Dec

10

The Collab points out that Ron Paul is taking over the Fed oversight panel and he promises it will not be a rubber stamp. "Skip to my loo" as Stubby would say and what consternation there must be at those marbled floors, and the executive dining halls. To say nothing of how bearish it is for the market if the flexions will not find it as easy to chip the first billions off the top of the find. (Pitt help me with the proper geological thing).

Pitt T. Maner III replies: 

A few geological metaphors and terms I think Chair is looking for…

Overburden provided by oversite members of the Party of the Elephants?

Marble is of course metamorphized limestone created by heat and pressure– an appropriate stone for the floors of the deliberaeors.

Styolites are those wonderful pressure solution features that make marble so attractive. 

Vince Fulco writes: 

It would also seem a strange twist of fate that the Dems are verbally pushing back hard on the tax/unemployment deal Obama reluctantly agreed to. He may find himself more isolated than he ever imagined soon.

Gary Rogan writes:

He knew that he would be isolated from the very beginning. The extra significance of how quickly he reached the deal and how quickly he changed his position from "no likelihood of a double-dip" to "we will get a double dip if we don't pass the measure" is that for the first time he provided an important tell that he cares more about reelection than ideology. He basically threw his base under the bus because the positives for his reelection outweighed the negatives in a very complex calculation. 

Jeff Sasmor comments: 

Neither party (if you think we actually have two) shows any real effort to rein in deficits. But I agree that it won't go on indefinitely…

Gary Rogan writes: 

Well, clearly some portion of the population responded to the bewildering decay around them with some degree of cohesion. The two parties are not some static entities with permanent agendas, and that's why saying that Bush "your own man" creating multi-billion dollar deficits is proof positive that nothing will ever be done doesn't work. Politicians do respond to the mood of the country over time. Ron Paul will have now a platform to accuse gentle Ben of mortal sins, the same Paul Ryan who voted for the TARP and bailouts will channel Von Mises and Mitch McConnell will support the ban on earmarks because of the "important symbolism". This is a rich country with a lot of assets to sell if push comes to shove. Until recently I saw absolutely no path to stopping the madness in time, and it may be too late, but when Jon Stewart stars mocking Bernanke and Bam can talk about the connection between taxes and recessions, as opposed to stimulus and recessions, the future at least depends on whether the voters will continue to stay involved as opposed to being completely hopeless.

Rocky Humbert writes:

Moving the conversation back to the markets, (which I justify as my reason for participating on SpecList), I note with interest, Mr. Rogan's comment: "Alan, I see a lot of the same things. I've seen them for two years. But I see some positive future results from the recent political changes. The tax deal was more notable for it's speed and cooperation at the top than anything else. Even with the rising rates I now like stable dividend payers and have acted accordingly in the last two days."

Mr. Rogan: I welcome you with open arms to the camp of us optimists. It is admirable when people publicly change their opinions when they believe the facts have changed. I believe Winston Churchill got it right when he said: "Americans can always be counted on to do the right thing …. after they have exhausted all other possibilities." (It just took you a little bit longer to realize this than did Winnie.)

In my humble opinion, however, stock markets are tricky beasts — and during the past two years, while you were cooking spam over sterno in your bomb shelter, the market capitalization of US equities increased by approximately $8 Trillion — with a most notable inverse correlation between President Obama's popularity and US stock prices — this phenomenon climaxing with last month's election.

Given the extremely low levels of the President's current popularity plus Zeno's Paradox, a new convert to the cult of equity should pray that this anti-president correlation breaks down in the months ahead…resulting in a Clinton-esque p/e expansion. However, I do believe that your dismissiveness of the bond vigilantes seems imprudent, and I believe is a huge risk that only increased with the "quick" tax deal.

Lastly I want to go on record as wishing you all the best in your stock purchases, and look forward to chocolate, roses and champagne in your future posts as your portfolio optimism translates to your verbal optimism.
 


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