Bank of America (ticker BAC) is a fascinating stock at the moment.  It's trading like a bankrupt penny stock, but it's priced around $12.50.  There's huge volume and extremely violent price swings.  On any rational basis, BofA is bankrupt, but it's being propped up by the Fed.  At some point, it almost certainly has to go, but God only knows when that might be.  If you have an extremely strong stomach for volatility it's a great short, but you have to be prepared to take the position up the ass for a while.

One way to try capture value in the market is to trade around the relative valuation of gold, silver, and DBC (the three components of my 'wealth-preservation fund').  If we're treating gold and silver as alternate currencies, and DBC as our inflation benchmark, we can expect that (in the long term) they should move roughly in tandem.  In the short term, however, there can be a lot of price volatility.  The idea would be to sell gold and/or silver if they get too far ahead (in percentage terms), and buy DBC with the proceeds.  When the precious metal(s) came back into line, we'd deallocate from DBC back into gold and/or silver.  This strategy would have worked very well during the recent silver ramp-job as it got way way ahead of both DBC and gold.

 I love Mish's writing and he's a valuable source of information, but at some point he's going to be carted away to a rubber room screaming 'There is no inflation!' as gas hits $10/gallon.  This is a perfect example of the difference between theoretical and practical economics.  In Mish's theoretical monetary terms there may well be no inflation, but it certainly exists for the average person.

For real-world examples of practical economics, one can look to the earnings of producers of consumer goods, and expect to hear the term 'margin compression' a lot in the near future.  Denninger is ahead of the game on this, with the earnings results of both Dean Foods and Campbell's.  In short, their input costs are way up and they have no pricing power due to the dire circumstances of the average consumer.  Result:  stock goes into the toilet.

Posted by: Hermit Dave at 10:52 AM | No Comments | Add Comment
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If the G20 bigwigs held a conference and nobody cared, did it even happen?

The sites that would normally be posting on the next round of the farce that is the G20 are largely silent on the matter.  This is because the outcome of the summit in Seoul is already known and it's meaningless:  There will be a lot of perfumed hot air blowing our way, while behind close doors, they'll be kicking each other in the shins.  The US will be sitting at the kiddy table this time around, as punishment for Bernanke's highly unsocial policies, but it won't make a damn bit of difference.

Here's a Bloomberg article on the summit, if you'd like to waste a few minutes of your time.

Posted by: Hermit Dave at 09:35 AM | No Comments | Add Comment
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The web is abuzz with news of the apparent launch of a ballistic missile off the US west coast.  My initial thoughts:

• There is no chance in hell it was a jet contrail.
• There is no chance in hell it was an accidental launch by the US military.
• NORAD (and therefore the US military) knows exactly what happened.
• The silence of the US military and Washington is deafening.
• On the sites I've perused, there are an interesting number of people popping out of the woodwork to advance certain innocent theories.  Almost all these people have either never posted before or rarely post.
• The most plausible explanation is that it was a scheduled test for which the usual notifications were improperly disseminated.  I'm amazed that (as of this writing) the US military has not said as much.
• If it's not the last, it's time to get out the tin foil.

This is a truly incredible event, and the silence coming out of the military and our political 'leaders' is disturbing.  Is this the 'black swan' that many market participants have been anticipating/dreading?  We live in interesting times, indeed.

Update:  As 24 hours have passed and this is being brushed off by the powers-that-be, I'm going to just assume it was a US launched missile and they're either trying to hide a  mis-notification SNAFU or they simply don't care to say what they were doing.  The jet contrail thing is simply not credible, but I don't expect to get any clarification on this event either.  We now return you to our regularly scheduled Ben Bernanke bashing.

Posted by: Hermit Dave at 01:01 PM | Comments (2) | Add Comment
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My earlier post on Mr. Market calling Bernanke out on QE couldn't have been timed any better.  I top-ticked today's spike in precious metals to almost the exact fucking minute.  Now, the larger picture still holds, but damn, that was impressive short-term timing on my part.

I wonder if I can get a job producing the covers for Newsweek.

Posted by: Hermit Dave at 12:21 PM | No Comments | Add Comment
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I thought it was relatively simple to foresee the long-term effects of the Fed's QE policy.  Well, it turns out that Mr. Market has no intention of waiting for the long term.  In the six short days since the announcement:

• Silver has gone vertical.  It's now up over 16% and being aggressively bought on the tiniest pullback (more on silver coming in another post).
• Gold is up over 5%
• Broad-based consumable commodities are up around 5%, on average.
• Trade and currency wars are already starting:  China is downgrading  US Treasury Debt and starting to enforce capital controls.  Other nations are telling us to go fuck ourselves in a variety of ways.

Zimbabwe Ben has completely screwed the pooch.  At this point he's trapped.  If he changes his mind on QE, both the stock and bond markets are likely to collapse.  Banks will immediately start blowing up left and right.  If he keeps going, other nations will move to protect themselves and then let the dollar go.  The US gets severe inflation in the short to medium term, followed by a currency collapse.

The only sensible thing to do at this point is kick Bernanke to the curb, announce that QE will be continued in the short term, as needed and only for liquidity purposes, and start to wind down the big banks.  This, of course, will cause other types of pain, but there is no way out at this point that won't be very painful.

The US is like one of the victims in the SAW movies.  To save our lives we have to disfigure ourselves.  Are we going to be able to do it?

Posted by: Hermit Dave at 09:56 AM | No Comments | Add Comment
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Zero Hedge brings teh funneh this morning with a short cartoon about gambling trading.  I found it hilarious, but YMMV ... it might only be funny to those who have been actively involved in the markets.

Posted by: Hermit Dave at 09:14 AM | No Comments | Add Comment
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I've noted numerous times that, when the Fed and other central banks are debasing fiat currencies, the stock market is a terrible indicator of economic health.  If one would like further proof of this, Zero Hedge has a post up showing the stock market valued in gold over the past three years.  The chart they use is a much more accurate representation of the current state of the US economy than the stock market valued in dollars.

All standard metrics of economic health show a small bounce off the 2009 lows, followed by further slow deterioration.  The S&P 500 as priced in gold reflects this extremely well.  This concept, of course, is the basis for my current 'wealth preservation' vs. 'investment' fund battle.  When fiat currencies are being debased as strongly and rapidly as they currently are, one simply can not use the raw (dollar denominated) stock market data as indicative of anything other than currency devaluation.

The Fed has made it clear that they are going to turn your dollar-denominated savings into trash, but the stock market is the wrong place to move those dollars.  The ZH post, and associated graph, demonstrate this quite clearly.

Posted by: Hermit Dave at 10:57 AM | Comments (1) | Add Comment
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If I'm going to keep an open mind about the GOP, I have to be willing to reconsider those who seem to be taking our current fiscal situation seriously, even if late to the game.  This Hot Air piece on John Boehner, and his claim that he is going to make the referendum on raising the debt limit a stand-alone vote, is extremely encouraging.

If Boehner follows through on this, and on his claims that he will subdivide budgetary votes into more transparent packages, I'm going to rapidly become a big fan of his.  The only way to have a legitimate debate on government spending and the national debt is to make all the components obvious and put politicians on the record.

At the moment, this is all just a lot of talk, and I'm fully aware of what that's worth, so I'll be looking for follow-through.  However, it looks like Boehner may be one of the few old-guard GOP guys who understands what the recent election meant.  If his future actions measure up to his words, I'm going to be willing to give the guy a break on his past indiscretions.  After all, this is not truly about the tea party vs. the GOP -- it's about sound governance.  If Boehner is willing to take the lead in that regard, more power to him.

Posted by: Hermit Dave at 10:16 AM | No Comments | Add Comment
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Yes, the title of this post sounds like a punchline to Olbermann's ouster at MSNBC, but I'm completely serious about this.  If Fox handled this properly, it would be a much bigger win for them than the Juan Williams hire, which was good for some positive PR, but has little long-term benefit.

First, it would have to be in at least a marginally acceptable timeslot, with a reasonable (based on his actual ratings at MSNBC) pay package.  I don't watch TV news at all, so I don't know where they could possibly stick him, but there must be some place.

Second, his contract would have to be pay-for-performance, and either short-term or with an opt-out for Fox if Olby didn't meet ratings targets.  The contract details would have to be announced or at least leaked so that everyone would know the deal.

Now, he probably wouldn't take the offer.  Fine.  For Fox, that's probably the best possible scenario.  They can claim to have tried to reach out to an arch rival, and end up sacrificing nothing while achieving the high ground.  But with his huge ego, Olbermann might think he'd be hugely successful on a better-rated network.  Hell, it wasn't Olby that was the problem, it was MSNBC!

If Olby does take the offer, many many more viewers get to see the true ugly face of the far left.  And he would get eyeballs, at least for a short while.  Plus, it puts the Kos-type crowd in a terrible spot -- to support Olby so he doesn't get canned again they'd have to watch him on fucking Fox of all places.

Most likely, Olby would end up back out in the street at the first opt-out opportunity for Fox.  There's almost no way his ratings could keep up with the other opinion makers on the network.  Fox will have pissed away a relatively small amount of money while potentially making some net gains on their other shows from people who came for Olby but stayed for people who were at least somewhat sane.  Plus, this would likely make Olby unemployable at any other network -- if he couldn't pull ratings on Fox, how the hell could he pull them anywhere?

The real longshot is that Olby both takes the offer and makes a success out of it.  I really don't see how that could happen, but anything is possible.  Fox could just shrug and count their money.  Or Fox could get rid of him on some obscure standards and ethics clause in the contract (given Olby's complete lack of standards or ethics, it's a nearly sure thing he'd be in violation somewhere).  Or maybe O'Reilly will completely lose his shit and murder Olbermann on live TV.  Whatever, Fox would have plenty of options.

So yes, I'm quite serious -- Fox should offer Olbermann a job.

Posted by: Hermit Dave at 07:22 PM | Comments (1) | Add Comment
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Plus a new Ben Bernanke betting game!

Before we go any further, however, I haven't made a disclaimer in a while:

I am not a qualified investment advisor.  I'm a moron posting stupid shit on the internet.  Anyone who takes my thoughts and predictions seriously enough to use them to trade or invest is an even bigger moron than I am, and should be shot on the general principle of improving the human gene pool.

Here are the results for Week One (really only half a week, but this starts regular Friday results posting):

The Wealth Preservation Fund is off to an early, and statistically significant, lead over the Investment Fund.  That being said, the horses have just left the gates, and it's a very long race.  I expect this trend to continue in the long term, as the Fed can prop up the stock market by printing money, but only at the expense of even higher inflation.  Still, this is a very volatile situation, and any given week could see large swings in any direction.

On to the Ben Bernanke betting game.  This will be where we can bet on the fate of Ben Bernanke as of the end of next year (Dec 31, 2011).  Here are the odds:

• Strangled by Ron Paul -- 1000 to 1
• Hung for treason -- 100 to 1
• Commits suicide -- 75 to 1
• Killed by bankrupt lunatic -- 50 to 1
• Fled the country -- 25 to 1
• Under indictment (or already jailed) -- 10 to 1
• Forced out of Fed but free -- 2 to 1
• Still selling America down the river -- Even money

If my spreadsheet is correct, that adds up to 100.64% -- close enough.  Feeling cynical?  Even money looks pretty good on him still going about his merry business of ruining America.  Feeling lucky?  Lots of good options at the top of the list.  I'm going with the 10 to 1 shot that he's in an orange jumpsuit by the end of next year.

Fund results and Bernanke odds to be updated next Friday.

Posted by: Hermit Dave at 12:33 PM | No Comments | Add Comment
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As long as I'm drawing lines in the sand, beyond which I will not compromise, here are three quick lists on the possible GOP candidates for President for 2012.  This is not meant to be comprehensive, nor will I give much commentary.  This is a simple reference for those who might care (all zero of my readers) where I stand.

Complete non-starters.  Those potential candidates that I will not even consider, and if nominated, I will sit out for:

• Mike Huckabee
• Newt Gingrich
• Mitt Romney

Candidates I will consider with an open mind.  There is no order of preference here:

• Sarah Palin
• Mike Pence
• Eric Cantor
• Tim Pawlenty

Candidates I generally like, but think are premature for 2012.  I would prefer that these folks keep doing what they're doing, but I would almost certainly vote for them if nominated:

• Marco Rubio
• Rand Paul
• Chris Christie

Special note one:  I really hope Sarah Palin doesn't run unless she bones up on her economics and shifts her focus to fiscal matters.  She's made some pleasant sounding noises in that general direction, but it's pretty clear she doesn't have much of a clue economically.  I think she's much better suited to a party leadership position, doing what she did so well this election.  Still, if she ends up as the nominee, I would almost certainly vote for her.

Special note two:  It was tempting to put Tim Pawlenty in the first list, based solely on the fact that the hacks at Powerline like him so much.  However, that would have been dishonest and unfair, so I guess I'll have to consider him, as galling as that might be.

Update:  I just realized Jim DeMint doesn't appear in any of these lists.  That's because I assume he's not going to run, as he's smart enough to know he's too socially conservative to have truly broad appeal.  That being said, even though I'm socially liberal, I'd vote for him in a heartbeat if he gets nominated as he's just so damn strong fiscally.

Posted by: Hermit Dave at 05:38 PM | No Comments | Add Comment
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In the wake of the recent elections, I'm doing my best to be conciliatory and look for areas of compromise between the 'top down' GOP types and us 'tea partiers'.  I think my vote for Whitman shows that I'm willing to compromise --  if it doesn't I don't know what would.  However, compromise can only go so far:  past some point it becomes just blindly going along with the other person's position.

To achieve our long-term goal of returning to fiscal sanity and restoring the Constitution, it's in our mutual best interests to find middle ground on the issue of candidates for office.  I had thought that the lessons from the DE primary were extremely simple:  for the GOP -- no mega-RINOs, for the tea partiers -- no whackjobs.  Apparently it's not going to be that easy.

So, let me make a few points perfectly clear:

• Fact:  I will never accept someone like Mike Castle as a candidate for office.  If the GOP runs someone like him again, I will try to primary that person.  If he is nominated, I will sit out the general election.
• Fact:  The 'top down' types will never accept someone like Christine O'Donnell as a candidate for office.  Whether or not I like this position is irrelevant. I have to simply accept it as fact.
• Fact:  The refusal by either side to compromise will result in further defeats for both the GOP and conservatism.

These are extremely obvious points, and rehashing arguments that try to avoid these facts is a completely useless waste of time.  If someone insists on trying to argue these facts, regardless of which side of the argument they are on, I very rapidly tune that person out.

This is why, way back in 2008, I left Ace's for good (and in an extremely impressive ball of flames if I do say so myself).  It became all too obvious that the 'top down' types were going to try to ram McCain down my throat regardless of any arguments I made towards long-term strategy.  They were simply not going to accept that I could possibly have a valid point.  As there was no room for compromise, I just left.  Staying would have been a complete waste of my time and Ace's bandwidth.

In what has become a thread from hell over at DPUD, I've done the same.  I'm certainly not leaving DPUD, but I'm done with that particular thread.  Everything that was useful to say has been said, and it's quite clear that Conservative Belle has no interest whatsoever in putting aside old grievances and attempting to find a compromise.  So, she goes into my 'ignore in the future' category, just like IVD did.

CB put up another post a short bit ago, but guess what?  I didn't read it ( I always look at the author before reading past the title of a post), because I'm not into wasting my time.  I won't read the comments on that post either, as it's going to be just another pointless pissing contest.  I'm going to look for a post by someone that's willing to compromise instead of just trying to force me to accept their point of view.

In fact, there's a very interesting post over at Ace's that is, in my opinion, the single best thing he's written in 2 1/2 years (that I've read -- for most of that time I have no idea what he might have written).  Hell, even the comments are mostly good.  Yes, after a long hiatus, I'm reading Ace again.  I have been since about three months prior to the election.  The reason:  to find out if there might be some room for compromise at this point.  The referenced post is highly encouraging, as are Monty's economics posts, and some other material as well.  That's not to say I'm going to start commenting there again, but I will continue to at least scan the posts on a regular basis.

I'm willing to compromise, but the 'top down' types and the 'tea party' types have to at least get onto the same page to do so.  In regard to the DE race, the discussion that we should be having is how to avoid that kind of standoff in the future.  If that's not the discussion, if the discussion is 'accept candidates like Castle or else', I'm just going to tune out.  And that doesn't do anybody any good.

Posted by: Hermit Dave at 02:01 PM | No Comments | Add Comment
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OK, not really, but I think it will be useful to measure, going forward, the effectiveness of a wealth preservation strategy vs. a dollar-denominated economic investment strategy.  To that end, I'm going to track a number of key statistics.

In the wealth preservation corner, we have silver, gold, and consumable commodities (energy, foodstuffs, etc.)  As a proxy for consumable commodities, we'll use the commodity fund I referenced yesterday, the PowerShares DB Commodity Index Tracking Fund (ticker DBC).  Our 'wealth preservation fund' will be 25% gold, 25%, silver, and 50% DBC.

In the dollar-denominated economic investment strategy corner, we have the stock market.  For this fund, we'll use a blended average of the Dow, Nasdaq, and S&P 500 indexes.

We're going to mark the funds to the close of business yesterday.  As there was sufficient time to enter a position after the Fed announcement made it clear that they were going to go the full-retard debasement/inflation route, this makes sense.  Because of the structure of the funds, it will be easiest to start with an amount that is divisible by both 3 and 4, so we'll give each of them $12,000 fake internet dollars.

Going forward, I'll post the performance of the funds and their components every Friday.  This is much, much simpler than trying to manage an active portfolio and is a much better approximation of what the average person can do to try to preserve their wealth.

Ladies and gentlemen, place your bets.  I'm going all-in on the wealth-preservation portfolio.  Unless and until the Fed is forced to change their policies, I think this is a no-brainer.  If, at some point in the future, the Fed is forced to stop driving the short bus over the cliff, we can revisit the issue of fund composition.  Until then (and God only knows when that might be), there will be no changes.

We're at the starting line, and here are our marks:

Posted by: Hermit Dave at 12:17 PM | No Comments | Add Comment
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Over at DPUD, there's a very interesting thread going on -- it's essentially an argument about Karl Rove and the Delaware Senate race.  To me, the essence of the argument boils down to how we should achieve our goals (end the fiscal insanity and restore the Constitution) going forward.  This is a repost of a comment I left in that thread (edited to remove thread-specific references):

There are three key divisions in planning: Vision, Strategy, and Tactics. Vision is what we would like as an end result. I think most, on both sides of this argument, largely agree on Vision. We want a country that is back in line with the Constitution, on a fiscally sound footing. There are some differences on social policy, but they're small relative to the larger Vision.

Strategy is the big-picture plan to achieve our Vision. This is where we differ. The 'top down' folks think that advancing the GOP is the proper Strategy. This makes Castle an easy call for them, simply because he's the GOP candidate most likely to win. The 'tea party' folks think that advancing conservatism is the proper Strategy. This makes Castle an easy call for us too (just in the other direction), because he's not conservative.

Tactics is the execution of our Strategy. In areas where we differ on Strategy, a discussion on Tactics is meaningless. The O'Donnell vs. Castle argument is a Strategic one, not a Tactical one. The Tactical argument would be how best to get the primary-winning candidate elected. That argument is pointless when we're still arguing over Strategy.

This is why I think it's important to make the distinctions between the various divisions in the 'battle plan' clear, and why calling Rove a strategist is just plain wrong. His Tactics won the GOP some difficult battles and though I don't particularly like the guy, I can certainly recognize that and commend him for it. His Strategy has been an utter fucking disaster. We're currently attempting to undo the damage his Strategies have done to the larger Vision.

This is why we need to move on from this race ... 'chill out' as DPUD says. We have to accept that our differing strategies made this race an impossible situation. What we should be discussing is how to combine our strategies so that we can implement effective tactics in the future. Otherwise, we're just rehashing old arguments and pissing each other off for no good reason.

Posted by: Hermit Dave at 10:34 AM | No Comments | Add Comment
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So, the Fed announced today an additional $600 billion commitment to propping up the stock market so their cronies could cash out; er, I mean a commitment to bailing out the banks and paying executives huge bonuses at the expense of the average American; er, I mean a commitment to helping revive the economy.  Yeah, that's it ... reviving the economy.

I knew this was coming, yet I'm still completely sick to my fucking stomach over this.  I don't have the energy to write a long diatribe about this utter fucking disaster, or even explain in depth what it means.  The economic, financial, and market links in my blogroll will simply have to suffice for analysis.  The key point is that the Fed has committed to a pace of monetization that equals the projected debt of the Federal Government for the foreseeable future.

This does diddly-squat to revive the economy -- just ask Japan.  All it does is steal, through inflation, from responsible and productive people in order to prop up a completely broken capital structure and pay off powerful vested interests.  In Al-Qaeda's wettest dreams they couldn't do one one-hundredth of the damage to America that the Fed is doing.

What can the average person do about it?  In the medium term, protecting oneself from inflation is the most important thing.  Cash is trash, and in an ever increasing fashion.  Bernanke is attempting to force us to buy dollar-denominated risk assets, but that is the one thing we must not do.  Stocks are out -- they'll probably go up, at least for a while, but eventually the economic damage from the current policies make them a terrible investment.  Bonds are likewise out -- they're the equivalent of Russian Roulette at these levels, and the Fed is playing a rigged game.

This leaves us with commodities and foreign investments.  One can buy silver and gold as alternative currencies to combat dollar devaluation.  One can buy into commodity funds with various weightings in things like energy, foodstuffs, and basic metals to protect oneself from inflation.  One can also buy foreign currencies (and invest in foreign assets), but this is extremely risky as other countries can try to competitively devalue their currencies to 'equalize things' with the US.  Going the foreign investment route opens up a Pandora's box of complexity and requires constant vigilance.  I don't recommend it.

For someone with a relatively small amount of wealth to preserve, the simplest and most effective thing is to convert all savings into silver, gold, and commodity funds.  Keep enough cash on hand for day-to-day expenses and to pay bills, but otherwise convert it into something which at least has a chance of holding its value.  The PowerShares DB Commodity Index Tracking Fund (ticker DBC)  is nicely weighted, with an emphasis on energy.  Combining that with some precious metal holdings would be a way to try to preserve your wealth without adding a lot of complexity to your life.

In the long term there are two possible solutions to our dilemma.  The first is the political solution -- to make huge cuts in government spending, end the Fed, take a hell of a lot of pain, but maintain society and our country.  The second is to write off America as beyond redemption, detach oneself from the government as much as humanly possible, and prepare to be largely self-sufficient.  I'd like for the former to happen, but the clock is ticking rapidly, so I'm preparing for the latter.

Posted by: Hermit Dave at 07:03 PM | No Comments | Add Comment
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The model portfolio managed to survive today's QE announcement.  It wasn't pretty, especially with the heavy reversal of the banks and the collapse in volatility, but it survived.  However, this is just too much work to put into a blog that nobody reads.

The truth of the matter is that when you have a market that is trading at valuation extremes, based strictly upon the Fed debasing the currency, you have to be extremely proactive in portfolio management.  This is one hell of a lot of work to do for no reward.  If I really wanted to do this kind of work, I'd try to go back to Wall Street and make some money at it.

That being said, this was a good exercise for me.  It got me back in touch with the markets and shifted my thinking from the realm of theory into the realm of practice.  There is no good way to do this witout having something on the line, even if only fake internet dollars and the chance of looking like a complete fool.  Final statistics:

So, not terrible, but hardly impressive.  Two and a half weeks is a blink of an eye in the bigger picture, but the early performance trend (vs. benchmarks) isn't encouraging.  As the portfolio would need massive post-QE announcement changes and serious daily maintenance, and I'm not going to put in that kind of effort, it's best to just shut it down.

My biggest mistake was overhedging.  During my trading days (in a previous life) I ran long-short books with little net exposure, but I also spent 80+ hours a week doing so and had the ability to react instantly when things started going against me in the markets.  I also had the benefit (or curse, when losing money) of massive leverage.  Running that kind of a portfolio is completely different than managing a wealth preservation portfolio and I simply didn't adjust my positioning enough.

So, what's a person with wealth to preserve to do?  I'll have some thoughts on that when I post on today's Fed announcement.  Short answer:  silver, gold and oil, baby.

Posted by: Hermit Dave at 03:43 PM | No Comments | Add Comment
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Turns out I was 1/3, with only my local Rep. Issa winning.  As he was a sure thing, it's somewhat of a bummer that the other two key races in which I had a vote went sour.  Unlike most of the nation, California decided to hammer the gas and try for lift-off while going over the cliff.

Whitman's loss doesn't bother me at all.  She was a lousy candidate, ran a lousy campaign, and likely wouldn't have done jack shit about California's fiscal disaster.  My vote for her was based almost entirely on the 'new blood' concept, but I had no illusions about her likely effectiveness.  Chris Christie she is not.  Let Moonbeam and the Dems have the pleasure of being at the wheel as the state goes flying over the cliff edge.  Fine by me.

Fiorina's loss, on the other hand, really bugs me.  She was a wild card, and it would have been extremely interesting to see what she would have done in the Senate.  With the country as fucked up as it is, it's worth taking risks to improve things, especially when someone has as much potential as Fiorina.  As I've said before, she could have been an utter disaster, or she could have been brilliant.  Seeing as the status quo is already 'utter disaster', Fiorina was worth taking a chance on.  I'm saddened that we'll never get to find out if she would have lived up to her potential.

That's pretty much it.  I'll probably have a few more things to say about the broader political picture, and the potential for reconciliation between tea partiers and the GOP establishment, but by and large this election didn't do much to excite me.  Politically, it's now a waiting game until the new Congress is seated.

Posted by: Hermit Dave at 01:43 PM | No Comments | Add Comment
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While I wait for the Fed announcement, here are some more thoughts on yesterday's election:

• You know who this hurts the most?  Palin.
• You know who this doesn't help at all?  Romney.
• Cantor may just be the big winner going into 2012 here.  If he allies with Rand Paul and hones his message, people could start to take him seriously.
• Rand Paul is fucking impressive.  He's the single most important pickup for the GOP.  It looks to me like he's got his father's fiscal chops and fighting spirit, without all the excess baggage.
• Paul and Rubio will be the ones to watch for clues as to where the GOP is headed.  They're both rock stars at the moment, but they'll have to back that up with sound fiscal policy.
• The GOP can be thankful they didn't win the Senate, as it buys them time to get their act together going into 2012.
• Both tea partiers and the GOP could come out ahead if they look to where they succeeded (Rubio, Paul, etc.) and failed (eg. Angle for the tea partiers, Fiorina for the GOP) and cooperate on fielding candidates that are both fiscally sound and electable.  Finger pointing would be a huge mistake -- learn and move forward.
• Jim DeMint is quietly becoming the most powerful conservative politician.  DeMint, far more than Palin, will determine who the next GOP candidate for President is.
• Palin should stick to fund raising and energizing the base.  She'd be most effective if she allies more closely with DeMint, and takes a party position, rather than trying for elected office.

In big picture, practical terms, none of this means much right now.  Once the new Congress is seated, it will be seen whether the GOP has any real fiscal balls or not.  I still think that, even if they want to play hardball, they won't be able to do much more than tinker around the edges and position for 2012.  Time will tell.

Posted by: Hermit Dave at 09:02 AM | No Comments | Add Comment
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My initial reaction is that, from a practical standpoint, this election turned out to be almost meaningless.  Yes, a repudiation of the crazier leftist positions, but still a vote for continuation of the larger status quo.  The 'extreme' tea party type candidates got pretty well trounced, meaning that the GOP is going to be looking to field more centrist candidates in 2012.  The Angle loss to Reid is especially important in this regard.  In short, as we head for the cliff, the electorate wants to take the foot off the gas, but is not yet ready to turn the car.

All this brings us back to the Fed and tomorrow's QE decision.  With these results, the Fed should feel fairly confident that they have free rein to do whatever they like.  The odds of an immediate challenge to the banking oligarchy would seem to be pretty low, barring any serious missteps.  They're going to have to deal with getting the debt ceiling increased in early 2011, but given the election results, it probably won't be a major issue.  If Obama is even half smart and throws Geithner under the bus as a token negotiating point, I'd say a debt ceiling increase is a foregone conclusion.

So, the first (and less important) half of this week's picture is in place.  Let's see what tomorrow brings.

Posted by: Hermit Dave at 10:10 PM | No Comments | Add Comment
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Let's imagine for a moment that Bernanke and his butt buddies on Wall Street are worried about a new Congress coming in and fucking up their plans to continue to rape and pillage the average American.  What's the best way for them to maintain their oligarchy?  Create a panic, of course.

The markets are setting up perfectly for this scenario. One with a sufficient amount of tin foil might say they've been set up this way.  All Bernanke needs to do tomorrow is announce no further QE.  At the same time, the Wall Street boys turn off the 'liquidity providing' HFT computers.  The stock market goes kablooie, giving the appearance of a 'no confidence' reaction to the election by the markets.

This would put the incoming Congress in a very bad spot.  They'd need to decide immediately whether or not to continue to sell out to the banking oligarchy.  As most politicians aren't looking much past the election, and are mental midgets relative to the banking crooks, odds are that America would find itself sold further down the river even before the last vote was counted.

Tomorrow is going to be a very interesting day.

Posted by: Hermit Dave at 10:19 AM | No Comments | Add Comment
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