U.S. President Barack Obama dramatically altered policy direction during his first State of the Union address by announcing plans to focus fully on creating jobs while doubling exports in five years. This could put the United States on a collision course with China’s export strategy. And a head-on crash, possibly centered on China’s foreign exchange rate policy, might occur before America’s mid-term elections in November.
No one wants confrontation, especially at such a critical time for global trade, the world’s recovering economy and China’s property market. But a changing political mood is steering Washington into Beijing’s lane. China can respond by turning the wheel before it’s too late.
The trigger for Obama’s policy turnaround was the defeat of the Democratic Party in the Massachusetts election for a U.S. Senate seat left vacant when Ted Kennedy died.
Increasingly negative social mood is overtaking politics — and the U.S. stock market.
A recent CBS News poll put President Obama’s job approval rating at a new low of 46 percent. This is not surprising from a Socionomics point of view:
Correlation with the stock market, consumer confidence, economic performance and other measures suggests that social mood is by far the main determinant of presidential popularity… There are two reasons for this fact. First, his actions, despite their endless analysis in the press, do little to affect his popularity. Second, his popularity is dependent upon a social mood and economy over which he can exercise no countertrend influence."
The Wave Principle of Human Social Behavior
"Anger in the Air" was the sub-headline on television, when the January 19th election results announced Republican Scott Brown the winner. The meaning was clear: Anger among Massachusetts voters in the U.S. Senate special election led to what would have normally been unpredictable: A Republican beat a Democrat in what is arguably the bluest of blue states. Not since 1972 had a Republican had been elected to the U.S. Senate from the Bay State.
What a turn of events." That’s what Diane Sawyer said during the January 22 broadcast of World News Tonight after a report on Ben Bernanke going from Time magazine’s Person of the Year to the possibility that he might not be re-appointed. Even some Democratic Senators voiced disfavor of the Fed Chairman. He was ultimately re-appointed, as the January Elliott Wave Financial Forecast predicted:
Social mood is still too elevated to deny Bernanke reappointment as head of the Fed in upcoming congressional confirmation hearings. But rising political tension confirms that his next term will be far more stressful than his first
Just one day before that broadcast, President Obama announced the "Volcker Rule," which proposes to restrict speculative investments made by banks. Former Federal Reserve Chairman Paul Volcker stood towering next to the President during the announcement. The diminutive figure of Treasury Secretary Geithner stood several feet away from the President. The setting suggested Obama was leaning more heavily on Volcker’s advice than that of his Treasury Secretary. Following the announcement of the Volcker Rule, media discussions revolved around whether Geithner would last much longer. On January 27, Geithner appeared before the House Oversight Committee…
The election of Republican Scott Brown to the U.S. Senate by Democratic voters in Massachusetts sends President Obama a message. Voters perceive that Obama’s administration has morphed into a Bush-Cheney government. Obama has reneged on every promise he made, from ending wars, to closing Gitmo, to providing health care for Americans, to curtailing the domestic police state, to putting the interests of dispossessed Americans ahead of the interests of the rich banksters who robbed Americans of their homes and pensions.
But what can Obama do other then spout more rhetoric?
The Democrats were destroyed as an independent party by jobs offshoring and so-called free trade agreements such as NAFTA. The effect of "globalism" has been to destroy the industrial and manufacturing unions, thus leaving the Democrats without a power base and source of funding.
Obama and the Democrats cannot be an opposition party, because Democrats are as dependent as Republicans on corporate interest groups for campaign funding.
The Democrats have to support war and the police state if they want funding from the military/security complex. They have to make the health care bill into a subsidy for private insurance if they want funding from the insurance companies. They have to abandon the American people for the rich banksters if they want funding from the financial lobby.
Now that the five Republicans on the Supreme Court have overturned decades of U.S. law and given corporations the ability to buy every American election, Democrats and Republicans can be nothing but pawns for a plutocracy.
Most Americans are hard pressed, but the corporations have only begun to milk them.
Wars are too profitable for the armaments industry to ever end. High unemployment is now a permanent state in the U.S., thus coercing job seekers into military service.
The security industry profits from the police state and regards civil liberties as a hindrance to profits. By announcing that he intends to continue the Bush policy of indefinite detention, a violation of the Constitution and U.S. legal procedures, Obama has granted the Democratic Party’s consent to the Republicans’ destruction of habeas corpus, the main bastion of individual liberty.
Jobs offshoring is too profitable for U.S. corporations for Obama to be able to save American jobs and restart the broken economy.
This is one of the greatest threats to our party in years," said one House Member. "Whether this plot is being driven by the far-left base of our party, our party leaders, or the President himself, we need to stop it!
I fully recognize that the crowd usually outsmarts the remnants and that the momentum in health care stocks and in the overall market has been strong.
The conventional view is that the Massachusetts election result will kill health reform and, thus, is bullish for health care stocks and for the market as a whole, but, for several reasons, I think that the crowd could prove mistaken on this one. I would not be surprised to see both health care stocks and the major market indices sell off over the short term.
A Scott Brown Senate win was growing more likely over the course of the past week…
The Massachusetts Senatorial race was not necessarily a referendum against the administration’s policies (health care being one of them); it’s broader than that. The populist uproar is geared toward the incumbent, toward anyone in power. It does not run on party lines, nor is it focused on health care. It is the zeitgeist of dissatisfaction, a sign of the times. Maybe it’s a function of high unemployment or the electorate ticked off at the wealthy and the largest institutions (especially of a banking kind). This dissatisfaction was expressed in the Democratic tsunami that brought Obama the Presidency, and it was seen yesterday in the Massachusetts Senatorial election that brought Brown the Senate seat. In other words, the mood of the country has been changing for a while, and it is being reflected in a very negative view toward those who have not suffered from high unemployment or from wayward derivative bets (and still got paid). And, as I have written before, this will lead to policies that are arguably needed but, generally speaking, are valuation deflating…
In the most liberal of liberal states, and in a complete repudiation of both backroom deals and Obamacare, Scott Brown pulled off the most stunning senate race upset in history. If you were for Brown, pour a cup of tea and celebrate. If not, cry in your tea.
Brown’s victory was not so much a vote for Brown, but a vote out of anger, anger of backroom deals, anger over jobs, anger over wars, anger over special deals for politicians and unions, anger over banks, and most importantly, anger because "Yes We Can" morphed into "Business As Usual, Only Worse".
Backroom Bargaining Give Unions, Politicians Sweetheart Deal
For a president who promised "no backroom deals" he unmistakably delivered "backroom deals".
Democrats seem impervious to embarrassment as they buy votes for ObamaCare, but their latest move makes even Nebraska’s Ben Nelson look cheap: The 87% of Americans who don’t belong to a union will now foot the bill for a $60 billion giveaway to those who do.
Emerging from their backrooms [Mish note: Obama invited union leaders to the Whitehouse for a private session], Democrats have agreed to extend a special exemption from the Cadillac tax to any health plan that is part of a collective-bargaining agreement, plus state and local workers, many of whom are unionized. Everyone else with a higher-end plan will start to be taxed in 2013, but union members will get a free pass until 2018.
Ponder that one for a moment. Two workers who are identical in every respect—wages, job, health plan—will be treated differently by the tax system, based solely on union membership.
Politicians Exempt Themselves
Not that the deal not only exempted unions, politicians gave themselves special favors.
Without a doubt, Brown sent a message to Obama specifically and Democrats in general that the public is fed up. Indeed, this special election shows Obama’s message is as out of place as a bullfrog on the lead microphone at an opera.
Nonetheless, rest assured the music will fall on deaf ears unless you act.
Call your congressional representative Wednesday morning. Tell them Massachusetts is fed up and you are too. Tell them, you are fed up with…
While most pundits are inclined to view Scott Brown’s Senate victory in Massachusetts as a referendum on President Obama’s healthcare plan, I view it as a sign of increasing anger over the state of the United States economy. President Obama swept into office on the back of “change” and “hope”. Although there has been an overwhelming amount of hope, there has been almost no change since taking office one year ago.
While the economy continues to suffer President Obama continues, with laser-like tunnel vision, to focus on the healthcare bill. At a time when 10% of American’s are out of work, bankers are receiving record bonuses and the government debt spirals out of control, the President is focused on a bill that will likely raise taxes and increase overall spending. Americans don’t think that makes one bit of sense and they’re exactly right.
Democrats as far as San Francisco are freaked out by the fact that a fellow party member could lose in Massachusetts.
Mayor Gavin Newsom told the San Francisco Chronicle: "We better get our act together – and quickly… (voters) are so angry. They don’t feel that we’re paying attention to their needs, in terms of their jobs, and what’s going on at the grassroots, in their neighborhoods."
It’s actually not all bad for Dems. A Coakley loss is an early wake-up calll, and there are several months before November elections for them to turn things around and get their message right.
No doubt the Democrats wish that in 1994, they’d had a similar warning. After all, they were largely blindsided by the Republican revolution of that year, predicting with only weeks to go before the election that they’d maintain control of the house.
Meanwhile, Martha Coakley is down to 31% on InTrade, which is around the odds that Nate Silver called for.
Word on politics – I agree with Mish’s summation at the end, complaining about the democrats is NOT an endorsement of the Republican party. Both parties have been "captured" and the biggest difference, in my mind, is the proportions of interests owning them. The Libertarian party could be improved by softening up some of its hard core principles, but it is the only party (or well-known party, there may be others) which has a platform that is inconsistent with continued over-the-top conflicts of interest and out-and-out corruption. – Ilene
In a move that could potentially decide the fate of the health care bill, and will certainly affect the balance of the Senate, Republican Scott Brown given not chance to win the election a few weeks ago has now moved into the lead.
Here in Massachusetts, as well as in Washington, a growing sense of gloom is setting in among Democrats about the fortunes of Democratic Senate candidate Martha Coakley. "I have heard that in the last two days the bottom has fallen out of her poll numbers," says one well-connected Democratic strategist. In her own polling, Coakley is said to be around five points behind Republican Scott Brown. "If she’s not six or eight ahead going into the election, all the intensity is on the other side in terms of turnout," the Democrat says. "So right now, she is destined to lose."
With the election still four days away, Democrats are still hoping that "something could happen" to change the dynamics of the race. But until that thing happens, the situation as it exists today explains Barack Obama’s decision not to travel to Massachusetts to campaign for Coakley. "If the White House thinks she can win, Obama will be there," the Democrat says. "If they don’t think she can win, he won’t be there." For national Democrats, the task is now to insulate Obama against any suggestion that a Coakley defeat would be a judgment on the president’s agenda and performance in office.
The private talk among Democrats is also reflected in some public polling on the race. Late Thursday, we learned the results of
Cosmopolitan dug through their archives to find a June 1982 issue featuring a very naked chap by the name of Scott Brown playing centerfold model. Flattering, in a certain light, but possibly problematic for Brown, who is running for Ted Kennedy’s United States Senate seat in Massachusetts. “Vote for Brown. He Has One Hell of a Stimulus Package,” the lady mag suggests as a slogan.
BOSTON (AP) – The race to succeed the late Sen. Edward M. Kennedy has turned into a proxy battle over the fate of President Barack Obama’s health care overhaul.
A once-pedestrian contest between Democrat Martha Coakley and Republican Scott Brown has coarsened with a week to go, as the two have cast themselves as custodians of the pivotal Senate vote to determine the bill’s fate.
"As the 41st senator, I can stop it," Brown said last week during a debate, highlighting his potential to be the breakthrough Senate vote that upholds a GOP filibuster.
The US and world economies are drifting inexorably into the next recession owing to the deflationary collapse of commodities, capital spending and world trade. These are the inevitable “morning after” consequence of the 20-year global credit binge which has now reached its apogee.
The apparent global boom during that period was actually a central bank driven excursion into the false economics of household borrowing to inflate consumption in the DM economies; and frenzied, uneconomic investing to inflate GDP in China and the EM.
The common denominator was falsification of financial prices. By destroying honest price discovery...
I’d like to address some aspects of the Greater Depression in this essay.
I’m here to tell you that the inevitable became reality in 2008. We’ve had an interlude over the last few years financed by trillions of new currency units.
However, the economic clock on the wall is reading the same time as it was in 2007, and the Black Horsemen of your worst financial nightmares are about to again crash through the doors and end the party. And this time, they won’t be riding children’s ponies, but armored Percherons.
Good stuff for bulls as resistance levels get ticked off on the advance. There breathing room for many indices and a chance for consolidation. Nit pickers could point to light volume, but it would be hard for buyers to be coming in here given the sequence of gains.
The Nasdaq 100 still remains tagged to resistance. Can it break tomorrow or will sellers make an appearance. All I know is yet another short trade of mine is stopped out. I should add, I haven't touched my investment account. I would be looking to buy if I had the funds available.
The S&P made a decisive push past its 50-day MA. Next resistance is up at 2,044. Tech...
1) The shares of one of my largest short positions (~3%), Exact Sciences, crashed by more than 46% yesterday. Below is the article I published this morning on SeekingAlpha, explaining why I think it’s still a great short and thus shorted more yesterday. Here’s a summary:
The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued yesterday is devastating for Exact Sciences’ only product, Cologuard.
I think this is the beginning of the end for the company.
My price target for the stock a year from now is $3, so I shorted more yes...
Uncertainty about the health of the global economy led investors to flee U.S. equities during Q3, primarily driven by worries about China's growth prospects and the Federal Reserve’s decision to not raise rates. Sure, there are plenty of real and perceived headwinds, but on balance it seems that a recession here at home is not in the cards. And when you consider sentiment and the technical picture, it appears that a continuation of Friday’s bounce is in store. The question remains as to whether the seasonally strong Q4 will be able to propel the bulls through levels of resistance that have built up.
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Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).
Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself.
Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene
The replay is now available on BNN's website. For the three part series, click on the links below.
Part 1 is here (discussing the macro outlook for the markets)
Part 2 is here. (discussing our main trading strategies)
Part 3 is here. (reviewing our pick of th...
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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