Investors Fear More Than Just a
'Fiscal Cliff'
Submitted by RickAckerman on
11/07/2012
‘The
Dow plunged 313 points yesterday, but don’t believe news media reports that it was
the nearness of the “fiscal cliff” that caused the selloff. What spooked
investors is a bigger picture that recognizes the economically catastrophic
implications of a second Obama term. To be clear, there is nothing Romney
could have done to avoid the deflationary Depression that lies ahead.
However, a Romney presidency might have at least served as a reality
check on malfeasant fiscal practices, delaying the onslaught of hard times for
perhaps long enough to allow Americans to put their financial houses in better
order before austerity is imposed on us with the force of an earthquake, as it
has been on Europe.
We’re
not going to dwell on the choice Americans made on Tuesday. Suffice it to say,
the election has substantiated conservatives’ worst fear – that, sooner or
later, Big Government’s clients would come to outnumber those of us who pay for
the criminal extravagances of their voracious welfare state. Actually, it turns
out they needn’t have outnumbered us, since the quirks of the electoral college
have enabled them to execute a coup even though they lacked a statistically
significant majority.
Bread and Circuses
Now,
with a $16+ trillion federal deficit that is growing by more than a trillion
dollars per year, the nation’s descent toward insolvency can only accelerate,
further widening the gap between tax revenues and outlays. Soaking the rich,
even by taxing them at 100%, would not begin to arrest the decline, but just
try to tell that to those who voted for Obama. Bread and circuses will be their
reward, and far be it from us to predict that they will feel unsatisfied.
Rather, the opposite should hold true, since it will not have cost the 47% a
dime.
As
far as the stock market is concerned, we were quite surprised to find some
bullish opportunities in the dozen or so charts reviewed in real time during a
“Hidden Pivot Analysis” session held Wednesday morning at Rick’s Picks.
Amazon, Priceline and Facebook, among others, look promising, suggesting
these companies, and presumably a few others, may be able to buck a
depressionary tide, perhaps by focusing on nickel-and-dime sources of revenue.
If you’re interested in the details, as well as the reasons for our bearish
outlook on the broad averages, a recording
of the session is publicly available. ‘