WASHINGTON, October 23, 2012 – Bookmaking is big business across the pond in Ireland. Unlike American bookmakers (bookies), who generally operate outside the law, Irish bookmaking is a legal profession—much to the chagrin of many a married woman—and for a good many former workingmen these days, it’s a potential source of, well, actual outside income.
Irish bookies will offer odds on almost anything, so it wasn’t surprising when this (excerpted) press release showed up in the Maven’s email this morning, courtesy of Paddy Power, bookmakers extraordinaire:
BETTING OPENED ON TRUMP’S OBAMA ANNOUNCEMENT
Donald Trump’s claim that he’ll make a game changing announcement on US President Barack Obama by Wednesday has led to Paddy Power, Europe’s largest betting company, to start taking bets on what the Billionaire’s announcement will be.
The most likely announcement according to the Irish betting house is that Trump, a known birther theorist, will tell us that Obama is not American at 2/5 while it’s a far less likely 8/1 for the business man to endorse the Democratic candidate.
Amongst the longshots in the betting it’s 75/1 for the Donald to give the current President honorary membership of Trump International Golf Links,250/1 for The Apprentice star to claim that he’s an alien and a massive 500/1 for Trump to tell the world that Barack Obama wears a wig!
For more specifics, here’s the Paddy Power link. (Bet at your own risk. We didn’t tell you to.)
So why are we even mentioning this in a daily column devoted to trading and investing in stocks and bonds on Wall Street? Simple. The Donald’s widely trumpeted threat/promise to disclose some really meaty October surprise factoid about the President is as good a reason as any for the market to continue waterfalling this morning. The Dow is down 260 points as we type this at 11:40 a.m. EDT, with the S&P 500 off a massive 24.06 and the NASDAQ plunging an even more awe-inspiring 28.77 points. (Figures are rapidly shifting even as we type, and have worsened in the afternoon.)
Seriously now folks, there could be other reasons for the plunge including the following in no particular order: 3rd quarter earnings season continues to disappoint (who knew?); the clock is ticking ever closer to the January 1 tax cliff as Congress and the White House dither; Europe is continuing its cynical tap dance until after the November elections here, the better to pretend anew to solve the Greek and Spanish problems with a socialist U.S. president covering their “collective” backs; Syrian dictator Assad is forging ahead in his quest for the Pol Pot Humanitarian Award with the strong backing of Iran’s mad mullahs, even as the clearly pro-Western Muslim Brotherhood endeavors to bring a 21st century Iron Curtain down over the Middle East. And, oh yeah, there’s that small matter of a continuing real unemployment rate of at least 14%.
So move along, nothing to see here folks.
Actually, there’s one more potential reason for the market’s plunge, and it’s a fairly esoteric one: the 2012 Presidential Debate Sweepstakes ended last night, and Romney came out still looking ascendant. In other words, last night’s Florida Presidential donnybrook (and a green hat tip to Paddy), while not a clear win for Romney, established the best odds yet that he’ll be our next president—barring a barrage of a few hundred-thousand surprise votes based on tombstones in Philadelphia, Miami, Detroit, Cleveland, and Madison Wisconsin.
Follow me here.
In the world of business and investing, nothing is more important than certain certainties. When projecting little things like new product development and introductions, marketing and advertising campaigns, and sales projections, the fewer variables you have to deal with, the better. The less variables, the easier it is to predict, project, budget, and hit your numbers. This means a greater likelihood of profits, bonuses, and maybe even an increase in hiring.
Until a month ago or so, most American businesses, large and small, were convinced that Mitt Romney had no chance to defeat a president that business has come to loathe. Oh, sure, the big guys like medical insurers, pharmaceutical companies, and some industrial giants like GE and the financial industry love(d) Barack Obama for the billions in tax dollars he was directing their way.
However, over the past four years, these bigwigs have increasingly been bridling at the price they’ve been expected to pay—nonstop, demagoguing and denunciation of said big businesses, particularly in the financial area, as well as catastrophic uncertainty with regard to Obamacare and tax policies post-November 6. This has led big as well as small businesses to turn away from the President in significant numbers to support his opponent.
That said, though, nobody really expected that Romney might actually win. Now that a Romney-Ryan victory has been put on the table, however, we have—Ta-Da!!—uncertainty. Cosmic uncertainty. An uncertainty that’s made even worse by the fact that as president, Romney might actually DO SOMETHING to start balancing the books and begin getting the vanishing American workforce back to work. Which could mean mass disruption in 2013 business plans already laid.
So the fact that at least some problems might start getting solved by a new president in 2013 is understandably scary to CEOs and investors who had—however grudgingly—already made their plans to co-exist with another reality.
And that, we suspect, rather than whatever entertainment The Donald has in store for us, is probably what’s tanking the market this morning.
We’re taking a shot at Apple call options today (and may get killed) and are adding to our gold ETF (IAU) just a bit. Otherwise, we’re holding what we have left and waiting for whatever happens next.
One interesting observation: the Pair of Romney-Ryan signs we have in our tiny front yard is still intact after nearly three weeks of exterior decorating. They should have been stolen or defaced right now, which is actually why you never see very many Republican signs or bumper stickers. People hate to get vandalized. But perhaps this year, the Democrat brownshirts are demoralized and not up to much in the way of sign stealing or car-keying. We shall see.
Meanwhile, steer clear of today’s market unless you have strong cojones. Our little ventures may end badly today, but we do keep on trying, even though our odds are probably a lot better in Paddy’s capable hands.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate. He continues to own a position in IAU and is long Apple (AAPL) January calls.
Positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.
Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.
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