Well about just one thing maybe. He IS giving the world a long flashback to the Clinton 90s, where two forms of Reaganism carried on - Cold War coercive diplomacy and financialized capitalism. The foreign policy team was chewed over nicely today on Democracy Now. Robert Dreyfuss was right to say that "There was nobody there from the anti-war wing of the Democratic party," and that it looks center-hawk, more of the same. Steven Clemons responded like this: "what if he brought in a lot of the people that Bob Dreyfuss suggested should be part of that cabinet? I think Obama would have to go out and bomb a small country or something to show he was tough and had the ability to deploy force."
There are no real openings here. We're talking Obama One - muddled and mediocre, not a man of destiny.
But I've underestimated his strategic abilities before. He may be avoiding Clinton, who did his outsider cuts and thrusts and got rolled every single time. Clemons was hoping for Nixon in China. Dreyfuss was saying not with these people, a combo of hawk Dems and actual Bush people, including Mr. Surge and Mr Escalate Afghanistan - Sec of Defense Robert Gates. It's kind of like Bill Clinton keeping Bush I's Secretary of Defense, one Dick Cheney.
But screw politics, let's talk money. Governments are trying to look like they care. They do care. They care because they're scared. Personally, deeply, very afraid. Their great business leaders took the money and ran the company into the ground. Their gurus like Larry Summers don't really have any idea what the hell's going on.
Luckily I do. It's simple. The securities out there are crap. Everybody has now figured this out. Nobody wants to buy any of it, or let any of it be put up for colattoral. There's money to be made extracting big upfront bribes in the form of government money. your money and mine. There's money to be made waiting for some bidding up after a big bailout - it's been a few days now, hasn't it? - and then selling it all short. Hence the NYSE's 600 pt drop yesterday after its happy thanksgiving. There's not going to be much going on until we get back to inventing and making stuff again - like in WWII. You know, green-nuke gliders to bomb Iran.
John Authers at the Financial Times has a nice chart that show up staying down.
When the Xanax kicks in, it still doesn't get the S&P up to the 50-day moving average which keeps going down (blue), or the post-Lehman average, which is even more down. The trend is not our friend.
In his "Short View" column for December 1, Authers tries to explain Monday's gloom:
What dashed the market’s hopes? Surveys of supply managers in China, the US and the eurozone showed economic activity contracting faster than had been expected. The US ISM survey raised deflation worries by showing that the prices paid by manufacturers had their sharpest drop since 1948.
The US National Bureau of Economic Research announced that the US went into recession in December last year.
My thoughts exactly. Time for some new medicine. But the US government hasn't done social medicine for a long time. It has cut society - like Mumbai cut basic emergency services, magnifying the death toll - and does wartime medicine. Now we have a "war cabinet" in the Obama 1 administration.
And Ben Bernanke, chairman of the Federal Reserve, said the Fed was prepared to buy long-dated Treasury bonds.
Many assets have become “toxic” this year. Treasuries are not among them. Even before the Bernanke speech, 10-year Treasury yields were at their lowest in 50 years, reflecting extreme negativity about the economy and a “flight to safety” by investors. Treasury bond investors do not need help.
Rather, the Fed would buy them to push their yields down further still, in the hope that lower rates would stimulate the economy.
This sounds like the “quantitative easing” practised by the Bank of Japan to combat deflation. This implies monetary policy as usual, setting rates for banks, no longer works.
This may be the right thing to do. But official recognition that it might be necessary removed all vestiges of Thanksgiving week’s optimism.
The trend is not your friend.