Fear does funny things

Volatility.

The exchange traded note, which provides leveraged exposure to VIX futures, has been rising on Eurozone debt fears and weaker economic data. The CBOE Volatility Index or VIX is known as Wall Street’ fear gauge and it tends to move in the opposite direction of stocks.

TVIX on Thursday rose above its 50-day simple moving average for the first time since late 2011.

If you were gutty enough, or crazy enough, and you bought this fund on Tuesday of this week, you cashed in to the tune of 43%. Shazam. What is the play? Fear. You are betting that fear and uncertainty will reign. The dark side. Dark side bets have to be timed exquisitely, and this week it would have been exquisite. Today alone, this thing did 13.33%. That’s obscene. But how much money you would lose playing around with this thing on just about any other day of the year would also be obscene.

I pulled a lot of 403b money completely out recently. I own a bit of this stuff but watch it like a hawk and constantly re-evaluate where I think the narrative is going. The last time this stuff went down, anytime the government types came out of a meeting, everyone jumped back in the pool. Safe again? Well, er, short term, yea, ok, but longterm? Look where we are now. Were we “safe”?

What it comes down to for me is the total incapacity of a career politician to understand that you can’t print, borrow and spend your way out of where they are now. And the average German taxpayer, is, or SHOULD, get mighty p***d o*f that because they kept their house in order, they now have to hose out cash and value to a nation that refuses to come out of the ballpit at the playland. It’s game over. Just the exact timing and nature TBD. I figure a weekend will be the time the plug is pulled if it is somewhat planned and orderly. If it slips out of their tenuous “control” (used loosely), it could be any time, but a weekend makes sense for the final jump.

Like in Seismology, the big question is: are we going to have a lot of little tremors that add up to the big one, or just have the big one. Game on. Good luck. BE CAREFUL. Praying won’t hurt either–it works for me.

Here’s why you have to love Obama

From this article

At the G8 summit, which starts on Friday, Obama will press Merkel to lean more towards a growth package for Europe, instead of pressing so hard for the austerity measures that were rejected by Greek voters.

Let me translate: “Lean more towards a growth package” means: borrow way beyond your means and print money as needed.

“Austerity measures”: Not spending more than you take in.

He doesn’t get it here. He doesn’t get it there. Wow.

Scenario for Obama winning in 2012

Thought exercise: Nov 2012. Election. Polls are now beginning to show the magnitude of folks’ unhappiness with the guy. If the economy doesn’t turn around fairly strongly, then it’s likely that he will lose and possible that he will lose like Carter in 1980–by that much.

Was discussing with my brother the other day, a thought I had. I have not read this anywhere (see Rag readers? We have some original stuff here), and the thing is this: Europe. It melts down in the next few months. Greece leaves, run on the banks in Italy and Spain. It burns all the way back to Germany in short order, and the Germans have to decide whether to be Atlas and try and hold the whole Socialist house of cards and borrowed and printed money together, or let it burn and take their chances on the other side of that.

Major global crisis erupts. Major fear grips the whole world–even places normally insulated from fear. Now there’s a thing in political science called “Rally Around the Flag”. That’s when a major threat, usually from outside the borders; usually war or close to it, happens. When that happens, party lines temporarily dissolve. Folks rally to their institutions; to their President, no matter what party. If this happens and the timing is right, I am positing that it could carry BHO to another 4 years. FDR, who would probably still be running for president if he didn’t die, ran in 1940 on the concept of “don’t change horses midstream” with all the stuff going on in the world ie Japan in Manchuria and the Germans running rampant in Europe. Think it worked? Think we’ll hear that very same thing?

Along these same lines is an Israel vs Iran deal that could go down in Sept-Oct-Nov. There’s also always a basic probability that a terrorist attack could be carried out in the USA. These are the types of events I’m referring to that might trigger a well-timed, “rally around the flag” deal. Would a rally even have saved Jimmy Carter in Fall of 1980? Dunno. Just sayin.

And yes, your money should be out of the market entirely right now imo. If you feel bold, when stuff really begins hitting the fan, if it hasn’t already, you can play a little TVIX. It’s a closed end volatility fund. It does well when fear in the market is highest. But WARNING: If not timed right, it will shred your money! Only play what you can afford to lose. Sitting on the side is a much better play, but if you must play the dark side, that’s an easy way the home gamer can do so. Please, please, please be careful!~

Great comments on Sotomayor and Obamacare

I came across an article today about the Supreme Court hearing on the Obamacare mandate and in the comments, which are usually pretty juvenile and incoherent, in there, there was a comment that was just brilliant. I lifted it. I wish I could remember it for attribution. I hope the guy or gal, doesn’t mind. Something tells me they would be flattered (and they should be–it’s stunning):

“Justice Sonia Sotomayor said the law’s new health exchanges have proved to be viable in some states even where there is no individual mandate, such as Utah. “Exchanges have proven to be a cost-saver in many states who have chosen them. Why should we cut out a cost-saver?” she said”

Here’s why. Because you, Sotomayor, are not a legislator or a health policy designer. You job is to protect the Constitution and our Rights under it. Dump the whole unConstitutional law. If legislators want to pass a law creating health exchanges, they can, but it is NOT your job to create them.

AND if the “many states who have chosen them” are saving money, THEY CAN KEEP THEM.

Why would a state need a federal law to keep a state-run health exchange?

Perhaps Ms. Sotomayor should open her copy of the Constitution and read about Federal and State governments….

There has to be evidence in the record from the courts below before we can accept the claim that Utah has actually saved money (and maintained the same or better quality). A judge cannot pull new evidence out of the newspaper or wherever to support a legal position.

Misinformation on O’Reilly re price of oil

Tired of it. Bill O’Reilly gets a lot of stuff right, but he is wrong on this item and is spreading complete populist hooey on the price of oil.

He says that “Speculation drives up the price of oil”. That’s wrong. It can NOT drive up the price of oil. It both drives it up AND DOWN equally. Speculation WORKS BOTH WAYS. It can not ONLY work in one direction. For every price increase it causes, it will cause a price decrease at some point. The difference? You won’t hear folks like O’Reilly talking about the price GOING DOWN! It’s a built in bias. It’s not news.

So O’Reilly: STOP spreading this hooey! You’re completely 100% wrong. The idea that the government needs to step into the free market to somehow curtail speculation is a disaster. Keep the government away from the free market wherever possible, and you’ll have better outcomes.

He also happens to be wrong about our “exporting” oil to China. He even had Rove on who explained to him, on his own show, how he was wrong. We refine it and reship it. But we are NOT a net exporter of oil. Stop misinforming us Bill.

And no sooner do I see a commercial on O’Reilly and it’s a Volt add and it’s lying through it’s teeth about the myth of the electric car. The guy in the spot ends with the big finish line that he, “…rarely puts gas in his car”.
Is this a lie? Narrowly? No. Not necessarily. But what he doesn’t say is that he plugs his car in. That makes his electric bill go up. And it goes up about the same as if he was buying gas. And that electricity is generated overwhelmingly by burning fossil fuels. But we aren’t supposed to talk about that. It’s a big lie.

People are so misinformed about things and we end up with idiot congress and senate people trying to write bills that manage hopelessly complex things and we wonder why we are broke. Sad.

President 2012: Gingrich, NOT Romney

Let’s talk politics. First let’s get some facts lined up:

FACT: The Liberal media provides millions of dollars of free tailwind and headwind to the candidates that they like/don’t like. In 2008, they got John McCain the GOP nomination because he was the closest thing to a Democrat running on the GOP side, and he was the most beatable candidate.

This time, they’d like nothing better than Huntsman, because he’s basically a Democrat. But they know it’s not going to happen, so they are backing Mitt Romney (a man, who, I might add, could NOT beat John McCain last time!). They are backing him in the primary season. If he gets the nomination, expect that same Liberal media that backed him to POUND him on being a Mormon and on having enacted universal healthcare in Mass. Oh, and they’ll dredge up some other stuff. The tone will change ON A DIME–over night.

Romney is NOT a Conservative. He is a very liberal pol. Any Republican who can (a) win in Mass and (b) pass universal healthcare, isn’t Conservative. Oh, and, by the way, that universal healthcare is costing multiples MORE than he promised and that’s precisely how the Obamacare will go and why it is imperitive to repeal it–we simply don’t have the money. Forget that it’s bad law–we simply don’t have the money. It will break us. We borrow 42 cents of every federal dollar spent. To enact a monolithic entitlement program like that when we are borrowing so much money is as close to national suicide as you’ll ever see. It must go.

The candidates who will figure are now running thusly:
Cain, Romney, Gingrich, Bachmann. Paul is only a factor if he is dumb enough to run as a 3rd party guy and virtually ensure that Obama wins. Huntsman is not realistic. Santorum ditto.

Bachmann may do very well in Iowa and, as a Conservative woman with gravitas, she may be a viable veep candidate. I would applaud that as the Dems have a permanent 15% advantage with women and that is why they attack Palin and Bachmann so rudely and visciously: they are scared stiff of a woman on the GOP side pulling that number down. Their whole “party” rests on that. The other leg of the stool is minorities, and that explains the treatment that Cain and Clarence Thomas get.

Now originally I liked Cain. I LOVED that he was NOT ROMNEY! And that was the point to Cain. But for 2 reasons, I don’t want him nominated. The 999 thing is not the right thing right now. I want a candidate who won’t waste ANY political capital on a radical overhaul. The radical overhaul is REPEAL OBAMACARE. It must be the first and only thing focused on until it is done. So 999 is a distraction that could cost us dearly. It also introduces a national sales tax, and I don’t want Congress with any new taxes to play with. Once enacted, they only go up. The power to tax is the power to destroy!

The Cain scandals are not a bother to me. I believe they are 100% manufactured by Dem operatives. That’s how scared they are about Cain on the GOP side. (See my earlier comments). The best thing I’ve read about it is this–it’s a must-read for every American and you won’t hear these things in the mainstream media–that’s how it works.

The real reason Cain needs to step aside? He recently said on the record that China was seeking nuclear weapons! Even as a school kid, I knew that China had them since the 1960′s. You can’t win the general and be throwing this red meat to the media. He will lose. There is too much at stake.

If he was Joe Biden, he’d get a pass, but he’s the opposite of Joe Biden–every Liberal “journo” wants to nail him, and if it’s that easy, then buh-bye, Herman. I respect you; I like you; but you can’t do that and win. This is too important. I wish you all kinds of well. And thank you for a very important job well done–you exposed the hate machine that is the Democratic/Liberal Media complex, that is for those who look at it objectively and in good faith.

With Cain a disaster, that leaves only Gingrich to thwart the disaster that is Romney. I know, I know, he said some things that were head scratchers. The photo op with Pelosi and the Globaloney Warming comments. I get it. But he is so smart and so dang erudite under pressure that he HAS to be the nominee. He also understands as do NO OTHER CANDIDATES that he is not only trying to convince people to vote for his IDEAS, but that he is fighting a ruthless and dishonest enemy: the press. He routinely goes after the press and calls out their ridiculous Liberal bias! To me, this is now a REQUIREMENT of any Conservative candidate. You MUST fight back against the bias and not only is Newt the one best equipped to do that, he is the ONLY one who seems to understand that it must be done! I’m tired of the Bush’s laying back and allowing their enemies attack them with no fear of pushback. The ideas need to be put out there and Newt will do it.

Newt is experienced. He has the Contract with American and the very skill full dampening of the most Liberal part of the Clinton years after the ’94 congress. He understands Congress and how you get things done. He understands the space. He is pleasant and smart and steeped in historical contextual knowledge and what’s more: he can THINK and SPEAK ON HIS FEET!

He is, I believe, realistically Conservative. What does that mean? Well, it means he is smart enough not to waste his time tilting at windmills with stuff like 999 while the healthcare bill alone is holding back GDP by 2-3% per year right now just on fear alone! He knows what needs to be done in what order and he knows what is OBTAINABLE and in what time frame!

We are very close to having the Liberal media, once again, shove a very liberal, lightweight candidate down our throats. We have a very short window left with which to thwart this. Newt is the only choice and he’s a da*n good choice too!

Don’t blow this. Don’t be fooled by radical/unelectable Ron Paul or Cain. Romney is who your enemies want. Gingrich has the added sweetner of being HATED by the Liberals! A Gingrich presidency would rankle them monumentally; right up there with Palin or Bachmann or Cain. They were so scared of Newt in the 90′s that they put him on the cover of Newsweek:

You want to know who the Left fears? Watch who they ATTACK! And NO ONE was more attacked in the 1990′s than Newt.

Addendum: How can I prove the media is pushing Romney and tearing down everyone else? Well, there are many ways. Newbusters.org is a great daily source of objective, verifiable stuff, but it’s even simpler than that. Just go about your business and count up the times you hear a KNOWN Liberal say, “…Oh, Romney has already won” and add that to the number of times you hear: “…Cain CAN’T win” or “…Bachmann can’t win”, or “…Gingrich can’t win”.

They want you to think that it’s over; that Romney has already won; that there are no issues with Romney; that all the other candidates are deeply flawed. Just listen with half an ear and it’s obvious.

Last weekend I worked all weekend clearing trees and raking leaves and had my headphones on Bloomberg Business News and the Liberal bias on Bloomberg was just STAGGERING. It was a joke. It was either bashing Cain or pushing Huntsman the whole weekend. It was a cartoon. But remember, Fox News is biased, even though they can’t give specific examples; even though Shep is a Lib; Greta is a Lib; Juan Williams and Geraldo are Libs. You think there are any Conservatives at MSNBC? hahahaha.

Tell us: What did you do with the LAST TRILLION???

Obama is going to speak tonight and probably ask for another 300 to 400 billion for a “jobs program”. Well, he’s not going to actually “ask” but rather, say that this is what should be done and then add that those mean Republicans in Congress will prevent this and thus, the rest of the recession is “on them”.

First of all, we don’t HAVE this money.

We borrow 42 cents of every dollar we spend at the Federal level.

That’s insane.

That’s unsustainable.

That will collapse the dollar eventually.

So, if he were actually telling the truth, he would say, “…I want to borrow or print, another 300 to 400 billion”, because that’s what’s really happening.

If I were a Republican running for President, I would jump up and demand, at the top of my lungs, that he stand before the nation like a man, and detail for us what he did with the last 787 Billion dollars that he spent (that we didn’t have either). Where is it? HOW did we spend it? On what kinds of things? Obama himself said that his “shovel ready” jobs weren’t so shovel ready. Oh really? Tell us where this money went! Where are the jobs? If it was a success, Obama ought to have many, many examples of them.

I would say we won’t vote a single dime of new money until he gives us a full accounting of the last one. It’s what any leader would do at the beginning of any meeting in which he was coming back and asking for more money. You want venture capital? You better have a good business plan. You want MORE venture capital? You better be prepared to show what you are doing and did with the money.

I think that’s fair. I don’t think that’s harsh or partisan. It’s OUR money, err, it’s our names he’s ringing up this insane debt on. Stand and deliver, pal. I keep reading what a great orator he is–get up and tell us? Where did the money go? Why will it be different this time?

That aside, if he wants to end the recession we’re in, he needs to do 2 things: Completely repeal the healthcare bill that is frightening business into sitting on cash. You rammed it down the American people’s throats out of a smoke-filled room. It’s 2000+ pages; you never read it. Nancy Pelosi ADMITTED she didn’t read it. It’s a budget buster. Businesses don’t know what their labor costs are going to be when this kicks in. Repeal it and businesses would breathe such a sigh of relief that it would be audible.

Cut spending. A LOT. Do it NOW.

These two things would send a signal to business that the government “gets” it. Then, they might take some risks. Until then? Nope.

Ultimately, our form of government has a major flaw in it. It will be our undoing unless it is fixed at the Constitutional level. Our system rewards politicians only for SPENDING MORE and never for spending less. Government will always grow, and that’s not a good thing. Spending will always grow and that’s about to destroy us. I think they called it “Bureaucratic Inertia” in my IR class in 1984: government always gets bigger–never smaller.

Since our currency is not backed by hard assets (and I’m not taking a position that is should or should not be), it is a “fiat” currency. It exists by government fiat ONLY. It has no other value other than “the government says so”. If politicians are allowed to deficit spend the stuff, AND to PRINT the stuff, then it will not end well. There has to be a hard limit tied to a verifiable metric like GDP, beyond which, the government can not spend. This must be an amendment to the US Constitution and it must be sacrosanct. Otherwise, sooner or later, it will not end well.

Don’t believe me? Your president will get on tv tonight and tell us we’re stupid if we don’t want to borrow and/or print another .4 TRILLION of the fiat dollars, so that he can spend them and tell everyone he’s a big hero. He’s already done this before.

Enjoy the game
–fog

Obama on the earthquake:

“…It’s centered on Bush’s Fault…”

The Healthcare Bill is the Malaise & the Elephant in the Room

I keep hearing and reading how the economy is a mess and no one really is sure why. Some talk of the crushing debt we are ringing up, and that’s part of it, but there’s another obvious elephant in the room that I DON’T hear: Obama’s Healthcare Bill.

Why aren’t pundits talking about this? If all systems are go and business won’t spend and hire and do big capital projects, then what is holding things up? Fear maybe? Fear that you can’t plan for your future because you have NO IDEA what your labor costs will be because of this completely insane and reckless 2,000 page bill that Nancy Pelosi said, “…we’ll know what’s in it when we pass it”.

Click here to read about all the waivers that have been granted because the legislation is so poorly conceived

The elephant in the room is simple; it’s this: You can’t plan large capital projects; you can’t go confidently forward when on top of all the uncertainty, you CAN NOT project one of your biggest costs out 12, 24 or 36 months into the future!

Since they can’t plan accurately and can’t trust that the government won’t just hold them up at gunpoint for this bad bill, they do the logical thing: Nothing. They sit and wait. And the economy enters the Malaise phase.

Make no mistake: The malaise was created by this administration. They are anti-business and this healthcare bill is just a ticking nuclear bomb over our jobs, our savings, our future. It’s bad, flawed legislation that was rammed down our throats in a back room–a smoke filled back room. There were no C-Span debates as Obama promised over 8 times in the campaign. There was no “transparency”. We were told, “you lost” and to “sit in the back of the bus”.

This issue should still be front and center in my opinion. You think we’re running up debt NOW? Just wait until this boondoggle kicks in fully. The debt will run away like Roger Bannister.

Business is scared and they should be. This healtcare bill is the main reason. It should be talked about EVERY DAY AND NIGHT until voters go to the polls in 2012, so that there is a chance to roll it back before too much MORE damage occurs. Yes, I said MORE. Because it is already doing a lot of damage.

If you want to design a state run healthcare system, do it on a small scale first and prove to me, that you have real costs that we can measure. It’s too big to take a tax-and-borrow-and-print-and-spend Democrat’s word for it. We don’t believe you. That’s why you had to lie to us and use tricks to ram the bill through. That’s why no one read it. That’s why you have grant waiver after waiver on it.

This is the elephant in the room. If this were repealed 100% tomorrow, the next day, the economy would start to rock and roll. It would be instantaneous.

Robert, Read This!

Global Warming: To be taught in public schools: Click here to open in a new window 

Study: Ice growing in Greenland; Global Warming guys say: “…hey, the climate fluctuates” Click here to read in a new window