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I Know What Keeps Obama Awake at Night II
While Obama spent the weekend shorting through contradictory primary results, trying to figure out what next to say about the Gulf oil spill, and basking in the afterglow of his Senate win on financial reform, a potential nightmare is giving him sleepless nights.
The $887 billion stimulus wad has now been mostly spent or committed, delivering us with a couple of quarters of decent growth. The effect was no doubt help by the Fed’s ZIRP strategy and massive housing subsidies. The “V” is in. Once the effects of this spendfest wear off, we slip back into a deep recession, setting up the classic “W.” Unemployment stays stick in the high nines, and around 18% when you throw in discouraged job seekers, jobless college graduates, and those with expired unemployment benefits, and the underemployed. This afflicted Franklin D. Roosevelt in the thirties.
So Congress passes another $1 trillion reflationary budget. Everybody gets wonderful new mass transit upgrades, alternative energy infrastructure, smart grids, and bridges to nowhere. But with $2 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 on a “Tea Party” platform, 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 30, and catapulted Ronald Reagan into an eight year presidency? A replay is not exactly a low probability scenario. This is why virtually every category of risk asset has melted down in the last two weeks. 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.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on the “Today’s Radio Show” menu tab on the left on my home page.
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well, I'm certainly no Palin fan. But it is true that she's physically appealing. Perhaps you would like to offer your suggestion to her in front of her husband? Didn't think so. Actually, from the looks of it, she could probably whip your ass.
Physically appealing?!? speak for yourself. I gag.
Reagan, Bush 1, Clinton(s), Bush 2 and Obama were all simply tools of the billionaire elite, folks. I doubt any of them lost any sleep. Why would they? 2012 will see the "election" of the next tool needed to screw down the rabble. Palin is simply too unpredictable to BE a tool; the Bayer et al class learned not to sponsor crazy people with Hitler, after all. If the Tea Party wins the Presidency, it will be because the proper tool was put into use by the same people who've co-opted the other parties.
The music is still playing and Messrs. Bernanke & Geithner are urging us to dance. Let Us Speculate! I'm actually tossing around the idea of placing MORE in the equity markets, albeit mostly in miners and short ETFs...
Contrarians can make a lot of money in this market...........or lose. Timing(luck) is everything.
Paul Ryan I believe is the best option out of the people who could have a shot at getting the nominee & getting elected. He is a pretty sharp guy.
Where does he stand on the Federal Reserve issues?
Palin has no chance at getting elected, nor should she.
I wouldn't rule out Newt ...
hear hear... paul ryan is the man - my money is on him
Paul Ryan is about one of the truly fiscally responsible.
What I question is...Can America handle the truth? I am highly doubtful. America will vote for their own benefits and rather extend and pretend.
Bingo!
We're already past the point where 49% pay over 51% taxes. Add in public employees and vested interests there are simply too many people that need the current system to survive. That is why the tea partiess will never control anything on the national level.
I would also like to know more about Paul Ryan as I am not enthused by the current field of Republicans.
Don't worry, Obama will be true to form and have us in W.W.III by 2012. War is the last and best refuge for cornered politicians. It stimulates the economy, mutes the opposition party, and if it's sold properly, everyone goes along initially.
Bush started two unfunded wars & handed them off. Obama doesn't have room for another.
Obama start WW3? huh? where have you been?
Obama has ALREADY waged war, on America.
Forget WWIII, and Palin, or the 2012 Election, Obama is going to start an Insurrection here, and that will give him legal right to declare Martial Law...........
Viola!................there goes the Republic, and there goes any chance of another US Presidential Election.
The risk of economic Armageddon is still out there. Personally, I give it a 50:50 chance.
But the risk of unicorns being non-existent and/or incapable of flight is 100%. If that doesn't keep Obama up at night it should.
you mean Soetoro?
paul ryan I think..
Perhaps a libertarian type republican like Rand Paul.
I think Rand needs 1 full term to get his bearings on how washington works before running for the big house.
Not necessarily -- if the Plan is to blow up how DC works, then it doesn't really require much of a learning curve.
President: "Here's the Budget bill I will authorize. You'll note it is only 45 pages, removes 65% of discretionary spending, and de-funds most federal programs. I am also firing most federal workers. If I get anything back from you that is significantly different it will be vetoed."
Congress: "You can't do that. Here's our latest pig trough offering, and if you veto we'll override."
President: "You're bluffing -- you don't have enough to override, and even if you manage to do so I'll make sure every Yes vote is advertised as heavily as possible come the next round of elections. By the way, I can ignore the phone calls longer than you can while the gov't is shut down -- I'm not planning on re-election."
DONE -- how much more does it really take?
yep, see this
http://www.zerohedge.com/article/i-know-what-keeps-obama-awake-night-ii#...
His fake home state, Hawaii, in his fake district, just swept in a Republican. The reform bill is hollow. The only thing keeping him up at night is his narcissism.
Has Hawaii been moved to Kenya or Indonesia?
The hard evidence is mounting high, and Michelle has slipped twice (videos) about Kenya being his homeboy country. His social security number is a doozy. On and on.
No Hospital Records of Obama's Birth - Mothers Social Security Number is Still Active and in Use: http://www.youtube.com/watch?v=2I_-ATxzyiM
But whether or not he is a US citizen, Obama is worse than Bush and in my view that is reason enough to get rid of him.
social security number
456-2K-enya
Not going to happen. The Tea Party will win 2012 but not with Palin. Sarah Palin is unelectable.
"I Know What Keeps Obama Awake at Night",
"Latest stock market crash"
The S&P 500 is right where it was in the spring of 1998, Obama went from civic leader to millionare Rock Star President. I bet he sleeps just fine.
Ron Paul supporters started the Tea Party movement, and I am hopeful it will return to Ron Paul prior to 2012. Rand Paul is a good indicator of where this is going. My fear is that it will be too little, too late. I think an economic meltdown will create a global crisis that will prevent major shift towards smaller government.
Correct...Ron Paul & the campaign for liberty started the tea party movement and the NeoCONs with Palin tried, and are trying to usurp it from true conservatives. http://www.campaignforliberty.com/ are the good guys, hopefully they can keep control of the movement and stop the neocons from gaining further control.
My money will be on Rick Perry Gov of TX or perhaps Chris Christie as a surprise, recent Gov of NJ. Paul Ryan should be groomed for the future.
Governor Goodhair would be a disaster worse than Shrub. I've lived with both as governor and Perry is a doofus par excellence. A Creationist president, yeah, great plan, not.
...Or Rick Perry becomes the new President of Texas.
+1000
+1000
I say Bobby Jindal gets it. He meets the new PC it seems to take to get elected these days.
When I first heard the suggestion of Ronald Reagan for president, I laughed, literally laughed, then forgot about it. A has-been movie actor and disastrously failed state governor? Admittedly he posessed some foggy-minded charismatic appeal for some folks, but as a mainstream candicate, come on, pull the other one please.
Well before his second term got underway, I had learned not to dismiss any possiblity as TATH (Too Absurd To Happen).
Will there be an election in 2012?
My thought's exactly. Look's like we might be @ war by then possibly WWIII. What kind of exc. order will they pull out of the hat?
No - but to be sure, there will be a selection......
Agree on Palin.
Unless he gets his ass in gear, Obama is one and done, though.
What we've seen in the 2010 election season is that every bailout queen has been ousted so far. There won't be a TARP 2.0, there won't be a StimPack 2.0 and there won't be a bailout for the states, at least none that we ever get to vote for.
Missing Link....I agree...it will be the Tea Party, but it won't be Palin....the media keeps trying to wrap Palin around the Tea Party...it's not working though...
Palins is just a tool to co-opt the Tea Party to Republican agenda. Same thing as the Reform Party, Green Party, Christian fundies, and many others before them, they are a threat, and will be made irrelevant, default supporters of the two party system.
Disagree with you both.
The Tea Party will be compromised the way the Reform Party was by Republican operatives Pat and Bey Buchanon.
You will see a Republican elected and possibly a few Tea Party affiliated lower level politicians.
Keep and eye out for a charismatic Republican, kind of like an Obama. Palin is a distraction and the real candidate should be starting to get promoted right about now.
Nothing keeps Obama up at night. He served his purpose as a Democratic bone to quell their anger.
black swans will be in a bull market..nothing is predicable and orderly removal of a crime syndicate is never orderly..the massive scam has placed disorder and chaos in control..
praying might help, sacrifice lambs, virgins to the volcanoes, ..or it will all blow over and
a great new sit com will replace the loss of
Seinfeld..there's hopium for you.
Let's sacrifice .gov spenders and filthy bankers to the volcanoes instead.
Agree with you. Look the way the White House and MSM have smeared Rand Paul.
They compromised the tea party by putting in Palin, who has tried to hijack it for her purposes.
What a bunch of phucking pussies you are. Ohhhhhhhhhh. WAAAAAAAAAAAAAAAAAA.
The White House smeared them. WAAAAAAAAAAAAAAAAAAAA WAAAAAAAAAAAAAAAAAAAA.
Grow some brass balls people. Or we are phucked.
+1000- Palin's the Judas goat. she sold out cheap too bad ..kinda liked the viking image she first had. Sell outs should not be this obvious.