Nobody For President.

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COMMENS:
By John Galt for America's Chronicle

The Third Party way - "Nobody" candidates getting 42% of the vote against President Obama.

Nobody's Press Conference.

As different offbeat organizations and quasi-parties fight for relevance and third party success in the coming general election without much progress, suddenly and in a complete spontaneous manner, three states' primaries have managed to obtain significant levels of voter support for candidates without any affiliation to either of the two main parties. In the democratic primaries of W. Virginia, Kentucky, and Arkansas, a convicted felon, a complete unknown, and a "Nobody" (uncommitted in the ballot), managed to garner 40 to 42 % of the vote, respectively, in all three states, against no other than the President of the United States, Barack Obama.

This amazing performance compares incredibly well against the long and painful - not to mention expensive - efforts of organized third parties wanabes  whose results have varied from embarrassing to laughable. The multimillion dollar effort put on the Libertarian-Quasi-Republican-Independent run of Ron Paul has persistently managed to obtain only about 10 to 12 % of the vote in most primaries. The Libertarian candidate, Gary Johnson, has not even officially entered any event, but his polling is predicted to come in the lower single digits. Even the past successes of Rick Santorum have not prevented him from dropping to the 5's and 8's percentage levels once he officially stopped campaigning. The new bilateral electoral effort by the multimillion dollar organization called Americans Elect did not even manage to find a strong enough candidate that could compete in these low levels of fellow third also-ran's.

Undoubtedly, breaking the two party system is a fools errand. But lo-and-behold, out of nowhere, the people of three states tell us that a third choice does have a chance if we only give them what they want - "Nobody". And it is beginning to make sense and to become clear to us why this is so. The only thing that Democrats and Republicans have in common is legions of voters that have come to place their ballots in their favor out of sheer momentum, apathy,  neglect, and DNA - out of lack of any other options. The options that are offered by the above mentioned third organizations serve only to justify voting again for the status quo parties. They are tired of clowns running for president.

All we hear from disgruntled conservatives and their brethren to their right is how much they hate the inadequacies of Santorum, Romney, Gingrich,  et al. The Libertarians are of course on a tear to tear everything down, I'm not even sure what they stand for in practical terms - yes, I know, they want freedom, liberty, no government (almost) - but none of these absolutisms are defined for real life day-to-day governance. The Paulites want to get rid of the Fed first, build a wall around the United States, and then hide under the bed. So we are finding out that all of this drives 42% of the voters crazy. But the third choice that perfectly composes the feeling and desires of these multiple discontents that may get approval from the crowds has been finally revealed to us by W. Virginia, Kentucky, and Arkansas voters - "Nobody". They want to fire all politicians, they want to fire Congress and fire the White House resident. But they don't want the "crazies", they prefer "Nobody".

That Third Party that nominates "Nobody" for President will get 40-42 percent of the vote and become a power house. Who knows, they might be able to elect a few "Nobodies" to the senate from some states and become the power balance of Congress. Americans Elect have found the perfect candidate and they don't even know it, "Mr. Nobody".

And let the main stream media criticize "Nobody". Let them print 5 thousand word articles about the teenage pranks of Nobody, or about how Nobody is a Vampire-Nobody because he creates businesses that actually make profits without government subsidies. Let the Obama campaign go negative on Nobody and how wrong it is for Nobody to practice capitalism instead of "fairness". Yes, siree, we finally have a perfect third party nominee - Nobody for President.

Imagine this, if all the nobodies will vote for a third party Nobody for President, Romney will win by a landslide, by sucking up 42% of the Democrat's base. The only way that Republicans would lose this election is if Obama ditches Mr. Gaffes and replaces him with Mr. Nobody. An Obama-Nobody ticket would be invincible.

Or better still, a Nobody-Nobody ticket will sweep the nation.

COMMENTS:

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How I’d Respond to Obama Campaign’s Attacks on Bain

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COMMENTS:

By Pat Slattery of The Free Market Project

The return of the Anti-Capitalist

Mr. President, I know you have no experience in the private sector, and you have shown no evidence of understanding either economics or business, so let me tell you how this works.

Sometimes businesses struggle. That means that they are either losing money–they are not profitable, or they are barely making ends meet. This can happen for many reasons, but the common thread is that costs are exceeding, or just barely meeting, revenues. You see, in business, unlike in government, if you are spending more than you are making, you go out of business. You can’t simply raise a debt ceiling, or sell treasury bonds, or print money. Those things eventually cause a nation to fail, and they are not options for companies.

When a company is struggling, but seems to have potential, one of two things can happen. Either it goes out of business and everyone loses their jobs, or someone comes in and tries to rescue the company, to make changes that will return it to profitability. These people, such as Bain Capital, are taking a risk. The reward is that if the company is made profitable, the investors can make money and the company stays in business as a profitable enterprise. If the investors fail, as I said, everyone loses their jobs and the investors lose their money. You have to understand, these are people losing their own money, not the money of anonymous “taxpayers” whose capital politicians squander on wasteful programs, and funding boondoggles such as Solyndra or any of the other “investments” your administration has made in green technologies that have yielded so few jobs.

Just as an aside, Mr. President, what was the upside for the taxpayers whose money you invested for them? If the companies hadn’t gone bankrupt and wasted that money, would the government have made profit, or would it just have broken even, maybe plus a little interest for the millions or billions of dollars that you risked on the taxpayers’ behalf? How much of your own skin did you have in the game? Or was it all just the people’s money, borrowed at interest from the Chinese, that you were risking?

Back to actually doing real business in the private sector. Most often, costs have to be cut in order to bring a company’s revenues and costs into balance, or even profitability. Again, this is not like Washington D.C. cost cutting, where you simply slow the rate of the growth and call it a cut even though you’re actually spending more, year over year. This requires actually cutting costs. Often, and unfortunately, this can mean cutting employees, particularly when their productivity does not justify their wages. Now, when you consider that not saving the company means everyone loses their job, having to cut some jobs to save others, while distasteful, is necessary.

I know that you and the Democrat party are beholden to unions. However, it might surprise you to know that, in the real world, some unions have a reputation for driving costs up and productivity down. They are more concerned with making sure the next shift has work to do than with increasing their own productivity in order to help the company. Often union wages are inflated, as are their benefit packages. When confronted with a company that is going under and that has an unproductive workforce, some of those jobs have to be cut. The unions never like this, but the unions tend to lose track of the fact that the enterprise has to stay in business in order for anyone to keep their jobs. And, just as you tend not to take responsibility for anything and try to place blame on others, such as your predecessor, unions tend to blame the company or the investors when jobs are lost or a plant closes without ever taking a moment to think that perhaps if they hadn’t driven the cost of labor so high, the company may have stood a better chance of success.

So, when I was with Bain Capital, and even after I left–something you well know since you have now twice brought up efforts Bain made to turn a business around that failed after I’d left the management of the company–we tried to turn businesses around, to keep companies that were going out of business from going out of business. We invested our own money, and private capital from other people. Sometimes we failed. More often, 80% of the time, we saved companies and jobs, and when the companies were turned around, they hired more people. Again, keep in mind that the companies were in trouble when we went in; they were on their way to failure which would have cost everyone their jobs and all of the investors to lose all of their money.

Now, just to make it clear to you, again, given that you have no private sector experience and don’t seem to understand business or economics: When a business fails, that is bad for investors as well as being bad for employees and even communities. (Unless, like with your cronies in your green energy boondoggles, there are taxpayer guarantees to help ease the blow.) When I, or Bain Capital, was not successful in saving a company, we lost money–our own money and our investors’ money. There was no great benefit to failure. You are not considered a success being a “vulture” that picks the bones of dead companies. Selling off assets to recoup what you can from a failure is far less lucrative than being successful in turning a business around and having it become a thriving enterprise, doing business, employing people, and creating wealth and prosperity.

Your campaign’s efforts to paint my work at Bain Capital as something bad simply reveals that you truly have no idea how business works, or how the economy works. It shows that you don’t understand that companies need to be profitable, to have costs that are lower than revenues, in order to stay in business and employ people and create wealth and prosperity for the employees and investors, and the communities in which the businesses operate, as well as in the country. You are used to government work, where productivity and efficiency are not highly valued, where waste is tolerated, and were debt is a matter of debate, treated like a fiction (until it’s too late), instead of a matter of whether an enterprise exists or not.

I will tell you right now, and tell all of the potential voters: Washington D.C. needs to start operating more like the private sector. This country is deeply in debt, our costs have far overrun our revenue, and we are on the verge of bankruptcy. You seem content to ignore that ugly fact, to pretend it is not real, even while evidence of the hard reality it brings is being shown to you in Europe. We do need a President that understands a balance sheet. We do need a President that understands profit and loss. We also need a President that understands business and who realizes that jobs are not something politicians create. Jobs are created by a thriving private sector, and politicians can, at best, create a climate where business can thrive and wealth and prosperity can be created. You have done the exact opposite of that in your administration. That doesn’t surprise me, because it is clear that the private sector is neither of interest to you, nor understood by you. Rather than criticize the efforts of people to save companies, even when they fail, you would do well to return to private life and see what it’s like to start a business and try to make it successful.

COMMENTS:

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The Largest Asset Bubble Yet That Is About to Burst

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COMMENTS:
By John Galt for America's Chronicle

The coming asset bubble pop is larger than the 2008 housing bubble but this time it can be predicted and is upon us.

 With treasury bonds at an all time high - and yields at Japanese levels - more wall street analysts are joining the already swollen ranks of those that think we are in a major asset bubble, and that this is the largest asset of them all. It has always been a kind of dark art to predict with any sort of accuracy and timing the bursting of bubbles. Even more difficult are those assets that are not market oriented - meaning their asset price is not determined by the market. That is the case of Treasury bonds whose market price is determined by the government, specifically the Fed's monetary policy.

Source: NYSE. Composed by America's Chronicle.

The treasury market size is 14.3 Trillion dollars. Much of it is held by foreign nations and entities that are not affected by US tax policy and macro-economic factors. We calculate this exterior participation in around $4.5 trillion, which includes $1.2 trillion held by China. Contrary to popular folklore this represents only 7.9% of the total market. What constitutes our interior and domestic holdings of treasuries and susceptible to US Macro-economic shocks is a total of $9.8 trillion, or 68.5% of the market; it is this asset sub-class that is in danger and for which we are ringing the alarm bells.

Much has already been written about treasuries constituting an asset bubble for different reasons, most of them based on the behavior of the maddening crowds. The detractors have equally defended the present trend of treasuries as logical to the markets physiology. Neither the accusers nor the detractors can be both right in their arguments simply because they are based on past experience with the ending of extraordinary trends. In the case of treasuries, the knowledge gained from past behavior with market oriented assets that experienced extraordinary and radical price movements does not apply simply because it is not a market oriented asset. The forces that will end the present trend are those where the self-interest and policy decisions of the federal government come into play. Those forces have a political content and can not be rely on to be economically logical.

Does that mean that price trends for Treasuries cannot be predicted with any economic accuracy? That is correct. They can only be predicted if political interest can be predicted. These are ultimately unreliable as an economic measure.

But Treasuries can be predicted by one-time short term economic events produced by political decisions of such importance as to alter the return of capital invested in that instrument. We have now such an economic event coming with a high degree of certainty which will alter the value of this asset class. It does not need to be predicted. It is already in the law and it has a timeline. It will increase or reduce the value of treasury bonds and their return on investment in relation to actions taken before or after that timeline.

We are talking about the unique and transcendental event of the US capital gains tax changing according to present law from 15% to 23.8% by January 1st, 2013, and possibly to 33.8% sometime during 2013 if President Obama gets re-elected and is successful in passing the 'Buffet rule' as proposed. This is an increase in taxation of between 58.7% at the minimum to 125.7% at the worst, directly affecting the sale of treasuries. It means that in 7 months time investments measure in the trillions of dollars cannot be sold without incurring one of the largest tax penalties in history.

It also means that domestic holders of treasuries, presently in the amount of 9.8 trillion dollars, know that this asset needs to be sold before December 31 of 2012 in order to avoid an increase in taxation of between 58% and 125%. This necessary economic action will burst the 9.8 trillion treasury asset bubble. This action will provoke interest rates to increase substantially killing the already insipid economic recovery. One single predictable economic calendar event will hit two birds with one single stone - the economy, and the re-election chances of the Democratic Party.

The bursting of the Treasury market will drag with it those holders of other asset classes; and the exit door shuts on December 31st.

COMMENTS:

Facebook to Faceblush Follow Through . . .

COMMENT:
By John Galt for America's Chronicle

This is the one-day after follow through on our analysis of Facebook's first day of trading last Friday. The graph says it all and corroborates what we predicted last week (see post below):

No fire yet, but lots of smoke!

FaceBook Changes To FaceBlush

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COMMENT:
By John Galt for America's Chronicle

Friday, May 18, 2012, 6:00PM

"Hoodie" management style doesn't go well in Wall Street.

Facebook goes public and falls flat on its book Face. The initial public offering that was supposed to be all the rage comes out at $38 per share and closes its first day of trading at $38 - as flat as a pancake .  A record number of 23 underwriters that participated in the offering had to resort to buying more shares in the market to prevent it from falling below the issuing price - they are not a happy bunch tonight. The marketing department of Facebook must be feverishly working on the main financial news to prevent them from saying what we are going to say right here - the Facebook IPO is an unmitigated disaster.

The Welfare State Has Arrived in America.

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COMMENTS:
By John Galt for America's Chronicle

And only the brave will be able to change its course.

The following chart of per capita expenditures in the United States compared to four of the most economically troubled nations of Europe was composed by the Senate Budget Committee Republican staff from IMF data and purports to show just how deep in debt the US is getting due to an out of control welfare and entitlement state.

All four bankrupt nations of Portugal, Greece, Spain, and Italy, are actually in better shape as to their financial commitments to their population than the United States who spends more than $20,000 per person compared to Italy's $16,900, Spain's' 13,100, and doubles Portugal with $10,200.

From Indian Chiefs To Kings - It Is Getting Hilarious But Worrisome.

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COMMENTS:
By John Galt for America's Chronicle

The Telegraph of London front page piece.

From politicians running as Indian chiefs to get elected to the senate, to dueling female factions between Hollywood stars and first ladies (see right column for those stories), and even national magazine covers declaring America's first gay president, it all adds up to a carnival of the absurd and a festival of laughs. Now, as if all of that is not enough to have us rolling on the floor hysterically, we find that serious people in Europe think we have become a monarchy.