WASHINGTON, January 20, 2015 – Same old, same old on this post-holiday Wall Street Tuesday. Since Mondays are usually down days these days. But due to the MLK Day hiatus, Tuesday has to pinch hit for the bears this week. Ergo, no surprise here that all the usual Monday angst is driving most investments down today as a result.
Of course, a little bad news always helps. Oil is back on the way down again this morning after a brief late week rally last week. That’s great for consumers, of course, but Wall Street hates it, so they drag everything else along with oil prices, more or less.
On other fronts, it appears, if headlines are to be believed, that Yemen has fallen to “rebel” forces, although it’s hard to parse that word when it comes to the Middle East where, it seems, everyone is a rebel and all the rebels themselves seem to be involved in a never-ending “let’s chop off infidel heads” contest. Weekly winners are determined, we’d guess, by comparing, umm, all the head counts each Sunday.
At any rate, the thought that even more barbarians are ready to swarm the gates is disquieting to traders, though it doesn’t seem to have done anything for the price of oil, so we’ll wait and see where this latest U.S. foreign policy defeat takes us next.
Closer to home, we await (according to the MSM) with baited breath, Barack Obama’s latest State of the Union (SOTU) address, to be broadcast live on many TV and cable channels tonight at 9:00 p.m. EST or whenever the President decides to show up.
Since the bulk of this year’s SOTU already been leaked, we know that once again it’s less a speech than a redistributionist laundry list meant to attract legions of Republican “Nay” votes in Congress. The real objective is not to get pie-in-the-sky legislation passed. Instead it’s all political. The idea, as always, is to tee the GOP up for a two-year round of nonstop dissing and slander from the Nation’s Propagandist-in-Chief.
Like the Marxist/Post-colonialist that he is and always was, Obama will be tossing out the usual laundry list of useless expenditures that will do nothing to help the middle-class, even though he continues to proclaim he’s their champion. What the middle-class will get instead is another litany of tax-the-rich proposals that will end up affecting the middle class negatively anyway.
All these “tax the rich” schemes are just rhetoric. If you raise tax “X” on the rich, all they have to do is re-characterize enough income as something else in order to avoid the tax, just as they’ve always done. Embedded in the tax code, the legal games the wealthy play to avoid higher taxes are not generally available to the middle class for a variety of reasons, namely administration and cost.
That’s how these Administration thieves have been “helping the middle class” for the past six years. No reason to stop now. When all the redistribution of middle class wealth to the rich on the top and the “deserving poor” on the bottom has concluded, the Administration will finally have completed its “transformative” objective; namely, they will have transformed the U.S. into yet another Third World banana public run by a wealthy, selective, faux-Marxist statists but mostly populated by impoverished and ignorant peons. Gone will be that annoying middle class, and America will finally be as it should be.
So if you’ve somehow managed to remain in the middle class, don’t cheer these new “tax the rich” proposals too loudly. You will very likely find that in the end, you’ll be paying those higher taxes, not Warren Buffett and Bill Gates.
Annually viewing this president’s empty street theater performances before of Congress these past six years, along with all the false, partisan applause and phony gestures meant to impress low-information voters (who likely aren’t watching these speeches anyway), has always required a high-capacity barf bag and a six-pack at hand. So we think we’ll skip this week’s teleprompter plumage display and catch the transcript later on, just to see what new job-destroying goodies might be hidden beneath the covers.
Elsewhere in the U.S., we’re also investigating a bit further a Wall Street Journal story about an interesting new “dark pool.” That news was trumpeted flamboyantly Sunday night on the increasingly whacked out ZeroHedge site which, once again, is in Full Armageddon Mode.
We’ll elaborate on this interesting development later in a separate article as we uncover more facts.
Meanwhile, last week’s Eurogame of “Hide the Real Currency Policy Moves” will allegedly play out this week when the Eurozone launches its brand new and highly exciting game of Euro QE1, as Switzerland’s sudden currency liberation allegedly predicted. Whatever Mario Draghi does or doesn’t do, the market is sure to freak out on this whether it happens or not.
Always remember, though: “They”—the Gnomes of Zurich and/or the international 1% already know precisely what’s going to happen or not happen. And we’ll be watching them telegraph their moves in the market, perhaps starting as early as today. Wouldn’t it be nice if we peons could get that illegal insider information early, too?
Today’s trading tips
We’re mostly sitting tight today, feeling a bit over-invested, but not yet quite ready to bail. Gold is up again and looking like it might want to rally, so we’ll nip in and get a little more via the Swiss gold bullion ETF, aka SGOL. Likewise, its silver counterpart, SIVR. If we can get a good price, that is. You never know, in these metals, whether you’re getting set up for a haircut or not. But you generally find out quite quickly, and when you’re least expecting it.
As a result, we keep these positions small and don’t hold them very long. That way, if you get badly head-faked, your account won’t be too badly damaged. We regard these as opportunistic pocket-change trades. If and when they work.
We also continue to hold a modest hedge via the S&P 500 short ETF, SH. We’re down on this just a bit, but the hedge is there, and will grab a few bucks for us if the market tanks.
It’s just really strange out there. Our once admirable democracy and our once wealth-enhancing capitalist system are being flushed down the crapper right before our eyes. And nobody seems to have a clue how to stop it.
*Cartoon by Branco. Reprinted with permission by arrangement with LegalInsurrection.com.