We have discussed in detail the potential ramifications of a 'close' vote (here, here, and here), and only yesterday
UBS Art Cashin opined on the potential for an 'embarrassing victory'.
Today, the wizened market participant turns the rhetoric dial to 11 (and
rightly so) as he warns "pray it's not close" for fear of the polarization of the populace that could occur. If Florida 2000 was a horror, a close election this year could present six or seven Floridas.Bill Gross Preemptively Summarizes Today's Election Result In 22 Words
Presented without comment - adding anything to this concise summation of the state of the union is superfluous...Gross: Whew! It’s over. To the victor belongs the spoils of political power but to the US voter only continuing frustration will accrue.
— PIMCO (@PIMCO) November 6, 2012
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How To Bring Back Capitalism
"Capitalists seem almost uninterested in Capitalism" is how Clayton Christensen describes the paradox of our recovery-less recovery. In an excellent NYTimes Op-ed, the father of the Innovator's Dilemma comments that "America today is in a macroeconomic paradox that we might call the capitalist’s dilemma."
Business and investors are drowning in Fed-sponsored liquidity
(theoretically, capital fuels capitalism) but are endowed with what he
calls the Doctrine of New Finance - where short-termist profitability guides entrepreneurs away from investments that can create real economic growth. We are trying to solve the wrong problem. Our approach to higher education is exacerbating our problems. There is a solution, it's complicated, but Christensen offers three ideas to seed the discussion.Spot The Foreign Demand For US Treasurys Under Obama
Few charts capture as effectively the shift in foreign demand for US Treasurys over the past 4 years, or under the Obama administration, as the following two, courtesy of the latest TBAC Q4 refunding presentation. They are quite self-explanatory.
The Imperial Presidency
There are few practical limits on presidential power. This is a key dynamic in the failed presidencies of G.W. Bush and Barack Obama. If you're not familiar with the term The Imperial Presidency,
you soon will be. Presidents before G.W. Bush and Obama managed to
perform their duties with a handful of Executive Orders--five per term
seemed about average. President Bush issued 160 in his first term while
President Obama has so far issued 139. The implicit claim by defenders
of essentially unlimited presidential power is that these broad powers
are needed to run the American Empire. No Establishment figure
would dare openly state that the U.S. operates a military, diplomatic,
financial and commercial Empire, but that is nonetheless the case being
made to justify the Imperial Presidency: an Empire requires an
Imperial President with broad powers to act not just in the domestic
economy and society but anywhere in the world. What we need is not a new president but a new presidency. Unfortunately neither candidate has expressed any interest in limiting the powers of the Imperial Presidency.With Ohio This Election's Deciding State, Here Is The Truth Behind Its "Jobs Miracle"
Forget Florida. This election it is all about Ohio: without Ohio, Romney's winning chances plummet (as can be observed at the following interactive chart),
even if one ignores history which is that since 1862 no Republican has
won the presidency without winning Ohio. This is a fact well-known to
the Obama administration, which explains why the incumbent has spent so
much time in the ravaged state, where he has spent so much time
ruminating on the the Ohio "unemployment rate miracle." Sure enough, in
September, the Ohio unemployment dipped to 7.0%, the lowest since
September 2008! On the surface, a tremendous metric and great
improvement for a state that would have certainly been firmly in the
pro-GOP camp had Obama not been able to hammer on this statistic time
and time again. Yet, as always, the unemployment rate is only part of
the story. The bigger question is whether or not another data set is
being fudged to make the Ohio jobs situation appear better than it is in
real life. The answer is, predictably, yes.Goldman's Guide To The Election In 3 Simple Charts
Ahead
of today's presidential and congressional elections, Goldman provides
some brief thoughts on various election-night (and beyond) events. From a
viewer's guide to the poll-closing times to a discussion of the
apparent 'closeness' of the race and post-election market performance,
they note that equity performance post 'tight' races has been better
than in elections where the winner is more clear-cut. This election has
a twist though in that it will be immediately followed by debate on the
fiscal cliff, and thus resolution of the election will reduce, but not eliminate policy uncertainty.Chart Of The Day: The Most Expensive Election Ever In Context
The GDP of Nicaragua: $6.4 billion; the cost of the US presidential election to the two candidates: $6 billion,
or $20 in petty cash per every US man, woman and child. Some things
Wall Street (with Diebold's help) can buy (because no matter which
candidate is left standing after the recount and the legal challenge to
the SCOTUS, Wall Street again wins). For everything else, there's
BernankeCard.Daily US Opening News And Market Re-Cap: November 6
Less than impressive macro data from the Eurozone failed to depress investor sentiment and as such, equity markets in Europe traded higher as market participants looked forward to US elections. Heading into the North American open, all ten equity sectors are seen in the green, with technology and financial stocks leading the pack. Still, despite the choppy price action and lack of progress on the much desired Spanish bailout, peripheral bond yield spreads are tighter, with SP/GE and IT/GE tighter by c. 6bps. EUR/USD failed to break below 1.2750 barrier level earlier in the session and since then stages an impressive recovery, partly helped by weaker macro data from the UK.Democracies, Reforms & Revolutions
Admin at Marc Faber Blog - 1 hour ago
History kind of repeats itself. In democracies, you start with good
intentions, and then power becomes polarized among few people and
eventually you have either huge changes occurring in a peaceful fashion
through reforms or usually through revolutions. - *in a recent interview*
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Patience Promotes Emotional Balance During AB Transition Flushes
Eric De Groot at Eric De Groot - 2 hours ago
Well-timed release of paper supply initiates the operation and ignites the
decline.Fear does the heavy lifting by flushing out the black box trading
programs and numerous other weak hands until the invisible hand regains
control of the trend before the C-wave advance. Today's flush following the
lead of increasing volatility is bigger than its predecessors. Increasing
amplitude of 'the chop' also...
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content, and more! ]]
Millennials are eating out less
Eric De Groot at Eric De Groot - 3 hours ago
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...
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content, and more! ]]
Final polls: Too close to call
Eric De Groot at Eric De Groot - 3 hours ago
While the Presidential race remains too close to call, it's not without
some certainty. One candidate will send capital underground faster than
the other. Does that matter? Yes. Long time readers have come to realize
the important of capital and money flows (through constant reference and
analytical study of them) in defining an empire's social, political, and
economic...
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content, and more! ]]
Video: No Government Complies With Anything
Admin at Marc Faber Blog - 4 hours ago
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
It`s Not That Simple
Admin at Jim Rogers Blog - 4 hours ago
"If all you had to do was to pile up debt and print money, Zimbabwe would
be the richest country in the world right now." - *in a recent interview*
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*Frontrunning: November 6
- Obama-Romney: Breaking the Tie (BBG)
- Fiscal cliff looms over campaign climax (FT)
- Tough Calls on Deficit Await the Winner (WSJ)
- Election Likely to Leave Housing Unmoved (WSJ)
- Regulator Investigating Rochdale Trading (WSJ)
- Greeks Plan Strikes On Eve of Votes (WSJ)
- China Communists consider internal democratic reform (Reuters)
- Wen urges Asia-Europe co-op to promote world economy (China Daily)
- Italy Said to Reject Bad Bank That May Boost Ties to Sovereign (BBG)
- IMF warning adds to French economy fears (FT)
- Europe, Central Bank Spar Over Athens Aid (WSJ)
- Unlimited Lending May Help Weaken the Yen, BOJ Official Says (BBG)
- PBOC Official Says U.S. Election Won’t Impact Yuan Level (BBG) - Just the USD level to which it is pegged
Overnight Sentiment: Looking Forward To Today's Big Event
Today it is all about the elections. It is not about last night's relatively surprising RBA decision to not cut rates (on an attempt to create a reflexive feedback loop when it said that China has bottomed; it hasn't, and the RBA will be forced into another "surprising" rate cut as it did previously). It is also not about Europe missing its Service PMI estimate (just like the US), with the composite printing at 45.7 on expectations of a 45.8 print (with both core countries - Germany and France - missing badly, at 48.4 and 44.6 on expectations of 49.3 and 46.2, respectively). It is not about reports that the EU believes Spain's GDP will again contract more than expected (it will, and certainly without any reports or beliefs). It is not about Greece selling €1.3 billion in 26-week bills even as, according to ANA, its striking power workers have taken 5 power plants online just as winter approaches. It is not about Jean-Claude Juncker telling the truth for once, and saying that Europe is still in crisis, and is facing the viability of the Euro (after saying weeks ago that the Euro is unshakable) and that some countries aren't facing up to their responsibilities. It most certainly isn't about German factory orders finally collapsing as the country is no longer able to delay its slide into full-blown recession, with a September decline of 3.3% on expectations of a modest drop of -0.5%, from the previous decline of 0.8% (the German ministry said that a weak Eurozone and lack of global growth are taking its toll; they will continue taking its toll for years and decades longer). No. It is all about the US elections, with the peak frenzy starting as soon as polls officially close at 8 pm. Everything else is noise.Today’s Items:
Asia’s economies may still be booming, but
a worrying amount of private sector credit is laying the groundwork of
the next financial crisis. Private sector credit as a share of gross
domestic product has surged over the past few years and is now at an
all-time high. This expanding credit may be indicative of a massive
bubble and you know what happens to bubbles… Pop!
Even with separate bilateral agreements, the Chinese Yuan may not replace the U.S. dollar because…
1. China’s bond market is not big enough yet.
2. Neither China nor the U.S. wants to be the global reserve currency.
With this, it is easy to see that perhaps another form of money… Perhaps gold and silver will become the world reserve currency. And with so much gold and silver showing up in Iran, such as the $1.4 billion worth smuggled from Turkey, this country could be a financial hub. Time to invade.
1. China’s bond market is not big enough yet.
2. Neither China nor the U.S. wants to be the global reserve currency.
With this, it is easy to see that perhaps another form of money… Perhaps gold and silver will become the world reserve currency. And with so much gold and silver showing up in Iran, such as the $1.4 billion worth smuggled from Turkey, this country could be a financial hub. Time to invade.
There is 15 million pounds of tungsten
err… gold bricks stored at the New York Fed. 25,000 visitors tour the
bank’s vaults each year; however, because of the flooding, visits have
now been canceled indefinitely. The New York Fed is tight-lipped
about how it secures the planet’s largest concentration of gold;
however, unreliable sources claim the Fed has ordered 200 gallons of
gold paint for some reason.
Trillions of dollars worth of stock
certificates and other paper securities that were stored in a vault in
lower Manhattan may have been destroyed. Yes folks, we may be now
hearing the bogus reason for any possible sell-off in the stock market
in the near future. Yes, I can see it now… People will blame their
collapsing 401K’s on the weather girl.
In a sign of panic, the EPA has devoted 50
bureaucrats to finalizing new anti-coal regulations that are set to be
released at the end of November. It would essentially ban all
construction of new coal-fired power plants. In short, the EPA is doing its best to destroy the U.S. economy as quickly as possible with as much bureaucratic red tape as possible.
As you go vote, here are some things to know about Obama and Rommey:
1. Both agree on a nationalized healthcare.
2. Both support NDAA, the TSA and apparently oppose individual liberty.
3. Both support the criminal enterprise known as the Federal Reserve.
4. Both support war in the Mideast; such as Syria and Iran, and and the use of drones.
In short, the differences between these two are little more than the lipstick on a pig. Sorry, I did not mean to offend pigs.
1. Both agree on a nationalized healthcare.
2. Both support NDAA, the TSA and apparently oppose individual liberty.
3. Both support the criminal enterprise known as the Federal Reserve.
4. Both support war in the Mideast; such as Syria and Iran, and and the use of drones.
In short, the differences between these two are little more than the lipstick on a pig. Sorry, I did not mean to offend pigs.
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