The Big Picture |
- Liberals and Conservatives Agree: Vote Third Party
- 10 Monday PM Reads
- This Is Your Tax ‘Fiscal Cliff’
- Chinese politburo standing committee to be “packed with conservatives”?
- Storm Sandy’s CT Scan, and Other Vital Images
- The Change in America’s Debt by Presidential Term
- 10 Monday AM Reads
- Google Crisis Map: Power, Gas, Damage from Sandy Damage
- “I’m tired of Bronco Bama and Mitt Romney”
- Bears Breach Apple’s 200-day
| Liberals and Conservatives Agree: Vote Third Party Posted: 05 Nov 2012 10:30 PM PST Voting for a Third Party Candidate Is NOT a Wasted VotePreface: Many Americans are waking up to the fact that the Republican and Democratic candidates are incredibly similar. See this, this, this, this, this, this, this. Many people are starting to realize that Obama and Romney are virtually indistinguishable on war,jobs, freedoms and favoring fatcats instead of the little guy. Many of us want a third party candidate to win … but are afraid of "wasting our vote". Leading conservatives and liberals say that we should vote for a third party candidate. Judge Napolitano explained today why voting for a third party is not wasting one's vote:
(Conservatives like Jon Huntsman, Sarah Palin have spoken favorably of third parties as well.) Liberal news commentator Lawrence O'Donnell urges us to vote for a third party candidate:
Why I'm Voting for Gary JohnsonOne of the main reasons to vote for a third party candidate is that the broken two-party system will never change unless third parties get more backing. If 5% of the American people vote for a third party candidate, that candidate will receive government matching funds, which will give them a better shot at competing. Moreover, a showing of 5% or more would create buzz and start a self-fulfilling dynamic of lending credibility and a sense of possibility for a third party. But do any third party candidates have a chance of getting 5% of the vote? Yes … Gary Johnson. Judge Napolitano endorses Gary Johnson. Jesse Ventura endorsed Johnson. Even Ron Paul hinted that he would vote for Johnson. And in 2010, Paul said that if he didn't run in 2012, he would endorse Johnson. A bunch of other people have endorsed Johnson as well. And at least some newspapers – such as the Chattanooga Free Press – have endorsed Johnson. In fact, polls show that Johnson might reach 5%. A September CNN/ORC International poll showed that 3% of likely voters and 4% of registered voters say they'd vote for Johnson. A Reason-Rupe poll the same month showed Johnson raking in 6% of likely voters. Those polls were taken before Ron Paul convinced his supporters that he's out of the race, and before he virtually endorsed Johnson. Moreover – since the polls were taken - Johnson has gotten on the ballot in 48 states … and won the right for write-in votes for Johnson to be counted in the remaining 2. Ron Paul supporters can, of course, write in Paul on the ballot. But a write-in vote for Paul will not be counted in most states. And since he is not affiliated with any party at this point – and since even he will likely himself vote for Johnson – a vote for Paul will not help any third party. No wonder many diehard Paul fans are announcing that they're going with Johnson. As such, I'm voting for Gary Johnson. Postscript: Johnson is not perfect, but he is solid on issues of civil rights, liberty, peace and fiscal responsibility. |
| Posted: 05 Nov 2012 01:30 PM PST My afternoon train reads:
What are you reading?
Economist commodity-price index II |
| This Is Your Tax ‘Fiscal Cliff’ Posted: 05 Nov 2012 11:30 AM PST Without legislative action, most of the tax cuts enacted since 2001 will expire on Jan. 1, when new taxes also take effect. Result: the government would take in more than $535 billion in increased revenue and the average family's tax bill would go up $3,500.
Source: NYT
Breakdown of the increases, ranked by the Tax Policy Center in order of likelihood. |
| Chinese politburo standing committee to be “packed with conservatives”? Posted: 05 Nov 2012 09:30 AM PST Australian retail sales rose by +0.5% in September M/M, above expectations of a rise of +0.4% and +0.3% in August. The better retail sales data has raised the question as to whether the RBA will cut interest rates tomorrow, as expected. The Australian trade deficit by A$420mn, to A$1.46bn in September, from August and below the A$1.55bn forecast. Exports declined by -1.0% to A$24.2bn, whilst imports declined by -2.0% to A$25.6bn. The Australian services sector (the performance of services index) came in at 42.8 in October, as compared with 41.9 in September, though the 9 consecutive monthly contraction; Chinese official PMI rose to 55.5 in October, up from 53.7 in September. New orders dropped by -0.2 points to 51.6, though the business expectations component rose by +3.4 points to 63.4. I really don’t know why I report this data – I certainly don’t believe it. Unlike the official data, the HSBC/Markit services index, on the other hand, suggested that PMI fell to 53.5, from 54.3; The South China Morning Post reports that the new Standing Committee of the Politburo is “packed with conservatives”. Apparently Mr Jiang Zemin (the former head of China) has been able to place one of his people on the Standing Committee (allegedly to be in charge of the economy) and has ensured that 2 other “reformers” have been bypassed. If true, the appointments which will be a problem for the incoming President Mr Xi Xinping and Premier Mr Li Keqiang. It is also going to be bad news and will result in increased tension between China and Japan at the very least. The outcome will be known on the 15th November, with the Congress to meet, starting on 8th November; Bloomberg reports that the Indian government may consider raising an additional Rupees 250bn (US$4.6bn), after setting a higher budget deficit for the current fiscal year ending 31st March. The finance minister today stated that GDP growth could be +5.5% to +6.0% this fiscal year, rising to 7.0% next fiscal year and that the budget deficit will -5.3% (previously -5.1%) of GDP – still tough to achieve; The Greek PM Mr Samaras is desperately trying to ensure that coalition members support the E13.5bn of austerity cuts this Wednesday in Parliament. Following that vote, the Greek Parliament has to approve the 2013 budget by this coming weekend. The passage of the measures are preconditions for Greece to get further bail out funds – which will also require the approval of other EZ countries. The EZ finance ministers meet on the 12th November to discuss this matter. Analysts expect that Mr Samaras will be able to push the vote through. Hmmmm. However, Greece will still require an additional E13bn to E18bn to cover its financing requirements to the end of 2014. The current plan is for Greece to issue short term T Bills, which will be bought by Greek banks and then used as collateral to obtain funds from the ECB. This truly is getting surreal. Remember that Greek debt to GDP is expected to rise above 190% in 2014. Other proposals being discussed by EZ finance ministers include cutting interest rates on bail out funds lent to Greece (by 150bps), extending maturities, debt buy backs and possibly the ECB giving up on “profits” on the Greek bonds that it has bought. The IMF has called for EZ countries to accept a haircut on existing loans. Wont happen. In addition, the Germans are trying to force through an “enhanced compliance” scheme in return, which would force automatic and across the board budget cuts if Greece does not meet its targets. Good luck. (Source FT); The ECB is to check as to whether it has contravened its own rules by lending to Spanish banks on more generous terms than should have been the case. Essentially, German newspapers (Die Welt) allege that the haircut on collateral provided to the ECB by Spanish banks (18 month T bills) was lower than should have been the case. The impact would be that Spanish banks will need to provide an additional E16.6bn of collateral to the ECB to cover the short-fall, as the E80bn of Spanish T Bills provided by the relevant banks were wrongly classified, as top rated securities, whereas they are of a lower quality. What further collateral, may I ask?. Spanish banks borrowed E378bn from the ECB in September, nearly E250bn more than at the start of the year. Oh dear, bad news for Spanish banks. The IBEX is nearly -1.5% lower today; Spain’s October unemployment rose by +2.7% (+128.2k) in October, much worse than the rise of +110.0k expected and just +79.6k in September, with a total unemployed rising to 4.8mn. The increase was the 3rd consecutive monthly rise. Spain will never hope to meet its targets and the situation is now deteriorating at truly alarming levels. Further austerity cuts will just make the situation much, much worse and I continue to believe that the country will have to restructure its debts in due course. PM Rajoy continues to dither in spite of the clear need for a bail out – however, its politics, especially given the upcoming elections in Catalonia and, in addition, Spain has concluded much of this years funding requirements which allows Rajoy to dither even more – however, Spanish bond yield continue to rise and the ratings agencies must be looking at Spain with a view to cutting its ratings; The EZ November sentix (investors confidence) index came in at -18.8, better than the -20.0 expected and -22.2 in October; The UK October services PMI fell to 50.6, much lower than 52.2 in September and well below the forecast of 52.0. It was also the lowest reading since December 2010. The business expectations component declined to 65.3, from 67.0 in September (the lowest since June). The BoE is to decide as to whether to expand its QE programme next Thursday. Most analysts expect the BoE to be on hold. Its going to be a tight decision, but I believe that the BoE may be more cautious and decide to increase its QE programme, though by £25bn only; The Irish October services PMI came in at 56.1, much better than 53.9 in September and the highest reading since October 2007. The Irish economy is stabilising and, indeed, recovering. However, it is dependent on the UK/EZ; S&P has lost a case in Australia which involved the ratings agency awarding its highest rating to a derivative product which subsequently collapsed. The Australian judge ruled that S&P was “misleading and deceptive”. This landmark decision will open up the prospect of legal action being taken against ratings agencies, particularly in Europe. In the US, the ratings agencies have been successful in defending themselves against similar cases, though certain cases remain to be heard. S&P is to appeal the decision; US Presidential elections tomorrow, with Intrade predicting that President Obama will win – his chances of succeeding is currently 67.5%; US ISM October non-manufacturing index came in at 54.2, slightly lower than the 54.5 expected and 55.1 in September – It was the lowest reading since June. The new orders component came in at 54.8, lower than the 57.7 expected. However, prices paid came in at 65.6, better than the 68.1 expected, with employment up to 54.9, higher than the 51.1 expected and the best reading since March; The G20 states that there is increasing risk due to the slow movement of policy in the EZ. They remain concerned about the fiscal cliff. the situation in Japan is problematical and suggest that a medium term fiscal consolidation is necessary. Finally, they warn that global growth remains modest and that downside risks prevail. Well, great news for a Monday – thank you G20 !!!!; Outlook Asian markets closed mainly lower, with European markets weaker. US markets are somewhat lower. Gold is trading at US$1682, with Brent at US$105.45. The Euro is weaker on worse news from Spain and uncertainty as to the Greek bail out. The US elections tomorrow, with the betting indicies suggesting a win for Obama, though analysts are predicting a very tight race – I’ll stick with the bookies. The market will focus on the impending “fiscal cliff”. Following that its the ECB meeting (no change expected) and the outcome of the negotiations relating to the Greek bail out. The Chinese Congress meets on the 8th November, with the announcement of the composition of the standing committee of the politburo on the 15th November. Quite a few market moving events. Still believe that it is better to be cautious in respect of equities. Whilst uncertainty over Greece should weigh on the Euro, analyst expectations are that some (totally absurd) deal will be put together, which should be Euro positive. However, thereafter…… The news from France continues to indicate that the French economy is under severe stress, to put it mildly – in fact its looking like a total disaster. It seems increasingly clear that President Hollande will not be able to stem the decline. This is going to be a real biggie when it blows, which, unfortunately, looks more and more likely. Where does the EZ go then? Any budget deal in Japan will support the Yen, but negotiations are likely to go down to the wire ie the end of the month. Just picked up a Reuters report which states that the Greek bail out will not be resolved by the 12th November and will be delayed till the end of the month – if that’s true, the Euro is going to be under pressure. Furthermore, the Greeks have been saying that they will run out of cash by mid November – they are the Greeks though !!!! Kiron Sarkar 5th November |
| Storm Sandy’s CT Scan, and Other Vital Images Posted: 05 Nov 2012 09:23 AM PST Owen Kelley, a research scientist at NASA Goddard, works with data from the TRMM satellite to image the insides of storms. TRMM looked into the eye of Sandy the day before it made landfall and saw something surprising. Satellites also took snapshots of Sandy. J. Marshall Shepherd, president-elect of the American Meteorological Society and the director of the Atmospheric Sciences Program at the University of Georgia, explains some of Sandy’s unusual features. |
| The Change in America’s Debt by Presidential Term Posted: 05 Nov 2012 09:00 AM PST |
| Posted: 05 Nov 2012 08:00 AM PST Back in the office late, where the city seems perfectly normal, but-I-still-don’t-have-electricity-or-heat-at-home-reading material:
What are you reading?
October Employment Report: Job Growth Relatively Strong as Unemployment Rate Creeps Up; Temp Help Up Nicely |
| Google Crisis Map: Power, Gas, Damage from Sandy Damage Posted: 05 Nov 2012 07:30 AM PST Click for interactive map: |
| “I’m tired of Bronco Bama and Mitt Romney” Posted: 05 Nov 2012 06:31 AM PST Here is a little humor ahead of tomorrow’s election and after an extremely difficult week for many, While many of us agree with this little girl and we’ll finally know for sure tomorrow night what we’ll get for the next four years, most business people and investors want a continuation of current tax rates (I specifically said tax rates because we’ll pay more in taxes if the economy gets better) and not rising ones, especially in the context of an economy that has grown less than 2% on average this year. In the current global economic circumstances, it won’t take much to push the US economy into a recession. In Europe, with more meetings on Greece this week, stocks there are playing catch up to our 2nd half of the day weakness on Friday. Yields in Spain are also moving to multi week highs. UK PMI services index fell to 50.6 from 52, the weakest since Dec ’10. In Asia, China’s state sector weighted PMI services index rose 1.8 pts to 55.5 in Oct but comes after falling 2.6 pts in Sept to the lowest in its short 1 1/2 yr history. The private sector weighted HSBC figure fell to 53.5 from 54.3 in Sept but still up from 52 in Aug. Australia, a Chinese economic proxy, saw exports in Sept fall to the lowest since Feb ’11 with merchandise exports specifically to China falling 6.5% m/o/m. |
| Posted: 05 Nov 2012 05:30 AM PST We posted yesterday how important Apple's 200-day moving average is/was.We noted, "It's been the dike that has kept the Bear Sea at bay ," since the bull run started in March 2009. Here's an excerpt,
Where now? Wish we knew, but it's unlikely, in our opinion, we have the V bottom that took place last November, when the stock spent only one day under the 200-day. The concerns about innovation and whether the company has jumped the shark with the iPad mini are more structural and, seems to us, need some time to be resolved in investors minds. The stock is still up huge for the year with a Jackie Robinson-esque return of 42.42% and could face capital gains selling if the President is reelected on Tuesday. It's also unlikely traders will step in to catch the falling knife until the stock stabilizes and moves back and closes decisively above the 200-day. We can't recall the last time Apple has been this oversold with a 20 handle RSI. This would be an opportune time for Apple to put some of its $100 billion plus cash to work to help stabilize the stock. Get with it, T.C.! We could be wrong and always remain flexible. Stay tuned.
(click here if charts are not observable) |
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