a long time to go on his contract. He will continue on his legacy of QE.

Dear Robert,
If Romney is elected, Bernanke must offer his resignation immediately after Romney’s public pronouncement that Bernanke is to be fired. When you are appointed by the President, even if it requires legislative approval, you serve at the pleasure of the president. Term of service contracts means nothing whatsoever.
Romney said he would fire Bernanke if elected, so he has to or he will look like a fool on day #1. Romney has said now that he would "walk down" from QE, meaning regularly reduce QE over time. Therefore, he must until it all explodes. Romney must do what he has said or his financial policy will be laughed at by our major economic competition, China and Russia.
When a new president comes in he is immediately tested in many ways by our competition. One is definitely financial. The term of the Chairman’s position, in this situation, is the height of meaningless.

Millennials Are Eating Out Less CIGA Eric
Millennials (18-to-34 age group) without the benefit of debt-fueled consumption supported in large part by the housing bubble (asset inflation) are eating out less because real (nominal less inflation) service-producing wages have been declining for decades.  Service-producing jobs account for 86% of nonfarm payroll jobs.  Those that can read between the lines know this trend spells trouble for the generation(s) expected to pay the country’s growing list of socialistic commitments.
Headline:  Millennials are eating out less
9:44AM EST November 4. 2012 – Smacked-down by the economic downturn, Millennials are doing something that no previous generation of 18-to-34-year-olds has done before them: eating out less.
Millennials are eating out roughly once a week less than the same age group’s eating habits in 2007, according to an eye-opening report out Monday from NPD Group.
"This is a shift of biblical proportions for the restaurant industry," says Harry Balzer, chief industry analyst at researcher NPD Group, which surveyed 2,400 adults 18 to 34 nationwide. "I’ve done this for 35 years, and we could always count on this age group as the biggest restaurant users. But not the last five years."
Source:  usatoday.com

Good morning Jim,
You’re right again…
CIGA Bryan

Dear Bryan,

We will see. Politicians do not win awards for doing the logical thing.

U.S. Vows to Avoid Fiscal Cliff Amid G-20 Warning
The U.S. gave an election-eve commitment to "carefully calibrate" its budget retrenchment amid global warnings that a rush of austerity would harm the weak world economy.

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