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The Market Just Figured Out Two HUGE Problems (ObamaNomics DeathWatch™)
Zero Hedge ^ | November 12, 2012 | Graham Summers

Posted on 11/12/2012 1:07:41 PM PST by Zakeet

The US Presidential election ended November 6, 2012. Since that time, the market has fallen 3%.

There are a multitude of reasons for this, but the primary one is the fact that the markets is beginning to realize two key items:

  1. Everything that was a problem in the run up to the US election is still a problem (in fact many issues are now worse than they were a few months ago).

  2. Having engaged in pre-emptive and extreme actions to keep things calm in the run up to the election, the US Fed and ECB have run out of effective monetary bullets.

Regarding #1, according to the ECRI, as of June 2012, the US is back in recession. The ECRI has proven far more accurate and timely in predicting recessions than the NBER. And now that the election is over I expect other US data (the ISM, LEI, and employment numbers) to start moving towards reality (bad).

By the way, the US just hit a new record for food stamp usage.

Across the pond, the European banking and sovereign debt crisis continues to worsen: Greece has to redeem €5 billion worth of bonds on Friday. The country just managed to pass its latest budget proposal (which undoubtedly the country will fail to meet… just like all the others) but the troika has yet to issue its latest report on Greece.

Germany has stated point blank that without the troika report, Greece won’t be getting more funds. Is Germany finally ready to let Greece fail? It’s hard to say. But Germany did put together a special advisory panel to focus exclusively on assessing the cost of a Grexit back in August.

Elsewhere in the EU, Spain continues to implode. The mainstream financial media notes that people are now killing themselves when evicted from their homes. However, things are in fact worse than that. My contacts in the country inform me that in some regions the government hasn’t even paid its pharmacies in six months. Indeed, the region of Valencia owes its pharmacies an insane €500 million.

This is nothing short of a societal shut down. Expect the civil unrest and economic implosion to accelerate in the coming weeks and months.

And finally, France’s private sector is falling to pieces. September’s auto sales numbers were worse than those of September 2008. The country’s PMI reading is back to April 2009 levels. And the French Central Bank has announced the country will re-enter recession before year-end.

Again, nothing has been fixed in the last six months. In fact, things have gotten much much worse.

As for #2, it is now clear that the ECB and US Fed used up their last remaining effective bullets this summer in their efforts to aid the Obama re-election campaign (Romney stated he would fire Bernanke, hence the Fed’s decision… while various EU officials admitted the Obama administration requested that they keep things calm in the build up to November).

Indeed, stocks are now sharply down since QE 3. Gold and Silver, in contrast are up. If this dynamic does not change immediately then the positive consequence of the Fed’s actions (namely stocks rising) is now obsolete while the negative consequence (higher inflation) is about to hit lift off.

What would the market look like without the Fed’s aid? According to the business cycle the S&P 500 would be closer to 1,000.

In the EU, the ECB announced a plan to make unlimited bond purchases for EU nations that meet various reforms and “conditions.” The problem with this is that none of the countries that need money (namely Spain and Italy) want to meet any conditions as their economies are already imploding without additional austerity measures (see the information on Spain above).

Thus, the ECB promise has in fact turned out to be a colossal bluff. At the end of the day, Mario Draghi can say whatever he wants, but unless Germany is willing to go along with the ECB, he can’t do much of anything. Germany demands “conditions” therefore so does the ECB.

So… the global economy continues to slow. Europe is burning (literally in some countries). And the primary Central Banks (the Fed and the ECB) are out of ammo.

Buckle up… things are about to get messy.


TOPICS: Business/Economy; Culture/Society; Extended News; News/Current Events
KEYWORDS: economy; inflation; market; recession
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Before much longer, even these meatheads are going to figure out that elections have consequences!

1 posted on 11/12/2012 1:07:47 PM PST by Zakeet
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To: Zakeet

Meatheads NEVER think logically, that is why they are meatheads!

Don’t wait for the Kenyan’s subjects to see the light, they are lost to communism...they are no longer Americans.


2 posted on 11/12/2012 1:11:52 PM PST by roses of sharon ("Truly I tell you, today you will be with me in paradise." Luke 23:43)
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To: Zakeet

Subtract dollar deflation from the Dow
and the real numbers around high 8870.


3 posted on 11/12/2012 1:14:46 PM PST by Morris70
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To: Zakeet

Collectivism, made up of the emotionally immature, cannot accept responsibility.

It can only blame someone or something else.


4 posted on 11/12/2012 1:16:33 PM PST by lurk
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To: Zakeet

The only thing that was keeping the market going was the perception that Romney might win. With that gone, the run is beginning.


5 posted on 11/12/2012 1:19:22 PM PST by Behind Liberal Lines
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To: Zakeet
Buckle up… things are about to get messy.

Yep. I read on another site a few days ago that some liberal group in Texas is trying to get a law passed. They want the police to go into any ones home without permission and confiscate all their food in case of a crises. They say all confiscated food should be equally shared with others in the area.

They're not even prepping for themselves. They're once again waiting for everyone else to spend all their money and do all the work. They STILL want someone else to steal for them !!

Even after all the damage they've done to this country, they still don't get it. They still think everyone else will be there to wait on them and take care of them if the economy collapses.

6 posted on 11/12/2012 1:24:08 PM PST by concerned about politics ("Get thee behind me, Liberal")
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To: Zakeet

The markets will realize that it cannot survive under communism. We are there and not likely to reverse for many years. The future will see feeble attempts to shore it up.


7 posted on 11/12/2012 1:25:49 PM PST by Logical me
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To: concerned about politics

I’d like to read about that, if you could give me a link or give me something to search with. Thanks


8 posted on 11/12/2012 1:28:21 PM PST by Rusty0604
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To: Zakeet

What they’ll “figure out” is that

“the nasty, greedy, vindictive conservative business owners caused this to happen”.

I really am beyond caring whom they blame, as long as they experience the consequences of their ideology.


9 posted on 11/12/2012 1:29:05 PM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: Zakeet

Bump


10 posted on 11/12/2012 1:30:07 PM PST by B.O. Plenty (Give war a chance.....)
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To: Zakeet

Conservatives have always understood that bad things would result from Obama’s re-election. We can start to see that Romney would have only delayed the inevitable. The media and the financial markets in this country are completely corrupt. There is no way we can continue function like that

It is all part of God’s plan. The fact that the Democrats seem to own this Goebbel’s like media machine in the US, is a huge problem. The Goldman Sachs-Federal Reserve nepotism and cronyism is too much. Without truth we have nothing. We are living in a strange Orwellian nation, from that standpoint we are no better than China. If it weren’t for our faith we would be completely lost. Prayers Friends, and be glad He is in charge.


11 posted on 11/12/2012 1:32:51 PM PST by mgist
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To: concerned about politics

After the SHTF, any cop that pull onto my spread will get more than he/she bargained for!


12 posted on 11/12/2012 1:35:09 PM PST by clee1 (We use 43 muscles to frown, 17 to smile, and 2 to pull a trigger. I'm lazy and I'm tired of smiling.)
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To: Behind Liberal Lines
The only thing that was keeping the market going was the perception that Romney might win. With that gone, the run is beginning.

And the feds are printing $40 Billion per month ( QE3) just to keep our faux economy alive.
They can't keep printing money to keep their social programs going forever.
What they're going to do about all those dependent people when the money runs out is the most frightening part. The parasites will be demanding their "entitlements", but there won't be any.
Even more frightening, the "scientists" at the UN have been screaming for population reduction. An economic collapse would do just that. So, don't expect the pro-UN politicians to try to fix it - or stop it.

13 posted on 11/12/2012 1:37:39 PM PST by concerned about politics ("Get thee behind me, Liberal")
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To: Zakeet

All those things have been known and factored in. I thought the market and betting odds assumed obama would win. What this tells me is many of these investors may have bet that obama would win but held out hope romney would win. Now that it is settled they are cashing in their chits


14 posted on 11/12/2012 1:39:27 PM PST by plain talk
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To: concerned about politics
"They want the police to go into any ones home without permission and confiscate all their food in case of a crises.

they'll get my ammo too

15 posted on 11/12/2012 1:44:50 PM PST by showme_the_Glory (ILLEGAL: prohibited by law. ALIEN: Owing political allegiance to another country or government)
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To: concerned about politics
Even more frightening, the "scientists" at the UN have been screaming for population reduction. An economic collapse would do just that. So, don't expect the pro-UN politicians to try to fix it - or stop it.

The UN is in New York City ... in an economic collapse, that would be zombieland. Even after the recent hurricane and following nor'easter, I think folks don't really understand how desperately fragile cities are.

16 posted on 11/12/2012 1:47:51 PM PST by ArrogantBustard (Western Civilization is Aborting, Buggering, and Contracepting itself out of existence.)
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To: Zakeet
from the article...

“...the negative consequence (higher inflation) is about to hit lift off.”

About to? Gas was $1.86 a gallon when Hussein Obama took office. Now its $3.17 a gallon where I live. That’s a 70% increase.

Last year a baked chicken was $4.99 at my local Walmart. Now it is $5.99. That’s a 20% increase in a year.

With the printing presses running non-stop, this will only get worse. Currency debasement is a cancer that will eventually cause the death of the economy.

17 posted on 11/12/2012 1:55:55 PM PST by Gabrial (The nightmare will continue as long as the nightmare is in the Whitehouse.)
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To: concerned about politics
I read on another site a few days ago that some liberal group in Texas is trying to get a law passed. They want the police to go into any ones home without permission and confiscate all their food in case of a crises. They say all confiscated food should be equally shared with others in the area.

They call it the Dead Police Officers Act of 2012


18 posted on 11/12/2012 1:57:07 PM PST by Buckeye McFrog
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To: Rusty0604
I’d like to read about that, if you could give me a link or give me something to search with. Thanks

It was mentioned on Urbansurvival.com. The site owner, apparently, lives in Texas. That's all the info he gave on it. He's a big time prepper.
His site, and expertise, is economics rather than politics, but he does cover quite a bit of it.
I did a quick search to find more, but this group was just getting started, so I'm sure it's small at this point. Once they gather enough parasites to join them, I'm sure we'll be hearing more about it.

They know good people are preparing, and as usual, they're going to be demanding a piece of everyone elses pie - again, by force - like they always do.

19 posted on 11/12/2012 1:57:58 PM PST by concerned about politics ("Get thee behind me, Liberal")
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To: Zakeet

So the left demonizes the rich as evil and somehow they believe that those evil people will just sit back and eat the increased taxes, increased business regulations, etc.. no they will never pass those costs on to consumers right?

That is the idiocy that defines the American left, but Obama has no more road left to kick the can down.


20 posted on 11/12/2012 1:58:08 PM PST by Typical_Whitey (The political mirage of something for nothing; has ruined many a nation.)
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