Investors and the Fiscal Cliff

Monday, November 05, 2012

Team Macro Man can't believe that the US administration will take the economy over the fiscal cliff. However we can see some investors going over it.

Here is a documentary about investors and the fiscal cliff.

Posted by Polemic at 1:54 PM  

15 comments:

Lemmings indeed. Here is a summary of the US financial media and their prevailing thought at the moment. We think this is dead wrong and we nominate this for our Knob of The Week award.

Stocks To Rise on Romney Win

The argument being made here is, Obama wins, four years of Capitol gridlock, higher taxes on divis, Janet Yellen on crack doing QE, everyone jumps off the cliff into an ocean of low yielding fixed income products, so the argument goes you should buy bonds. How did that work in 2008?

On the other hand if Romney wins, we get rid of nasty banking regulations, oil spurts out of the ground all over the Heartland, gasoline costs $1, it's Morning in America, bread becomes white again, US exceptionalism returns, Chevy, baseball, apple pie and naturally stocks zoom to the moon.

In fact, it's really a choice between infrastructure spending and reflation under Obama, with a fiscal fudge in exchange for punting on tax issues, versus austerity under Romney/Ryan, which would be a positive only for the dollar and Treasuries. I'll skip the social agenda as it's beyond the scope of the blog, but the Supreme Court appointments obviously have tremendous significance.

Anyway, that's the US election as viewed by a long- term resident and non-voting taxpayer....

Leftback said...
3:00 PM  

Dickheads or Lemmings..whatever

amplitudeinthehouse said...
3:05 PM  

The Supreme Court is beyond the remit of this blog, but FHFA is not.

DeMarco's mandate is up in late 2013, and some TBTF backdoor bailout beneficiaries are already warming up to the significant housing reflation efforts likely to come up under a more hmmm, flexible FHFA boss.

Dee Dee Humberside said...
3:30 PM  

That Lemming video was dubbed the Disney "snuff" film. The crew ACTUALLY threw the lemmings off the cliff to their deaths.

More on the fake video that started the myth that lemmings follow themselves to their demise

http://www.snopes.com/disney/films/lemmings.asp

scharfy said...
5:03 PM  

Scharfy that is a truely awesome piece of knowledge.. and fascinating in its own right. Bravo, and you are hereby selected to captain the tmm pub quiz team.

I wonder if the analogy of forcefully destroying financial institutions and citing the result as evidence of their stupidity and dreadful management could be applied to other media manipulators?

Polemic said...
5:13 PM  

Speaking of destroying financial institutions, another mickey mouse outfit (LB actually means a mid-sized brokerage house) has apparently been trading with 300 x leverage. They reported $3.44M capital, but went long to the tune of "$750M-1B" in AAPL. Wonder if this explained some of the late morning selling in size seen in October?

Rochdale Blows Up, in Rescue Talks

Of course it was another "rogue trader".... there will be a buyout/merger/bailout. Crony capitalism once again. No CEOs left behind....

Leftback said...
5:21 PM  

Here's yer lemmings, Mr P. According to this CFTC data, the little guy has gone long Treasuries to the largest extent since February 2009. Now that's a crowded trade, folks.

10 Year Treasury Commitment of Traders

Just look what happened in March and April !!!

Leftback said...
5:56 PM  

C says,
Put that COT data together with what I posted awhile back re the amount of cash sidelined earning neg returns,and you have astory of a market that still can't put fear to bed regardless of what sentiment surveys say the contrary.
Remains underinvested in terms of any bubbly market I can ever recall.

Think Mutt R would have had a better chance of election if he had run with the slogan vote
" Money R US". I couldn't resist the anagram play.

Anonymous said...
7:47 PM  

"The hand behind the Lemmings" was a bit shocking don't you think it should be cannonized somehow here?

LB, although Romney promises austerity to get the infamous deficit under control, do you think he means it? I definitely think there will be austerity...in a sector... but not without an equal amount or more spending in another area.

Anonymous said...
8:01 PM  

think a better metric relative to non-commercials would be the cftc Traders in Financial Futures asset manager sub-index.

this shows largest 10yr net SHORT dating to 2007.

Anonymous said...
8:05 PM  

Austerity will be a tough sell at the moment for anyone who is elected. Prevailing wisdom suggests that they will try to do some long-dated work on the budget and leave the immediate budget more or less alone while the US economy is in such a vulnerable state. Even the mild austerity budgets of the UK Coalition government sent the British economy back into recession.

Romney plans austerity for one sector. It's the hatchet for Kermit, Bill Maher, Big Bird, Thomas the Tank Engine and other well-known pinkos.

Leftback said...
8:13 PM  

Team Macro Man can't believe that the US administration will take the economy over the fiscal cliff. -- Never underestimate the sheet stupidity of the political class...

10:08 PM  

alt inv - yeah fair point

Polemic said...
10:10 PM  

and thanks LB

Polemic said...
10:12 PM  

thanks for share dude :D

Android said...
12:05 AM  

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