elections have consequences - even primary elections
This involves a fair bit of 'tin foil hat crowd' speculation, so I'll post it here in the 'Wild West' ...
This past tuesday the primary election results, and survey polls of voters, arguably caused a fundamental shift in the likely future direction of American presidential politics ... and likely future financial policies associated with those presidential politics.
A. Hilary Clinton was able to garner enough votes to avoid being pronounced 'dead' as a candidate. Efforts are now underway to 'redo' the Michigan and Florida primaries (or better yet to accept the original results of these primaries). Superdelegates are being 'worked'. Bottom line is that by surviving last tuesday Hilary provides the best hope for an 'electable' president (in the eyes of the rich and powerful anyhow)
B. John McCain now appears to be the de-facto republican nominee
C. Polling from the day after these latest primaries showed that Hilary has a 50% vs 40% chance of beating John McCain. The same polls showed that Obama has a reasonable chance of beating McCain also, but by a significantly smaller margin than Hilary.
D. this basically means that from a socia-economic standpoint, any of these three candidates are likely to bring the following to the US Economy
- tax increases (= repeal of the GWB tax cuts, if not out and out new taxes)
- social program spending increases ( be it national health care, mortgage bailouts, benefit eligibility for illegal aliens etc.)
- 'green' policies ( = continued or increased gov't subsidies for ethanol, wind, solar ... a cap and trade carbon tax system, targeted taxes on oil companies, whatever)
The 'tin foil hat crowd' is of the opinion that major US and foreign investors have looked at these poll results and have decided that, no matter who wins the US presidential election in November, the probable policies they bring will be bad for the US economy. In reaction to this, you'll note the following developments over the past couple of days ...
- US dollar has shed another 5% of it's 'purchasing power' i.e. another record low exchange rate
- Oil, Gold, Food and other commodity prices have hit record highs
- American stocks of (virtually) all sectors have dropped precipitously
- credit availability has suddenly dropped, and interest rates for borrowers has risen (versus fed funds rate = cost of money for banks projected to fall)
- hedge fund margin calls are being missed for essentially the first time
The 'tin foil hat crowd' explains these developments as being the result of a 'quiet' move by upper echelon US and foreign investors to liquidate their US dollar denominated stocks in preparation for the US dollar falling off a cliff, and the US economy going into a seizure.
Re: elections have consequences - even primary elections
^^^why should anyone care what the "tin foil hat crowd" thinks? That name alone should tell you that their opinions are a bit far fetched.
Re: elections have consequences - even primary elections
^^^ because sometimes, just sometimes, they see things the way they really are well before others do ! And also sometimes, just sometimes, a little advance warning and a little advance preparation can make a huge difference if they turn out to be right !
~
Re: elections have consequences - even primary elections
Quote:
Originally Posted by
Richard_Head
^^^why should anyone care what the "tin foil hat crowd" thinks? That name alone should tell you that their opinions are a bit far fetched.
Yea! Like Al Sharptons!
Re: elections have consequences - even primary elections
Quote:
Originally Posted by
Melonie
^^^ because sometimes, just sometimes, they see things the way they really are well before others do ! And also sometimes, just sometimes, a little advance warning and a little advance preparation can make a huge difference if they turn out to be right !
~
^^^interesting, sounds like you're putting yourself into the "tin foil hat crowd", anyways, it seems to me they're just throwing shit against the wall and hoping something will stick.
Re: elections have consequences - even primary elections
I'm a proud tin foil hat wearer and all three major candidates are indeed going to be bad for the economy.
Re: elections have consequences - even primary elections
Quote:
I'm a proud tin foil hat wearer and all three major candidates are indeed going to be bad for the economy
^^^ the point behind this thread was to speculate on the possibility that all of the 'unprecedented' financial developments on both the US and world 'stage', that have so very coincidentally occurred since last tuesday's primary elections, are not the result of 'random' events. They can all be explained in a co-ordinated manner by concluding that the 'smart money' is now pulling out of the USA based on the results of last tuesday's primary elections having created / confirmed a situation where 'all three roads lead downhill'.
Is it possible that all of the record moves in the 'wrong direction' for US stocks, oil, gold, banks, hedge funds etc. over the past few days is the result of a whole lot of different factors that coincidentally manifested themselves all at the same time ... maybe. At least according to mainstream financial media. However, some of us have great difficulty believing in coincidences of this unprecedented magnitude !
If it is is indeed the case that the 'smart money' is now pulling the plug on their US dollar denominated investments, it portends a WHOLE lot of bad financial news to come for Americans ... but also the possibility of some Americans being able to minimize the personal financial damage to come if they were to take quick defensive action (on the assumption that the 'tin foil hat' crowd is right this time).
Re: elections have consequences - even primary elections
Quote:
Originally Posted by
Melonie
^^^ [big snip]
If it is is indeed the case that the 'smart money' is now pulling the plug on their US dollar denominated investments, (snip)
Melonie: 2??'s : 1) What key financial parameters being "met" would "make" the plug pulling case?
2) Who/What exactly would "smart money" be?
Just for the hell of it, I went to "YF", searched a few random big corps. in oil, mfctrg, consumer products. Sure enough, 9 out of 10 times insiders (I guess they could be considered "smart money") sold their shares in the last qtr. Most cases, total % of insider shares sold were<10%, but in 1 case was 57%:shocking: of total shares. I guess to get a better picture, should go back 6-12 mos. to detect big exodus???
Perhaps institutional(ized???) investors could be considered "smart money", though I've seen opinions to contrary expressed by some posters.
Again, YF indicated that more institutional investers sold than bought shares, though not as high as insiders. Institutional investors sold anywhere from 0.7-12% of holdings. Would, say<10% turnover in 6 mo. period be OK, but >10% be cause for alarm? Ditto for insiders.
As for bonds, or US Treasuries, any source or link that could detect mass exodus by major players?? Yes, I see some dark clouds, but does that portend a f6 tornado??
Re: elections have consequences - even primary elections
Quote:
1) What key financial parameters being "met" would "make" the plug pulling case?
basically, a serious net loss in terms of their 'home' currency ... or a net loss in terms of their foreign currency carry trade loan, the proceeds of which were used to leverage US based investments, but which must eventually be paid off in a foreign currency.
Quote:
2) Who/What exactly would "smart money" be?
private banking clients (getting recommendations to do so by the investment bank that manages their private banking)
sovereign wealth funds from China / Saudi etc. whose national 'incomes' include a whole lot of US dollars, but whose national 'bills' must be paid in a different currency.
international institutional investors, as you more or less pointed out already