Wednesday, November 05, 2014

Well, we won't have to deal with political phone calls for another 24 months :)

Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other.
Oscar Ameringer

I tweeted this yesterday but I thought it would be appropriate to wrap up any coverage of the midterm elections with that quote because it perfectly sums up our political system today despite coming from a socialist nearly 100 years ago.

I'm contemplating starting a political blog so that I can keep the two issues separate and if i do,I'll add a link here sometime to give you the option of listening to my political ramblings.
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Stocks are looking up this am and many are pointing to the elections as a catalyst but frankly, that's 1990's thinking.  All moves today in the markets are driven by currencies and right now the computers are destroying the Japanese Yen which is causing stocks to rise. Like every other "fundamental" catalyst before it, this will burn itself out eventually and we'll be forced to talk about actual sales and profits at some point.

I'll point out that economists are already starting to temper expectations for Q4 GDP in the US.  I actually think they will have to cut those forecasts even further when the unexpected happens in Nov/Dec in the Northeast - snow.

I follow a number of great weather blogs that are much more accurate than the weather channel b/c the weather really does impact the economy, crop production, etc. These guys have all come to one conclusion recently - winter will be here in the Northeast in the next 2 weeks.  The good news is that they also forecast an early Spring, but the setup for most of the winter is one that will deliver a number of coastal storms from DC to Boston and despite prospects for a MUCH warmer winter on the West coast, economists will be able to easily blame any economic weakness on winter weather hitting the Northeast in WINTER (who could have predicted that?).

Oil is still in free fall and the price at the pump is steadily declining however, the impact on the US shale industry is going to be significant.  Most shale producers will be losing money on every barrel of oil they pull out of the ground at this point.  The companies are some of the most speculative players in the industry with massive amounts of debt and limited rainy day funds.  The Saudis claim to be pumping extra supply only to impact Russia and Iran, but they are not thrilled with the US production and the prospect of the Keystone pipeline becoming a reality will probably make them dig in their heels even more.  It probably means cheaper gas for a bit, but the job losses in ND and Texas are going to start adding up REALLY fast if this continues.

Cheers!


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