Washington Opportunity…………..with Comment on Fed Meeting at 2:11 PM CDT
Congress and Obama have an opportunity here. No doubt there will be a lot of rhetoric, but will there be action that shows they heeded the wake-up call? Here are some thoughts that come to me. Other than the technical market reasons, there was no other reason for us to cover all of our short positions yesterday. This is the time for real change.
1) Obama has to move beyond his wonderful speeches and stop trying to be the great compromiser. He has to kick butt now. First, get rid of Geithner, a leftover of the Robert Rubin legacy and the Federal Reserve idea that saving Wall Street is goal number one. If I were Obama I would announce that I would not be seeking another term, that my only goal is to spend the remaining year to get people back to work. If he succeeds he would be drafted, if he doesn’t let the Republicans win and bring the end to trickle down economics as the market does its final swoon .
2) Everyone in Washington should stop blaming S&P for the U.S. debt downgrade, we finally had someone who spoke some sense in the economic debate.
3) The Tea Party had it half right, they got the anger part, too bad that there solution agenda got taken over by a bunch of rich Republicans. In order for real change in this country to happen we need to see a new coalition that gets the anger issue and couples it with progressive economic principles.
A couple of good articles over the weekend are here:
http://www.nytimes.com/2011/08/07/opinion/sunday/what-happened-to-obamas-passion.html
Fed Meeting Update: The initial reaction to the meeting notes was a runup in gold and decline in stocks. To me this is just knee jerk movement in the most recent market direction, not a reflection of the meeting. What the Fed did was talk as they are out of inflationary ammo. This lack of Fed action is bearish for gold…period.
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