It's now ok to say "it's official." Obviously a roaring Treasury market, an exit from a recession, passage of major and landmark legislation and stabilization from financial catastrophe would normally be cause for a regime to celebrate. Instead we have the "bailout" of our administration's entire economic team without an even asking for a "goodbye." In parlance of infantry work: "they're quiting," Apparently what soon to be Speaker Boehner meant to demand is that this administration "immediately quit and leave their President to the wolves" since "demanding their resignation" is now clear understatement. Obviously the "what" of what they are fleeing is now obvious. The trillion dollar bamboozle known as "healthcare" was Rahm's finest hour. This is a fact and I don't mean this to be mean to the guy. Getting this legislation passed of course will remembered as the "sweetest sorrow" of his life. He is fleeing to Evanston because the disaster that is this particular entitlement is coming into focus in "real time." This is no mere question of "not being able to afford it." This achievement which for all intents and purposes cannot be rolled back has now lead the "advanced industrial economies" right over the precipice of financial solvency. What exactly we have plunged into is mysterious since we're still trying to get over the shock of "having plunged." By "we" of course I include Japan and all of Europe. Gotta hand it to Democrats: they don't plunge mere "Los Angeles" into the abyss. Is it so catastrophic that I can call the shot for "the next three months" and not merely "in real time relative to Greece vis a vis The Chancellor"? Well "history is to be made" so here goes one trip down turnpike lane.
The easiest explanation for a September to Remember rally in equities is that these catastrophic policy errors by the Democrats are a made to order "running of the board" by "the private interests" over government itself. The most obvious expression of this reality was the surging of the stocks of education companies. This was a direct challenge to Federal authority and as card carrying members of the "public education elite" this could not be allowed to stand. Needless to say it did not and a ruthless investigation was ordered and carried out by none other than the Justice Department! (As is the wont of "rookies in power" they always turn to Justice because Justice is the little guy that can put you away--although interestingly it really is built and designed to go after cases of discrimination so using it to attack "education companies" is really not in its interests. God forbid if these resources are used to go after a terrorist or two although I do take note they are on the case of "housing discrimination." That should be interesting.) Initially the targeted stocks were devastated but have since "bottomed" thus allowing for some possible consolidation or perhaps even take-out activity. The point of this diatribe is to try and get people to understand whatever they believe the connection between Wall Street and Washington might be the connection between THE LAW, Washington and Wall Street is always there. In short "the lawyers define the extent to which government" in this case and what I'm arguing "even exists."
I will not get into the details of the education business (other than to say its debt is different from your house's so make sure you do the math when it comes to "education") but am trying to use this explicit example of a Wall Street/Washington connection to show how the collapse of government itself is in fact providing liquidity, profits, trading opportunities and ultimately "growth" such that jobs are created and incomes rise and ultimately "government can't do anything about it." Needless to say "education is penalized" but after decades of not making any choices whatsoever this is what you get. I therefore do not like any of the stocks with the possible exception of ITT. This is not to say they aren't buys however. Consider them a "21st century play on government as chaos." Needless to say "the funding for the banks will always be there because the war is still there."
Disclosure: no positions