Let's go out there like a bunch of crazed dogs and have some fun.
Don't get me wrong, the Fiscal Cliff, followed by implementation of Obamacare taxes and rules, and then later, in the year, another debt ceiling debate is dangerous as hell for the economy and stock market. But, there is also a new danger that will run amok on both in a designed plan to wreck the joint.
Senator Elizabeth Warren
Over the weekend, I was honored to speak at David Horowitz "Restoration Weekend" conference in West Palm Beach. I discussed many things including my plea to conservatives to wake up about a real grass roots effort to win the vote. I also met so many wonderful people all desiring to save the greatest nation in the world.
There were a ton of varying opinions.
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During our panel, I used an analogy of the wedge breaker in football. Although professional football is so evolved there isn't the same need for such a player as just a few years ago, the fact of the matter is, it's the current role of Elizabeth Warren in Washington. A few years ago, Joe Tafoya of the Seattle Seahawks was considered the best in that role on kickoffs, and he was described by a local magazine as long on grit and short on glamour. Hate her or love her, Warren is long on grit and short on glamour and ready to wreck anything that generates profits.
In a piece on the Huffpost, she said her first task is to wreck the ability of Congress to filibuster. I'm sure she cries with joy every time she watches Jimmy Stewart in "Mr. Smith Goes to Washington," but now, the time-honored filibuster has to go so democrats can ram policies even easier than in the past four years. But, this is just a warm up act. Wait until she goes after everyone that "didn't build it" from the mom-pa hardware store owners to self-made business icons like Steve Wynn and Sandy Adelson.
The wedge breaking in football doesn't care about making the tackle, his only task is to disrupt. He hits a wall of blockers at breakneck speed and without regard to his own body and health. In Ms. Warren's case, she will run head long into any blocking of free enterprise, and the Constitution, without regard to health of the nation or economy. The fiscal cliff is a problem largely because it focused on raising taxes rather than spending cuts. However, once we get a deal, the larger problem will be the manhandling of the American Dream lead by an unglamorous Senator from Massachusetts.
Yesterday, the Wall Street Journal pointed out the dramatic decline in business spending and investment which has been happening for some time now. It's not just the fiscal cliff; it's the browbeating, regulations and threats. It doesn't stop, but the flow of cash does. Hiring slows and investments are made outside the United States. Plus people stop spending, especially those in the cross hairs of tax hikes. According to Gallup, people have already begun to spend less in a survey that measures self-reported spending "yesterday."
Housing data came in better-than-expected although no great shakes.
Permits 866,000 from 890,000 prior month but above consensus estimate of 840,000
Starts 894,000 from 863,000 prior month and above consensus estimate of 870,000
Not sure how much the news moves the needle equity futures haven't budged since the release.
Typical midweek angst is creeping into the market earlier this week because of the holiday. It felt like yesterday's session was more an ode to pleasantries from Sunday morning talk shows. There's no doubt the market has been trying to force Washington's hand and that happens with carrot and the stick- but mostly the stick.
But the market may have to go into full meltdown mode to get the attention of lawmakers. Consider France lost its AAA rating after the bell last night and didn't cause the ripple of dragonfly fly wings over and idyllic lake.