Mish's Global Economic Trend Analysis

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• Arrogance of "One-Trick Pony" Hedge Fund Billionaire Paulson; Is the Wall Street Protest Misguided?
• Unprecedented Drop in Port Traffic: A Sobering Omen for Holiday Sales or Should we Listen to Analysts?
• France will Not Use EFSF to Recapitalize Banks; Slovak Government Falls, EFSF to be Approved Anyway; Greek Haircuts of 30-50% Coming; EU Seeks Magic
• Pennsylvania State Capital Files for Bankruptcy
• Republican Debate a "Nine-Dimensional Truth-Stretching Wonder"; Perry and the "Pinocchio Test"

Arrogance of "One-Trick Pony" Hedge Fund Billionaire Paulson; Is the Wall Street Protest Misguided? Posted: 12 Oct 2011 10:49 PM PDT Bill Gross, manager of the world's biggest bond fund, and Jim Chanos, founder of of $6 billion hedge fund Kynikos Associates, understand the protest against Wall Street. John Paulson, who became a billionaire "hero" (now under attack) by betting against the housing market fought back against the protesters according to the Bloomberg article Chanos, Gross Understand Wall Street Protest Paulson Rejects. Demonstrators in New York marched to the upscale Upper East Side neighborhood as the Occupy Wall Street movement that started last month in New York's financial district spread to other U.S. cities. BlackRock Inc.'s Laurence D. Fink, who runs the world's biggest asset manager, and billionaire investor Warren Buffett have said they understand the protesters' frustration. Hedge-fund manager John Paulson, who became a billionaire by betting against the U.S. housing market and then profited from the recovery of banks, criticized the movement. His townhouse was among those targeted by marchers who left a fake tax-refund check made out for $5 billion on his doorstep, which was barricaded by police. "Paulson & Co. and its employees have paid hundreds of millions in New York City and New York State taxes in recent years and have created over 100 high paying jobs in New York City since its formation," the $30 billion hedge fund said yesterday in a statement. "Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City and continue to grow." The protest march, which organizers called a "billionaires walking tour," targeted other executives including Jamie Dimon, who runs JPMorgan Chase & Co., and billionaire oilman David Koch. One Trick Pony For starters it might help if Bloomberg got its facts correct. Paulson has not benefited from the "recovery of banks" as the article suggests. Indeed, Bloomberg itself sports the headline "Paulson's Main Fund Said to Lose 47% in 2011 Through September" John Paulson, the billionaire who is betting on an economic recovery by the end of 2012, has lost 47 percent this year in his largest hedge fund, according to three people with knowledge of the matter. Paulson's Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies, uses leverage to amplify returns. The fund's gold share class declined 32 percent this year through the end of September, said the people, who asked not to be identified because the fund is private. Paulson, 55, would have to return about 89 percent in the remainder of the year to break even in the Advantage Plus Fund. Paulson & Co., which is based in New York and manages $30 billion, has lost money this year on investments including Citigroup Inc., Bank of America Corp. and Sino-Forest Corp. One Idea Executed to Perfection Paulson had one idea, played to perfection, with leverage. That idea made Paulson a billion dollars. I do not begrudge Paulson in any way for that billion. However, by betting the farm on a financial recovery he proved he is a one-trick wonder who does not understand history, debt deflation, and most importantly risk management. Never in history has the "last bubble" been immediately re-blown. Once look at the share price of Cisco, Intel, or the Nasdaq in general proves as such. Sure there are some individual winners like Amazon and Apple, but the rest has been slop, with many corporations long since bankrupt. Quite frankly I do not care about any of that. I am writing this post because Paulson brags about creating "100 high paying jobs in New York City since its formation". Well La-de-fricken-da. Paulson made a billion dollars and wants a statue for creating 100 jobs even though he paid a low tax rate as a result of hedge fund laws, when the economy shed 4.5 million jobs in three years vs. expected demographics (Please see Hypothetical Employment and Unemployment Charts from the Atlanta Fed; Mish "What If" Scenarios for details) Who Is Really to Blame? To be fair, I have some sympathy for Paulson. After all, he has proven he does not know what he is doing (at least recently). Moreover, and more importantly, I can make the case that the attacks on Paulson are misguided. The Fed sponsored this bubble. Paulson, saw it and profited from it, to perfection. Is Paulson to blame for profiting from Fed mistakes or is the Fed to blame for piss poor economic policy? I suggest the Fed. Who bailed out the banks? The answer of course is Congress and the Fed. Where should the protests be? The answer is the Fed and Congress. Yet Paulson is so arrogant he cannot see the protests for what they are. People are losing their homes, their dreams, and families are being torn apart as millions of jobs vanish and he frames his response about creating 100 jobs when he gets huge tax breaks on a billion in profits. Message to Paulson Paulson, it is no wonder you are reviled. But why should you care? You have a billion dollars and you created 100 jobs. Congratulations for being on-time (or simply lucky). I suspect others had the exact same idea but went up in flames because they were one year early. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Unprecedented Drop in Port Traffic: A Sobering Omen for Holiday Sales or Should we Listen to Analysts? Posted: 12 Oct 2011 02:17 PM PDT Port traffic on the West coast is down significantly. Expected traffic for September is also way lower. Yet analysts have been busy raising expectations for the holiday season. One thing for sure, one group is wrong. Please consider the New York Times article A Contradiction in the Cargo When retailers expect that Americans will be crowding into their stores, their orders pile into the nation's ports in August and September for delivery to stores by late October. But logistics companies say that is not happening this year. "We're concerned, because usually at this time, you see this peak," said Richard D. Steinke, the executive director of the Port of Long Beach in California. "We haven't seen it." In fact, the five busiest container ports in the United States said that imports in August 2011 were lower than or even with 2010 volumes. In Long Beach, the second-busiest container port by volume, August imports fell by 14.2 percent from August 2010. While the port has not yet released September volumes, a spokesman, Art Wong, said it expected about a 15 percent drop from September 2010. The reports from the remaining container ports in the top five were equally gloomy. In New York-New Jersey, the number of incoming containers in August was about flat with last year. In Savannah, Ga., imports in August fell by 4 percent. Oakland reported that August imports were down 0.9 percent from a year earlier. And Los Angeles, the nation's highest-volume container port, counted 5.75 percent fewer containers in August than a year earlier. "I expect over all the peak season will be muted," said Kathryn McDermott, deputy executive director of business development for the Port of Los Angeles. Last Thursday, the National Retail Federation said it expected holiday sales to rise 2.8 percent over last year. And late last month, the federation said it expected port volumes to rise by at least 4.5 percent a month for the final four months of the year. At the same time, some analysts revised their holiday forecasts upward after the retailers tracked by Thomson Reuters beat estimates and reported an average 5.1 percent increase in same-store sales for September last Thursday. "For the holidays," Craig R. Johnson, president of Customer Growth Partners, wrote in a note to clients last week, "a 5 to 6 percent increase is clearly in reach." On Monday, a Citigroup retail analyst, Deborah Weinswig, revised her holiday forecast up by a percentage point, saying she expected 4 percent to 5 percent gains in same-store sales at department stores, up from 3 percent to 4 percent. There is traditionally a strong correlation between the back-to-school and holiday seasons, Ms. Weinswig said. Some retailers are raising their prices because raw-material costs have gone up, she wrote, which would help sales. And the "surprisingly resilient" back-to-school season, she wrote, had led to "our more upbeat outlook." While Mr. Steinke said that retailers occasionally delayed shipping for as long as possible to see how the economy progressed, he said they usually gave transportation companies a heads-up if they were planning a lot of last-minute orders. This year, he said, the retailers do not seem to be expecting that. "We talk to the railroads, we talk to our ocean carriers, and they're not seeing this big peak, or bracing themselves for a big late peak," Mr. Steinke said. It's not just port traffic that is down. Spokesmen for Burlington Northern Santa Fe Railway and Federal Express said the same thing. Unprecedented Drop in Port Traffic The Wall Street Journal tells a similar story in At Ports, a Sobering Omen for Holiday Sales Dick Steinke, executive director of the Port of Long Beach, says shipping volumes have posted two consecutive months of declines, and he's anticipating a double-digit drop for September. The last time the port experienced no peak was during the height of the recession in 2009, he says. Before that, the phenomenon was unprecedented. After a strong holiday season last year—with sales up 4.1%—forecasts are pointing to more moderate gains as the bumpy economic recovery, sustained high unemployment and higher living expenses keep consumers cautious with their gift spending. A recent survey of more than 3,500 consumers by market research firm NPD Group found that 27% of respondents plan to spend less this holiday season. Stage Stores Inc. is leaner on inventory this year, says CEO Andy Hall. The department store chain has over 800 stores in the U.S. operating under the names Bealls, Goody's, Peebles, Palais Royal and its namesake. Mr. Hall says his customers are affected by high unemployment and gas prices. "We can't afford to be over-inventoried in our stores," he says. Rail companies are also noting a shift. Burlington Northern Santa Fe Corp., which moves more containers between ships, rail and trucks than any other U.S. railroad, didn't experience a traditional holiday peak in volumes this year, says John Lanigan, executive vice president and chief marketing officer. Some retail clients have outlined plans to stay lean and chase items closer to the holiday, he says. Depending on their timing, BNSF could be cut out of the equation if retailers have to the rush product deliveries by air, says Mr. Lanigan. "We do not expect to see a traditional fall peak this year," says Robin Chapman, a spokesman with Norfolk Southern Corp. In a September interview with The Wall Street Journal, Union Pacific Corp. CEO Jim Young said the rail company's peak had moved from July until mid-September. So what are analysts thinking? Or are they thinking at all? Shippers don't see it, the labor market does not see it, and consumer sentiment does not reflect more willingness to spend. Are analysts giddy over this 1-week rally in the stock market or are they simply cheerleading "rah rah sis-boom bah" as they do 99% of the time? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

France will Not Use EFSF to Recapitalize Banks; Slovak Government Falls, EFSF to be Approved Anyway; Greek Haircuts of 30-50% Coming; EU Seeks Magic Posted: 12 Oct 2011 10:46 AM PDT In what may be a worst of both worlds scenario, the Slovac government did fall but the EFSF will pass in a second vote later this month. Everyone has finally admitted that the 21% haircuts taken so far on Greek bonds is insufficient. However, the talk now is of 30-50% haircuts, and that is still insufficient in my opinion. In France, Valérie Pécresse, Minister of the Budget says the EFSF will not be used to recapitalize banks. This trifecta of news was stock market friendly, at least for now, judging from the reaction. However, longer-term it solves nothing. France Will Not Tap EFSF The Wall Street Journal reports France Won't Tap Rescue Fund to Shore Up Banks Speaking after the weekly cabinet meeting, Valerie Pecresse said once the expanded European Financial Stability Facility is approved, it "will be able to lend to certain countries that need to recapitalize their banking system, but France won't make use of the EFSF." Private shareholders should contribute to the recapitalization of lenders, and the government will intervene only if necessary, Ms. Pecresse added. "If public funds are necessary, the French state stands ready to respond to a demand for public funds for the banks," she said. French officials stress that a vehicle backed by France's sovereign guarantee and used to recapitalize the banks in 2008 is still active and legally operational. French banks have since reimbursed the funds. Ms. Pecresse said France will be pushing for a common European plan for banks, and that a collective rule will be adopted at a later-than-planned euro-zone summit Oct. 23. "Europe must show its solidarity in the face of market nervousness and give itself a collective rule in terms of equity, of recapitalization and of soundness," she said. "The collective position will be adopted in Brussels in the framework of the European council." The new standards, Ms. Pecresse said, will be drafted taking into account market tensions, and not necessarily Basel III standards, a set of rules approved last year that require banks to hold more and better quality capital in reserve as a buffer against market shocks. Pécresse Translated Europe will ignore Basel III if it's convenient (and it will be very convenient) If French banks need to be recapitalized (and they will), look for taxpayers to be put at risk via a 2008 bailout mechanism still in effect Slovak Government Falls The Telegraph reports Slovakia rejects enhanced bail-out fund, government falls Slovakia's lawmakers have rejected a revamp of the eurozone's European Financial Stability Facility (EFSF) rescue fund in a crunch vote that also toppled the country's centre-right government which had staked its future on the motion. Only 55 of 124 lawmakers present in the room voted in favour, while nine were against and 60 did not vote, effectively blocking the fund and toppling the four-party coalition cabinet of Prime Minister Iveta Radicova. The country's leaders said earlier they would try to pass the EFSF revamp in a repeated vote with support from the opposition, but no date has been fixed for that vote yet. "What we are deciding on today is the good name of Slovakia, reliability, where it will belong... or if we exclude ourselves from the community of the successful," Prime Minister Iveta Radicova said ahead of the vote. "I beg you, trust this government... the interests and reliability of Slovakia are the most valuable things I know, I have, I offer," she added, her voice trembling with emotion. Richard Sulik, the rebel leader of the coalition's minority member, the Freedom and Solidarity Party, abstained from the vote. He told the parliament: "I'd rather be a pariah in Brussels than have to feel ashamed before my children, who would be deeper in debt should I back raising the volume of funding in the EFSF bail-out mechanism." A tip of the hat to Richard Sulik for standing with principles instead of opting for more bailouts. Slovak is the first, but not the last government that will fail over these bailouts. The sad thing is, the vote will pass anyway. Europe Eyes 30-50% Losses for Banks Reuters reports Europe eyes bigger Greek losses for banks Ahead of a make-or-break summit of European leaders on October 23 at which a comprehensive new Franco-German crisis plan is expected to be discussed, four euro zone officials told Reuters that a "haircut" of between 30 and 50 percent for Greece's private creditors was under consideration. That is far more than the 21 percent loss they had asked banks, pension funds and other financial institutions to accept in July as part of a second rescue package for Athens. Game Easy to Spot This game is easy to spot. I called it long ago. Note the range 30 to 50. I figured 30-35% even though 60% or bigger losses are called for. The more blood the EU tries to get blood out of a turnip, the harder Greece will ultimately fall. By setting expectations as high as 50%, then coming in below that (via fantasy projections as to when Greece will be back on its feet), EU officials are attempting to game market psychology. Perhaps I am wrong and they will opt for 50%. We will know soon enough. EU Seeks Magic Solution and Additional Powers Bloomberg reports Barroso Seeks More Firepower European Commission President Jose Barroso called for a reinforcement of crisis-hit banks, the payout of a sixth loan to Greece and a faster start for a permanent rescue fund to master Europe's debt woes. Barroso said Europe needs to get more out of the the 440 billion-euro rescue fund, set to obtain additional powers once Slovakia completes the 17-country ratification marathon. Officials are working out how to scale up the financial clout without requiring another round of parliamentary approvals or tapping the ECB's balance sheet. The central bank has ruled out granting the EFSF a banking license. "The EFSF must be more than just a firewall," Barroso said. "It should have real firepower. We should maximize its capacity." Barroso repeated a call for governments to set up the permanent fund, the European Stability Mechanism, by mid-2012, a year earlier than planned. Message to Barroso and other EU clowns: The German supreme court already rejected a a permanent mechanism and it also rejected use of leverage. Even were that not the case, Slovak shows what happens to governments when they try to force things through. German Chancellor Angela Merkel will fall, the Italian Prime Minister will fall, as will the Greek Prime Minister, and perhaps French president Nicolas Sarkozy falls. What part of that do you fail to understand? There is no magic bullet and the Eurozone will not survive intact. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Pennsylvania State Capital Files for Bankruptcy Posted: 12 Oct 2011 10:07 AM PDT At long last, Harrisburg Files for Bankruptcy on Debt Harrisburg, Pennsylvania, facing a state takeover of its finances, filed for bankruptcy protection after failing to pay the debt on a trash-to-energy incinerator. The council made its 4-3 decision against the advice of a city attorney who said the panel did not follow proper procedure. It was the ninth bankruptcy filing this year by a municipal-bond issuer, according to James Spiotto, a partner at Chapman & Cutler in Chicago who tracks such cases. "This was a last resort," Mark D. Schwartz, the council's Bryn Mawr-based lawyer, said after he faxed the documents to a federal court yesterday. "They're at their wits' end." Harrisburg would be the biggest city bankruptcy since Vallejo, California, filed in 2008, according to a ranking by Municipal Market Advisors, a research firm in Concord, Massachusetts. Municipalities across the nation have been battered by the financial crisis. Harrisburg's filing came less than a month after Alabama's Jefferson County Commission voted to try to avert what would the nation's biggest municipal bankruptcy, and nine months after Vallejo emerged. While Chapter 9 bankruptcy, named for the section of federal law that governs insolvent municipalities, would mean the loss of state aid under a law passed in June, it would be better than pain caused by a state-imposed recovery plan, said Councilwoman Susan Brown-Wilson. "We're not incompetent," Brown-Wilson said. "We're just not going to let you run us over with the train anymore." Going Rogue Jason Hess, acting city attorney, told council members that they didn't follow procedure and their action wouldn't be binding. The members went ahead. The filing is "a ridiculous idea not worth taking seriously," Robert Philbin, a spokesman for Mayor Linda Thompson, said in a phone call today. Although Harrisburg was officially in bankruptcy when it filed the Chapter 9 petition, whether it stays there is an open question. Unlike companies, whose Chapter 11 filings are rarely dismissed, a municipality can find itself tossed out of court. Federal law lets states place restrictions on bankruptcy filings by municipalities. As a result, the Bankruptcy Code calls for the judge to entertain objections. If an objector shows that the filing wasn't authorized under state law, the bankruptcy court dismisses the petition. A state law bars Harrisburg from filing until July 2012. Of the 629 Chapter 9 filings since 1937, 161 cases have been dismissed or their plans haven't been confirmed, Spiotto said. Harrisburg finally did what should have been done three years ago. Instead, taxpayers have been put through hell because the city council refused to do what needed to be done. Unfortunately, those against bankruptcy will likely waste months of time, energy, and dollars fighting the decision instead of going along with it. If the law requires Harrisburg wait until July 2012, nothing will stop the city council from doing the same thing eight months from now. Hopefully, Mayor Linda Thompson is shown the door in the next election, assuming a court receivership plan does not effectively remove her in the meantime. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Republican Debate a "Nine-Dimensional Truth-Stretching Wonder"; Perry and the "Pinocchio Test" Posted: 11 Oct 2011 11:29 PM PDT Tuesday evening I had the displeasure of watching the Republican debate. Here are the lowlights. Herman Cain touted his "9-9-9" economic tax plan at every conceivable opportunity as if nothing else mattered. Most of the other candidates trashed "9-9-9" at every chance, enough to make the debate a "nine-dimensional wonder". Mitt Romney sounded like "Slick Willie" tiptoeing around Obamacare, for and against it. Romney would abolish Obamacare even though his plan while Governor of Massachusetts was the basis for Obamacare. Ron Paul seldom got to speak. It was as if he did not exist. When he did speak, in the candidate-to-candidate questioning, Ron Paul had his facts wrong about things Cain said about the Fed. Cain blasted Paul in response. In a moment that should be enough to make anyone with economic sense keel over in agony, Cain praised Alan Greenspan. Good grief. Mitt Romney, as president would take it upon himself to label China a currency manipulator, with all the bad consequences thereof. Mitt Romney repeated his pledge for a strong military which of course means wasting more money we do not have on perpetual war-mongering. Everyone treated Perry as if he was irrelevant (which he probably is given numerous recent bouts with foot-in-mouth disease). However, irrelevant is better than ignored. Perry (unlike Paul) got to speak. He just never said anything worth hearing. Romney's Advisers Met With Obama to Help Craft 'Obamacare' Fox news reports Romney's Advisers Met With Obama to Help Craft 'Obamacare' Three of Mitt Romney's advisers went to the White House at least a dozen times in 2009 to consult on the former Massachusetts governor's health care plan that President Obama used as a model for his initiative -- now a federal law that all the Republican presidential candidates want to repeal. White House spokesman Josh Earnest told reporters Tuesday he was "not in a position to comment on specific meetings." But in a remark that won't help Romney in his pursuit for the 2012 Republican nomination, Earnest repeated that Obama took cues from the Massachusetts legislation. Romney also worked closely with the late Sen. Ted Kennedy on the Massachusetts health care plan and Kennedy was the lead author of the national legislation. Kennedy had said that the Romney plan was a model for the national one. Republicans Stretch Truth in Debate Bloomberg reports Republicans Stretch Truth in Debate Salvos on Jobs, Health Care Mitt Romney, Rick Perry and the other Republican presidential candidates stretched the truth on health care, job creation and the deficit in a debate last night as they attacked each other and President Barack Obama. Romney, a former Massachusetts governor, said Obama's health-care law would increase spending by $1 trillion, while Texas Governor Perry said he would make America energy independent. Former pizza executive Herman Cain pledged to present a balanced budget a year after taking office. Those are among the statements by the White House contenders that strayed from the truth as the candidates sought to distinguish themselves on jobs and the economy, the focus of the debate at Dartmouth College in Hanover, New Hampshire, sponsored by Bloomberg News and The Washington Post. Bloomberg cites more truth-stretching than I can excerpt, but the article is worth a read. How Accurate is Rick Perry's New Ad about 'RomneyCare'? The Fact Checker investigates Rick Perry's new ad about Mitt Romney and 'RomneyCare' Texas Gov. Rick Perry launched an ad Monday attacking Mitt Romney on the healthcare-reform law that not so affectionately bears his name among conservatives. The overall theme of the ad--that Romney's health care law is intellectual father of Obama's law--is correct. But then it goes even further than that. The ad, strikingly similar to a Hollywood movie trailer in terms of its quality and dramatic effect, paints "RomneyCare" as an economic disaster similar to the way conservatives portray Obama's national healthcare law. (Much of Obama's law has not been implemented yet, so that is a bit premature.) The ad also flashes images of Obama, Ted Kennedy and Jimmy Carter, delivering an almost subliminal message that Romney is akin to those liberal icons. We've already scrutinized Perry's attack on the Romney book edits, so we won't spend any more time on that. Suffice it to say we awarded three Pinocchios to the Texas governor for manufacturing a phony issue. The Perry campaign deceives the audience by chopping off the footage at exactly the right moment from the Dec. 16, 2007 interview on "Meet the Press." If the campaign had aired a few more seconds of the interview, viewers would hear Romney reject a national mandate and jump into his usual spiel about states tackling rising health care costs through reform plans of their own. The Pinocchio Test Perry's ad relies on a pair of studies from a group with a predictable agenda: fighting new taxes and healthcare reform. That doesn't mean the reports are false, but it does suggest they're slanted. It's not the worst sin a candidate could commit, and in fact is fairly typical in these kinds of attack ads. But the Texas governor also gets bad marks for his deceptive use of the snippets from Romney's book and interview with Russert. Much as Romney dislikes to admit it, his law helped set the intellectual underpinings of Obama's law. But Perry puts his foot on the scale by manipulating the Russert video and recycling the discredited material about Romney's book. We don't do half-Pinocchios, but the ad leans more toward three than two Pinocchios. Three Pinocchios Significant factual error and/or obvious contradictions. For an explanation of the Pinocchio Scale, please see About the Fact Checker The debate itself was painful enough to watch. A little fact-checking after the debate made the debate even more distasteful. Governor Veto Gary Johnson, former governor of New Mexico, and arguably the best Republican candidate for president, was not invited to the debate. Johnson served as governor of New Mexico from 1995 to 2003, where he made a name for himself as a staunch libertarian. His anti-interventionist foreign policy, his support for gay rights (he has said he supports gay unions, suggesting the government shouldn't be involved in marriage at all), and his support for marijuana legalization have drawn comparisons to Republican Rep. Ron Paul, another possible 2012 presidential contender. While his position on those issues sets him apart from most other candidates, Johnson holds up his record as governor of New Mexico as proof of his small-government, fiscal conservative credentials. He pointed out in his statement today within two terms as governor, he erased New Mexico's budget deficit and reduced the state workforce by over 10 percent. "Saying no to waste, corruption and political games is easier than you think," Johnson said. He also pointed to his record of vetoing hundreds of bills that passed through the New Mexico legislature, which earned him the nickname "Governor Veto." That nickname, coincidentally, draws another comparison to Paul, who's known in the House as "Dr. No" for voting against so many bills. "America needs a 'President Veto' right now," Johnson said in his statement today, "someone who will say 'no' to insane spending and stop the madness that has become Washington." Wikipedia offers these facts on Gary Johnson. Gary Earl Johnson (born January 1, 1953) is an American businessman, former Governor of New Mexico, and candidate for the Republican nomination for President of the United States in the 2012 election. He served as the 29th Governor of New Mexico from 1995 to 2003, and is known for his low-tax libertarian views and his regular participation in triathlons. Founder of one of New Mexico's largest construction companies, Johnson entered politics for the first time by running for Governor of New Mexico in 1994 on a conservative, low-tax, anti-crime platform. He beat incumbent Democratic governor Bruce King by 50% to 40%. He cut the 10% annual growth in the budget by using his gubernatorial veto on half of bills in the first six months. His use of the veto over his two terms gained him the nickname "Governor Veto". He sought re-election in 1998, winning by 55% to 45%. In his second term, he concentrated on the issue of school voucher reforms, as well as campaigning for marijuana decriminalization. During his tenure as governor, he adhered strictly to an anti-tax, anti-bureaucracy program, and set state and national records for his use of veto powers: more than the other 49 contemporary governors put together. Term-limited, Johnson could not run for reelection at the end of his second term. A fitness enthusiast, Johnson has taken part in several Ironman Triathlons, and he climbed Mount Everest in May 2003. He announced his candidacy for President on April 21, 2011. Instead of someone like Ron Paul or Gary Johnson we face a possibility of disastrous foreign policy decisions by Mitt Romney. For details on the major mistake Romney's trade wars would bring, please see ... Trade War Threat Looms Once Again; Senate Takes Up Bill to Punish China for Manipulating Currency; How Many Jobs Would Tariffs Create? Ben Bernanke Fans Fires of Protectionist Legislation to Senate Joint Economic Committee; Expect Global Depression if Obama Signs On This country desperately needs an anti-tax, anti-bureaucracy, anti-public-union candidate who will bring the troops home and otherwise let people make their own lifestyle choices in peace. We have two potential candidates, Ron Paul and Gary Johnson, but neither has a chance. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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