Its pretty much raining everywhere right now so I thought it would be a good time for a fireside talk about what is happening in the financial world as we wait for the football games to start this afternoon.
However, something fascinating began to happen over the past few weeks. An unknown contender, Scott Brown, began to run his campaign based on his ability to vote down Obama's spending bills of mass destruction and on Tuesday night he shocked the world by winning the seat.
His victory takes away the needed 60 votes the democrats had to vote through any bill they wanted. It slammed the breaks on Obamacare, as well as his other never ending spending a-bombs.
Tuesday night was a moment when I had a brief feeling of hope for our country. Not because I feel Republicans are any better than Democrats, but because it appears the people of the nation are very slowly starting to wake up to what is being done to them.
How does this all effect the markets?
The markets, looking on with horror, began to sell off hard on Wednesday, Thursday, and Friday, understanding that our leadership is a rolling, reckless, loose cannon that is waiting to deploy on the next part of our ship.
Someone forgot to tell Obama that the proprietary trading was the current major source of revenue for the reckless gamblers that he nationalized last fall. Estimates show that proprietary trading was 45% of the revenue source for Bank of America during 2009.
What is prop trading? It means using your own firm's capital to trade, different from a hedge fund who uses client's capital to trade.
Since they can no longer sell mortgages, put together merges and aquisitions, or launch IPO's, prop trading (gambling with the tax payer's money) was one of the few sources of revenue remaining.
In reality, Obama will do nothing of the sort. This was just populist chatter that will ultimately have no teeth.
What does have teeth is Obama's promise this week to re-direct focus on job growth. His most recent $154 billion jobs bill two months ago was just the down payment for what is likely coming.
As the jobs indicators across the board appear ready to turn down again, look for a massive spending bill to come from Washington to "create" jobs for the country.
By "create" of course I mean "destroy." The government has no money; they tax an efficient part of the economy to create inefficient government jobs. The sum is a net loss to the nation.
What will be interesting will be to see how large the job destruction bill will end up being. It's total will add to the current $1.7 trillion deficit projection this year.