The Dow plunged 313 points yesterday, but don’t believe news
media reports that it was the nearness of the “fiscal cliff” that
caused the selloff. What spooked investors is a bigger picture that
recognizes the economically catastrophic implications of a second Obama term.
To be clear, there is nothing Romney could have done to avoid the
deflationary Depression that lies ahead. However, a
Romney presidency might have at least served as a reality check, delaying the
onslaught of hard times for perhaps long enough to allow Americans to put
their financial houses in order before austerity hits with the force of an
earthquake, as it has in Europe.
We’re not going to dwell on the choice Americans made on
Tuesday. Suffice it to say, the election has substantiated
conservatives’ worst fear – that, sooner or later, Big
Government’s clients would come to outnumber those of us who pay for
the criminal extravagances of their voracious welfare state. Actually, it
turns out, drones needn’t have outnumbered
taxpayers, since the quirks of the electoral college have enabled them to
execute a coup even though they lacked a statistically significant majority.
Bread and Circuses
Now, with a $16+ trillion federal deficit that is growing by more than
a trillion dollars per year, the nation’s descent toward insolvency can
only accelerate, further widening the gap between tax revenues and outlays.
Soaking the rich, even by taxing them at 100%, would not begin to arrest the
decline, but just try to tell that to those who voted for Obama. Bread and
circuses will be their reward, and far be it from us to predict that they
will feel unsatisfied. Rather, the opposite should hold true, since it will
not have cost the 47% a dime.
As far as the stock market is concerned, we were quite surprised to
find some bullish opportunities in the dozen or so charts reviewed in real
time during a “Hidden Pivot Analysis” session held Wednesday
morning at Rick’s Picks. Amazon, Priceline and Facebook, among
others, look promising, suggesting these companies, and presumably a few
others, may be able to buck a depressionary tide,
perhaps by focusing on nickel-and-dime sources of revenue. If you’re
interested in the details, as well as the reasons for our bearish outlook on
the broad averages, watch the session recording.