While watching both MSNBC and Fox News this past week, Arnold had the unfortunate experience of seeing Democrats and Republicans selling their respective talking points, and he is finally disgusted with the Democrat position that Republicans are all rich and that Republicans get all their campaign money from the rich.
Both of these statements of fact are in fact false. First, the Democrats in fact have far more billionaires and millionaires as supporters than the Republicans, and secondly and more importantly, the vast majority of the billionaire and millionaire campaign contributions go to the Democrats.
When, in 2008, then Senator Obama proposed taxing private equity (carry) income at ordinary income tax rates rather than capital gain treatment, it was the Republicans who opposed it and ultimately stopped it. But over 90% of those affected private equity people were contributors to President Obama. And look at all the money being raised by President Obama: the billion dollars plus that came in 2008 and the billion dollars plus coming in 2012 are primarily from billionaires and millionaires – simple arithmetic makes this obvious, as does the contributor’s names.
The Republicans, by approving of the extension of the reduction in social security rates for employees have now backed the Democrat position. All of the Tea Party Congresspeople have approved this situation because the enactment of the reduction required unanimous consent. So with each of the Tea Party in particular, and the Republicans in general, approving this extension (which violates everything that they say) then clearly nothing is going to change in Washington. What we will see is Republicans disagreeing to everything, then allowing it to pass, or even (dare I say) voting for it.
- The DJIA should have one more short rise, followed by a major decline in 2012.
- Gold fell to below $1600 the ounce and should have one last rally before it too falls, probably to $1000 the ounce (or less).
- Interest rates are still in a trading range and will stay that way for the foreseeable future.
- Oil is rising above $100 a barrel and could rise to maybe $120.
- The dollar should start to rise again and rise significantly in 2012.
- Real estate pricing looks lower into 2012.
- The economy had some uptick in late 2011; but will fissile out by the second quarter of 2012.