With only days passing since the presidential election. It would seem
the rainbows, and unicorns that most John or Jill Public believed were
to arrive are now morphing into shapes more in line with gargoyles under
darkening skies.
Clarity has arrived, and what has become apparent is this: It’s not
what Wall Street, businesses, and many others wanted, or expected. Never
the less consequences either good or ill are going to be felt with such
immediacy John and Jill will have no time in truly understanding why.
After all, they’ve been told by the so-called “Smart crowd” in the
financial media, cables shows, network news, print, and more that the
government, or Federal Reserve can fix everything. All I’ll say is this:
“Sure they can. Want to buy a bridge?”
First off this isn’t about who won or lost. Nor is it about if
there’s an R, D, or I after their name. Personally I don’t care. I pay
attention to what a person says, and what they do. Particularly what
they do about the things they say. Period. That is what truly matters.
All the rest is for parlor game aficionados.
Elections have consequences. I am amazed when people act as if
elections are some soap opera to be viewed on television as if it
wouldn’t or doesn’t affect them. Then the consequences begin to appear.
Then it seems to get all too serious. However by then it’s too late. The
dies (ballots) have been cast.
So far in less than 24hrs business, Wall St. and a whole lot of
others that understand these implications have begun reacting both
negatively, and immediately. Only John and Jill Public will be left
wondering.
The clarion call heard round the country for many was “Tax the rich!”
Yep, that’s right. Only one problem there. They have their money right
along side John and Jill’s in the markets. They know how they’re going
to move and protect theirs. Does anyone think John or Jill will know? Or
could?
They’ve been instructed or taught bad things won’t happen now. The
Federal Reserve has got ya back “Boo-Ya!” How’s that working out today
alongside with Apple® shares now falling over 20% in 8 weeks losing
nearly $180 BILLION dollars of market cap?
On Friday alone we witnessed one rather famous investment brokerage
is near insolvency while shopping itself for someone – anyone – to throw
them a lifeline or they’re history. Let alone all the John and Jill’s
that were told “Apple’s a screaming buy here on a pull back…Load up!”
How’s that working out today? Is one to “Load up” again right here?
Or does one need a bell like Pavlov’s dog to make investment moves?
That’s right I forgot. It’s bells, whistles, and gongs today. Well it is
on TV so it must be right…Right?
We also witnessed on Friday both sides of the political aisle make
their cases or arguments for what they think should be done. It was near
comical listening to talking heads trying to parse the demeanor or
implications of this word said, or that word not said, and what it might
mean. What part of “Your taxes are going up” does one not understand?
Oh, right…revenues. I feel better already.
Those dreaded loopholes of the rich are going to be closed. Yay! Oh
wait..dividends, and interest. Isn’t our money where their money is? In
the markets? Yes it is. I wonder if John or Jill has looked at the
market over the last couple of days? How’s that 401K doing?
People that pay attention are acting – have already acted – and
will continue to act. These are the ones first to the exits. I fall into
this group, and I believe many of you do also. We are the: React now –
get safe – reassess from a safe vantage point. Most of John or Jill
Public doesn’t. They fall more along the lines of remaining seated
while wondering to themselves: “What’s going on? The movie’s not over yet.”
Only to realize once they finally understand – it’s too late.
Don’t misunderstand me. I’m not saying it’s good, bad, or
indifferent. Neither am I implying the current administration should or
shouldn’t do exactly what it said it was going to do. No matter whom was
elected I knew exactly what actions I would begin to take, what I would
no longer contemplate, and others I would just put off in a wait and
see type folder.
The difference in both myself, and most of you currently reading this
is we understood these implications and have already begun making moves
in our own lives and finances. My point here is this: Do you think the
public at large has any real idea of the implications? Let alone with
how to deal with what might be on the horizon? I’m not a doom and
gloomer, but I remember
2008-09. For most it’s ancient history never to be repeated. After all
we have the Federal Reserve and they got our back! ( I still have that
bridge for anyone believing that.)
Here are just two small examples put into play nearly 24hrs after the
elections. Remember all that talk about business uncertainty that was
pooh-poohed as hogwash by most main stream economists and touted across
television and print? All one heard was: “Unemployment’s going down,
business are beginning to reinvest, the stock market is fairly valued,
stocks for the long haul,” blah, blah, …blah.
It’s “free healthcare” for all working people. Ah..sorry, but no
that’s not quite true. Some of the hardest working people (and many of
them I know from decades in the food industry) restaurant employees woke
to a shocker. Darden Restaurants the parent company of Olive Garden®,
Red Lobster®, and Longhorn® restaurants announced Friday they will begin
experimenting with lowering workers hours below 30 per week as to not
face fines from the new healthcare mandates. Because the new tax, I mean
mandate, I mean revenue enhancement would probably bankrupt them.
Here where I live a very well-known multiple location restaurant had
an interview on a station I listen to where he explained at his 9
locations he had reduced his staff from 85′ish employees down to 60. On
purpose. Choosing to have few customers that required less staff, rather
than staying at his current – profitable levels.
How the election played out would mandate if he needed to reduce
further and get his staff under 50 because the new law would impose
fines that would be unworkable to his current structure, and put him out
of business quickly if he just did nothing. So as he has been doing,
he’s now just finishing. But John and Jill won’t understand why 2 of
their favorite places are no longer there. Which is the issue.
Elections have consequences. They always have, they always will.
Whether you’re the happiest voter on the planet because your team won or
the saddest. If you’re reading this you should be reacting to what is
now known. Not waiting to see if the time is right to do one thing or
the other. That time has passed. The time is now to put your plans into
action. No matter how you see the sun rising – or sky falling.
© 2012 Mark St.Cyr www.MarkStCyr.com
