I try to keep politics out of the weekly posts but screw that!
That disgusting, vile, son-of-a-bitch (just my opinion, we report – you decide!) Newt Gingrich is on a 12-city pre-election tour where he is advising Republican candidates to frame the choice for voters between Democrats as "the party of food stamps" while selling the GOP as "the party of paychecks."
With a truly shocking 42M Americans in such dire straits that they need food stamps to make ends meet (and our study of the shopping habits of the poor last week clearly illustrated that this aid is the only way they can eat as they shop the same day the checks come every month), Gingrich this week distributed a memo to Republican hopefuls saying they should use the final month to stress tax and spending cuts as a way to spur job growth while attacking Democratic policies as detrimental that effort.
"It's perfectly fair to say they are earning the title of the party of food stamps," he said. "By contrast, we have historically since Ronald Reagan of 1980 been the party of job creation."
The party of job creation??? Ha! Ha, ha, ha, ha, ha, ha – ha! Ha, ha, ha. Ha! OK, I think I'm done now. Ha! OK, now I can go on (but I'm still giggling). I will sum up the very cogent point I made to Members early this morning by simply saying: Is this out of touch elitist wealth-sucking windbag totally insane or just a big, fat liar? Let's look at a chart:
What? Don't like this one? Do you think it's unfair to keep picking on poor W? I hear this all the time, Obama's been in office 21 months, he needs to OWN this recession now and we need to stop looking at the idiot who caused it and pretend it was all Obama's fault since he took office in the month that job losses maxed out at 850,000.
As logical as that line of reasoning may be, I do like to try to keep a historical perspective on things. We republished a full set of charts that illustrate my points from Member Chat over at Seeking Alpha, so you can view them here, but let me share just two that I find relevant. For the first chart, let's take a look at ALL the post-Depression Presidents, including the great and powerful Ronald Reagan, and see how they stacked up in providing jobs for the American people:
Ouch! Not looking good for the red team is it? In fact, this was only through August of '09 and did not include 2.8M job losses in Bush's last 4 months in office. A feat of failure that put his Administration squarely in the red for the first time since Hoover sucked up the economy in the 20s.
Well, sure, the Republicans may suck at creating jobs but they shine on controlling spending, right. Ha, ha and ha ha again! There is not even a close contest there as Reagan, Bush and Bush ran up OVER $6Tn in debt in 20 combined years ($300Bn per year) while the dreaded Carter and Clinton caused a GRAND TOTAL of $548Bn (0.55Tn) to be added to the deficit in 12 combined years ($45Bn/year).
How about government spending (all these figures are on the linked charts, by the way)? Also no contest, since 1940, Republicans have added far more then Democrats and, in fact, the only modern President to ever significantly reduce government spending was Harry Truman, despite all those liberal programs that paid for our parents homes and sent them to college, etc.
"Ooh, ooh" – you may say, as you raise your hand for attention "What about the pork projects – those filthy Democrats love pork projects." No, so sorry but this is one of the funniest charts. Mr. Gingrich's party took over the House and the Senate in the 1994 elections and controlled both houses every session other than 2001-2 (when Jeffords got disgusted and switched parties) through Dec. 2005 and LOOK WHAT THEY DID!:
THESE are the people who want you to vote them back in, THESE are the people who are making all the same promises they broke last time about spending and fraud and waste and family. Who was in control of Congress from 1995 through 2005, when Total Federal Spending DOUBLED? You may think politics is not about the markets but it's ALL about the markets right now. We are teetering on the edge of a precipice and going back to the disastrous policies that drove us to the edge of a cliff in the first place is NOT going to make things better. Our future investing decisions will very much hinge on who is in charge and so will our economic futures as a nation.
Just look at the tremendous burden we face if we extend the Bush tax cuts. It's bad enough if we don't but perhaps we can cut back spending and grow a little faster to offset the doubling of our debt to GDP load between now and 2050 but CLEARLY, extending them is nothing short of National Suicide!
You can't give Trillions of dollars of tax breaks to the top 5% while 20% of the bottom 95% are unemployed or under-employed! A healthy economy needs a healthy labor force, which leads to healthy consumer spending which leads to more wealth for everyone – the proverbial "bigger pie." Cutting back on the social safety net and running an austerity budget when 42M of your citizens (13.5%) can't live without food stamps is simply immoral. They do still teach morals somewhere, don't they?
In fact, here is yet another chart of the income growth rate of post-war America broken down by party and, once again, the Democrats CLEARLY deliver better economic results for all. Well, not all, the top 1% do not do as well by a small margin under the Democrats but the entire top 5% STILL DO BETTER when the Dems are in charge by a full 10%!
We just got the Non-Farm Payroll numbers and they show that we LOST another 95,000 jobs in September. A loss of 5,000 jobs was expected. Government payrolls shrank by 159,000 jobs (damn those Democrats and their cutbacks!) while private enterprise added 64,000. While Unemployment held steady at 9.6%, U-6, the broader and also official measure of Unemployment jumped from 16.7% in August to 17.1% in September. Even worse (and you won't hear this in the MSM), March has now been revised down — wait for it — by 366,000 jobs! That's right, we dropped 366,000 jobs in March vs. an originally reported up 50,000(ish) so an 800% miss in the data. Wow – good thing we didn't know that then or the market might not have run up 7.5% between March 1st and April 26th! I wonder what other "lucky" statistical mistakes are being made during the current rally?
So don't get me wrong, Democrats suck too but just not as much as Republicans and, since we really only have two choices – I have to go with the guys who at least have some kind of track record fixing an economy, because this one is TOTALLY BROKEN! Of course, poor unemployment numbers boosted the futures because futures traders are generally idiots who are in the highest tax brackets and only think in terms of how things affect them and no jobs means (in theory) more Quantitative Easing and low interest rates and cheap labor – it's everything a Capitalist dreams of all coming true at once!
From a trading perspective – frankly my dears, we don't give a damn. We are cashy and flexible and we hit shorts on the Dow yesterday for a quick 50% in yesterday's Member Alert and we'll be looking to do it again this morning if they are going to keep pretending that TERRIBLE news is good news. A test of 10,800 is my goal for today and, if not, we'll certainly take some flyers for Monday, which is a semi-holiday in America which celebrate Columbus "sort of" discovering the country 500 years after Leif Ericson – all of which came as quite a surprise to the people who had been living there for thousands of years, who had this crazy idea that they had discovered the place…
We'll have to digest this nonsense over the weekend and play it by ear into Member Chat this morning because anything can happen and probably will on what is likely to be a low-volume day. Sorry for the rant but I work feeding the hungry and that really touches a nerve for me so sorry, Newt, maybe you aren't a totally disgusting, vile, son-of-a-bitch.
Ha! Ha, ha, ha, ha, ha, ha – ha! Ha, ha, ha. Ha!
Have a good weekend,
Seawall/DD – That sucks! Good example of our nations’ crumbling infrastructure, which I have written will be our undoing, one disaster at a time.
Money/Hoss – That’s the fiat money system in action. It’s always shocking when you think about it so it’s best not to think about it… 😎
Sugar cane – Yes, that’s the key, we need 5x more land to make the same energy as Brazil and since we are substituting land use from food to fuel rather than adding crops, it’s an idiotic program to take away 100 meals for a tank of gas.
IMF/AC – Nope, nothing happened to help the dollar this weekend so the madness continues.
TMV/Savi – Wow, you sure do make big, unhedged commitments, don’t you? I’ve never looked at TMV before but you’ll notice that, like TBT, it seems to have bottomed out for the past month so I don’t think I’d dump out but I don’t know your actual position, which makes it harder to help. CME is very interesting because commodities are up like a rocket and CME is trading down. Also there I’d need to know your position but, if you own the stock, there’s lots of ways to fix that.
Highs/Kinki – Yes, it is kind of nuts.
Inflation/Gel – I don’t believe in the low rates + inflation scenario. QE can only take you so far but we are not doing this in a vacuum and other countries will not and cannot put up with a worthless dollar. If we were not the World’s reserve currency, we might be able to get away with it, like Japan did for quite a while but look at them now. The relative weakness of the Dollar and Euro as soon as they stopped QE programs, drove their currency higher and crashed their market, which fell from 18,000 to 7,000, quite a bit worse than the S&P, which fell from 1,550 to 700. Of course, this doesn’t mean you are not right at well, it’s just a question of time-frames and that’s what I’m really grappling with on the big picture – trying to determine how long all these balls can be kept up in the air before gravity takes its toll. I had been bullish, thinking we can inflate our way out of this mess but we can’t do that smoothly without wage inflation and we can’t have wage inflation without jobs. Without wages helping people keep up with inflation, we face severe economic shocks that may dislocate whole sectors of the economy, starting with housing and spreading to retail etc. As I keep saying, QE without stimulus is a disaster waiting to happen and that seems to be the current plan.
Retail/Cap – Case in point! I was in the city last night it was a little too easy to get a table for 8 and the line for the ferris wheel at Toy R Us in times square wasn’t very long and the Cold Stone in times square was only operating one side of their store (they are set up to have 2 sets of workers working each side to service 2 lines of people) and the East side of town was dead quiet – all strange for a holiday weekend, especially with nice weather.
FOREX/Gel – That will be interesting, I’m wondering if we’re due for big move there.