To be sure, falling yields on Bank issued debt, decreased LIBOR levels, and evidence of liquidity creeping back into the commercial paper market are all positive signs that the credit markets are starting to thaw, but history reminds us that the speed at which liquidity returns to normal may prove to be glacial.
In the meantime, the positive slope that is developing in the US yield curve is good for healthy banks and anyone with net cash – borrow short, lend long – remember? Those businesses requiring debt leverage are less attractive however. Cost of long term capital is rising while access to it continues to tighten (spreads widen).
Keith McCullough & Andrew Barber
Research Edge LLC
- It is interesting to note that CKR management made changes to its “Why Invest in CKE” section of its investor presentation highlighting the company’s defensive nature. The company supports this idea that it is well positioned to withstand tough economic times by pointing out that “fast food is not a luxury item” and “people are going to continue eating fast food.” The new presentation also includes a chart that looks at Carl’s Jr.’s same-store sales performance relative to overall QSR in other difficult times (attached below).
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The most recent national poll, from CBS-NY Times, has Obama with a 14-point lead at 53 – 39 in likely voters. This poll is obviously an outlier, but a noteworthy call out in that the last time this poll was taken, seven days ago, Obama only had a lead of 3-point lead in the poll.
The other indicators we are focused on include:
• The Real Clear Politics national poll average now that has Obama leading by 8-points and, for the first time ever, Obama is polling above 50% in the average;
• The Real Clear Politics electoral college poll average now has Obama/Biden at 313, McCain/Palin at 159, and Toss Ups at 67, so even if all states currently categorized as Toss Ups swing to McCain he will lose; and
• The Intrade Market now has Obama trading at 80.1, which means that if you buy Obama you only get a payout of 19.9 if he wins.
Absent an “October surprise” between now and November 4th, an Obama victory is almost a sure thing. The impact of this Obama momentum will also be felt in the congressional races. Increasingly, an expanding Democratic majority in the House and the potential for a filibuster proof majority for the Democrats in the Senate. Incidentally, the last time the Democrats won the Presidency, had a majority in the House, and filibuster proof majority in the Senate was Jimmy Carter in 1976.
While we could easily make the case that Barak Obama is the second coming of Jimmy Carter, the current Republican administration is hardly differentiating themselves as free market capitalists. As Allan Mendlowitz very aptly stated: “The Bush administration, which took office as social conservatives, is now leaving as conservative socialists.”
Daryl G. Jones
'While it we may NOT have needed the money, we'll GLADLY accept it'...
Is this what Hank Paulson had in mind in setting this entire country on fire with alarmist rhetoric? JPM doesn’t need the money!
This is beyond embarrassing. American integrity is being short sold by the world this morning. We can do much better than this. George, it’s time to fire Hank “The Market Tank”. He is crushing our retirement accounts. Bring in someone else and the ensuing market rally will make Monday’s melt-up look tame.
You used to have a man managing the Iraq situation as recklessly. His name was Rumsfeld.
Research Edge LLC
“Madam Speaker, I rise today in support of the Employee Free Choice Act, because the right to organize is essential to the path to prosperity for all Americans.” – Speaker of the House Nancy Pelosi
“Every single Senator ought to support this bill.” – Senate Majority Leader Harry Reid
These quotes should remove any doubt. If Obama is elected President, the Employee Free Choice Act will become law. Whether or not the removal of secret ballots in deciding union elections makes employees more free is not important. Since 1989, unions have contributed almost $500 million to political campaigns. Over 90% of that cash has gone to Democrats. The favor will be paid back by an Obama administration and a Democratic congress.
So what does this mean? The elimination of secret ballots will make it much easier to unionize. Secret ballots are the cornerstone of any modern democracy for a reason. People can vote without the pressure that an open petition would apply. More unions = higher wages and benefits for hotel, casino, and leisure companies to name just a few.
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