Social Security check delay? Obama blames Republicans in advance

If anything bad happens, it's the Republicans' fault. Or Bush's. Photo: Universal Studios

WASHINGTON, January 14, 2013 – As of around noon today, U.S. stock markets were neutral to down, hopelessly mired in a virtual LaBrea Tar Pit of superficial news, quarterly earnings anticipation, options expiration week, and assorted sound and fury signifying precisely nothing. Meanwhile, President Obama seemed back to his old self, beginning the next round of “fiscal cliff” negotiations with his patented partisan bluster—his way, we’d guess, of reaching out to the opposition and telling them to bugger off. 

In a Monday morning presser, the President led off with a whopper, telling reporters that “Raising the debt ceiling does not authorize more spending…it just allows the country to pay the bills it’s already committed to.” It’s kind of funny, but somehow, “more spending” is precisely what happens each and every time the debt ceiling is raised. 

No matter. The President’s observation here reminds us of that ditzy blonde on a current insurance commercial who believes everything she reads on the Internet “because they can’t put it on the Internet unless it’s true.” Likewise, we’re supposed to believe everything the President says because if he says it, it must be true. 

At this point, the President jumped aboard the Democrats’ favorite tactic for getting their way: terrify all the old people. “The consequences of us not paying our bills would be disastrous,” he claimed, noting, for example, that a key consequence of not raising the debt ceiling would include the delay of Social Security benefits and veterans’ checks, according to CNBC. 

Of course, it’s only Republicans who want to screw old people and the military, never the Democrats who are always as pure and innocent as the driven snow. 

As far as those dastardly Republican budget cutters and grandma murderers are concerned, the President sharply put them on notice: “They will not collect a ransom in exchange for not crashing the economy,” he said. “The full faith and credit of the United States of America is not a bargaining chip. And they better decide quickly because time is running short.” I.e., “Take that, you evil swine. And there’s more coming if you don’t shut up and do what you’re told.” Living within your budgetary means is a “ransom?” This is bipartisanship at its finest, no doubt.

It’s kind of funny, but at every budget impasse, dating at least back to the Clinton II administration, it’s always the Republicans who are to blame when it comes to reining in this nation’s unsustainable debt load. It’s never the Democrats who busy themselves loading up the larder with new entitlements and new spending at every opportunity. Weird. 

We mention this latest partisan fusillade at length this morning because it’s this kind of viciously negative excuse for leadership that’s will dominate the markets for at least the next six weeks. President Obama’s position is now clear, as if it hadn’t been already. He will support only higher taxes and spending increases; he will never support any kind of meaningful budgeting that might put the nation on a more sustainable fiscal course; and he will ruthlessly, relentlessly, and remorselessly drive toward the primary goal of his second term—the Alinsky-style demonization and permanent destruction of the Republican Party, which in turn will pave the way for transforming the U.S. into Venezuela II.

As in the Terry Gilliam cartoon clip above, snipped from the 1983 Monty Python film, “The Meaning of Life,” we can easily picture The One as he sits daily at his desk in the Oval Office, pondering what kind of world he’s going to shape for future generations. The nation in its collective naiveté expects him to choose the round one, of course. But he’s already made his choice. It’s be the square one, the one that can’t spin properly once it’s launched into orbit. Too bad for anyone who stands in his way.

You heard it first here. 

All of this cosmic stuff, of course, is really starting to spook the markets, and today is just the beginnning. After an early January of fun and (mostly) profit, the market is now beginning to take a darker turn. In the coming weeks, there will certainly be a few euphoric days here and there. But the tone of the market will gradually become more fearful, and the selling may finally be enough to overcome the Federal Reserve’s endless and well-meaning QE pump-priming. 

We got pretty fully invested during the final days of December, convinced that the vicious selling late in that month was mostly due to the mass sale of stocks by investors with profitable positions. Investors in this position were overwhelmingly desirous that their capital gains be taxed at 2012 rates, fearing what might happen if they held off taking profits until 2013. So they unloaded at a frantic clip. 

Our own idea was to pick up the oversold stocks that were unjustly being dumped allowing us to capture their almost inevitable New Year bounce-back. It’s a well known phenomenon even in more normal markets. And so far it’s worked for us in early 2013. 

But we think this trade is rapidly winding down now, as investors and funds fear the unknown, which is precisely what we’re going to get a lot of in the coming weeks. So we’ll continue to raise cash as the current week unfolds. It’s now a proven fact that taking higher-than-average investment risks during the current administration will almost invariably lead to higher-than-average losses. So why take the chance during the current, hyperpartisan budget “debate?” 

The whole situation is ominous as far as the Maven is concerned. This administration’s political cynicism—also borne out by the hardened leftist ideologues the President plans to appoint to key cabinet posts—is breathtaking in its audacity and viciousness. These are cold people, and they mean to rule, not govern. 

Although the ultimate outcome of this high-stakes poker game for 21st century America will likely take a few more years to play out, the more the current partisan intransigence dominates the Nation’s capital, the more likely it is that this miserable chapter of our short history will end quite badly. Savvy investors seem to agree, and they’re quietly bailing. We’re doing the same, not out of desire or conviction, but out of simple common sense and prudence. True, we’ll hold on to our high-dividend REITs, MLPs, and utilities as long as we can. But we’re not going to sacrifice our own portfolios to a pack of elitists who’ve already made their pile but don’t much care what happens to ours. 

This is a truly bad way to start out the trading week. But nobody in Washington much seems to give a hoot, spending their time covering their own bases and shoring up their own political assets as Obamanation: The Sequel squeezes our directionless nation in its relentlessly tightening, anaconda-like deathgrip.

 

Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.

Any 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. 

Follow Terry on Twitter @terryp17

 


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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  

 

 

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