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JP Morgan Previews Obama's Tomorrow Speech: "We Anticipate That Little Will Come Out Of It"

Tyler Durden's picture





 

JP Morgan, whose Banker In Chief has not spared harsh words in the past to describe the POTUS, has released its just as uncompromising assessment of tomorrow's Obama speech which if predictions are correct, will be such a load of hot air, that the mere non-news factor alone should send the market into a volumetric coma on Friday, hence pushing ES limit up easy by close of Friday. Michael Feroli's take: "Cynically, one could say this is merely pushing back the fiscal drag past the time of the next election. More constructively, one could argue that this is pushing back the fiscal drag to a point in time when household sector balance sheet repair has hopefully progressed enough that the private sector can generate self-sustaining growth momentum. Either way, the Republicans in the House are unlikely to be easily impressed by the President's arguments. None of the major programs proposed has received much support from Republicans, and if any were eventually passed it would probably only be after bruising negotiations later in the year. All in all, we anticipate that little will come out of tomorrow's speech to make us re-think the near-term outlook." The outlook, in question and presented previously, being one that jives with the S&P at 900, and certainly not at 1200.

From JP Morgan's Michael Feroli

Preview of tomorrow's policy talks

 

Tomorrow will bring two closely-followed speeches, one by Fed Chairman Bernanke, the other by President Obama. We expect the former will create much less news than the latter. Bernanke's 1:30pm address to the Minnesota Economics Club will discuss the economic outlook but likely deliver few clues about the actions to be considered at the upcoming two-day FOMC meeting. The shift to a two-day meeting to air views could represent an attempt to re-affirm a sense of collegiality into the deliberations. Any strong signalling of a pre-ordained policy preference in tomorrow's speech could be seen as front-running the committee and at odds with the spirit of collegiality.

 

The President's speech at 7pm, before the Packers-Saints game, will be much more explicit about policy preferences, even as he is much less likely than Bernanke to see all of his preferences realized. Media reports indicate that the President will likely petition Congress for an additional $200-$300 billion of tax cuts and spending increases. The centerpiece of this will almost surely be an extension of the one-year, 2%-point reduction in payroll withholding taxes. With a price tag of around $110-$120 billion, this tax cut could represent as much as half of the dollar value of the President's proposals. Another significant proposal will likely be an extension of emergency unemployment benefits, which, like the payroll tax cut, is scheduled to lapse in January of next year. More generally, we see the aim of the proposed initiatives as largely to offset the impending fiscal drag scheduled for next year. As the table below shows, the expiration of the two above-mentioned programs, as well as the gradual phase-out of other temporary stimulus measures, implies a narrowing of the structural (i.e. non-cyclical) deficit of around $350 billion next year. Our estimates put the implied drag on GDP growth at over 1.5%. If the President were to get all he wanted, this would offset almost all of that drag.

 

Cynically, one could say this is merely pushing back the fiscal drag past the time of the next election. More constructively, one could argue that this is pushing back the fiscal drag to a point in time when household sector balance sheet repair has hopefully progressed enough that the private sector can generate self-sustaining growth momentum. Either way, the Republicans in the House are unlikely to be easily impressed by the President's arguments. None of the major programs proposed has received much support from Republicans, and if any were eventually passed it would probably only be after bruising negotiations later in the year. All in all, we anticipate that little will come out of tomorrow's speech to make us re-think the near-term outlook.

 


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Wed, 09/07/2011 - 17:19 | Link to Comment JW n FL
JW n FL's picture

 

 

A former vice president for Citigroup pleaded guilty Tuesday to embezzling more than $22 million from the company and funneling the money to his personal bank account.

http://www.banktech.com/risk-management/231600907?cid=nl_bnk_daily

 

Keiser Report: Fake Assets (E180) http://www.youtube.com/watch?v=lgVBWQ99IgM&feature

 

"We the People" should Bow to our Owners! JP Morgan and friends!!

Wed, 09/07/2011 - 17:35 | Link to Comment bankruptcylawyer
bankruptcylawyer's picture

yea but he was  a jew so it's really just the jews fault, not bankers.

Wed, 09/07/2011 - 18:32 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

.

Wed, 09/07/2011 - 18:36 | Link to Comment --Freedom--
--Freedom--'s picture

And to stimulate the ailing financial sector, he should propose a policy banning withdrawals at banks.

Wed, 09/07/2011 - 18:11 | Link to Comment disabledvet
disabledvet's picture

First rule of embezzlement: "pay yourself."

Wed, 09/07/2011 - 17:19 | Link to Comment kito
kito's picture

more punting before the football game actually starts. wonderful!!!!!!!!!!!!

Wed, 09/07/2011 - 22:18 | Link to Comment trav7777
trav7777's picture

Little has come out of the entire Obama presidency, why should we expect different now?

Thu, 09/08/2011 - 02:14 | Link to Comment StychoKiller
StychoKiller's picture

The Decepticrats and Obamatron REALLY expect the Republicons to just hand them the swiped-out credit card ONE MORE TIME??

Even my 25-year-old Daughter knows better than these Idjuts!

Wed, 09/07/2011 - 17:20 | Link to Comment serndipity
serndipity's picture

Obama is a 'jobs creator'....since returning from vacation, Michelle has added 15 people to her staff.

Wed, 09/07/2011 - 17:59 | Link to Comment djsmps
djsmps's picture

Do you suppose that he will extend the Bush/Obama tax cuts for the job creators?

Wed, 09/07/2011 - 20:55 | Link to Comment smlbizman
smlbizman's picture

what he is going to do is provide stimului to the states...translated...fill state and union pension funds...and raise revenue...translated....fuck the stupid fucking sheep to pay for it....i thought slavery was abolished...irony at its best..

Wed, 09/07/2011 - 17:26 | Link to Comment buzzsaw99
buzzsaw99's picture

mr. bernank, it's mr. mugabe on the line.

Wed, 09/07/2011 - 17:28 | Link to Comment BurningFuld
BurningFuld's picture

Why is SLV not following the price of Silver anymore?

Wed, 09/07/2011 - 18:19 | Link to Comment Silver Pullet
Silver Pullet's picture

Not sure what you mean. At this level, SLV is about $1 less than silver.

SLV=$40.53, silver ~$41.50

The higher silver goes, the more they diverge. It was a 25cent difference back around $15

Wed, 09/07/2011 - 17:28 | Link to Comment BurningFuld
BurningFuld's picture

BaHa!

Wed, 09/07/2011 - 17:32 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Okay, anyone shorting into the close today?

Wed, 09/07/2011 - 23:24 | Link to Comment Shocker
Shocker's picture

Should be a up day tomorrow

Wed, 09/07/2011 - 17:34 | Link to Comment Rodent Freikorps
Rodent Freikorps's picture

Want a false flag option?

Obama get 'em all in the chamber and just has a minion roll in a canister of VX.

Wed, 09/07/2011 - 17:35 | Link to Comment user2011
user2011's picture

I would venture a bet.  Tomorrow, the stock market will shoot up another 200 points after Obama talks.    It is like cheer leading by the HFT.    The programs are set to push things up.   An attempt to rally his approval rating.     Same thing happen to Ben Bernanke speech earlier.   Let the machine push the market up to portrait a great leader with great economy going....

It's pathetic.

Thu, 09/08/2011 - 02:16 | Link to Comment StychoKiller
StychoKiller's picture

That scenario would only be true if the clock runs backwards tomorrow.

Wed, 09/07/2011 - 17:40 | Link to Comment GenX Investor
GenX Investor's picture

(folly) A costly undertaking having an absurd or ruinous outcome.

Wed, 09/07/2011 - 17:44 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Pssssst.

Oil just hit $116, and WTI futures $90.

How's this gonna play in Peoria?

One does wonder if these Bozos realize oil maxed at $125 in Spring and it's now less than $10 from there.

Behold the post Peak world.  If you try to grow, demand will spike the price and smash your growth.  And each 6 month cycle will get worse and worse.

Forever.

Wed, 09/07/2011 - 17:50 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Hush.  I am making a profit. 

Wed, 09/07/2011 - 22:22 | Link to Comment trav7777
trav7777's picture

yeah, when I forecasted this a few years ago over on peak-denier TF, it didn't go over well.  But it's the reality.  The overhead supply curve is like a roof that keeps coming down lower and lower, like in Indiana Jones.  And at every bit of breathing room due to crashes, it just cinches tighter and tighter.  There's no respite, nor will there be until/unless fusion power is developed.

The problem is that the powers have no fucking clue what needs to be done or how.  They continue in their echo chamber of belief that things must continue the way they have been.

Mark my words:  the nations will destroy the oil companies for "gouging" before they will admit that the 400 year paradigm is OVER, outmoded, and obsolete.  And, every step these idiots take will only make things worse.

We stand a real chance here of being past PSR in terms of the capital expenditure necessary to make a quantum leap, if such a thing is even possible.

Wed, 09/07/2011 - 17:48 | Link to Comment RichardENixon
RichardENixon's picture

Holy makeel, dey am jivin' wit dat S&P Five Hunnert agin.

Wed, 09/07/2011 - 17:48 | Link to Comment how to trade ar...
how to trade armageddon's picture

$300b of stimulus would bring up the date when the debt ceiling would be reached to before the 2012 elections.

Obama doesn't want that. He's only proposing this because he knows it won't pass.

Wed, 09/07/2011 - 18:11 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

That . . . is a very good point.

He can't possibly have this pass or he busts the ceiling early.

Wed, 09/07/2011 - 18:29 | Link to Comment steve027
steve027's picture

exactly............this is purely a campaign tactic, that is why the repubs will not reply, they know it is a trap to make them look like they are the ones creating all the problems by shooting down all of the dems idea's..........very smart to not rebutt, ignoring is brilliant as it makes obama look weak(er)

 

Wed, 09/07/2011 - 17:54 | Link to Comment redpill
redpill's picture

Boy JPM sure went out on a limb with this prediction.

 

Wed, 09/07/2011 - 17:57 | Link to Comment Hansel
Hansel's picture

Yep, must be why they get the big bailouts.

Wed, 09/07/2011 - 17:55 | Link to Comment catch edge ghost
catch edge ghost's picture

Everybody is saying this is going to be a Nothing.  Expectations are decimated.  Propaganda 101.

In reality, it will become one of the biggest permanent federal expenditures ever created.

Wed, 09/07/2011 - 18:00 | Link to Comment monkeyshine
monkeyshine's picture

Would the Grand Old Party be so cynical as to agree to extend unemployment simply so that we can get a more accurate count of the unemployed?  Say for example they extend it to 200 weeks and allow anyone who got pushed off the rolls to get back on.  Unemployment might jump to 14% the following week and stay there through November 2012.  As a purely political ploy, the request could be used against him. A 'be careful what you wish for' moment?

Wed, 09/07/2011 - 18:01 | Link to Comment anyways
anyways's picture

could it be, that Obama will announce

Homeland Investment Act Part 2 ?

Serious question to zerohedgers.

 

Wed, 09/07/2011 - 18:05 | Link to Comment Plata con Carne
Plata con Carne's picture

I bet the market goes down, and PMs go up after this speech, which I'll be skipping. I'd rather go Christmas-fishing with Scott Peterson than listen to Obummer.

Wed, 09/07/2011 - 18:06 | Link to Comment goldfish1
goldfish1's picture

"...The Obama Jobs Plan is taking shape, another gutless errant ineffective exercise in stupidity, futility, and misdirection. Prepare for an annual $2 trillion federal deficit, as all engines for austerity and budget cuts will be abandoned in a bold reversal to address an emergency. The Gold price will zoom past $2000 per ounce when it becomes crystal clear that more USGovt stimulus and spending is next, not less. Ironically, watch the $2 trillion budget deficit go hand in hand with the $2000 gold price arrival. The United States will be last to enact austerity. Heck, the Standard & Poors debt downgrade has been relegated to the back pages. Its ratings agency Chairman has been replaced by a Citigroup executive, the bandaid applied. If truth be told, the USGovt has already exceeded the new debt limit in violation."...

- Jim Willie 09/07/2011

Wed, 09/07/2011 - 18:17 | Link to Comment Zymurguy
Zymurguy's picture

Any bets on how long until Standard & Poors upgrades the US???  My bet is that it'll occur before the election.

Wed, 09/07/2011 - 18:15 | Link to Comment Zymurguy
Zymurguy's picture

He's just going to propose the $300B... it's just to restart his dialog bashing the GOP for not cooperating and working together and finding common ground and reaching across the aisle or any of the other ways of saying "We want compromise, that is you do all the compromising and we'll get our way."

Wed, 09/07/2011 - 18:17 | Link to Comment disabledvet
disabledvet's picture

As one of the inner circle i just got my advanced copy (as in before all of you) and it looks pretty amazing. The title is "moonraking our way to jobs" and goes into great detail about how "the first trillion will be for the bases on the moon that will get us to mars." "and that's just for starters!" it says. I'M EXCITED!

Wed, 09/07/2011 - 18:44 | Link to Comment RSDallas
RSDallas's picture

"to a point in time when household sector balance sheet repair has hopefully progressed enough that the private sector can generate self-sustaining growth momentum."

This is what every Keynesian nut doesn't get.  I really think that they think that the debt somehow goes away while they sleep at night.  They better look somewhere other than the household to get us out of this one.  Our economy is likened to a world class athlete with constipation beyond belief.  It can't perform until 70% of the bad debt is unclogged from the system.

Wed, 09/07/2011 - 19:57 | Link to Comment New_Meat
New_Meat's picture

Headline: "

"We Anticipate That Little Will Come Out Of It""

how prescient!

Wed, 09/07/2011 - 20:13 | Link to Comment Incubus
Incubus's picture

I bet the US government wishes they had another Osama Bin Laden to whip the proles into a fervor for another decade, or two--if they engineer this one bigger and better than the last one. 

Imagine all of the cost-plus goodness that'll come of it once they can pretty up another emmanuel goldstein for the 2-mi--er--decades hate.

 

Only way we're gonna "recover" is if we have some manufactured great evil to fight.

Wed, 09/07/2011 - 20:23 | Link to Comment centerline
centerline's picture

Orwellian future, coming right up!!!

Wed, 09/07/2011 - 22:26 | Link to Comment trav7777
trav7777's picture

I personally am sick and fucking tired of 911.  We are coming up on 10 years and the orgy is restarting.  Fucking tribute fund or some kind of "learn how YOU can help the 911 families."  WTF?  They are all MILLIONAIRES; they got paid ASININE money by the Fedgov for being victims or survivors or wtfever they were, a bunch of useless crying bitches.  Anyone who could spell 911 is expecting to be heard and they wanted WTC shut down forever as a memorial to their stupid dead "loved ones."  Fuck off.  We killed 20x this many people in Hiroshima and they didn't turn the effing city into a goddamned shrine to LOSING.

America is a nation of losers who see virtue in being a victim.

Wed, 09/07/2011 - 20:20 | Link to Comment HungrySeagull
HungrySeagull's picture

Thank god for Physical Silver charts. Keeps me away from Obama and his Morale stripping, time wasting and double talk that serves no one.

 

I wish anyone who wants to be the next POTUS to sit down in the Oval Office and work as they were hired to do by the people. If something bad happens, then we will want to hear from POTUS.

If POTUS is gone there is a number of People in line to run the Nation in really bad times. It is likely we will see these people and say, who is that?

Wed, 09/07/2011 - 20:46 | Link to Comment berlinjames02
berlinjames02's picture

I am so sick of that dumb fuck Obama. It's like watching an idiot dog chase its tail. Only difference is our dog (named Dumb-fuck) can't be shot, and costs the US hundreds of billions everytime it plays this stupid game.

Case in point- Healthcare.

'Dumb-fuck' jams healthcare legislation down business' throat. Businesses don't know the cost and potential liability they have if they hire an employee. So, they don't hire. Now, 'Dumb-fuck' comes along, humps Uncle Warren's leg, and creates a 'Jobs Plan' for another $300 billion.

What the hell happened to the ARRA money? That was just shy of $800 billion. How much employment did that create? Jack-shit. Dumb-fuck wasted that too.

Wed, 09/07/2011 - 21:31 | Link to Comment MGHJFHD
MGHJFHD's picture

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Wed, 09/07/2011 - 22:44 | Link to Comment Billy Shears
Billy Shears's picture

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