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Instapundit: Has Obama Legitimated Conspiracy Theories?

In USA Today, Glenn Instapundit
Reynolds argues that Obama has mainstreamed conspiracy
theorizing:

Spend a little while on Twitter or in Internet comment sections
and you’ll see a significant number of people who think that the
NSA may have been relaying intelligence about the Mitt Romney
campaign to Obama operatives, or that Chief Justice John Roberts’
sudden about-face in the Obamacare case might have been driven by
some sort of NSA-facilitated blackmail.

A year ago, these kinds of comments would have been dismissable
as paranoid conspiracy theory. But now, while I still don’t think
they’re true, they’re no longer obviously crazy. And that’s Obama’s
legacy: a government that makes paranoid
conspiracy theories seem possibly sane.

The problem with government is that to be trusted, you have to
be trustworthy. And the problem with the Obama administration is
that, to a greater extent than any since Nixon’s, it is not. Do not
be surprised if the result is that people mistrust those in
authority, and order their lives accordingly. Such an outcome is
bad for America, but bad governance has its consequences.

Read the whole thing.

I’m partway there in agreement: The Obama years
have been marked by the sort of blatantly insincere encomia to
transparency, fairness, and post-partisanship that are almost
immediately revealed as false. The list includes everything from
the IRS and NSA revelations Reynolds focuses on in his column to
the adminstration’s assertions that lobbyists wouldn’t run policy,
that you could keep your health plan if you liked it, that the
stimulus would create jobs and jumpstart economic growth, and more.
The reality is that Obama’s time in office has been marked by
failure, with the very notable exception of his winning a second
term. Even Obamacare, the one thing he could point to as
“transformative,” is nothing to brag on these days (it matters,
too, that it was passed without any Republican votes; regardless of
the reasons, any law of that scope that can’t even fake a nod to
bipartisan support is almost certain to cause massive anxiety).

Yet I think Instapundit’s analysis goes a bit too far a bit too
fast. Obama was the subject of highly fraught conspiracy theorizing
before he even won the Democratic nomination in 2008. The whole
secret Muslim from Kenya birther shtick proceeded not from anything
particular he did or proposed – it clearly was thrust upon him by a
mix of racist theorizing and inchoate anxiety about the direction
of the country. And, even more important, Obama comes after eight
years of conspiracy mongering about George W. Bush – that he stole
elections in 2000 and 2004 (remember all the “not my president!”
stuff), that Dick Cheney and Haliburton was calling all the shots,
or Big Oil, that Iraq was a personal mission to avenge
assassination attempts on his life, that he planned the 9/11
attacks, and more.

Which is one way of
saying that conspiracizing is as common a feature of the American
landscape as, say, Mount Rushmore. It’s man-made, for sure, but it
never seems to go away. And it gets worse when the economy sucks
and flagrant falsehoods and deceptions by government come to light
(weapons of mass destruction, secret kill lists, you can keep your
plan, etc.). And let us be clear: Obama’s economic policies have
helped keep the economy in the doldrums.
Stimulus spending doesn’t work and layering on massive amounts
of uncertainty in the form of Obamacare (and Dodd-Frank) is no way
to boost the economy.

Reynolds is surely right that “bad governance has its
consequences.” Between the Bush years and the way the Obama years
have played out so far, it’s going to take a long time for the
nation’s politicos to dig themselves out of the crisis of
confidence they’ve inspired. That means the rest of us pay, both in
lost time and resources, as power-brokers get their act together.
And as I’ve noted elsewhere, one of the most disturbing outcomes is
that bad government may counterintuitively create
a demand for more regulation.

For a great discussion of how conspiracy theory has long been at
the very center of American political and social life, read Jesse
Walker’s
The United States of Paranoia.

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Most People Signing Up for Obamacare Already Had Insurance, Say Industry Sources

When the Obama administration
announced its latest set of enrollment numbers for Obamacare
earlier this month, officials on a conference call did not provide
information about how many people signing up for insurance under
the law were previously uninsured. That information would come
later, officials said, although they wouldn’t say when. Not would
they explain how, exactly, the data was being tracked and
measured.

Given how heavily the law’s backers relied on the expansion of
coverage to the uninsured in selling the law, one might
think that this would be a rather important figure. But in fact it
seemed rather clear that the administration was none too eager to
provide these numbers.

A report in The Wall Street Journal this weekend
suggests a possible reason behind the reticence: The majority of
sign ups appear to be from people who were already insured.

Early signals suggest the majority of the 2.2 million people who
sought to enroll in private insurance through new marketplaces
through Dec. 28 were previously covered elsewhere, raising
questions about how swiftly this part of the health overhaul will
be able to make a significant dent in the number of uninsured.

Insurers, brokers and consultants estimate at least two-thirds
of those consumers previously bought their own coverage or were
enrolled in employer-backed plans.

The data, based on surveys of enrollees, are preliminary. But
insurers say the tally of newly insured consumers is falling short
of their expectations, a worrying trend for an industry looking to
the law to expand the ranks of its customers.

… Only 11% of consumers who bought new coverage under the law
were previously uninsured, according to a McKinsey & Co. survey
of consumers thought to be eligible for the health-law
marketplaces.

Couple this with the millions of insurance cancellations that
are happening because of the law and it appears possible that there
has been no net expansion of private coverage at all.

Given the fuzziness of the data, it’s still hard to tell exactly
what’s happening. And even if it’s true that there are no more
uninsured now than there were last year, there’s still time for
that to change. As the administration is keen to remind us, people
who want coverage have until the end of March to sign up for
coverage this year. But even still, this doesn’t exactly bode well
for Obamacare’s future. Certainly, the law isn’t off to the kind of
start that the administration hoped for, or promised.

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Past Is Prologue: Repeating The Secular Bear Of The 70’s?

Submitted by Lance Roberts of STA Wealth Management,

As I was writing this past weekend's newsletter, "Some Things I Am Thinking About" (free email subscription) I touched briefly on the similarities between the current market and that of the secular bear market of the 1960's and 70's. I wanted to expand more on that thought today.

Just recently Carl Swenlin wrote:

"A secular market refers to a market trend that persists over decades. I pulled up a very long-term chart and noted that the last secular bull market began off the bear market low in 1974. The first clue we would have had that something big was brewing was when the S&P 500 Index broke out of the ragged trading range it had been in during the 1960s and 1970s.

Now note that the S&P 500 has recently broken out of a trading range that spans more than a decade."

The breakout of the trading range has been noted by many market bulls proclaiming a new secular bull market has started despite fundamental evidence to the contrary. However, is that really the case?

The chart below compares the last secular "bear" market that ran from 1963 to 1982 as compared the current cycle. Notice the chart for this previous period stops in 1973. I will show you the rest of this period in a moment.

What is important to notice, besides the very similar pattern between the two periods, is that the breakout in 1969 did not start a new bull market. It was a setup for the next major decline.

Of course, the breakout in 1972 was surely the beginning of the new bull market – right? Not so fast.

The second breakout in 1972, like the previous, was the setup for the final market dive that reset valuation levels back to historic secular bear market lows. That crash also created the necessary extreme negative in investor psychology. The 1974 bear market low is known as a "black bear market" because investors were so brutally ravaged by the crash they did not return in force until nearly two decades later when the next secular cycle was already in progress.

I also stated this past week is that are also numerous valuation and sentiment measures that do not support claims for a new secular bull market. I touched on some of these recently in "Correcting Some Misconceptions About A New Secular Bull Market" to wit:

'Secondly, the ability to have a '1982-2000 affair' is highly improbable. The 1982-2000 secular bull market cycle was driven primarily by a multiple expansion process with a beginning valuation level of 5-7x earnings and a dividend yield of 6%. Interest rates and inflation were at extremely high levels and were at the beginning of a 30-year decline which would increase profitability as production and interest rate costs fell."

I wanted to use this post to illustrate the statement above with a couple of charts. The first chart shows the secular bear market of the 60's and 70's with an overlay of valuations, dividends, interest rates and inflation.

You will notice that at the beginning of the bear market in the 60's valuations were high while everything else was low. By the end of the secular period, these factors were reversed.

The next chart shows the much beloved and hoped for, secular bull market of the 1980's and 90's.

There were several contributing factors that drove that particular secular bull market:

Inflation and interest rates were high and falling which boosted corporate profitability.
The extreme negative sentiment of the late 70's was finally undone by the early 90's. (At the turn of the century roughly 80% of all individual investors in the market began investing after 1990. 80% of that total started after 1995 due to the investing innovations created by the internet. The majority of these were "boomers.")
Large foreign net inflows to chase the "tech boom" drove prices to extreme levels.
The mirage of consumer wealth, driven by declining inflation and interest rates and easy access to credit, inflated consumption, corporate profits and economic growth.
Corporate profits were boosted by deregulation of industries, wage suppression, outsourcing and productivity increases.
Pension funding requirements and accounting standards were eased which increased corporate profits.
Stock based executive compensation was grossly expanded which led to more "accounting gimmickry" to sustain stock price levels.

The dual panel chart below shows the economic fundamentals versus the S&P 500 and the change that occurred beginning in 1983. (Red dividing line)

I have also noted the expanding "megaphone" pattern in the current market as compared to that of the 60's and 70's.

Despite much hope that the current breakout of the markets is the beginning of a new secular "bull" market – the economic and fundamental variables suggest otherwise. Valuations and sentiment are at very elevated levels which is the opposite of what has been seen previously. Interest rates, inflation, wages and savings rates are all at historically low levels which are normally seen at the end of secular bull market periods.

Lastly, the consumer, the main driver of the economy, will not be able to again become a significantly larger chunk of the economy than they are today as the fundamental capacity to releverage to similar extremes is no longer available.

While stock prices can certainly be driven much higher through the Federal Reserve's ongoing interventions, the inability for the economic variables to "replay the tape" of the 80's and 90's increases the potential of a rather nasty mean reversion at some point in the future. It is precisely that reversion that will likely create the "set up" necessary to start the next great secular bull market. However, as was seen at the bottom of the market in 1974, there were few individual investors left to enjoy the beginning of that ride.

via Zero Hedge http://ift.tt/1bP97L2 Tyler Durden

Past Is Prologue: Repeating The Secular Bear Of The 70's?

Submitted by Lance Roberts of STA Wealth Management,

Just recently Carl Swenlin wrote:

"A secular market refers to a market trend that persists over decades. I pulled up a very long-term chart and noted that the last secular bull market began off the bear market low in 1974. The first clue we would have had that something big was brewing was when the S&P 500 Index broke out of the ragged trading range it had been in during the 1960s and 1970s.

Now note that the S&P 500 has recently broken out of a trading range that spans more than a decade."

The breakout of the trading range has been noted by many market bulls proclaiming a new secular bull market has started despite fundamental evidence to the contrary. However, is that really the case?

What is important to notice, besides the very similar pattern between the two periods, is that the breakout in 1969 did not start a new bull market. It was a setup for the next major decline.

Of course, the breakout in 1972 was surely the beginning of the new bull market – right? Not so fast.

'Secondly, the ability to have a '1982-2000 affair' is highly improbable. The 1982-2000 secular bull market cycle was driven primarily by a multiple expansion process with a beginning valuation level of 5-7x earnings and a dividend yield of 6%. Interest rates and inflation were at extremely high levels and were at the beginning of a 30-year decline which would increase profitability as production and interest rate costs fell."

You will notice that at the beginning of the bear market in the 60's valuations were high while everything else was low. By the end of the secular period, these factors were reversed.

The next chart shows the much beloved and hoped for, secular bull market of the 1980's and 90's.

There were several contributing factors that drove that particular secular bull market:

Inflation and interest rates were high and falling which boosted corporate profitability.
The extreme negative sentiment of the late 70's was finally undone by the early 90's. (At the turn of the century roughly 80% of all individual investors in the market began investing after 1990. 80% of that total started after 1995 due to the investing innovations created by the internet. The majority of these were "boomers.")
Large foreign net inflows to chase the "tech boom" drove prices to extreme levels.
The mirage of consumer wealth, driven by declining inflation and interest rates and easy access to credit, inflated consumption, corporate profits and economic growth.
Corporate profits were boosted by deregulation of industries, wage suppression, outsourcing and productivity increases.
Pension funding requirements and accounting standards were eased which increased corporate profits.
Stock based executive compensation was grossly expanded which led to more "accounting gimmickry" to sustain stock price levels.

The dual panel chart below shows the economic fundamentals versus the S&P 500 and the change that occurred beginning in 1983. (Red dividing line)

I have also noted the expanding "megaphone" pattern in the current market as compared to that of the 60's and 70's.

Despite much hope that the current breakout of the markets is the beginning of a new secular "bull" market – the economic and fundamental variables suggest otherwise. Valuations and sentiment are at very elevated levels which is th
e opposite of what has been seen previously. Interest rates, inflation, wages and savings rates are all at historically low levels which are normally seen at the end of secular bull market periods.

via Zero Hedge http://ift.tt/1bP97L2 Tyler Durden

Nasdaq Options Break Again, Clients May “Experience An Influx” Of Messages

That Nasdaq’s options market is broken again as the market opens is no surprise. It is now a daily occurrence. However, the associated message is worth the 2 cent price of admission (or 0.5 cent liquidity provision rebate, depending on one’s inclination): “Clients may experience an influx of symbol add messages.” Sure why not. Just remember to BTFATH.

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Nasdaq Options Break Again, Clients May "Experience An Influx" Of Messages

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Herbalift: Barclays Raises HLF Price Target From $78 To $94, Says Herbalife’s “China Business Model Is Unique”

The soap opera that just won’t end… won’t end. After last week’s collapse in the price of Nuskin, which dragged down the price of Herbalife, there were some rumors that Ackman’s calls for a collapse of one of the best performing stocks of 2013 may finally come true. Not so if Barclays has anything to say about it. Moments ago the British bank reported that it is raising its price target on HLF from $78 to $94, and anticipates some 34% upside from current levels.

From the just released report:

Our new EPS also reflects a large stock buyback. HLF has said it was comfortable with leverage of 2.5x, which would permit it to repurchase stock worth about $1.5bn ($1.2bn from new debt, $0.3bn from cash). HLF has many ways to execute a buyback: dutch tender, ASR, or enhanced open market purchases, but right now it is in a blackout period following YE13. We assume the stock is repurchased at prices of $80 (1Q14) and $85 (2Q14), leading to 18.4mn shares being retired. Our price target rises to $94 from $78, which represents 15.0x our new FY14 EPS of $6.27 vs 13.8x our old $5.65. We maintain our OW rating.

Cue some more theta.

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Herbalift: Barclays Raises HLF Price Target From $78 To $94, Says Herbalife's "China Business Model Is Unique"

From the just released report:

Our new EPS also reflects a large stock buyback. HLF has said it was comfortable with leverage of 2.5x, which would permit it to repurchase stock worth about $1.5bn ($1.2bn from new debt, $0.3bn from cash). HLF has many ways to execute a buyback: dutch tender, ASR, or enhanced open market purchases, but right now it is in a blackout period following YE13. We assume the stock is repurchased at prices of $80 (1Q14) and $85 (2Q14), leading to 18.4mn shares being retired. Our price target rises to $94 from $78, which represents 15.0x our new FY14 EPS of $6.27 vs 13.8x our old $5.65. We maintain our OW rating.

Cue some more theta.

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Yes We Cannabis!: Obama’s Best Shot at a Legacy is Ending the War on Pot

You’re a second-term president and your
health-care plan is imploding, your economic policies have come a
cropper, and your overseas adventures are anything but
sucessful.

Oh yeah, and you’ve seen your support among younger voters and
civil libertarians plummet in the wake of all sorts of revelations
about government snooping (which you signed off on).

But there is one thing that Barack Obama could do to salvage
what is shaping up to be the worst two-term presidency
since…George W. Bush’s:

Declare a swift and honorable peace in the decades-long war on
pot. The drug war in toto has been a long-running and
ineffective disaster that disrespects individual autonomy,
corrupts law enforcement, and undermines the rule of law. By ending
the war on pot, he would be remembered as a true visionary.

It wouldn’t be hard. Focus on the issues of fairness and basic
common sense that already have fully 58 percent of
Americans in favor of legalization….

If Obama announced that he was de-prioritizing the federal
government’s war on pot—not even on all drugs, but just
marijuana—he would almost certainly be joined by a growing number
of libertarian Republicans who think drug policy is a state-level
issue. Indeed, if Obama framed the issue explicitly in federalist
terms, he could likely count on the support of characters such as
Sen. Rand Paul of Kentucky and Rep. Justin Amash of
Michigan….

If Obama really thinks pot is no more dangerous than alcohol and
that the war on pot systematically screws over minorities, why
should he have any hesitation in liberalizing the federal policies
over which he has control? And using the bully pulpit to push for
broader legislative change at the federal and state level? What is
he waiting for, a third term?

That’s from my latest column for The Daily Beast.
Read the whole thing.

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Yes We Cannabis!: Obama's Best Shot at a Legacy is Ending the War on Pot

You’re a second-term president and your
health-care plan is imploding, your economic policies have come a
cropper, and your overseas adventures are anything but
sucessful.

Oh yeah, and you’ve seen your support among younger voters and
civil libertarians plummet in the wake of all sorts of revelations
about government snooping (which you signed off on).

But there is one thing that Barack Obama could do to salvage
what is shaping up to be the worst two-term presidency
since…George W. Bush’s:

Declare a swift and honorable peace in the decades-long war on
pot. The drug war in toto has been a long-running and
ineffective disaster that disrespects individual autonomy,
corrupts law enforcement, and undermines the rule of law. By ending
the war on pot, he would be remembered as a true visionary.

It wouldn’t be hard. Focus on the issues of fairness and basic
common sense that already have fully 58 percent of
Americans in favor of legalization….

If Obama announced that he was de-prioritizing the federal
government’s war on pot—not even on all drugs, but just
marijuana—he would almost certainly be joined by a growing number
of libertarian Republicans who think drug policy is a state-level
issue. Indeed, if Obama framed the issue explicitly in federalist
terms, he could likely count on the support of characters such as
Sen. Rand Paul of Kentucky and Rep. Justin Amash of
Michigan….

If Obama really thinks pot is no more dangerous than alcohol and
that the war on pot systematically screws over minorities, why
should he have any hesitation in liberalizing the federal policies
over which he has control? And using the bully pulpit to push for
broader legislative change at the federal and state level? What is
he waiting for, a third term?

That’s from my latest column for The Daily Beast.
Read the whole thing.

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