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Wednesday 30 November 2011

Headwinds and Tailwinds: An Opening Salvo...

On the date of posting this initial comment of a series of collective thoughts about the investment climate ahead, the US equity markets closing headline from Bloomberg is 'Dow Jumps Most Since 2009 as Central Banks Take Action on Crisis'. The investor cheer was largely to do with announcement of concerted central banks action to pump more liquidity in the financial system. An engine doesn't run without oil. 

As a contrarian to such ill-warranted and purely short-term speculative enthusiasm by market practioners, FPM is prescribing  for the discerning investors a  dose of economic reality-check from the man who doesn't 'talk in absolutes'. Yes we mean Texas Republican and Rebublican nomination candidate  for  the 2012  presidential elections Ron Paul. This article and CNBC interview with Ron Paul from TheStreet.com about today's world wide quantitative easing announced by prominent central banks, is the on-the-money dissection of existing financial policy measures (as pioneered and practised to death by the Chicago Business School professors and alumnus during the Reagan era and onwards to present day).

The man we’re backing for president: FPM supports Ron Paul as the GOP / Republican candidate for President in 2012 general elections. He is a credible, strong and self-willed politician with real reform plans to address the disastrous economic global highway "the western hegemony" is heading down. United Kingdom had such a bold leader in Prime Minister Margaret Thatcher in the 1980s. She was making hard decisions towards much-needed economic reforms (that also admittedly introduced the unfortunate runaway capitalism of today, and blindly unchecked by her vote-pandering weaker successors).

The other front-running Republican candidate Mitt Romney is backed by  powerful hedge funds and other heavyweights. Mr Romney only has plaster-fixes for the economy which  most hedgies, such as John Paulson (of sub-prime fame), knows preserves status quo of financially exploitable opportunities i.e. creative-destruction. Radical reforms of Ron Paul's manifesto would undermine the cosy crony capitalism, and represent an uncertain upheaval in policy direction of the past 30 years or so.
 Pointedly, remember that Mitt Romney was a founding partner of global private equity behemoth Bain Capital in 1984.A shadow-banking partnership which now manages $66 bn in assets (as at end 2011),  across its various platforms. Platforms that also include multi-billion dollar hedge funds Brookside Capital, Sankaty Advisors and Absolute Return Capital. These financial affiliates pull strings in economic affairs as campaign sponsors and financiers of lobby groups. Such financially entrenched organisations and their leaders can only openly predicate a economic setup for the wealthy i.e. a socio-eco-politcal establishment organised for the benefit of the 1% of world population. Where does that leave the man on the street or the 99%ers?

In full-picture FPM style we briefly introduce the other main candidate for the  Republican nomination . Newt Gingrich is a mixed bag electioneer with persistent political pedigree with many successes and a few skeletons in the proverbial closet. 


Addendum 02 Feb 2012: In joined-up thinking FPM have incorporated two current headlines and a glue. The glue being an idea from a pertinent short-story by Charlotte Perkins Gilman, written 100 years ago and entitled "When I Was a Witch". A feminist writer who in this story imagines how she would deal with some of the 'wrongs' of her day.
So on my seeing a list of mainly capitalist financiers backing Mitt Romney for US Presidential candidate (see Federal Election Commission of USA full list), and then seeing "Texas Fund Eaten Alive By Hedge Fees May Curb Costs By Hiring In-House", I had a premonition. What if all the contributors to Romney's campaign had all their proceeds 'eaten-up' in massive promotional campaigns that came to no fruition. That is, their man was not elected for Republican presidential candidate, and instead business reformer Ron Paul was eventually elected President. This would be an ironic lesson to hedgies et al who take maximum performance fees when luck is in and then continue to collect minimum management fees when markets are against them and their investors lose out. The voting US public still have power over this premonition.They can squarely stymie the swagger of the mover-shakers protecting status quo.

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