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David Rosenberg: "Hope And A Prayer"

Tyler Durden's picture


From David Rosenberg of Gluskin Sheff

Hope And A Prayer For... End The Gridlock!

Survey data indicate the American people are much less polarised than the
broader political class that purports to represent them.

Francis Fukuyama

Senior Fellow. Stanford's Freeman Spogli Institute

Page 9 of the FT. November 6th, 2012


So we get a brand new start. Either way... it was always going to be either a new president or the old president but with a fresh term in which to contemplate his legacy — a legacy that could hardly be another four years of subpar economic performance.

When I was at John Mauldin's conference last spring. I thought the extremely provocative lunch-time speech by Paul McCulley contained many hidden truths. If that sermon is available anywhere on video. I'd highly recommend you watch it — preferably over a tall glass of single malt.

The one 'hidden truth that truly resonated was Paul's comment that the toughest thing in the world right now is to be bullish.

Maybe I should try harder to see whatever silver linings there are.

For example, we are entering into a period of stable consumer prices that should last at least for a generation. This will help prevent erosion in real household incomes. There is a strong probability that after years of very solid productivity gains in the industrial sector, that the U.S. will experience a manufacturing renaissance of sorts and re-emerge as a global export leader. This process is already in its infancy stages, by the way, aided and abetted by cheap natural gas costs. The move towards frugality and savings will make us less reliant on foreign borrowings and usher in a period of stronger household balance sheets.

As far as what that means for investments, my primary strategy theme has been S.I.R.P. — Safety and Income at a Reasonable Price — because yield works in a deleveraging deflationary cycle. Not only is there substantial excess capacity in the global economy, primarily in the U.S. where the "output gap" is close to 6%, but the more crucial story is the length of time it will take to absorb the excess capacity. It could easily take five years or longer, depending of course on how far down potential GDP growth goes in the intermediate term given reduced labour mobility, lack of capital deepening and higher future tax rates. This is important because what it means is that disinflationary, even deflationary, pressures will be dominant over the next several years. Moreover, with the median age of the boomer population turning 56 this year, there is very strong demographic demand for income. Within the equity market, this implies a focus on squeezing as much income out of the portfolio as possible so a reliance on reliable dividend yield and dividend growth makes perfect sense.

We are in a period of heightened financial market volatility which is typical of a post-bubble deleveraging period when the forces of debt deflation are countered by massive doses of government reflationary polices. This to-and-fro is the reason why in the span of a decade we have seen two parabolic peaks in the equity market (March 2000 and October 2007) and two depressed bottoms (October 2002 and March 2009). For any investor, return of capital is yet again re-emerging as a very important theme, and so is the need to focus on risk- adjusted returns. This in turn means that a strategy that minimizes both the volatility of the portfolio and the correlation with the equity market is completely appropriate — the best way to play this is with true long-short hedge fund strategies.

Gold is also a hedge against financial instability and when the world is awash with over $200 trillion of household, corporate and government liabilities, deflation works against debt servicing capabilities and calls into question the integrity of the global financial system. This is why gold has so much allure today. It is a reflection of investor concern over the monetary stability, and Ben Bernanke and other central bankers only have to step on the printing presses whereas gold miners have to drill over two miles into the ground (gold production is lower today than it was a decade ago — hardly the same can be said for fiat currency). Moreover, gold makes up a mere 0.05% share of global household net worth, and therefore, small incremental allocations into .bullion or gold-type investments can exert a dramatic impact. Gold cannot be printed by central banks and is a monetary metal that is no government's liability. It is malleable and its supply curve is inelastic over the intermediate term. And central banks, who were selling during the higher interest rate times of the 19805 and 1990s, are now reallocating their FX reserves towards gold, especially in Asia.

On the political side of things, let's hope we see the return of the two-party system, that the fringe elements in both the GOP and Democrat camps see their influence diminish, and that the populist anti-business sentiment in Washington subsidies.

If we can only end the gridlock finally and begin the necessary process towards fiscal probity that will of course necessitate shared sacrifice but will also remove the clouds of uncertainty, then households and businesses will be able to plan more effectively for the future and perhaps feel more comfortable in releasing their massive cash hoards into the real economy (that may be little more than a hope and prayer, mind you).

All that said, it is not going to be a new government that necessarily ushers in a whole new era of growth, prosperity and confidence. Even under the revered Ronald Reagan, the period of secular growth and bull market activity took two years to unfold — it didn't happen right away. It took the inflationary excesses to be wrung out of the system and concrete signs that the executive and legislative branches could work together to usher in true fiscal reform — and to get blue Democrats on board with reduced top marginal tax rates.

Hope isn't generally a very useful strategy, but there is reason to be hopeful nonetheless. The critical issue is going to be how we get Washington to move back to the middle where it belongs. This requires bipartisanship which in turn requires leadership. Reagan's whole eight-year tenure in the 1980s occurred with the House being in Democrat hands the whole way through. Bill Clinton's second term coincided with both the House and Senate controlled by the Republicans.

It can be done!

The most fascinating article I have read in recent weeks was on page B1 of yesterday's NYT, titled The Election Won't Solve All Puzzles. The title just about says it all, but some heft was added as an economic report jointly published by Stanford and University of Chicago was cited, with this conclusion:

The claim is that businesses and households are uncertain about future taxes, spending levels, regulations, health care reform and interest rates. in turn, this uncertainty leads them to postpone spending on investment and consumption goods and to slow hiring, impeding the recovery", and added that "current levels of economic policy uncertainty are at extremely elevated levels compared to recent history.

With this in mind, the best that can happen is a Reaganesque and Clintonesque return to compromise on the road to fiscal reform.  It will be painful. We all know it will be painful. But all we need is the roadmap to reform so at least we can plan for the future — removing the cloud of policy uncertainty alone will be empowering for the private sector (to this end, I also recommend a read of Business Craves Fresh Certainty on page 3 of yesterday's FT).

In the final analysis, it is up to the business leaders and innovators to step up to the plate. They are the ones that have always been responsible for bringing the economy off the bottom, and taking us over the top. Boy, a new "killer app- or some major innovation that manages to spur sustainable growth in multi-factor productivity would sure be nice to bring me to where I was back in 1987 when I started in this business.

A perma-bull!

Now how good would that be? A sustained decline in oil prices that is induced by new supplies as opposed to demand destruction would act as a he facto tax cut. Structural economic reforms in the world's "surplus saving" countries like China, India and Germany that stimulate their domestic demand, and hence bolster U.S. exports and reduce the global reliance on the U.S. as the consumer of last resort, would be a huge plus. Signs that the debt deleveraging cycle has run its course. Progress in terms of working our way through the domestic balance sheet repair process among households and businesses, though history shows that this is not merely -a two or three year adjustment following a credit bubble and ensuing financial crisis on the scale that we have just endured.


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Wed, 11/07/2012 - 17:01 | 2957930 fonzannoon
fonzannoon's picture

It will be painful. We all know it will be painful

Which is why it won't happen.

Wed, 11/07/2012 - 17:04 | 2957942's picture

Why would we want those who have caused our woes to work even more diligently to increase them? Madness.

Hey fonz, you're back. How's it going?

Wed, 11/07/2012 - 17:09 | 2957965 knukles
knukles's picture

What woes?
I gots my Obama phone, EBT card, section 8 housing, flat screen and Charlie Rangel representin' me.

Whatz za probem?

I have my strong representation in the Congress to ensure that America is kept free.
I'll build whatever weaponry needed.

What problem?

We built it and they have come, the energy solution has been created in the form of ethanol.
I have my subsidies to keep America Energy Independent.

What problem?

And on and on it goes, ad infinitum, just like the money supply.

Wed, 11/07/2012 - 17:11 | 2957993 malikai
malikai's picture

"For example, we are entering into a period of stable consumer prices that should last at least for a generation."

WTF? Is it april fools already?

This is a joke, right?

Wed, 11/07/2012 - 17:17 | 2958025 PLira
PLira's picture

Yeah, I stopped reading at that part. Stable if it's Flat Screens or other silly crap you don't need.


Wed, 11/07/2012 - 17:37 | 2958161 JLee2027
JLee2027's picture

Thank you. I stopped reading it too after that. I had to look at it several times, thinking I had missed something. It's an idiotic article.

Wed, 11/07/2012 - 18:39 | 2958451 Manthong
Manthong's picture

What’s the BFD?

All we need to do is cut back a trillion or so a year in expenditures and grow GDP  a few per cent.

That should be a cake walk especially with all of the Obama voters stepping up to do their fair share.

Wed, 11/07/2012 - 17:23 | 2958040 akak
akak's picture

If you thought THAT was funny, he followed up with this doozy:

"This is important because what it means is that disinflationary, even deflationary, pressures will be dominant over the next several years."

Yeah, and inflation is only 1% and the real rate of unemployment is only 7.9%, right?

Tyler, why are you posting such obviously idiotic pro-Establishment bilge?


Wed, 11/07/2012 - 17:45 | 2958194 marathonman
marathonman's picture

Good luck with all that Mr. Rosenberg.

Wed, 11/07/2012 - 17:58 | 2958247 malikai
malikai's picture

It's got to be in the top ten of the most twisted and bizarre articles I've ever read.

Normally this guy makes some sense. What the hell happened?

Wed, 11/07/2012 - 17:24 | 2958076 HappyCamper
HappyCamper's picture

If we've told you once we've told you a hundred times.  There is no inflation.  You want proof?  This year's IPod is better than last year's IPod, but it doesn't cost more.

See?  Now please excuse me while I go take out a PayDay loan so I can go buy some groceries and booze.

Wed, 11/07/2012 - 17:46 | 2958197 malikai
malikai's picture

I think you figured it out. This guy eats iPads.

Everyone show your kids this article and explain to them that this is what happens when you eat an iPad.

Wed, 11/07/2012 - 18:33 | 2958428 HappyCamper
HappyCamper's picture

Yum, there's nothing better in the morning than crunching cadmium and lead. 

Wed, 11/07/2012 - 19:21 | 2958593 Offthebeach
Offthebeach's picture

Truck stops and rest areas have more, younger women offering at lower prices.( I don't know chicken prices. Memo to call Bwarny Fwanks office. )
Young men are better quality to be used as foder to keep the ME Arab Spring, Fed induced food revolutions controlled.

So young men and women can be had at lower prices, just like IPads.

Wed, 11/07/2012 - 17:31 | 2958118 Urban Redneck
Urban Redneck's picture

Perhaps someone consumed a bit too much alcohol during last night's drinking games-

Wed, 11/07/2012 - 17:48 | 2958204 northman
northman's picture

I also stopped reading at this point. This is not something i'd expect from Rosy. Perhaps he is forgetting how the exponential function works? It's x squared man! not square root x!

Wed, 11/07/2012 - 17:59 | 2958250 pirea
pirea's picture

I do not know why so many listen to this bozzo, and consider him as an advisor. 

Wed, 11/07/2012 - 18:45 | 2958478 L0nG-DoNg-SiLv3R
L0nG-DoNg-SiLv3R's picture

Do food stamps buy ammo...?

Wed, 11/07/2012 - 17:11 | 2957991 r101958
r101958's picture

The problem is that the "the middle where it belongs" has been moving relentlessly leftward, inch by inch, for the last 30 years and so it is now nowhere near the 'middle' of 30 years ago.

Wed, 11/07/2012 - 17:19 | 2958034's picture

The middle we're moving toward looks like Unimatrix One.

Wed, 11/07/2012 - 17:12 | 2957994 fonzannoon
fonzannoon's picture

I'm good thanks for asking. Have everything I needed. This was the best learning experience I could have ever had. Especially now that assholeface won. I am convinced the currency is toast. Now I had a dry run as to what happens when things break down. If I am not ready next time it's my fault.

Wed, 11/07/2012 - 17:17 | 2958027's picture

John Williams said hyperinflation by 2014. And he's got the numbers. Glad you're well.

Wed, 11/07/2012 - 17:05 | 2957957 macholatte
macholatte's picture

On the political side of things, let's hope we see the return of the two-party system, that the fringe elements in both the GOP and Democrat camps see their influence diminish, and that the populist anti-business sentiment in Washington subsidies.


Lipstick on a pig.

Wed, 11/07/2012 - 17:14 | 2958007 Gully Foyle
Gully Foyle's picture

Once again for your edumacation

Where does Obama go now? The House remains firmly in the hands of militant right-wingers. The Senate will continue to be paralyzed by the filibuster-happy minority and a spineless Democratic majority. Stalemate? Probably not. Second terms are almost always about polishing a presidential legacy, already being harped upon by the withered likes of Tom Brokaw.  Obama will be desperate for some signature legislative victories.

So what to expect from Obama? An aggressive new plan to combat climate change? A real federal jobs program aimed at full-employment? Liberalization of immigration policies? Decriminalization of marijuana? Deep cuts in the defense budget? Rollback of the Patriot Act? A ban on assassinations by drones? Movement toward single-payer health care? Sure.

No. Clinton will be his template:  the Clinton who pushed for the elimination of the Glass-Steagall Act, the gutting of welfare and the war on Serbia.  Obama will pursue bi-partisanship with a vengeance. Obama has always been a committed neoliberal, a closeted agent of austerity. Now he no longer needs to even play-act for his political base. He can openly betray their interests.

In a few months, the president will reach out to his old pal Paul Ryan to take a stroll across that tragic terrain known as the common ground in pursuit of those twin obsessions of the elites: deficit reduction and entitlement reform. In the name of political conciliation, Obama will piously move to slash away at Social Security, Medicare, Medicaid and the last frail fabrics of the federal social welfare programs.  These savage cuts will be enthusiastically cheered by the mainstream press, Wall Street and the Washington establishment.

Wed, 11/07/2012 - 17:21 | 2958048's picture

+1 That was an incredibly lucid statement for you. No offense.

Wed, 11/07/2012 - 17:25 | 2958083 fonzannoon
fonzannoon's picture

LOL I only read it because you apparently did.

Wed, 11/07/2012 - 17:39 | 2958167 divide_by_zero
divide_by_zero's picture

Soros will be the more likely template.

Wed, 11/07/2012 - 17:17 | 2958028 FL_Conservative
FL_Conservative's picture

Please explain to me exactly what PART of fucking "center" we're supposed to move towards.  You mean the "center" part that flushes our Constitution down the toilet?   Please enlighten those with a sub-liberal intellect.

Wed, 11/07/2012 - 17:22 | 2958063's picture

Return to center, address unknown...

Wed, 11/07/2012 - 17:40 | 2958169 dbTX
dbTX's picture

Have you ever seen a threeson try to tango?

Thu, 11/08/2012 - 01:32 | 2959521 glenlloyd
glenlloyd's picture

This reads like a wish list for Christmas...nice, but unaffordable.

I doubt any of the things he's wishing for happens.

Wed, 11/07/2012 - 17:01 | 2957934 Encroaching Darkness
Encroaching Darkness's picture

"For example, we are entering into a period of stable consumer prices that should last at least for a generation."

Nurse, bring the long-sleeved white coat and 20 cc of Thorazine, the patient is hallucinating.....

Wed, 11/07/2012 - 17:07 | 2957963 CommunityStandard
CommunityStandard's picture

I was just going to post something like this.  Seriously, that quote.  I can't even.  I just can't.

Wed, 11/07/2012 - 17:13 | 2957998 odatruf
odatruf's picture

I am with you both. If you squint, you can almost read that Rosenberg is saying that this is a delusion that is come to by looking very hard for hard to see (nonexistent) silver linings. But honestly I am not sure.

Wed, 11/07/2012 - 17:19 | 2958033 slaughterer
slaughterer's picture

This Rosenberg piece seems like something a person would write after nearly dying through a hard drug overdose and going through 6 independent detox treatments and maybe a long stay in a S. Cal. psych ward.    Has his wife recently divorced him?  Does he need cuddling?

Wed, 11/07/2012 - 19:01 | 2958530 SafelyGraze
SafelyGraze's picture

great article!

very uplifting!

 and a good source of quotes!

brand new start. 
a fresh term 
the toughest thing in the world right now is to be bullish.
try harder to see whatever silver linings there are.
we are entering into a period of stable consumer prices that should last at least for a generation. 
manufacturing renaissance
cheap natural gas
stronger household balance sheets
reliance on reliable dividend yield and dividend growth makes perfect sense
shared sacrifice
It can be done!

vorward, citizens!

Wed, 11/07/2012 - 17:09 | 2957982 Everybodys All ...
Everybodys All American's picture

Some of these people can't be helped they are Obama zombies.

Wed, 11/07/2012 - 17:13 | 2957996 malikai
malikai's picture

Just saw this after posting mine above. It's a joke right?

Wed, 11/07/2012 - 17:42 | 2958177 Orly
Orly's picture

And why?  Because the nurse who just got laid off from her $34/hr. job had to take a similar position across the street for $28/hr.  Same with the MRI tech and the Nuclear Medicine Tech...

The pipefitter...

The machinist...

The grocery manager...

and on and on and on.

Stable consumer prices are okay, as long as the "wage market" can keep up.  News Flash: It doesn't!

Wed, 11/07/2012 - 17:57 | 2958241 malikai
malikai's picture

I've been trying to put myself in an alternate world where real disposable income declines and it is called 'deflation'. It still doesn't make sense. I can't make sense of it no matter how i try and alter my perspective.

Wed, 11/07/2012 - 17:04 | 2957937 knukles
knukles's picture

Only problem is that each side's gonna point at the other and say that it's them's gotta compromise.

The R's have no incentive to make this work, at all.
And the D's are goona take this as a free ticket to endless government created wealth... via higher taxes and more money printing.

Good fucking luck
This is the worst possible outcome imaginable.

After all, in another 4 years the phrase will turn from "Bush's Fault" to "Obama's Fault."

Wed, 11/07/2012 - 17:09 | 2957978 fonzannoon
fonzannoon's picture

knukles I had at least 3 people over 50 call me today and gloat and say all exasperated "WELL....We have 4 more years of this guy....and its all your (generation's) fault!!"

To each one I asked why it is my generations fault. The response is the same "You guys all have your heads up your asses and voted him in!" So I asked them if they give any credit to their parents for not raising them to have their heads up their asses? Of course they tried to change the subject.

My guess is everyone under X age just gets chucked under the bus. Which is fine by me because I was not planning on any of this shit anyway. But it will rip the social fabric apart along generational lines. 

Wed, 11/07/2012 - 17:14 | 2958005 malikai
malikai's picture

If it keeps going this way it's going to blowback and then we'll have a real class war on our hands..

Wed, 11/07/2012 - 17:22 | 2958059 knukles
knukles's picture

I'm with you, Fonz.
The divisiveness, blame, anger and celebratory arrogance being displayed is beyond comprehension.
There has been little if any demonstration of maturity, civility or common sense.
The people who've been placed in orifice sincerely believe that through higher taxes and printing money, they can build a wondrous paradise.
Unfortunately, it is bereft of morality, ethics and any sense of reason.

While I didn't expect too much of a change (altho I'd hoped for it) the biggest tell is the group here at ZH.  Most sincerely believe (if they're truthful) that either side (red or blue) of the One Big Leviathan Party are really one and the same, but the emotions shown over the past few days decry that premise, at least in part.

Another 4 years of higher taxes, increased government spending and expansion, further encroachment upon the Naturally Given Rights of Man, increased liberalistic degradation of society's morals and ethical foundations....
We are indeed facing the maw of the atheistic statist liberal monolith, which in the end will likely necessitate greater curtailments to individual freedoms in order to maintain a sens of status quo, as has been happening.
Orwell was prescient.
This, in my mind's eye, is what I would imagine as a path to serfdom.  A complete breakdown in the social fabric of the country.  Unfortunately, these people just don't get the reality:

Math, the New Inconvenient TruthTM

Wed, 11/07/2012 - 17:28 | 2958100 fonzannoon
fonzannoon's picture

Damn right. I could not believe how many jumped to one side of the boat or the other as things came down to the wire. I was floored.

Wed, 11/07/2012 - 19:27 | 2958622 Offthebeach
Offthebeach's picture

Leno asked the president a viewer’s question about what subjects he struggles with when he helps his daughters with homework. ”Well, the math stuff I was fine with up until about seventh grade,” explained Obama. “But Malia is now a freshman in high school and —I’m pretty lost.”

Wed, 11/07/2012 - 17:38 | 2958165 giddy
giddy's picture

What do you expect from a presidential campaign waged on dividing and conquering by interest groups?  The problem with boomers is they raised their kids with the expectation that life was easy... that somehow the accumulation of "stuff" is important or infinite.  The purpose of life isn't "ease" but "struggle".  Without the struggle we devolve into lumps of glob. So cheer up... maybe your grandchildren will be strong and manly.

Wed, 11/07/2012 - 23:01 | 2959177 chubbar
chubbar's picture

Well Fonzannoon, here's the conflict I see in your position (as I understand it). I basically agree with your general premise. However, aren't you one of the "blame the baby boomer" guys around here? If not, then I apologize and please disregard my following comments.

Here is the discrepancy with your position as I see it. I'm a baby boomer who was 14 when Nixon took us off the gold standard in 71. I got to experience what the austrian economists describe as the inflationary period, where life is pretty good. That is to say that with the exception of the few recessions that were cured by printing, I got to live 30+ years experiencing the constant inflation and opportunities that are presented when money is poured into an economy and malinvestment occurs along side wage gains and lifestyle improvements. During that time, several presidential elections occured, lots of senate elections occured and many debates happened concerning SS, other entitlement programs, military spending, etc. Not many folks were really aware of what the fuck was going on in the big scheme of monetary policy and while the good times were rolling, not many cared. I think that is human nature but I do agree that thinking people should have questioned what was going on.

Now we get to the present time. According to your theory, everyone over 18 should be culpable going forward because they can vote, at least according to the logic of anyone claiming the baby boomers should be held responsible for the past 30+ years of congressional stupidity. The failure of that logic is that you personally now find that you in fact don't have a say in gov't, regardless of your views and the fact that you (and many of those your age) now vote. We didn't have much of a say either at your age and going forward through the years, but that doesnt' seem to occur to you. How does it feel to know that the country is in the hands of the bankers and nothing you say or do will change the tragectory of the nation? We have never had a choice that mattered (presidentially) with the possible exception of Ron Paul, whom the MSM promptly dismissed. The baby boomers only had the timing of their birth, in relation to this monetary cycle, to owe to their widespread comfort (a generalization) not some sort of natural progression or superior ability. We are now in the downcycle, eveyone gets to participate. With the possible exception of the elites. I wouldn't spend too much time blaming anyone other than the folks who constructed this debacle.

The folks calling you are just reminding you that you don't get to call them out for the failings of the last 30+ years without owning the failure of the next several years since you and your peers can now vote. You are now the same age and have the same power as the generation you blame for the mess we are in.

Welcome to the party!

Wed, 11/07/2012 - 17:15 | 2958017 Gully Foyle
Gully Foyle's picture


So Biden is Gore in four?

Wed, 11/07/2012 - 17:26 | 2958088 knukles
knukles's picture

Oh Jesus God...
Please no.

And the Democrats were worried about Palin.

A number of folks I know (of both persuasions politically) have of late ruminated upon whether the man is unstable.  (Just the messenger)

Wed, 11/07/2012 - 17:21 | 2958051 odatruf
odatruf's picture

Knuckles - I disagree that is the worst possible outcome. All that has to happen for things to start going rights is nothing. As in: let the fiscal cliff occur.  The election results make that more likely than other outcomes would have.

Let the unemployment extensions stop, the SS tax holiday stop, the sequester take effect, the Bush tax cuts expire and on and on.  Let it happen and we will not only see a slower rate of spending growth but we will see the year after year deficits drop by 2/3rd. Yes it will cause pain and discomfort, but it won't be the end of the world for anyone who isn't grossly rent seeking.

Then, when gridlock again carries the day sometime late next spring as we bump into the debt limit again, we can get further across the board spending cuts. At that point, unless the House Tea Party Caucus caves, then the government will have the borrowing band-aid ripped off at once and we will be forced to have revenue equal spending. That won't mean that the $16 + trillion debt is getting paid down, only that it isn't being added to.

So that's my prayer: for nothing.

Wed, 11/07/2012 - 17:04 | 2957947 Confundido
Confundido's picture

I am really confundido...WTF....Was David just being David or was he being ironic? Can some one please be honest enough to tell his clients that the US has peaked? 

Wed, 11/07/2012 - 17:04 | 2957948 Zgangsta
Zgangsta's picture

C'mon America!  If freakin' Libya can liberate itself, why can't you??

Wed, 11/07/2012 - 17:04 | 2957950 ghostfaceinvestah
ghostfaceinvestah's picture

Wow, is this guy 100% wrong all the time?  He totally failed to understand what massive money printing would do back in 2009, and he misses it completely now, more than three years later.

Wed, 11/07/2012 - 17:14 | 2958002 Ineverslice
Ineverslice's picture


Yes. 100%.

Give up Rosie.

Wed, 11/07/2012 - 17:04 | 2957952 Induced Coma
Induced Coma's picture

Mittrack Obamony Won.

America Lost. 


Its not about the next 4 years - its about the entire future of a country that fails to understand: you are not the world police, your banks are not TBTF, your country is not at war with Terrorists, drugs, crime, etc. When it is too late, you will realize that the paradigm shift that requires you to critically think about yourself and your country would have saved you.



Wed, 11/07/2012 - 17:04 | 2957953 Motorhead
Motorhead's picture

Remember when the GOP had both houses of Congreß....lotta good that did.

Wed, 11/07/2012 - 17:06 | 2957966 Everybodys All ...
Everybodys All American's picture

I remember when Reid and Pelosi were majority leaders just two short years ago.

Wed, 11/07/2012 - 17:22 | 2958064 odatruf
odatruf's picture

With the 60 vote super majority in the Senate, no less.

Wed, 11/07/2012 - 17:05 | 2957959 Racer
Racer's picture

Hope and prayer didn't work the last 4 years so why would it now...

Wed, 11/07/2012 - 17:27 | 2958095 knukles
knukles's picture

"Hope" is not a good plan.

Wed, 11/07/2012 - 17:05 | 2957960 HappyCamper
HappyCamper's picture

What planet is David living on?  Obama and Soros are not interested in compromise.

Wed, 11/07/2012 - 17:05 | 2957961 HappyCamper
HappyCamper's picture

What planet is David living on?  Obama and Soros are not interested in compromise.

Wed, 11/07/2012 - 17:07 | 2957971 Hedgetard55
Hedgetard55's picture

Planet Shit for Brains.

Wed, 11/07/2012 - 17:08 | 2957972 Everybodys All ...
Everybodys All American's picture

Obama and his ego are far too big for compromise to begin with and this election just made it even bigger.

Wed, 11/07/2012 - 17:11 | 2957992 Unprepared
Unprepared's picture

Shut up Dave, I hope the hangover did this to you.

Wed, 11/07/2012 - 17:14 | 2958004 adr
adr's picture

So in 1987, 1999, and 2007 you were a permabull.

Wow, how did that work out for you?

Wed, 11/07/2012 - 17:15 | 2958013 Herdee
Herdee's picture

Is the fiscal cliff a downpayment on starving the biggest war machine in history?Start beating the swords into plowshares.God forbid we'd start towards world peace.What a dreamer I've become...

Wed, 11/07/2012 - 17:24 | 2958074 odatruf
odatruf's picture

If it happens, the DoD takes a huge funding whack. All the better, I say.  Just don't stand for these deals being undone.

Remember, the fiscal cliff is a feature, not a bug.


Wed, 11/07/2012 - 17:15 | 2958014 rustymason
rustymason's picture

Chicken Soup for the Idiot Soul. Thanks, Rosenburg, but could you squeeze a couple dozen more meaningless cliches in there? My hopey-change tank is running a little low.

Wed, 11/07/2012 - 17:20 | 2958015 tickhound
tickhound's picture

"On the political side of things, let's hope we see the return of the two-party system, that the fringe elements in both the GOP and Democrat camps see their influence diminish, and that the populist anti-business sentiment in Washington subsidies."

Too many misrepresentations in this paragraph to address.  The entire article is a POS. 

Wed, 11/07/2012 - 17:17 | 2958024 reason_1
reason_1's picture

And there isn't a chance in the world of that happening with an ideology like Obama.

Wed, 11/07/2012 - 17:22 | 2958055 divide_by_zero
divide_by_zero's picture

Appparently Rosenberg is unaware that one of the components of the Obama "Stimulus Bill" was the complete unwinding of the welfare reforms enacted under the bipartisan Clinton/Republican years(Obama has since used EO to further erode welfare reform work requirements). Good luck getting that done again or unwinding the loosening of SNAP and SS disability eligibility the last 4 years.

Draconian EPA coal regulations and the worst aspects of Obamacare start kicking in shortly.

Wed, 11/07/2012 - 17:24 | 2958079 EZYJET PILOT
EZYJET PILOT's picture

Rosenburg=banker shill

Wed, 11/07/2012 - 17:35 | 2958144 Big Ben
Big Ben's picture

With this in mind, the best that can happen is a Reaganesque and Clintonesque return to compromise on the road to fiscal reform.  It will be painful. We all know it will be painful.

Dream on! Last night's vote was a vote to continue the course of the last four years. There will be lots more spending and borrowing. The government will continue to distribute goodies to everyone. And the only tax increases will be on the rich. However, the rich are very good at avoiding taxes (that is one of the reasons why they are rich) so these new taxes will yield much less revenue than expected. We will party like it's 2009. Hangovers are impossible now. Ben Bernanke says so.

Wed, 11/07/2012 - 17:36 | 2958148 Invisible Hand
Invisible Hand's picture

For your edification, I have attached a link to an old poem by R. Kipling called "The Gods of the Storybook Headings."

Personally, I think we will be meeting these guys soon.

You have to paste this into your browser, I believe but it is worth a little effort.

PS.  I don't know what the author is smoking but it might make the coming disaster easier to take if I could get some.

Wed, 11/07/2012 - 17:58 | 2958244 Orly
Orly's picture

Well, he wasn't smoking Hopium, that's for sure.

You're right, to read it is well worth the effort.  I am only just beginning to appreciate Kipling.

Many thanks.



Wed, 11/07/2012 - 17:46 | 2958191 CrabGrassKila
CrabGrassKila's picture

I do not believe Clinton nor Reagan ever referred to the white man as being: Colonialists

Hmmmm.... Nice try but.... Not!!!!! 

Wed, 11/07/2012 - 17:59 | 2958248 fuu
fuu's picture


Wed, 11/07/2012 - 18:09 | 2958291 markar
markar's picture

No hope, no change and certainly no reason for optimism. The days of Reagan and Clinton bi partisanship are gone--victims of the complete corp. takeover and regulatory capture of govt. The house Repubs will continue to obstruct,the President will just sign executive orders to get what he wants while the feckless Dem Senate sits on the sidelines with their thumbs up their asses.

Wed, 11/07/2012 - 18:21 | 2958364 BudFox2012
BudFox2012's picture

What is this drivel?  Sorry, but the shit storm that is about to hit us has been building for 40 years.  A little compromise will do nothing at this point.

And let's be honest, the only way this current crop of cretin politicians will work together is when they are barricading offices together in DC when the mob comes with pitch forks and torches...

Wed, 11/07/2012 - 18:32 | 2958422 SilverFish
SilverFish's picture

You people are fools. We have the tools in our posession to fix this problem right now.


1. Obama gives everyone an Obamafone, free of course.

2. Once we find out how many we need, call China to manufacture them for us.

3. Borrow money from Japan to pay for said phones.

4. Miracle happens.

5. Profit.


Its just that simple.

Wed, 11/07/2012 - 18:40 | 2958457 falak pema
falak pema's picture

Hope and prayer....I stopped right it about the economy, not about lynching an innocent.

But there is less poetry in economy, than there is in seeing a man swing from a tree, even if he be not innocent of supposed felony.

Hope and prayer for the economy sounds more like grope and despair.

Wed, 11/07/2012 - 21:48 | 2958986 Orly
Orly's picture

But there is less poetry

In economy,

Than there is in seeing a man swing from a tree,

Even if he be

Not innocent of suppos'd felony.


There, fixed it for ya!  (Always wanted to partake in the ZH-speak...)

Very nice, falak!


Wed, 11/07/2012 - 18:51 | 2958493 Burticus
Burticus's picture

"...get Washington to move back to the middle where it belongs."

Get far/extreme left statists to voluntarily gravitate back to the middle, when they profit from the status quo and face political suicide for even whispering to their favorite hooker about cutting the scope and size of gubmint?


Wed, 11/07/2012 - 19:00 | 2958524 redd_green
redd_green's picture

Tyler, Tyler, Tyler.    Reagan, fiscal reform?  Boooo.  You absolutely must be kidding.   The only thing that came directly from the Reagan administration was wild, runaway deficit spending.   that's it,   Go back and read your history again.    As ZH has written many times:   the economy is mostly affected by the actions of the Fedral Reserve.   Not the president, or congress or senate.  


'Give me control of a nation's money and I care not who makes the laws.' - Mayer Amschel Rothschild

Thu, 11/08/2012 - 04:56 | 2959684 Notarocketscientist
Notarocketscientist's picture



Now We Can Stop Paying Attention

Two years, billions of dollars worth of political ads, and a nearly infinite number of platitudes and lies later, the election is finally over and we’re…back where we started, with a divided government run by the same people, likely to pursue the same policies and spend a similar amount of time in gridlock. Not all that surprising when you think about it, since the country is evenly split between two outmoded but antithetical worldviews.

What is surprising is that anyone thought the outcome of this election mattered in the first place. The sad reality is that the institutions that dominate the system no longer care who is “in charge.” And all it takes to illustrate this point is a quick glance at the following chart of America’s total debt, which is the sum of federal, state, and local borrowing, home mortgages, credit cards, student loans, business loans, etc.


Note that between 1980 and 2008 it rose steadily under both republicans and democrats. Even during the supposedly fiscally responsible Clinton years (1990 – 1998), while government debt fell a bit, total debt soared. Why? Because there are two ways for a government to fund its overspending: The first is to borrow, as happened in the 1980s under Ronald Reagan. The second is to convince individuals and businesses to do the borrowing and to buy stuff with the proceeds, thus producing taxable income that helps balance the government’s books. Either way, systemic debt goes up.

In the 1990s the Clinton administration chose the second strategy, using easy money to fuel a housing boom and tech stock bubble. The result was a torrent of borrowing, spending, and IPOs, which boosted federal tax revenue and produced a few years of balanced budgets. The government – for those who were focused only on the public debt – looked well-run. But to the tiny handful of Austrian economists out there, the fact that total debt was soaring, and that the average loan was becoming more and more speculative, led to the conclusion that we were creating a debt bubble that could only end with an historic bust.

That bust came in 2000, and republican George W. Bush was forced by its magnitude to leverage both the public and private sectors, producing a housing bubble combined with record government deficits. That bubble burst in 2008, leaving incoming democrat president Obama with a traumatized private sector incapable of leveraging itself further. He saw no option but to run deficits that a generation ago would have seemed physically impossible.

The system, in short, demands ever-increasing amounts of debt and couldn’t care less whether republicans or democrats provide it.

Someday the markets will put a stop to the borrowing, but until then it really doesn’t matter who we elect or what they promise. Debt, after it reaches a certain level, is all that matters – not immigration policy or health care or marginal tax rates or short term interest rates or gay marriage. All are irrelevant compared to the institutional momentum of increasing leverage.

Total debt is now about $175,000 per citizen, or $700,000 per family of four. The average family’s income is something like $50,000, so it’s clear that we’ve long since passed the point where a return to a 1980s version of placid normality is a viable possibility for the country, any more than it would be for a typical family that woke up to find itself $700,000 in debt. Going forward the choice is to inflate or die.

So Why Bother Watching?
This story is at least a decade old, and it’s getting tiresome for all involved. For the majority who expect positive change from each election the disappointment must be exhausting, as each inevitable compromise moves their latest hero one step closer to impotence. For the small number of people who see the underlying truth, this show is even harder to watch because the obvious, inevitable ending just won’t come. The zombie that should have died for good after the 2000 tech stock crash keeps shambling along, wreaking havoc or boredom, depending on whether you’re in its path or watching from a safe distance.

The solution? Accept that time spent obsessing over a process with a predictable result but unpredictable schedule is time wasted. So just stop watching. Make the right – and by now obvious – financial and lifestyle choices and then tune out. Turn off the TV and stop reading the business and political sections of the paper. Use the resulting time to develop yourself and cultivate your community. You know what’s going to happen, more or less: A decade hence your gold will be worth a lot more and everything else quite a bit less. And you know your friends will suffer and need your help. So prepare for the things that you can predict.

Once the markets stop providing unlimited leverage and the system crashes for good, then tune back in and add your voice and your capital to the debate over what to build in its place.


Wed, 11/07/2012 - 19:01 | 2958529 ekm
ekm's picture

I have never ever seen Mr Rosenberg be so wrong, utterly wrong. Very unusual.


It cannot be done. Nothing can be done.

There is only one solution: Debt forgiveness, which would mean closure  of at least 3 of 5 big US banks.

Only debt forgiveness, nothing else works.

Wed, 11/07/2012 - 20:42 | 2958791 MikeMcGspot
MikeMcGspot's picture

In my book "Hope" is a framing attitude, less to do with how you wish things may then be waiting for your dreams to come true, more like how you perceive and shape yourself with internal dialog leaning towards the belief that “I have the power to shape this world, act accordingly, learn and adapt.”

TBTB/TBTI – The Powers That Be divided by the Power that IS.

A hallmark of slaves is bowing down your spirit in acceptance to the delusion of powers that be while failing to recognize each moment the power of self here now in the present. The Power That Is.

Sandy came to the US East Coast kicked the crap out of it, a Nor’easter is bearing down on them, many without heat or power yet, as the temperatures plummet I wonder: how many water pipes will be busting all over the place, what risk is this to the water supply? How many more weak trees in saturated ground will fall over power lines as 70 miles per hour winds blow, causing more power outage for so many people.

I wish for these people: that it all misses them and if not that hope is not a wish but an attitude of a Power That Is not a Power That Be.

Life – live it. Hope.

Thu, 11/08/2012 - 00:33 | 2959434 oldman
oldman's picture


This is exactly why old men do not give advice---we are out of the loop.

'This time' may be or not be 'different' ----i'm too old to have a word on this   om

Thu, 11/08/2012 - 03:06 | 2959612 ItsDanger
ItsDanger's picture

I've got some bad news for you.  Compromise has created this mess.

Do NOT follow this link or you will be banned from the site!