I Know What Keeps Obama Awake at Night
While Obama relaxes in Hawaii, sipping Mai Tai’s adorned with little umbrellas and hooking up with distant relatives, a potential nightmare is giving him sleepless nights. Let’s say we spend our $2 trillion in stimulus and get a couple of quarters of decent growth. The “V” is in. Then once the effects of record government spending wear off, we slip back into a deep recession, setting up a classic “W.” Unemployment never does stop climbing, reaching 15% by year end, and 25% when you throw in discouraged job seekers, jobless college graduates, and those with expired unemployment benefits. This afflicted Franklin D. Roosevelt in the thirties.
So Congress passes another $2 trillion reflationary budget. Everybody gets wonderful new mass transit upgrades, alternative energy infrastructure, smart grids, and bridges to nowhere. But with $4 trillion in extra spending packed into two years, inflation really takes off. The bond market collapses, as China and Japan boycott the Treasury auctions. The dollar tanks big time, gold breaks $2,300, and silver explodes to $50. Ben Bernanke has no choice but to engineer an interest rate spike to dampen inflationary fires and rescue the dollar, taking the Fed funds rate up to a Volkeresque 18%. %. The stock market crashes, taking the S&P well below the 666 low we saw in March. Housing, having never recovered, drops by half again, wiping out more bank equity, and forcing the Treasury to launch TARP II.
The bad news accelerates into the 2012 election year. Obama is burned in effigy; Sarah Palin is elected president, and immediately sets to undoing all of his work. Republicans, reinvigorated by new leadership, and energized by a failing economy, retake both houses of congress. National health care is shut down as a wasteful socialist mistake, boondoggle subsidies for alternative energy are eliminated, and the savings are used to justify huge tax cuts for high income earners. We invade Iran, and crude hits $500.
If you’re over 50, and all of this sounds vaguely familiar, it’s because we’ve been through it all before. Remember Jimmy Carter? Remember the “misery index,” the unemployment rate plus the inflation rate, which hit 20, and catapulted Ronald Reagan into an eight year presidency? A replay is not exactly a low probability scenario. This is why junk bond yields are still stubbornly high at 12.5%, and credit default swaps live at lofty levels. It’s also why the investing public is gun shy, favoring bonds over stocks by a ten to one margin. Are the equity markets pricing in these possibilities? Not a chance.
The risk of economic Armageddon is still out there. Personally, I give it a 50:50 chance. Batten the hatches, and please pass the Xanax.
For more iconoclastic and out of consensus analysis, visit me at www.madhedgefundtrader.com.
(10 votes)
»
- Login or register to post comments
- Printer-friendly version
- Send to friend
on Mon, 01/04/2010 - 09:49
#181912
It's funny you should mention "Obama burned in effigy". This article from the BBC this morning:
http://news.bbc.co.uk/2/hi/americas/8438852.stm
It didn't even take until 2012.
Personally, I don't think that Bernanke ever intends to come to rescue the dollar. If inflation kicked up as you suggest, the Fed would probably keep printing to sustain expansion. This of course would lead to the collapse of the dollar, but it could be replaced with some sort of international currency. Not a real solution, but it seems we're headed in that direction.
on Mon, 01/04/2010 - 12:22
#182059
You are right. I think the Fed will try to maintain inflation higher than a comfortable target of 2.5%, but not so high as to be politically unacceptable. They would like an extended period of 5-6% inflation without much action (but lots of talk) to bring it down.
But we also need to be aware that any significant inflation would be a disaster to retired ( or about to retire) baby boomers. That may have a big influence on the politicaly acceptable rate of inflation. But then again, could the boomers vote be bought with handouts and welfare to offset their inflation loss? A decade of 6% inflation would go a long way toward solving many debt problems.
on Mon, 01/04/2010 - 12:59
#182099
There exists the possibility of a decade of 6% inflation with little or no increase in wages. That scenario certainly promotes beltway insomnia.
on Mon, 01/04/2010 - 15:14
#182294
"But we also need to be aware that any significant inflation would be a disaster to retired ( or about to retire) baby boomers"
As if artificially low interest rates combined with higher food, energy, and healthcare are not currently a disaster for many that are now retired?
on Mon, 01/04/2010 - 13:08
#182111
They are reporting this in the states - http://news.yahoo.com/s/afp/20100104/ts_alt_afp/uspoliticsobamathreat
This also happened before, several times in fact. Still, pretty disturbing, if not highly ignorant. A better effigy to hang would be Blankfein or Bernanke.
on Mon, 01/04/2010 - 16:52
#182392
This is clearly a hoax.
on Mon, 01/04/2010 - 10:54
#181984
Better than 50:50 IMO. It won't be Palin though, it will be Romney.
on Mon, 01/04/2010 - 13:02
#182105
+1
on Mon, 01/04/2010 - 13:06
#182108
Agree. Dems are sealing their fate as I type this.
Cash flows continue to disappear and energy costs are moving higher.
on Mon, 01/04/2010 - 13:15
#182124
At least Romney was a successful businessman - but at this stage in the game who cares.
on Mon, 01/04/2010 - 13:26
#182135
Romney will never get the support of the Tea Party which will seal his fate. He is seen as part of the problem. Palin's strength is not her wonkishness indeed we love her specifically because she hasn't lost sight of what is important in life. Wonkish types have foregotten family, friends, and why it is we love this country.
on Mon, 01/04/2010 - 18:22
#182480
Palin = viagra votes.
on Mon, 01/04/2010 - 18:53
#182501
This is why Obama will be back. Tea Party morons will split the Republican party in half.
on Mon, 01/04/2010 - 21:02
#182595
..and continue to ignore Ron Paul.. which is why you can't take the repub party seriously
on Mon, 01/04/2010 - 14:02
#182189
Romney >>>>>>>>>>>> Palin
...but most people I know are freaked out by Mormons. Just sayin.
on Mon, 01/04/2010 - 14:36
#182223
you hit the nail on the head, Cursive. I think Romney's Mormon background will eventually be his downfall as a widely popular candidate. People are deeply suspicious of Mormons.
also, as a comment on Bernanke's plans to raise rates to choke off inflation, I expect Ben to draw on what he's learned as a student of the depression. Rates were raised too early because the pols were worried about inflation. It choked off a nascent recovery and threw the country back into recession. My guess is Ben tolerates abnormally high inflation for some period to ensure that a recovery has taken hold before even thinking about raising rates. He will not make the same mistake. We'll probably get an inflation scare at some point over the next year, but the prevailing force is still debt deflation and Ben knows this. I think all the talk of a meaningful rise in rates in 2010 is off base. A guess says we're at least 2-3 years from seeing anything above 1%. And as rates do come up, they will rise very slowly.
on Mon, 01/04/2010 - 15:00
#182268
"People are deeply suspicious of Mormons"
It's the underwear...uh, sorry...The Garment.
on Mon, 01/04/2010 - 16:18
#182356
Here is Bernanke's fate Chunky et all.
Things will go so wrong, that BB while trying to plug one hole many others will start leaking.
It is 3:30 am on a Wednesday 201? and while thinking hard for his next move, he realizes that it's check mate time.
His final solution? His glock 40. A templar shot angling upwards 23%.
on Tue, 01/05/2010 - 21:20
#183771
People are deeply suspicious of Mormons.
It's that extra "m"....
on Mon, 01/04/2010 - 15:58
#182336
I think if an economic crisis can give us our first black president an even worse economic crisis can give us our first Mormon. Or hockey mom.
on Mon, 01/04/2010 - 17:07
#182406
Romney is a liberal with an R after his name... look at what his healthcare did to MA. He's just as bad as all the rinos and dems currently in office.
If Palin would embrace Ron Paul's ideals she'd have a shot.. as it is .. she's still too liberal on some things.
on Mon, 01/04/2010 - 21:05
#182598
Ron Paul should just run as a democrat to jazz it up
on Mon, 01/04/2010 - 20:30
#182575
"...but most people I know are freaked out by Mormons."
Dude, have you seen what's in the Whitehouse now? If people aren't freaked out by that, then nothing will freak them.
At this point you can be anything from anywhere and won't matter.
on Mon, 01/04/2010 - 23:36
#182688
Maybe Tom Cruise could do a
better job at being
president?
He did help get tens of
thousands of kids of
psychotropic mind-altering
drugs.
Bad for big pharma but good
for kids souls.
We should consider his
strengths.
on Mon, 01/04/2010 - 12:09
#182048
Burns and Miller had a choice and didn't dampen inflation, why would Bernanke be any different?
Hey, Reagan gave me a tax cut too!!
on Mon, 01/04/2010 - 12:49
#182088
Interesting premise; not your analysis of the economics but that this situation keeps Obama up at night. That assumption would imply that he understood economics and finance which he clearly doesn't. What should keep him up at night is Iran.
on Mon, 01/04/2010 - 13:15
#182125
The only thing keeping Barry O up at night is Michelle.
on Mon, 01/04/2010 - 13:40
#182160
Giddie Uppp!!
on Mon, 01/04/2010 - 16:27
#182366
Ditto that.
There are rumors that he gets up at night, he looks himself in the mirror and gives one of the "fisted left hand, arm bent at 90%, elbow pointing to the floor, swing downwards" and screaming "yeees." Just like Tiger putting a 30 footer.
He is still in campaign mode. He just can't believe he is the President.
on Mon, 01/04/2010 - 17:50
#182451
"He just can't believe he is the President."
And niether can I!
on Mon, 01/04/2010 - 13:07
#182110
roflmao, on my yearly review, i worked out such a scenario, athough, the probability is alot lower than yours, imho, you're way off on unemployment...........
i do agree though oil is still the big risk, inflation if when it comes will be energy forms, no other, over 100 and we got major problems, thus, i really see dollar support to dampen commodity prices, or profits go bye bye bye-
on Mon, 01/04/2010 - 13:13
#182121
Sounds good. Bring on Sarah Palin. Energy independence which means hundreds of billions stays in the USA instead of being sent overseas.That would do wonders for this economy.
on Mon, 01/04/2010 - 21:09
#182601
except by that point China will own most of it so we'll be making nuclear energy here for their profits!!!
on Mon, 01/04/2010 - 13:23
#182130
Romney= more big government spending. Check his record in MASS. Huge healthcare entitlement that they cant pay for.
on Mon, 01/04/2010 - 20:26
#182571
You're aware that the Democrats controlled about 85% of the legislature during Romney's 4-year term, right?
And not just Democrats - Massachusetts Democrats.
And yes, RomneyCare is an epic disaster. But the alternative was a single-payer 2006 ballot initiative that would have almost certainly passed 70-30 so yeah, given the options I'll take RomneyCare over being plopped into the "public" health system in MA.
Romney is certainly open to a fair chunk of criticism on his liberalism, but for Pete's sake let's cut the dude some slack given the looney bin he had to preside over. Seriously folks, let's not confuse Massachusetts with the USA or even the real world.
on Mon, 01/04/2010 - 21:11
#182603
yeah in fact lets just shrink down the U.S.A down to Texas.. and just keep that one star instead of 50
on Mon, 01/04/2010 - 21:43
#182624
I'm still holding out hope for a Lone Star secession, personally.
on Mon, 01/04/2010 - 13:23
#182131
Sorry but Obama is not an idiot nor is he worried about what is happening one whit. What is happening is what is supposed to be happening, destruction is his goal. Marxists at his level are never stupid. He knows exactly what he is doing and what he is doing is destroying the system that made his family miserable. The system that every single of his cohorts has hated since they were able to read das capital.
He is bringing to fruitition the long held goal of marxists everywhere, destroy the best example of freedom in the world. That the Republicans have helped him accomplish this by being so feckless is one of the biggest crimes of this young century.
Once you accept the premise that he is intentionally destroying the country you no longer are surprised by anything...matter of fact he becomes predictable.
He was able to come to power because the country wished to amuse themselves to death...we have gotten our wish.
http://pierrelegrand.net/2009/12/15/amusing-ourselves-to-death-by-stuart-mcmillen.htm
on Mon, 01/04/2010 - 14:44
#182245
Ok, but also keep in mind much of this nonsense was initiated by Bush:
“I’ve abandoned free-market principles to save the free-market system,” Bush told CNN television, saying he had made the decision “to make sure the economy doesn’t collapse.”
on Mon, 01/04/2010 - 23:33
#182682
Yup and Republicans positively danced in the corruption surrounding them in DC, instead of doing something about cleaning it up. It appears that none of the politicians on either side were smart enough to realize that they were playing right into the hands of those who would like to destroy this country.
Obama is the leader of that group.
on Mon, 01/04/2010 - 18:19
#182477
You're a fucking moron. He's not a Marxist, he is a fascist. The closest he gets to socialism is National Socialism, but I'm not saying he's a Nazi. But like those folks, O's aligned himself with the business interests, be they Big Pharma, the health insurance companies, banks, the military industrial complex for whom he extended the war. Hitler aligned with the Junkers, Farben, and all the other German industrialists to the point workers had to carry work cards that bound them to their companies. Your boss had complete power whether to hire, fire, let you go and it was ALL THEIR CHOICE. No quitting for the German worker, was verboten. Obama is a fascist and his rise was predicted in the book THE FOURTH TURNING, if you consider him to be the first GenX president rather than a last-Boomer as he actually is. The pragmatism of the GenX latch-key kids.
And no, he doesn't intentially seek to destroy, that's an infantile, immature (Right wing) read. He simply seeks to get reelected using the politics of expediency. He has no inner core, just like Bill Clinton. He believes in nothing, save himself and saving his own skin. He is President DoucheBag.
Practicing his bad politics, he's a one-termer who will ultimately lose by exposing his left flank to a withering primary challenge and the rise of a 3rd party contender.
on Mon, 01/04/2010 - 21:06
#182600
There are some interesting arguments in your thesis, but using epithets based on the opinion of others discredits you. This is a great blog and we should be open to all opinions, including yours and mine.
on Mon, 01/04/2010 - 23:47
#182694
hehe...Ah the sophisiticated argument about the differences between socialism and marxism....how many angels are dancing on the needle bullshit. There is NO difference both steal away your freedom in the interest of being able to make better decisions than you. In your case that might be true.
When someone is not honest and Obama is anything but honest you are forced to judge them by the company they keep. All of Obama's influences are decidedly Marxist...from his parents to his grandfather to his mentors to his friends and allies. You probably don't want to believe this clownfuck is a marxist because you probably were one of the dumbasses who voted for him based on his "promise" for change. How is that change working out for you?
We should be so lucky to think he is so fucking stupid that all this destruction is not intentional. But sorry clownboy your guy is an evil bastard and it was plainly evident for those of us who looked. Now suck it up and admit to the world that you believed all of Bambi's bullshit.
Just like all Marxists he is believes that you cannot make an Omelet without breaking a few eggs.
on Tue, 01/05/2010 - 01:01
#182744
Why are Righties so brain-damaged? Why can you not understand the difference between MARXISM and FASCISM? Marx criticized the bourgeoisie class and all that capitalism implied, of private companies (mostly banks) over The People. Mussolini gets Obama perfectly straight:
Fascism should rightly be called Corporatism, as it is the merger of corporate and government power.
If we're equating Marxism with communism or socialism, Obama would have wiped out the people's debt in a total bastardization of contract law, a la Lula or Chavez, at the price of the companies. Instead, Obama's Treasury has borrowed against the future of America to back the banks while requiring the people to continue being responsible for their own debt. Privatized profits and socialized losses is FASCISM. BTW, fascism is not about police states, it is about economic policy. Like communism, it often (usually?) comes with a police state, but it is not necessary to the concept.
on Tue, 01/05/2010 - 20:12
#183701
I agree that the too close cooperation between Government, banks and corporations is fascism especially as practiced in Germany 1870-1920. So also is the too high leverage in the banking system based on foolish collateralization decisions a parallel to the German banks of that era.
So is the closed off to the rest of society thin closing ranks of the oligarchs.
When it all was going over the falls in a barrel they turned to a charismatic wall paper hanger they were sure they could control
on Mon, 01/04/2010 - 18:58
#182506
Quite honestly, I do not understand these sort of statements.
When you limit a persons actions to some sort of belief system how can you state they`re intelligent. These quasi-psychological assessments based on external stimuli while the person was growing up seems like an incredible oversimplification of all the factors involved.
Obama is not an island.
on Mon, 01/04/2010 - 23:53
#182700
Jesus H Christ quasi-psychological??? Are you serious? Every SINGLE influence on the man from his childhood onwards were by some sort of marxist...or perhaps you prefer the term Progressive? He would have to be made of stone to have grown up believing in the right of an individual to make their own decisions. We can see now, and some of us who did some due diligence on this clownfuck saw it way back in 2004, every time this clownfuck makes a decision it is based on the premises you would expect a Marxist to hold.
Father, Mother, Grandparents, childhood mentor, school, school teachers, religious leader, friends, community organizers, all of them were from either admitted Marxists or cowards who hid behind the label of progressive.
on Tue, 01/05/2010 - 01:16
#182751
LOL. You remind me of Mrs. Kravitz from Bewitched, looking through the curtains and saying, "Oh my. Oh dear. There's MARXISTS next door. And across the street. Oh my, oh dear, there are MARXISTS everywhere."
Or maybe you're the kid in Sixth Sense:
I see Marxists. Walking around like regular people. They don't see each other. They only see what they want to see. They don't know they're Marxists.
If you don't know it, you're hilarious. A career in comedy for you.
For god's sake, if you really want to say it, Pierre, just say COMMUNIST. It ain't the N word, it's just so silly retro. Seriously, it's dated, like calling Obama a Colored or a Negro.
You're killing me whitey, you really are.
on Tue, 01/05/2010 - 02:39
#182780
interesting debate.
so mr anon, i take it that you *don't* believe our current president (community organizer) was influenced by 'spread the wealthers' (pick your favorite label, whatever...), and that you *don't* believe he is currently acting in that manner?
personally i think he's a complete puppet of an effective elite, and hasn't quite figured that out yet. and while i can't figure out what *their* agenda is, it will undoubtedly cost me more than it will help me.
i'd have a beer with him, but his policies scare the hell outta me.
on Tue, 01/05/2010 - 09:06
#182886
Apparently you are another Obama voter eh? You are either in denial or you think like Axlerod and Rahm that if you simply deny deny deny that I will change my mind...and that others will believe your bullshit. Of course a lie repeated often enough becomes the truth.
Let's repeat again for the stupid fucks...
EVERY SINGLE INFLUENCE ON OUR FIRST BLACK PRESIDENT WAS EITHER AN ADMITTED MARXIST, or they claimed the label of progressive which is another name for communist if you wish. I will not argue about the degree bullshit that some of you want to descend into because EVERY SINGLE INFLUENCE OF OUR MR WONDERFUL PRESIDENT wants to take my freedom away. I don't give a fuck about whether he is Mussolini, Hitler, Stalin or Mao...fuck them all they are all coming from the same portion of space with the same basic premise. ALL those motherfuckers know better than I how to make my money, spend my money and educate my children.
Once read Das Capital and ever since then I have had nothing but contempt for the clownfucks who sat around gazing at their navels saying how fucking brilliant Marx was. Stupid fuck understood zero about his fellow travelers on earth.
on Tue, 01/05/2010 - 10:47
#182987
Hopeless. You are one of those people who, in a conversation, simply waits for the very first chance to start talking again, listening to not a word the other person has said because you're so busy thinking about your brilliant response, the one that will 'turn on the light' for the other person. A bore, in other words.
By the way, I had no idea he was surrounded by Marxists his whole life. His granny looked like a nice old white lady to me, and he attended Harvard and that bastion of Freidmanite, free-market economics, the UofC. Of course, like British intelligence post WWII, it's probably riddled with Marxists and pinko commies.
In the end, it does not matter. As many on this board have so rightly said, the president is a puppet for the people in charge. Someone above alluded to this, but said they didn't know what 'Their' agenda is: it's pretty simple. It's like 1984, when Smith's interrogator says, to paraphrase, That the sole reason they are in power is to stay in power FOREVER. I have been a lifelong REPUBLICAN going back to Reagan's second term, every election, every candidate, but it appears from where I sit that the two parties are just different brand names for the same beer which the hoi polloi with fight over on bullshit sideshow antics like abortion, gay rights, wars, illegal immigrants, even the president himself, with one side attacking while the other vigorously defends and all the while the beer makers count their profit. Obama is a wet dream for the people in charge, because the traditional Left will defend him to the while the right grows ever more batshit crazy with legitimate frustration, much like old-school Republicans would go nuts when 'ChristoFascists' would defend Bush and his moronic policies at any turn. I don't support Obama, I utterly despise him and wish him gone, but the reasons are that he has sold the American people up the river for the chosen few, the banksters, the stakeholders, the connected and the insiders, all while wrapping it up in a lie entitled 'I care'.
on Tue, 01/05/2010 - 12:12
#183099
We probably agree more either of us realizes...I fucking hate him and I hated McCain nearly as much. Faced with two awful choices I went with McCain.
I have to believe that someone can fix the system or it is time to take out blunt instruments and start striking the leaders over their heads.
And yes every single influence on the "Messiah" has been from the Marxist side of the aisle. I do not like others believe that there is much difference between fascists and communists. Both want my freedom. Both of them can kiss my ass and ultimately as hopeless as this is to say I will say... Molon Labe motherfuckers.
on Tue, 01/05/2010 - 23:10
#183872
Really, dude, lay off the weed. Propping up Goldman, buying up AIG and GM - those are not the actions of a Marxist. As others have pointed out, this is FASCIST or CORPORATIST, not Marxist. A Marxist would have nationalised GM and AIG, let Goldman fail, and protected workers' jobs. It wouldn't have been cheaper than what was done, and probably wouldn't have been any more successful, but it would have been DIFFERENT.
Face it - Eisenhower was mostly right, but now it's the military-financial complex, as American industry has been hollowed out. It's Goldman and BankAmerrillwide on one side, and General Dynamics, Boeing, and UT on the other. They're calling the shots, and Bush and Obama both are capering monkeys dancing to these organists' tune. Businesses don't call the shots in a Marxist state, but they do in fascist ones. Add in the complete erosion of civil rights under the Orwellian "Patriot Act" and the increased goonery of the TSA, and it's only a matter of time before the jackboots are sounding in the streets.
on Tue, 01/05/2010 - 11:25
#183029
I wonder what our distinguished Progressive (Republican!) Presidend Teddy Roosevelt would say about you calling him a Communist. Really, the only question is whether he'd shot you or beat you with his bare hands.
on Mon, 01/04/2010 - 13:27
#182137
Would $500 a barrel oil soak up excess dollars? Thus avoiding hyperinflation??? In other words, might they have a strategy of creating an oil crisis?
on Mon, 01/04/2010 - 13:28
#182138
When are we going to think of the alternative to the money economy?
on Mon, 01/04/2010 - 13:39
#182157
It doesn't matter. The only reason we have presidents is so we can name a specific time period after them (e.g. Bush era, Reagan era, Obama era...) and so we can feel like we actually have a democracy and a voice.
There is little difference between the Presidents. Does anyone really see a difference in how this crisis has been handled between Bush and Obama?
Palin being Reaganesque? Ha! Reagan did what any President would do after interest rates subsided... He ran the country on a credit card. You think Palin, or anyone else for that matter will be able to run the country on a credit card in 2012? You think the Bond Market will allow for a significant tax cut? Do you have the faintest clue of who really calls the shots?
Follow the money.... then you will understand how our "democracy" works.
Nonetheless, it's funny watching the "little people" discuss presidential politics as if pulling a lever every four years actually accomplishes something.
Ross Perot would have been the only unencumbered President. We lost that chance. Anyone else that comes from the status quo parties only changes the drapes in the White House.... little else.
on Mon, 01/04/2010 - 13:44
#182170
So true, and SO UTTERLY MADDENING---
We voted for someone who would stomp down the banking oligarch, not someone who would become OWNED by the banks!!
He has only shown us our government has been completely CAPTURED by the financial elite! And I am someone who VOTED for him!!
Puppets, all of them. As so many congressmen and women have admitted, "They--aka the banks" own this place"..everything else is just for show.
on Mon, 01/04/2010 - 18:35
#182488
It has been a long time since I have heard of another voice for Ross Perot - Misthos - am with you on this one - It's over and what we have been doing for a long time is entering the Dark Ages of America. We use to have a "society" that wanted America Prosperity, which meant everyone, not just one class or another if not perfect but better. "One for all, all for one" was yesterday's battle cry, replaced with what best describes the line of Wall Street - "Greed, for lack of a better word, is good" - I am, as you state, "little people", and I realize I do not know anything in comparison with what others who do know and should know have but this much I know, it's not working. All I can do is show up every election and do what I have always done except this time I know that my vote is meaningless, regardless of who I vote for.
on Mon, 01/04/2010 - 19:03
#182510
I find it funny that this post was alloted to the `junk`category by some individuals in this forum where it`s common knowledge that the two parties are opposite sides to the same coin. Presidents are only presidents because their party allowed them to become the president. All US citizens had a choice of was between the two candidates that the two parties put forward.
on Tue, 01/05/2010 - 02:47
#182782
+10
after watching the '08 campaigns and debates... it was with disgust that my general summary of the US political system was "out of 300 million citizens, those two are the best we could do?"
this from someone who hasn't voted either main party in 20 years... i may be forced to watch the silly game, but i don't have to play. sadly though, i must suffer the results.
on Mon, 01/04/2010 - 13:48
#182172
Well done, exactly as i would expect this to play out. My first introduction to the stock market was in 1974, after being snatched up from watching cartoons, and whisked away to the brokerage with my father, to stand in a line more than 2 blocks long. Deja-vu..
on Mon, 01/04/2010 - 13:50
#182177
Sad but true Misthos. At least pulling a lever or punching a touch screen once every four years gives us the feeling we matter :-)
on Mon, 01/04/2010 - 13:54
#182181
Wow, I'm saddened that you all seem to think that everything we are going through/will go through is an internal affair. You really need to look around.
on Mon, 01/04/2010 - 14:05
#182195
I'd like to know what MadHedgeFundTrader predicts this will do to the lifestyles of us simpleton, average folk. Do we carry on as usual, or does life as we know it come to a screeching halt as we adapt to eating Top Ramen for the rest of our lives?
on Mon, 01/04/2010 - 16:14
#182350
There is a reason it is called the misery index.
J6P won't be sent to the gas chambers or anything, he will just lead the lowly life of quiet desperation that he was meant to live, as has been the case throughout history.
Think fewer opportunities - for education, for career advancement, for luxury goods, for vacations, for just about anything in life beyond toiling away to pay for the essentials.
The nice experiment our forefathers were able to set up is over, sheeple. Things are going back to the way they have been throughout history - two classes of people - the oppressors and the oppressed.
Now get back to watching TV.
on Mon, 01/04/2010 - 18:55
#182505
I think its hilarious that you and your ilk think that in some mythical past, outside of the last 30 years, there were more opportunities for career advancement.
on Mon, 01/04/2010 - 14:42
#182241
If it plays out, I like a total political outsider to get elected. Someone not over-saturated like Palin. A charismatic and inspirational talker like Reagan and possibly with a background in business but not necessarily Wall Street finance.
on Mon, 01/04/2010 - 14:43
#182242
Obama....
Does not have a worry in the world...
He's already made....
Part of the new country club crony set....
And young too....which means the blabber continues
For a long time....
on Mon, 01/04/2010 - 14:52
#182256
It won't be Palin or Romney or anyone other establishment pro.
This fall is going to be a bloodbath for anyone seeking public office who is even remotely connected to Wall Street. The American public is finally waking up to the fact that the country has been hijacked by financial interests that have sold ordinary Americans down the river. Think about what the IMF and the bankers did to Argentina a decade ago. Same thing is happening here now.
It will be more difficult to keep a lid on all the corruption and double-dealing in the US. Anyone that can be attached - even in a tangential way - to Goldman Sachs or JPM, or to Fannie or Freddie, or to the Federal Reserve, IMF, BIS, TBTF banks, AIG, etc. etc. is going to be labeled a traitor and a financial terrorist and will be run out of Washington DC.
New leadership will emerge from the Libertarian right - with plenty of support from "anti-corruption" Democrats on the left. A new generation of leaders must take over now. The current generation is well beyond compromised.
on Mon, 01/04/2010 - 21:57
#182634
Although I would love to see that happen, any serious 3rd party candidate or movement will be destroyed or coopted from within as soon as they gain traction.
This fall you will have the choice if a giant douche or a turd sandwich.... unless you live in Conn where you can choose between a criminal who now has seen the light or the wolf disguised as a sheep Peter Schiff.
Here in Michigan we get tnevturd sandwich with fires, large sized..
on Mon, 01/04/2010 - 15:14
#182292
You really think these guys care ?
The 401k guys are asleep at the wheel with their contributions at auto-pilot. I think this madness will go on a while longer than the 30s..
on Mon, 01/04/2010 - 15:22
#182306
MHFT, i think for Obama to be kept awake at night, he has to have an understanding of what is going on to begin with. Nothing he has said or done gives me any indication that this is the case, and with all his advisors constantly telling him what a great demi-god he is, I honestly believe he sleeps like a drunk baby.
on Mon, 01/04/2010 - 15:38
#182317
One thing's for sure. He doesn't go sleepless worrying about the safety of Americans from Islamic terrorists.
on Mon, 01/04/2010 - 16:23
#182360
I refer you to PierreLegrand's post above, #182131. I concur with him, Obama knows exactly what he's doing. It seems to many he's a bumbling idiot when it comes to running the show, but that's because he's not trying to run the show. He simply isn't playing the game that the POTUS is supposed to play. It's like saying Pete Rose was doing a piss-poor job managing the Reds during games that he was trying to lose for benefit of his own interests.
He's just a cog in the wheel who's goal it is to overload and topple our system.
on Tue, 01/05/2010 - 23:32
#183886
Much as I detest Pete Rose, he maintained, and it was never disproved, that he never bet against the Reds. He's still a turd, but he's not as big as turd as the stain in the White House.
on Mon, 01/04/2010 - 16:25
#182362
Must be nice. I love sleeping like a drunk baby.
on Mon, 01/04/2010 - 15:33
#182314
madhedgefuntrader is quickly becoming my favorite guest contributor.
on Mon, 01/04/2010 - 15:42
#182324
"Then once the effects of record government spending wear off, we slip back into a deep recession, setting up a classic “W.” "
Or an even more classic "reverse N."
on Mon, 01/04/2010 - 17:11
#182412
Before we consider odds, let's wait til the State and Muni public sectors FINALLY come to grips with the longer term condition of their budgets. They've tried the furloughs. That's not nearly enough ........ lacerations are not cuts. Once they've come to grips with the permanence of the downturn, they'll cut jobs like mad . The Sun and Sand states will be into it bigtime by mid year. The other Bloated Blues will follow.
An unemployment rate at 10 % will make us giddy with relief when we return to it in about 3 years.
on Mon, 01/04/2010 - 18:23
#182481
Probably something that isn't discussed enough. The financial system won't stay high then suddenly fall off a cliff. It'll happen domino-style with the states leading the way. California, among others, is so screwed right now it's laughable. Maybe the realization of states failing one by one will be the Black Swan we're all looking for?
on Mon, 01/04/2010 - 19:03
#182512
I constantly remind myself that the most vital of steps toward sustaining Fabian Socialism is consistently outsized public sector employment. Taken in the aggregate, it represents an IMMENSE group who are fundamentally and realistically wards of the Fed, State, City, County or other municipality.
They aren't rising up, protesting or snitching......unless or until the employment ax falls. Keeping them employed will be a very high priority for our Gubmint Masters.
on Mon, 01/04/2010 - 18:14
#182473
Bernanke and Geithner's top priority is to keep bankers rich. What actions they will take will be primarily driven by this goal. The effect of inflation and unemployment on the masses matter little--the effect of these on banks matter massively.
So what policies would be best for the banks?
on Mon, 01/04/2010 - 18:15
#182474
Mad
"Unemployment never does stop climbing, reaching 15% by year end, and 25% when you throw in discouraged job seekers, jobless college graduates, and those with expired unemployment benefits."
I submit to you we are already at 25%...........
The Disgruntled, and tired of looking, and the part timers.
The only thing that's keeping this puppy from going violent, is the nearly 52 weeks of Unemployment bene's they have been recieving.
When this start to run out, and are not renewed.........look out.
on Mon, 01/04/2010 - 19:05
#182513
This.
How long can Congress extend Unemployment benefits is an important question. Once the extensions end, so does any resemblence of a recovery.
on Mon, 01/04/2010 - 22:42
#182652
The recession of 1920–21 was characterized by extreme deflation — the largest one-year percentage decline in around 140 years of data. The Department of Commerce estimates 18% deflation, Balke and Gordon estimate 13% deflation, and Romer estimates 14.8% deflation. The drop in wholesale prices was even more severe, falling by 36.8%, the most severe drop since the American Revolutionary War. This is worse than any year during the Great Depression (adding all the years of the Great Depression together, however, yields more severe deflation). The deflation of 1920–21 was extreme in absolute terms, and also unusually extreme given the relatively small decline in gross domestic product.
Unemployment rose sharply during the recession. Romer estimates a rise to 8.7% from 5.2% and an older estimate from Stanley Lebergott says unemployment rose from 5.2% to 11.7%. Both agree that unemployment quickly fell after the recession, and by 1923 had returned to a level consistent with full employment. The recession also saw an extremely sharp decline in industrial production. From May 1920 to July 1921, automobile production declined by 60% and total industrial production by 30%. At the end of the recession, production quickly rebounded. Industrial production returned to its peak levels by October 1922. The AT&T Index of Industrial Productivity showed a decline of 29.4%, followed by an increase of 60.1% – by this measure, the recession of 1920–21 had the most severe decline and most robust recovery of any recession between 1899 and the Great Depression.
http://en.wikipedia.org/wiki/Depression_of_1920%E2%80%9321
on Tue, 01/05/2010 - 03:13
#182794
The remarkable thing about the 1920-21 recession/depression is that it righted itself in a few months with absolutely no government intervention. The 1929 depression was on its way to recovery in 1931 or 1932, but Hoover/Roosevelt got their clumsy mitts on the controls and totally screwed it up. They should have taken a lesson from good old Warren Harding: hang out with the mistress more often, leave the White House in the hands of Silent Cal, and don't touch nothing! Just leave it alone! When will our supposed "experts" figure out that they actually know nothing about running an economy?
on Tue, 01/05/2010 - 03:20
#182796
The remarkable thing about the 1920-21 recession/depression is that it righted itself in a few months with absolutely no government intervention. The 1929 depression was on its way to recovery in 1931 or 1932, but Hoover/Roosevelt got their clumsy mitts on the controls and totally screwed it up. They should have taken a lesson from good old Warren Harding: hang out with the mistress more often, leave the White House in the hands of Silent Cal, and don't touch nothing! Just leave it alone! When will our supposed "experts" figure out that they actually know nothing about running an economy?
on Mon, 01/04/2010 - 18:19
#182476
Dupe
on Mon, 01/04/2010 - 18:22
#182478
I would be surprised if someone as arrogant as Obama lets anything keep him up at night.
on Mon, 01/04/2010 - 19:07
#182516
I disagree. I don`t think Obama is arrogant. He was chosen for his ability to seem confident and trustworthy throughout these events. Arrogance would imply he has any real control.
on Mon, 01/04/2010 - 18:53
#182503
Bernanke is up to something. I don't think he is going to let them throw him under the bus. What could he do?
on Mon, 01/04/2010 - 19:13
#182519
Actually, under FDR, unemployment went from 25% to 15% between 1932 and 1938. This was almost entirely due to government spending. Interestingly enough, in the 1938 elections, Republicans managed to gain a substantial amount of seats in Congress, which compounded a growing concern over the growing national debt (sound familiar?). In response, FDR actually scaled back New Deal government programs and began to raise taxes. The result, was a that "W" to which you refer. A contracting economy, and higher unemployment. What ended that, was the largest government spending program the U.S. has ever seen: World War Two. Yes, believe it or not, the war effort was financed almost entirely by government dollars, and it, in effect, ended the Great Depression. Thank you, Mr. Keynes.
on Tue, 01/05/2010 - 01:33
#182761
Because the war was 'won'. If we had lost, the stimulus failed (like the Keynesian stimulus failed in Germany). The stimulus of WWII worked because, first and foremost, we were the only free industrial state standing and EVERYONE had to buy their goods from us. How's that for market share? Secondly, we had, a la China, manufactured and exported the shit out of goods for which we took borrowed dollars. We were a net debt-holder to the world as recently as 25 years ago. Wars only succeed if you win AND you find a bagholder. Look at England: they got one for two right and yet it left them financially wrecked, ending their Empire and bringing about the malaise they only recently (via the financial ponzi scheme) and temporarily escaped.
Military Keynesiasm, in and of itself alone, is just one more lie on the fire.
on Mon, 01/04/2010 - 19:28
#182527
Ah Ah
you should work in Hollywood and write movie scripts.
I am sure you would be successful.
There is certainly some truth in what you say , but reality
will always surprise us in a way we cannot envision.
on Mon, 01/04/2010 - 19:36
#182534
What makes you think the Republicans will repeal any legislation spearheaded by Democrats? You mean you believe in the two party paradigm? For fucks sakes man. If anything, they'll just make the situation worse regardless of any historical lessons to be learnt.
on Mon, 01/04/2010 - 20:32
#182577
"I Know What Keeps Obama Awake at Night"...
Snakes? Spiders? White people?
on Tue, 01/05/2010 - 01:22
#182754
You mean dem Honkies?
on Mon, 01/04/2010 - 21:05
#182599
Guys you have not got a clue about the realities of Mitt. He is a good man but a classic liberal Republican, and in this environment well liked by liberals but not by conservatives. Palin is another Reagan type and as such draws exactly the same fire that Reagan drew all through the years. Obama is a classic far left socialist ( basic true believer like Castro and Hugo) and as such he will continue to take this economy into the tank. Now you are beginning to see exactly what I lived through with Jimmy Carter. He talked conservative to get elected, then proceeded to follow the liberal agenda which tanked our economy in no time. This is deja vu all over again!
on Mon, 01/04/2010 - 21:28
#182613
Obama is Madhedgefundtrader's main man, loves hob knobing with the dems and speaks highly O's lofty goals of green energy and mass transit funded by powdered bones of your "granchilen"
on Mon, 01/04/2010 - 21:49
#182628
We will be in crisis mode for the next 20 years.
We have been in crisis mode since 2000 when the dot com bubble blew up. Soon after 9/11 happened (which i believe was a false flag operation) which further put us in crisis mode. The Greenspan fed panicked and dropped rates down to 1%. Then the housing bubble blew and burst and now rates at 0%. Even though things have stabilized for the time being we all know that crisis mode will return, whether it comes in 2010 or 2011. We also have to worry about peak oil, never really knowing when it will rear its ugly head again but with crude at $81.60 in this environment the future doesnt look bright at all.
We also have the bond market to worry about as we all know that gov debt issuance will explode in the next 3 years. Rates will rise further putting pressure on real estate values and bank balance sheets. Bottom line is we have a plethora of problems that will keep on hitting us in the face.
Therefore, we must numb our emotions to the current environment if we want to be happy. There is, unfortunately, nothing we can do about this. The PTB have a strong hold on the people and will maintain their power for another generation at least. The only thing we can do is personal preparation, whether it be buying gold, guns, food, saving money, preparing emotionally, etc. The message of truth will not reach the mainstream, the mainstream must seek truth for itself. For people love the lie and hate the truth. For when the truth shines on the darkness, it exposes evil and therefore the darkness tries to hide.
I have accepted reality for what it is now. I know there is no truth in the land. I know that corruption and lies reign. I know that the next 20 years will be very difficult. I know that there will be no colorful revolution of any sort and that liberty will die as fascism will reign. Thus, i will do everything in my power to have peace in my spirit, and not let the evil of the world consume me.
on Mon, 01/04/2010 - 23:09
#182670
Ditto your thoughts
Got me a farm in S. America and retiring there in 2012. However, I will stay and fight, if there is a glimmering hope that things are starting to change.
on Mon, 01/04/2010 - 22:37
#182651
This time is different. The fabric of society is breaking up.
"Strategic default on mortgages will grow substantially over the next year, among prime borrowers, and become identified as a serious problem," said Robert Shiller, an economist at Yale University. "It will grow because of a building backlash against the financial sector, growing populist rhetoric, declining sense of community with the business world. Some people will take another look at their mortgage contract, and note that nowhere did they swear on the Bible that they would repay."
http://online.wsj.com/article/SB126261702966614853.html?mod=WSJ_hps_LEFT...
on Mon, 01/04/2010 - 22:38
#182656
I don't think BB is going to save the dollar; the wealth of Americans is in stocks, not dollars (approx zero savings rate).
Which means, that the stock market will skyrocket. It's happening already, with bonds tanking. But not many people have realized this yet. When they do, we will be reaching past SPX 1550 in no time, and really up to the moon.
In worthless dollars.
on Mon, 01/04/2010 - 23:33
#182683
The American political process is about as broken as the financial system. Therefore, one has to be a bit skeptical. Just to give you one little example, one unrelated to the financial crisis. Here we are on Dec. 29, almost a year after the Inauguration, and there is no Under Secretary of the Treasury. That should be an important position. How can we run a government in the middle of a financial crisis without doing the ordinary, garden-variety administrative work of filling the relevant agencies?
----Paul Volcker
Well, there aren’t many useful historical models. But the example that comes closest to the situation facing the United States today is that of Japan after its late-80s bubble burst, leaving serious debt problems behind. And a maximum-likelihood estimate of how long it will take to recover, based on the Japanese example, is … forever. OK, strictly speaking it’s 18 years, since that’s how long it has been since the Japanese bubble burst, and Japan has never really escaped from its deflationary trap. This line of thought explains why I’m skeptical about the optimism that’s widespread right now about recovery prospects.
----Paul Krugman
on Tue, 01/05/2010 - 02:08
#182774
Regarding Obama, I think it is more or less impossible to deduce what the guy is genuinely about. I mean that he is surrounded by the same utterly corrupt crown of Beltway folks and endless delegations of corrupting lobbyists. It is a system beyond salvage and repair, just like in the last days of the Roman empire. What Obama is about or is not about really makes no difference. And neither does who gets elected next time around. It is the Banks, the Big Pharma, the Enery Folks, the Media Moguls and the Industrial Military oomplex that call the shots. If Obama or any other president has a problem with that, he or she will have the same fate as Kennedy. These people take their vested interests and money seriously.
on Tue, 01/05/2010 - 07:58
#182850
"Romney is a liberal with an R after his name... look at what his healthcare did to MA. He's just as bad as all the rinos and dems currently in office."
No, Romney is a pragmatist. He did what was required to survive
politically in the most liberal of states. In a state hell bent on socialism
he did what he could to keep it rational.
Out of school, I think he was focused on a business career. If he had
been a career politician, most anywhere but MA would have been
better.
on Tue, 01/05/2010 - 11:44
#183051
+1
Mormons will help you as long as you are willing to help yourself. Romney played his hand well, considering the circumstances.