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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