Quick Round Up

Austerity to coming to America?


First the Bush tax cuts which have largely been priced into the market and taken for granted now look like a dead issue as Moody's says it will most likely lead to a downgrade of US debt. So taxes rates are set to rise across the board. Now Obama's "debt Reduction Panel" is debating a VAT (Value Added Tax) which essentially a national sales tax on all Americans. furthermore, we can expect to see a rise in the cost of food and anything having to do with cotton-like clothes.



In addition, the controversial pocket veto of bill HR3808 is back on the floor of congress today. There is wide spread confusion about what is being attempted here. I posted a link last night on it, but it is not clear what is going on, whether the pocket veto was an election year, loop hole tactic to get the bill passed after the elections or a battle between Congress and the executive branch over the issue of separation of powers. I don't have a good feeling about this and the fact that Congress even passed it shows that the rule of law can be conveniently and quickly changed in support of Wall Street and strip Americans of due process whenever Congress sees fit. As I have said since 2007, there's only one way we'll get to the bottom of this crisis and that is to take our lumps and stop pushing it off on further generations as well as this one.


As to today's POMO, I'm really not sure what exactly they are buying and for what reason, I'll have to look into this closer, but the much anticipated submitted to accepted ratio came in at 3.7 which in the last POMO regime would have been a bullish ratio for the market to close higher. 


In Europe, as things are happening in Ultra-fast forward, the announcement that Austria will hold out on further payments to Greece, until it gets on track (gets its books together and makes the cuts that it has already claimed to have done-you may read that as Austria telling the Greeks "no more money until the lies stop"), today it seems the rest of the Union has jumped on board and delayed the December payment Greece is supposed to receive until January, obviously a punitive action.


In currency trading, t looks like the Euro has caught a slight bid, within the downtrend which is to say it's still n the process of making lower highs, lower lows, but the slight move up in the Euro/Down in the dollar makes sense with today's gains in the averages.