No Change Under Obama

Anyone who really believes that Obama represents anything more than a happy smiley face is as delusional as the Bushies who believed in witches, warlocks and weapons of mass destruction. This election was a good cop bad cop, the billionares got over on those of you enamored with the princely President elect. Don't believe me; remember how he stabbed you so deep in the back on FISA that you could see the blade burst out through your heart.

Sen. Barack Obama (D-Ill.) today announced his support for a sweeping intelligence surveillance law that has been heavily denounced by the liberal activists who have fueled the financial engines of his presidential campaign.

In his most substantive break with the Democratic Party's base since becoming the presumptive nominee, Obama declared he will support the bill when it comes to a Senate vote, likely next week, despite misgivings about legal provisions for telecommunications corporations that cooperated with the Bush administration's warrantless surveillance program of suspected terrorists.

Of course the Senator had all the smart things to say and made all the appropriate explanations as to why it was such a good idea to vote for it, but the fact that he had previously opposed it, then flipped tell anyone on my planet that they are just excuses, and that the good Senator was delivered by party insiders, he was delivered from righteousness again when he voted for the no billionaire left behind bailout. This man is already making me sick with his Clintonesque manner for appealing to all sides at once and screwing everyone but the rich and well connected.

At this very moment our nation stands on the verge of martial law, as its economy has been pushed over the edge due largely to two huge bills Obama voted for and as a nation is in crisis and desperate need of hero Obama stands up with no more than a finger in the wind and bends in the direction the billionares tell him to.

Karl Denniger has more to say on this sad state of affairs.


Change We Can't Believe In

Friday about an hour before the market closed, it was "leaked" that Obama intends to appoint Tim Geithner as head of Treasury.

Mr. Geithner is the President of the NY Fed. Among other travesties he has overseen we can include the Bear Stearns and Lehman, along with AIG fiascos. The first can legitimately be categorized as a looting operation, as Bear was told they had a term credit facility only to see it evaporate a couple of days later - giving them no time to work something else out. We never have seen details of exactly what happened there, and we've seen zero detail or explanation on the big pile of money that apparently "disappeared" from the NY Fed when Lehman went "poof."

While there are worse picks Obama could have made, this is hardly "change." Indeed, unless Mr. Geithner comes with a promise to open the books of the NY Fed (and the Washington Fed), which I rate about as likely as that of Santa Claus personally appearing in my fireplace in a month or so, we certainly aren't getting "change" in Treasury. Opacity reigns, even though its all our money (at least in theory.)

The market apparently liked it (from one pigman to another!) and rallied 500 points into the close Friday. Never mind the suspicious timing of the announcement - one hour before options expire?! I've seen obvious manipulation before (August 07 anyone?) but this was so transparent as to be ridiculous. One hour later, no market impact.

I guess Obama can read a chart too eh? Hmmm.....

Next we heard that Obama wants to "stimulate" the economy. He's missing the obvious (not that this is a surprise), which is that our problem today is debt load, and you can't "stimulate" something with more debt when carrying capacity has been exhausted.

It appears to be up to the bond market to deliver this message. It will be interesting to see if it does.

More ominously on Thursday we got primary bear market reconfirmation on the DOW, Transports AND S&P 500 along with the Russell and Nasdaq. The bad news is that this reconfirmation Thursday makes it highly likely that we may not see 1500 on the S&P500 for a very, very long time, and that the bear market bottom in this particular cycle could be as low as 300 - an 80% loss from the top.

Hyperbole? Not exactly. The "double top" spanning eight years is quite rare, but when they happen, the entire original bull market run is usually retraced, and what's worse, the final bottom might not be seen for three or more years.

1930s anyone?

Or Japan of the 1990s?

The better question is whether the rally Friday afternoon was something real or just more BS. We'll know early this coming week. If we can break back above 800, the intermediate-term rally case has more credibility. Over 850ish, it has significant credibility. Of course if we immediately collapse and head lower..... brimstone.

In either event believing in the "bottom" being here means you think the economy will turn within the next 6-12 months. Not even Obama believes that; he said as much in his speech, in that he expects it to get worse before it gets better.

So do I.

The question becomes whether we can avoid any of the disastrous things that could turn a nasty recession (or even a Depression) into political and monetary failure. That's the worst-case scenario now on the table, and it is NOT far-fetched.

Thus far virtually everything that has been done has been wrong.

Go back and read "Tired of The Crash?" and then show me any evidence of a change of course.

I sure haven't seen it.

I'll be out-of-pocket this coming week - enjoy your Turkey; it sure looks like we got plenty of 'em in Washington DC......