Ad Majorem Dei Gloriam

Essential thinking for reading Catholics.

Friday, November 16, 2012

Today's News You Should See But Haven't (11/16/12)

(I'll update these today as I can.)
Hostess Brands, the maker of treats such as Twinkies and traditional pantry staple Wonder Bread, is closing its plants and firing 18,000 employees after failing to reach a cost-cutting agreement with union workers.
Pessimism Abound: Bearish Sentiment Hits 2012 High Amid Fiscal Cliff Worries The stock market's post-election swoon has investors currently feeling more downbeat about the market now compared to any other point in time this year.
Israel's military assault on the Gaza Strip is complicating President Barack Obama's Middle East policies just days after his re-election.
Start building a defensive portfolio today.
Stocks edged lower as investors eyed the start of budget talks between White House and congressional leaders and continued tension in the Middle East
White House officials are said to be in advanced talks to replace the “sequester” with a package of smaller, more targeted spending cuts and tax increases, The Wall Street Journal reported.
How Hostess Failed: Unions
The hour-long session is not expected to yield much in the way of tangible results, but it could create a template for the coming weeks of negotiations.

Thursday, November 15, 2012

Today's News You Should Have Seen, But Haven't (11/15/12)

Obama 'Grand Bargain' More Gimmick Than Grand
The wide gap between GOP lawmakers and President Obama over what constitutes serious deficit reduction may be too much to overcome in time to avert the year-end fiscal cliff.

Stocks Slouch Further South; Obama Message Falls Flat
Stocks dug a deeper hole Wednesday, unable to find any encouragement from the Federal Reserve minutes, a presidential press conference or economic data. The NYSE composite lost 1.5%, the S&P 500 1.4% and the Nasdaq 1.3%. Small caps did even worse, with the Russell 2000 diving 2%. The IBD 50, a proxy for leading stocks, also fell 2%. Volume rose across ...

Stocks Tumble as Fiscal, Geopolitical Worries Mount
Stocks skidded deep into negative territory Wednesday amid worries about the fiscal cliff and rising tensions in the Middle East. The Dow closed at the lowest level since June.

Breaking Down Centi-Millionaire "Papa John" Schnatter's Obamacare Math
Grim facts about Greece's debt situation were revealed this week after an EU report was leaked to the public. Greece’s economic depression is in its fifth year and its debt-GDP ratio is projected to reach 190 percent next year. 

Euro Zone Slips Into Second Recession Since 2009
The euro zone fell into a recession in July-September, the second since the global financial crisis in 2009, as French resilience could not make up for a slump across Europe and the three-year debt crisis slowed Germany to a crawl.
The CIA chief was weakened by criticism of his role in the Libya crisis as the affair scandal unfolded.

Petraeus Mistress Had Substantial Classified Data

Print Baby Print, Japan’s Likely Next PM Tells Bank of Japan

Panetta Unaware of Any Others Involved

Obama Undecided on FBI's Petraeus Probe

Morning MarketBeat: Brace for More Turbulence

The president said he will push for a deal to resolve the year-end fiscal crisis by raising tax rates on upper-income Americans, while leaving enough wiggle room to suggest to Republicans that the two sides could still compromise.

Why Buying Bonds Could Be Riskier Than You Think

At Meeting With Executives, Some Push, Pull, Give

Video: Obama on the Fiscal Cliff, Bipartisan Cooperation

Live: Fiscal Cliff Stream

The euro-zone economy contracted in the third quarter despite modest gains in Germany and France, as rising unemployment and fiscal austerity across much of Europe deepened the Continent's economic malaise.

Live: Europe's Debt Crisis

The FHA is expected to report this week that the agency could exhaust its reserves because of rising mortgage delinquencies.

Wednesday, November 14, 2012

Today's News You Should Have Seen, But Haven't (11/14/12)

I'll update these as time allows today. (Updated at 2pm EST)

Unions in Spain, Portugal and Greece went on strike to protest government austerity plans amid a wide economic contraction across Europe's periphery, but questions remained about the unions' ability to influence economic policy.

If newly re-elected President Obama was hoping to float into his second term on a cloud of renewed national optimism and bipartisan goodwill, he's likely to be disappointed. The latest IBD/TIPP Poll shows that, at least as far as economic optimism is concerned, America very much remains a house divided.
When President Barack Obama meets with about a dozen business and labor executives to discuss the "fiscal cliff," not a single Wall Street e...
Congressional oversight committee members say decisions made by former NJ Gov. Jon Corzine at his firm led to missing $1.6B in customer funds, reports CNBC's Kayla Tausche.
Stocks closed poorly Tuesday, ending in the red and near their session lows. The Nasdaq lost 0.7%, while the S&P 500 and NYSE composite both shed 0.4%. Volume increased from Monday, when the Veterans Day holiday slowed trading. Each index touched a fresh low for the current correction, in a sign that the market has yet to stabilize or establish a ...
Obama will start budget talks with congressional leaders Friday by calling for $1.6 trillion in additional tax revenue in the next decade, far more than Republicans will likely accept.
Firms Warn on Cutbacks
Business Leaders Spooked
Capital: Next in Budget Drama
Higher tax rates on upper-income Americans are a central part of the White House's deficit-reduction proposal, Geithner said at the WSJ's CEO Council, because there is no way to raise enough revenue only by limiting tax breaks.
Fiscal Cliff ‘Simply Not Going to Happen’: Sen. Corker

Democrats Like Romney Idea on Income Tax
Is America on the path to welfare and government dependency, or is there a future of free market capitalism?
CNBC's Eamon Javers reports top U.S. General in Afghanistan John Allen is under investigation for emails to Petraeus' friend Jill Kelley; an...
John Schnatter, CEO of Papa John's has a problem with Obamacare -- many franchise operators are planning to cut employee hours to part-time ... 
Vernon Bogdanor, professor of government at King's College London, tells CNBC that Britain is fortunate to be outside the euro zone and Germ...

Friday, November 09, 2012

Today's News You Haven't Seen But Should Have (11/9/12)

[NOTE: This post will be updated throughout the day as I get the chance. Latest update: 3:55pm]

Don't worry. Be happy.

Analyst Art Cashin of UBS on Why Stocks Fell as Obama Spoke

Battle Plan Shifts on Dodd-Frank 

Markets After Obama's Speech
Discussing the market action today, with John Spallanzani, GFI Group; Dan McMahon, Raymond James; and CNBC's Steve Liesman and Rick Santelli...

Fuzzy Fiscal Cliff Math
The President is speaking out on the fiscal cliff, and standing his ground on higher taxes for wealthier Americans. Jared Bernstein, Center ...  

J.C. Penney Turnaround in Doubt as Sales Plummet
(This is because they discontinued the Chris Madden "Spa Collection" towels. -J.)

Repeal The-Hollywood Tax Cuts

Greece Says Cash Reserves Almost Depleted

Iran Fired on U.S. Drone Before Vote
Iranian fighter planes shot at an American drone last week, in an unprecedented air attack that raises military tensions in the Persian Gulf.

Help Wanted...but in a Whole New Way 

Many of the world's most important economies face significant trouble.Three economists from the Peterson Institute for International Economics today offered a tour through the risks in all three economies. It was not uplifting.

Worried Germany seeks study on French economy
US election: now for the hangover 
How to Fire Someone
UBS to cut up to 10,000 jobs: report
Swiss banking giant UBS is getting ready to roll out a plan to cut as many as 10,000 jobs, the Financial Times reports.

U.S. banking regulators do not expect proposed rules requiring financial institutions to hold more capital to take effect at the start of next year, three agencies said on Friday.

The economic downturn is hurting Americans including young people, who are struggling with debt and joblessness. See what's new on millennials' list of financial woes. (Elections have consequences, kids. -J.)

Vestas says it will cut an additional 3,000 jobs by the end of 2013. But spokesman Andrew Longeteig says service revenue has increased 46 percent in the past year. Vestas will provide maintenance to Palouse Wind in Washington.

Gold Hits 3-Week High on US Fiscal Concern

PepsiCo Looks to Juice Profits With 4,000 Layoffs

In an effort to boost its bottom line, PepsiCo management is reportedly contemplating laying off about 4,000 workers and putting a stop to its 401(k) match.

Energizer to cut more than 10 percent of workforce

Technical Indicators Suggest ‘A Long Way to Go’ Down
Iran Warplanes Fired on US Drone Over Gulf: US
Euro Zone Leaders Face Brinkmanship on Greece
How to Trade the Euro's Slide
What 4 More Years Means for Housing
Buy Gold Miners on Obama’s Victory?
Ominous Signal From the Fed? 
The Fed has shown how gravely concerned it is about the U.S. economy and its prospects, Former Fed Governor Kevin Warsh said

France's central bank said it expected the euro zone's second-largest economy to slip into recession as 2012 ends—a scenario that could make it harder for the government to hit next year's debt-reduction targets.

Europe Shares Fall on Global Growth Fears
European shares traded lower on Friday as uncertainty about a new bailout deal for Greece and some disappointing earnings from European companies added to concerns about a looming "fiscal cliff" in the United States.

German Growth Set to Slow as Euro Zone Crisis Hits Home
Growth in Germany, Europe's largest economy, is likely to weaken in the fourth quarter of this year and the first of 2013 as firms postpone investments due to the euro zone crisis.

China, India GDPs to Exceed Entire OECD by 2060: Report The combined economic output of China and India will exceed that of the entire OECD bloc (Organization for Economic Cooperation and Development) by 2060, the group said in a report published on Friday.

More Pain for Spain: 4,500 Iberia Workers Dismissed
IAG the owner of British Airways and Iberia, on Friday reported a 25 percent fall in third-quarter operating profit, hit by rising fuel costs and a poor performance from its Spanish unit. Is said it would dismiss 4,500 workers at Iberia.

Sears, which sold many Bionic Wrenches last holiday season, is selling a similar product this year — only now it is made in China instead of America. The NYT reports.

Credit Agricole reported a steeper-than-expected 2.85 billion ($3.63 billion) quarterly loss on Friday as the French bank was slammed by its exit from Greece and a series of other write-downs.

Nearly half of Britons would vote in a referendum to leave the European Union and less than a third to stay in, according to a poll highlighting divisions facing Prime Minister David Cameron.

China's annual industrial output growth quickened more than expected in October and fixed asset investment also ticked higher, cementing investors' expectations of a modest rebound in the final three months of 2012.

The trouble with money.

If I had to name a pet peeve over the next/last few days it'd be the savage innumeracy of the American public in general and the self-styled intelligentsia. As legendary humorist IowaHawk noted: "The bad news: we're all about to get boned. The good news: 51% of us will deserve it."

There are of course, multiple reasons why there are gravely distressing scenarios likely to play out in the global/US economy. Given the laws of arithmetic find even lesser acceptance among our betters than the prospect of Sharia, I can only hope the following analysis of monetary policy is sufficiently simplified.


The U.S. M1/M2 Money Supply data was published Thursday by the Fed and that got me going through the growth trend.

Non-Seasonally Adjusted (NSA) M2 continues to grow at an annualized +/-8% rate, based on a "straight-line curve fit" over the last 6 months.

This +/-8% rate will not be sufficient to reignite the US economy, but there are some areas of the US housing sector that could benefit, given that the Fed is buying up Mortgage Backed Securities, like a Colorado voter in the Twinkies section of a 7-Eleven, with the hot-off-the-press QE3 money. Any sensate person analyzing this will realize such a money growth rate will not be adequate to lift the overall US economy.

In all likelihood, the US economy and stock market will remain in the same doldrums for a while. Now, if the M2 growth rate stays at 8% or drops, eventually the market will crash. The ONLY way a market rally will manifest itself is if/when the growth rate accelerates for a sufficient period of time. (More on that below.) 

The ABC theory (Austrian Business Cycle) one of the tenets of Neo-Classical economic thinking (to which I adhere and you should also) serves to clarify how growth happens in response to growth in an economy's  money supply. In other words, the growth of the money supply must accelerate (i.e. the rate of increase must also increase) to keep a growth period going.

Now, let's put our +/-8% growth in perspective.

The record (all rates are annualized) of US M2 growth for the past 30 months:
6/10 – 6/11:            6.8%
6/11 – 8/11:          24% (2 months)
8/11 – 3/12:            7.3% (7 months)
3/12 – 5/12:            0% (2 months)
5/12 – Present:        8%

The 2 months of 24% growth was the, er, "printing flurry" that was manifested as a boomlet in the US stock markets and caused some measures of economic activity to (artificially, IMCO) pick up in the US. After that printing flurry, the money supply only grew at a 7.3% rate. Then, the hangover: earlier this year U.S. M2 growth evaporated to 0%. The money supply grew at about 8% afterwards.

WARNING: Arithmetic follows.

If you take the 2 months at 0% and average them in with the last 6 months at 8%, then average M2 growth for the combined last 8 months is +/-6%. The more eagle-eyed among you will suspect this to be actually less than the 7.3% for the 7 months before that. This means we are actually in a period of decelerating money growth. As a result, US markets and economy are showing signs of weakness. (There are some exceptions in the housing sector.)

Consider this. US banks now have almost $1.5 Trillion in excess reserves. (Remember what I said before about liquidity?) Natch, the Fed has an unstoppable capacity to print new money and they are adding $40 Billion/month from QE3 program with no end in sight. This means the US money supply could accelerate (unpredictably...whee!) at any given time if for some reason the US banks started lending again, or if the Federal Reserve goes on a printing jag.

If this occurs, it shows up in the Money Supply and US Banking Reserve reports issued by the Federal Reserve. Short version? US markets are not likely to grow in the near future, but things could change fast. Interest rates will eventually rise when price inflation spikes. (Remember, all that "extra" money has to fit to all the goods and services produced by an economy, which translates to higher prices.) That +/-8% rate of money printing on the heels of the last printing will, sooner or later, cause inflation to return, and that will make bond prices swoon.

The above provides a useful glance why US economic data has been disappointing, especially of late when – in contrast to earlier this year and late 2011, when there were hopes of a "real" US recovery (which were borne of a surge in money supply over 2010 and the first half of 2011). The problem here, as I'm sure you've figured out, is that the "natural" growth (i.e., absent Quantitative Easing) in M2 remains very disappointing.

The more tepid the money supply growth is, the more likely it is that we see a stock market and broader economic downturn that would be deeper and longer-lasting than the one from 2008.

Thursday, November 08, 2012

Gee, why didn't we hear all this, say, Nov. 5?

The temptation, for those who are far more skilled than I am at holding on to the memory of injury and insult, would be to say "Let Rome in Tiber melt."

Anyway, here's a neat summary -- by no means exhaustive -- of what you will find when you gaze into the crystal ball, America:

Global Slowdown Threatens More Layoffs

PC chipmaker Advanced Micro Devices said it will cut its work force of nearly 12,000 by 15 percent. (That's 1,800 for you journalism majors.)
Boeing announced a major restructuring of its defense division on Wednesday [11/7/12] that will cut 30 percent of management jobs from 2010 levels.

USA Today reports: Layoffs rise as firms retrench due to earnings.

NBC News - Dow Chemical layoffs announced

Dow Chemical Co., the largest chemical maker in the United States, said on Tuesday it plans to cut 5 percent of its workforce and shutter 20 plants as part of a restructuring program aimed at countering a slow global economy. Dow and other chemical companies face slipping demand for products around the world. Rival DuPont slashed its earnings forecast and announced 1,500 jobs cuts.

Welch Allyn, manufactures medical diagnostic equipment in New York state, announced it'd be laying off about 10% of their workforce over the next three years. One of the major reasons mentioned? A proactive response to the Medical Device Tax mandated by the new healthcare law.

Just before the election, Dana Holding Corp., a global auto parts manufacturing company in Ohio warned of potential layoffs, citing "$24 million over the next six years in additional U.S. health care expenses". After laying off several management staffers, insiders have mentioned there is more to come. They have to cover that additional $24 million cost somehow, and that means numerous cuts to their current workforce of 25,500 worldwide.

Stryker (One of the biggest medical device manufacturers in the world.) will close their facility in Orchard Park, New York in December. Even more exciting, they plan on coping with the medical device tax featured in Obamacare by slashing an estimated 1,170 positions of their global workforce.

As far back as October, 2009, Boston Scientific CEO Ray Elliott, warned that the taxes written into Obamacare would "lead to significant job losses" for his company. Two years later, Boston Scientific announced they would be cutting between 1,200 and 1,400 jobs, while simultaneously shifting investments and workers overseas - to China.

In March of 2010, medical device maker Medtronic warned that Obamacare taxes would bring about cuts of 1,000 jobs. This became a reality when the company cut 500 positions, with another 500 set for 2013.
Here is a partial list of other companies facing layoffs at the hands of Obamacare

Smith & Nephew - 770 jobs lost
Abbott Labs - 700 jobs lost
Covidien - 595 jobs lost
Kinetic Concepts - 427 jobs lost
St. Jude Medical - 300 jobs lost
Hill Rom - 200 jobs lost

But it gets better! You're also going to see a shift from companies switching from full-time to part-time workers.

According to Sean Hackbarth of Free Enterprise:
A JP Morgan economist "points out that 8.3 million people are working in part-time jobs even though they'd prefer full-time work. Unfortunately, because of President Obama’s health care law, the Patient Protection and Affordable Care Act (PPACA), workers in the hotel, restaurant, and retail industries could be pushed into part-time jobs working less than 30 hours per week."
"Under the health care law, if a company has more than 50 'full time equivalent' workers, a combination of full and part-time employees, but doesn’t offer 'affordable' coverage that meets the government’s minimum value standard, the company will have to pay a penalty. This penalty is determined by the number of full-time employees minus 30 full-time employees. So to reiterate a very important point: part-time workers are not part of the penalty formula. The health care law creates a perverse incentive to hire part-time versus full-time workers."
Ah, yes. The Law of Unintended Consequences.

Reported in the Orlando Sentinel, Darden Restaurants, (Red Lobster, Olive Garden and LongHorn Steakhouse, etc.) will be "experimenting with limiting the hours of some of its workers to avoid health care requirements under the Affordable Care Act when they take effect in 2014".

The CEO of JANCOA (specialists in Janitorial Services), Mary Miller, testified in Congress that Obamacare was a "dream killer", adding that one option she had to consider "is reducing the majority of my team members to part-time employment in order to reduce the amount that we will be penalized."

As per this Doug Ross piece:
"A mid-level manager with the company reveals that Kroger will soon join the ranks of Darden Restaurants and slash the hours of its non-exempt (hourly) workers to avoid millions in Obamacare penalties."
According to the source, Obamacare could result in tens of thousands of Kroger employees being limited to working 28 hours per week.

Sometimes the lessons can only be learned when they are learned the hard way and sometimes, the hard way needs to be especially hard for people to learn.

Today's News You Haven't Seen But Should Have (11/8/12)

I'll try to update these as the day goes on.

Europe's Next Worry: Germany in Recession
US homeownership rate falls to a 17-year low of 65.3% in Q3 as ‘homeownership bubble’ continues to deflate
Greece Is Running Out of Cash
Obama Victory Fails to Thrill European Business 
German Exports Fall at Fastest Pace Since Dec 2011
Greek Parliament Narrowly Passes Austerity Bill
Europe Is Heading for a 'Severe Recession'
Thorsten Polleit, chief economist at Degussa Goldhandel GmbH, tells CNBC that credit supply to the private sector is contracting at a rate unseen since the early 1980s, the severest decline in decades. (Quiz: What will higher taxes do to global credit supply? Write your answer on the pack of the page and show all work.)
Europe’s Fears Over US Energy Gap
Why US Economy May Be Headed for Another Recession
All the problems investors face — from the fiscal meltdown to the economic woes around the world — add up to one daunting prospect: another possible US recession.
Inflation Fears Grow
Don’t Count on the Yield Curve for Recession Warning
Credit Card Debt Recovery Sluggish With Incomes Weak
Germany’s Second-Largest Bank in Big Profit Miss
Euro Falls on Recession Fears
El-Erian: Really Depressing Numbers Out of Greece
ECB Europe’s Paymaster Heading for Recession: Economists
ECB's Draghi Says Euro Zone Economy to Remain Weak
Wall Street Traders Fear a Nasty Season for Stocks
McDonald's Suffers First Monthly Sales Drop In 9 Years
Bubble Brewing for Two-Tier Housing Market: Goldman
Asian Shares Fall on U.S. Cue
Europe's New Austerity Is Not Coming From Governments
Earnings season in the euro zone has been marked with a raft of job cut announcements, signaling more trouble ahead for the region.
New Housing Bubble Forming Across the Globe: Goldman
Middle Class Worse Off Than You Think: MIT Professor
Manufacturing Weakness Persists Across Mix Of Reports
Ripped Apart by-Financial Crisis Greek Society in Freefall

A quick bit of explanation I need to drop on you.

One of the truisms we hear a lot -- because it's true, incidentally -- is that it is very unwise to raise taxes in, or facing, a recession.

It seems very, very likely this advice will be ignored.

"But why is it bad? Rich people can afford to pay more."

Here's why, and keep in mind I am giving you a FEROCIOUSLY abbreviated version of things.

We have had a recession and "recovery" (ponder that we had higher unemployment during the recovery than during the recession) that was characterized by a near-evaporation of liquidity. People had "stuff" (i.e., goods and services) but they were not liquid (i.e. people had no cash and the stuff they did have wasn't so simple to turn into cash). In a normal situation that's not a very big deal because financial institutions provide the cash (i.e. liquidity) to compensate.

But for a whole bunch of reasons we shan't discuss today, the banks weren't providing that lubrication and the system really, really broke down. So the Fed steps in to "inject liquidity" or "provide monetary easing" into the system. But here's the problem with that: The money (again for a whole textbook's worth of reasons) gets stuck in the banks where it has remained. The analogy of a clogged hose is apt.

So what does that have to do with taxes?


When you increase taxes -- and we're using only for the sake of simplicity, because it's otherwise loathsome and useless, a static analysis model -- you get money that was otherwise coursing through the private sector, and put into the government sector. The problem with that is that there is a multiplier differential between what $1 does in the private economy and what $1 does in the government pipeline. The last time I checked, the difference was a +/- 1.78 for private and +/- 1.21 for government. That means that for every $1 that goes into the private sector's pipeline, at the other end emerges $1.78. In the case of the government, you get $1.21.

The logic is simple, if you start with Person A and $1, you see that $1 buys goods and services as it goes through the private sector and changes hands. Stuff gets made. Not so with the government. (It still has a multiplier -- albeit a very diminished one -- because as government employees all along the chain get paid they then buy goods and services. But keep in mind that it costs $40K to give $20K in assorted benefits.)

In other words, think of that innumerate limousine progressive (but I repeat myself) such as Stephen King. He can afford to pay, say, an extra $X dollars. And so he does. Fine. What would have he done with that $X? "Wasted it on ____." would be the reply of the self-styled bien pensants. But let's examine that. Let's say he chose to "waste" it on, oh, a custom suit. Those $X pay for that suit, in turn pay for the rent on the store, pay for the needles, thread, fabric, etc. The landlord, needlemaker, spinner, weaver all, in turn, pay for assorted goods and services, and so economic activity is generated, leaving us with the 1.78 multiplier. But that $X in the government coffers? It doesn't pay rent, it doesn't buy supplies, it doesn't buy needles, thread, fabric or any other economic-generating goods or services...which brings only a 1.21.

This is where it gets hairy. IF we're having an economy starving of capital (again, setting aside the "why" of that) the last thing you want to do is starve it further. Increased government spending cannot hope to compensate because its multiplier effect is simply too bloody low. (The spending would have to be almost 3¾ times higher to have the same effect and, while that may have been a viable option in the salad days of Keynesianism, the towering debt -- however you want to measure it -- we face now makes that a practical impossibility.)

So you have a double whammy at a time when the global economy is very, very fragile. Siphoning capital from the private side and putting it in a labyrinthine system that almost four times less efficient at generating economic growth.

This in turn, petrifies the holders of the remaining capital. Anything they invest into stands a good chance of failing or being delayed in bringing a return.

...oh, and it doesn't take much of a tax spike, especially in combination with other shocks (one of the clearest examples would be 9/11/01) to send the economy into a tailspin.


Kindly note the following. Until now, recessions were cushioned by the expansion of the preceding recovery. Now, if you just yelled at your poor, innocent screen "WHAT recovery????!!!!!????" you win a prize. This is why this is so worrisome this time around, because we have had, functionally, no recovery. Much of what has been ascribed to same is statistical misdirection or simply flatlines unadjusted for population growth. So:
There's essentially no cushion. Worse: Germany, which has been bailing out the Eurozone is staring into recession itself (three guesses what that does for the bailout-ees?) and their economy has much better fundamentals than ours.

Sleep well.

Wednesday, November 07, 2012

Today's News You Haven't Seen But Should Have (11/7/12)

First, read this.

(I'll update this daily entry as time permits.)

(I'll do some math for you on this later. It'll include some Economics 301 level stuff. I apologize to my innumerate friends and those on the left -- but I repeat myself -- if I get too "inside" with that. You'll be amused.)

Obama Victory, Grim Europe Forecast Forces Dow Below 13,000 As Stocks Plunge

U.S. to plunge into recession in 2013

Will see more turmoil in currency & oil markets

I'm back, but not happy about it.

I'm taking something of a sabbatical from Facebook and Twitter. There are too many people there whom I otherwise like and for whom I'd rather not develop an irredeemable distaste. So, to keep my sanity, I'm back here. Thus endeth the housekeeping.

I am mindful of a few things: Despair is a sin. I have to keep repeating that to myself, over and over because, frankly, the temptation is too strong.

There are a lot of things I have been ruminating these last few hours, some existential, and some practical. I'll get the practical ones off my chest first and feel free to hold me to what I say. There are many reasons why Romney lost last night. I don't know which one proved the straw which broke the electoral camel's back, but surely they are share a portion of the responsibility. In no particular order (well, OK, in the order in which I think of them):

Hurricane Sandy. Going into the last week Romney was slowly edging away then Hurricane Sandy hit. This had several aftereffects: 1) It gave glowing coverage to the President, looking all Presidential, 2) It caused Romney to stop campaigning, while the President took advantage of the incumbency, 3) Gov. Christie's behavior looked anti-Romney in a "what does he know that we don't?" way. This caused one subtle - I doubt we'll be able to get the numbers on this, ever - shift, one that to me elegantly happens to capture what happened and why it caught so many intelligent and learned pundits out: The dispirited base turned out in somewhat greater numbers than they would have a week prior. (It doesn't take much.) So, an election that probably would have been a D+2, turned into a D+6. The exit polling data was clear that 15% (!) of voters were influenced by the President's Sandy response. And thus what you saw.

Mitt Romney. The single biggest Achilles' Heel of Obama was the deeply unpopular Obamacare. The one man whose signature achievement in the office he won as the result of his ONE electoral victory - Romneycare - was in a singularly ill-suited position to sharply attack it. The fact he let Team Obama run unanswered ads against him all summer was another crucial mistake. Resting on his laurels after his victory in Debate 1 was another fatal mistake; he never fully recovered after Candy Crowley incorrectly corrected him (Can you imagine, say, Newt Gingrich letting that slide?) on Libya and never took aim at the issue again even after the details as they emerged showed an ever mounting horror show of foreign policy.

Team Romney, at least in my TV market, never ran the sorts of ads that, sadly, work. Perhaps he thought they would tarnish his nice guy persona - the President never seemed to suffer any such scruples - perhaps he has a particular distaste for them. But the GOP apparatchiks have never gotten over the Willie Horton thing. They save those ads for, inexplicably, the primaries. (Don't doubt me, compare the anti-Gingrich ads to anything aired during the general campaign.)

A moderate-ish record, both in terms of governance and pronouncement, alloyed with a rather malleable set of positions (i.e. Etch-A-Sketch) all as revealed throughout the GOP primary season; and, sadly, his Mormon faith, probably tamped down GOP turnout. (One number thrown around last night was that evangelical voter turnout was down 7% in Virginia.)

Furthermore, Romney is the latest in a series of GOP nominees who simply canNOT speak well extemporaneously, and whose speeches were lukewarm and insipid.

I am on record as saying that Paul Ryan was a tactical mistake for VP. Nothing wrong with Ryan qua Ryan, mind you it's just that I never saw in him, at this point in history, the ability to actually generate a positive vote flow. Almost certainly, Team Romney overestimated the positive Gov. Walker results and assumed Ryan would flip Wisconsin. And thus what you saw.

The media. It is now a hackneyed trope that the media is worth X points to the Democrat nominee.  That after all these years a GOP nominee can't figure an effective end-around is dismaying. Newt Gingrich soared to contention chastening the in-kind media, directly and forcefully and, for much of the campaign, rendering it a spent force. But Romney never took the opportunity to go after a free target - given the media's abysmal approval ratings - and thus what you saw.

George W. Bush. Four years after leaving office, it now becomes clear how destructive the feckless Presidential management (and some policies) of GWB have been to the GOP. A candidate like Romney, for example, was never able to distance himself from GWB enough in a climate where, true or false, a substantial number of voters still hold Bush responsible for the economic woes that bedevil the USA. That Romney never refuted (or to my eyes, even tried to) the "this can't be fixed in one term" also cost him dearly and helped inoculate Obama. Obama by 2010 should have "owned" the mess we're in, but the aftertaste of GWB was/is so bitter still that, the assertion left unchallenged, he was able to convince enough people.

What passes for a silver lining is that even with all of these handicaps, Romney managed 49%. The storm cloud is that he couldn't punch through after the shoreless ocean of abject failure (Solyndra, Benghazi, Stimulus, QE1/2/ know the drill) of Obama's 1st term.

And now to the more...intangible.

There is much that worries me about the future. Not so much the "will/won't we get it back" aspect. But, rather, whether there's anything recognizable to get back. This boils down to a very painful thing: "If America really, truly believes the candidate with the usual promises of spending more and taxing more is really going to save America, I don't know that I can help you."

The only way I see a happy outcome is through a crucible for the US as a nation. Obama took over mid-mess and made it worse, but for reasons alluded above, was able to only receive some glancing blows therefrom. But in a 2nd term - and historically 2nd terms are the graveyards of presidencies - such shelter won't be forthcoming. Especially in light of the impending economic perils.

Obama was able to make a case (we'll set aside the merits of that case for now) that things were getting better and sufficient voters agreed that yes, things were getting better. But once economic storm clouds break loose again, his semantic lines of retreat towards "failed policies" and GWB will be significantly weakened. But that will entail a likely harrowing economic trial for the USA.