'New Yorker': Obama denies role in government
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WASHINGTON, May 24, 2013 — This just in from “The New Yorker”: “President Obama used his weekly radio address on Saturday to reassure the American people that he has ‘played no role whatsoever’ in the U.S. government over the past four years.
“‘Right now, many of you are angry at the government, and no one is angrier than I am,’ he said. ‘Quite frankly, I am glad that I have had no involvement in such an organization.’” Appalled at the President’s blatant attempt to gain blanket plausible deniability for the merry-go-round of scandals currently rocking his administration, Wall Street bears this morning appear to have resumed yesterday’s morning market plunge, betting that holidaying bulls won’t snatch the decline away from them as they did yesterday afternoon.
Actually, our headline and opening tease this morning was borrowed from the “Borowitz Report,” an “Onion”-like online “New Yorker” column by Andy Borowitz, who seems to be an equal opportunity satirist. More or less. Which is a step up for “The New Yorker,” a consistently well-written, literate, literary rag that typically operates well within in the self-congratulatory, faux-socialist comfort zone of New York’s one-per centers and one-per center wanabes.
In point of fact, the market’s down opening this morning is likely due more to light trading action as Wall Street’s Masters of the Universe head off for some lighthearted Memorial Day holiday dissipation and anti-Republican gossip out in their Gatsby-like summer palaces out in the Hamptons. Or perhaps to Secretary of State Kerry’s Heinz-financed yacht anchored in yacht tax-friendly Rhode Island at last report.
As with our market prognostications above, most financial reporters are fishing for equally banal headlines to explain the market’s current wobbliness. But what’s most likely happening is the beginning of the end, for now, of the market’s QE-driven spring bull market, just in time to make everyone’s Sell in May wishes come true. We’ve been peeling off positions here as we can, mostly for modest profits. There’s always time to get back in later.
We do, however, continue to nibble at REITs on their way down. No doubt, many portfolio managers are now dumping these reliable high dividend payers, fancying that riskier assets will make them more money next month as they square up portfolios for the end of May.
Back in Washington, where we generally write from, the bubbling Benghazi, AP/Fox News, and multi-level IRS scandals are, for now, nicely distracting the Administration from concluding its plan to “fundamentally transform” the United States into yet another iteration of Euro-socialism. That’s already a failed model, of course, but who care’s when you’re ideologically committed to force this country to fail, thus putting it in its place.
This, of course, is what gives Borowitz’ clever headline some resonance. This White House tends to take the Presidential tradition of plausible deniability to new heights, indulging this week in a string of oxymoronic observations, in which the President seems to be saying, “The buck stops here, but I didn’t know anything and I didn’t do it.” Borowitz actually has another headline for that: “Obama asks staff to start cc-ing him on stuff.”
More than likely, all this 24/7 “let’s exterminate the Republican Party at all costs” politicking is probably why the markets continue to operate in a state of total confusion, lacking any real policy direction from on high, save the massively underfunded mandate otherwise known as Obamacare.
Controversial though it is, the Federal Reserve’s ongoing QE program, whether it’s actually “tapered” or not, is the only fiscal policy game in town. As the last remaining adult in DC, Ben Bernanke has, on numerous occasions, asked for a little legislative and executive help from Congress and the White House. But, locked in a political death-match, as the current hydra-headed IRS scandal amply proves, there’s no time in DC for constituents, nearly all of whom continue to twist slowly in the wind, as they have been since January 2009.
Conservatives and liberals alike can yell at Bernanke if they want. In the end, he’s probably staved off a precise, instant-replay of 1929 and the following decade. But without some actual help from those we’re paying to provide it, America is headed for a couple of lost decades, à la Japan, which commenced its own one-percent-friendly perma-stasis circa 1990 which it has only begun to genuinely confront within the last two or three months.
That’s a cheery thought for America’s first summer holiday weekend in 2013. Most people would rather think of the beach this weekend, or indulge in a juicy outdoor-grilled steak—a treat made even more righteous if you’ve already installed barbecue smoke-scrubbers on your Weber. Although you’re probably risking death from cancer anyway.
Today’s trading action:
Not much to report or tout this morning. During yesterday’s trading, all four IPOs/secondaries that we’ve been discussing here— Blackstone Mortgage Trust (BXMT), Global Brass and Copper (BRSS), ChannelAdvisor Corp (ECOM) and Ply-Gem (PGEM) had decent pops yesterday, with the former two actually surprising us with smallish pops, even though we didn’t take down any of those shares yesterday.
Of the two we actually jumped into, ECOM remains by far the top returner, still up close to 35 per cent this morning. PGEM, while somewhat less impressive, is currently up roughly 12 per cent this morning, still pretty respectable. Actually, the pops in both IPOs yesterday were the sole reason why the larger of our portfolios ended up in the green on a relatively bad day. Which is part of the reason we play the IPO game in the first place, even though we’re saddled with an occasional turkey.
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