Which Way Wednesday – Obama Chosen to Drive US Over the Cliff

Well, maybe two more months until we go over that fiscal cliff and I hope the President enjoyed his victory last night but now we all wake up to the same nonsense we've had for the past two years with the Republicans firmly in control of the House, enabling to block any economic programs proposed by the President.  As Obama said last night:

Tonight you voted for action, not politics as usual. You elected us to focus on your jobs, not ours. And in the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together. Reducing our deficit. Reforming our tax code. Fixing our immigration system. Freeing ourselves from foreign oil. We've got more work to do.

I believe we can seize this future together because we are not as divided as our politics suggests. We're not as cynical as the pundits believe. We are greater than the sum of our individual ambitions, and we remain more than a collection of red states and blue states. We are and forever will be the United States of America.

Sounds good but let's see what really happens in the critical weeks ahead.  The Futures are way down this morning – giving up pretty much all of yesterday's gains but it's more to do with bad news out of Europe than election news out of the US as the Dollar flies back over 81 against a diving Euro as Greece remains on strike and Germany puts in poor economic numbers this morning, with the EC slashing growth forecasts from 1.7% to 0.8% in 2013 and projecting a miss of Budget targets by Spain.  Sounding like he's setting the stage for another rate cut, Mario Draghi says he expects no change to the weak eurozone economy in the near future, and says the weakness has begun to affect Germany.

Meanwhile, we know Europe is a mess but we should be more concerned about a smooth transition in China this week as they make their 10-year leadership change.  If that goes well (and it should) then we can look forward to a positive Holiday Shopping Season for reasons I outlined yesterday, when I was the first analyst in the US to call the Obama victory – including…

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