Inspired by tea party success, Latinos float ‘Tequila Party’ grass-roots movement

Latino leaders in Nevada and around the country are floating the idea of breaking traditional ties with the Democratic Party and creating a grass-roots independent movement tentatively called the Tequila Party. According to Delen Goldberg at the Las Vegas Sun, the leaders want to pressure the Democratic Party to deliver on Latinos' priorities much in the same way the tea party has done with the GOP over the past few years.

Robert de Posada, the former GOP operative behind this fall's controversial "Don't Vote" ads aimed at Latinos in Nevada and California, tells The Lookout that he has heard "rumblings" of this movement among national Latino leaders.

"The Tequila Party is a great concept to basically say, 'You know what? This blind support for you is coming to an end,'" De Posada says. "If you are perceived as someone who will never vote for a Republican, then you're screwed," because Democrats will take you for granted, he says.

[Video: President Clinton: We should all listen to the tea party movement]

In the midterm elections, 64 percent of Latinos voted Democratic, and in Nevada, analysts agree that Latinos' votes were responsible for Sen. Harry Reid's re-election.

Reid promised to bring the DREAM Act -- which would let youths who were brought into the country illegally gain legal status if they join the military or attend college -- to a vote in the current lame-duck session of Congress. But some Democrats, and the vast majority of Republicans, are shunning the legislation, which once garnered significant bipartisan support. Juan Hernandez, Arizona GOP Sen. John McCain's former volunteer director of Hispanic outreach, told reporters Monday that the White House and Democrats are not showing enough leadership on the issue.

Republicans are leading the charge against the legislation. Sen. Jeff Sessions (R-Ala.) claims some criminals will qualify for legalization (which immigration advocates dispute). A weeks-long hunger strike by dozens of University of Texas students has failed to convince Sen. Kay Bailey Hutchinson (R-Texas) to renew her earlier support for the DREAM Act, her spokeswoman says.

The Tequila Party is still just talk for now, as no Latino leader has publicly backed the scheme. But De Posada says their silence makes sense, as they will want to be sure they have a fully formed plan before they risk angering allies in the Democratic Party. "They'd better be prepared when they come out swinging," he says. Frank Sharry of the pro-immigration reform group America's Voice, says he doubts the Tequila Party will ever actually get off the ground. "I do think Democrats should worry because the arguments for the Tequila party are persuasive to me...The frustration is understandable," he says.

It's curious that Latino leaders are looking to the tea party for organizational inspiration, since many tea party groups supported Arizona's tough immigration law and other enforcement measures. More than 85 percent of Hispanics back comprehensive immigration reform, including a path to citizenship, according to a recent poll, and 80 percent disapprove of Arizona's immigration law.

As some Latinos ponder a symbolic break with the Democratic Party, the GOP is more aggressively trying to attract coveted Latino voters ahead of the presidential election. Former House Speaker Newt Gingrich is co-sponsoring a conservative Hispanic Forum, which he has publicized this week on his Hispanic issues news website The Americano. According to the forum's agenda, terrorism and national security are a major focus.

[Related: Did tea party have an effect on hit show's results?]

Meanwhile, the American Action Network and American Action Forum -- outside conservative political action committees led by former Sen. Norm Coleman (R-Minn.) -- have formed the Hispanic Leadership Network, which is co-chaired by former Florida Gov. Jeb Bush, a proponent of comprehensive immigration reform. Coleman told The Lookout that the group will not take an official stand on immigration reform.

The trigger for the Tequila Party may be if Democrats again fail to deliver on comprehensive immigration reform

"It would definitely induce us," Fernando Romero, president of the nonpartisan Hispanics in Politics, told the Sun. "We would have to do something at that point to get ready for 2012."

(Photo of Chicago resident Magda Castaneda protesting the tea party: AP)

See also:

• The One Number That Spells Market Upside or Downsi...
• Stocks drop on European debt concerns; Dow off 110...
• Markets doubtful as Germany, France say euro saved...

The One Number That Spells Market Upside or Downside in 2011

 
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From 700 to 1,200. That's the stunning move made by the S&P 500 in just 20 months.

No one's expecting that index to tack on another +70% in the next 20 months, but more than a few market watchers are calling for moderate +10% to +15% gains next year. For that to happen, the economy must prove to be on a path to health, with 2011 GDP growth rates exceeding what we're getting in 2010. Indeed, third-quarter GDP has just been upwardly revised from +2.0% to +2.5%. But a just-released forecast from the National Association for Business Economics should give pause.
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The survey of economists anticipates GDP growth of +2.6% in 2011, down from +2.7% in 2010. And that just won't cut it. So many components of the economic picture are reliant on more robust growth to finally become healthy again. Let's look at what the difference would be between +2.0% to +2.5% growth and +3.5% to +4.0% growth in various parts of the economy. Based on the picture painted from these outcomes, you'll want to adjust your portfolio accordingly.

Employment and consumer spending. Economic growth below +3% is likely to keep the economy moving enough to avoid the need for any further layoffs. But it is also insufficient to get things moving, either. On the other hand, if GDP growth were closer to +3.5%, you could expect to see the beginning of a jobs boom as we saw in the mid-1990s as companies gain greater confidence in the 2012 and 2013 economic outlooks. And any material upturn in employment -- where the economy is creating more than 200,000 jobs a month -- would be a clear panacea for consumer spending.

Retailers and housing. If the NABE survey bears out and we see growth of around +2.6% in 2011, then brace yourself for another subpar year for retail and housing stocks. Housing in particular looks to be troubled for yet longer until and unless we get a really robust economic upturn, as there are simply too many empty houses creating a drag on the sector. Looking on the bright side, retailers are already geared for a tough environment and would become hugely profitable if the economy were on a higher plane.

Federal, state and local budget deficits. Politicians are loathe to raise tax rates, but all would welcome an increase in tax receipts that come from a more robust economy. Rising tax receipts helped us generate budget surpluses in the late 1990s after years of budget deficits. And the difference is hard to overstate: +2.5% GDP growth would leave many industries marginally profitable. Yet if you tack on another percentage point to GDP growth rates, then profit margins would quickly fatten, and so would the taxes that many firms pay. Without a material upturn in tax receipts, it's hard to see how Washington can finally chip away at the federal deficit, and it's also hard to see how state and local governments can avoid draconian measures to avoid default.

Trade and the dollar. Weak economic growth brings a small silver lining. Our level of imports would be restrained as demand and spending remains weak. And the weak economy could push the dollar yet lower, which would be a boon for our exporters. This is the long-term thesis of some economists. They believe that the United States has to endure an extended period of subpar economic growth relative to the rest of the world to get our trade deficit back into balance.

Watching the calendar. That's why the next two months are crucial for investors. You'll want to closely monitor the economic data as it is released for any signs that we're exiting 2010 on a robust note or a tepid note. By late winter, we'll have a clearer sense of how the 2011 economic picture will play out.

Here are key upcoming economic dates to watch ... .

The week after Thanksgiving will bring several important economic items, including the Case-Shiller Housing Price Index, the Chicago Purchasing Managers Index and the latest read on consumer confidence (all on Tuesday).

On the first Friday of December, we'll get the latest look at employment trends. Economists expect the unemployment rate to remain unchanged at 9.6%, and looking out during the next six months, forecasts.org anticipates the unemployment rate to fall to 9.1% by next June. If that happens, the markets are likely to react mildly positively, as it would set the stage for an anticipation of further employment gains into the future, possibly pushing unemployment below 8% sometime in 2012.

The following Friday, December 10th, is also an important day for economy watchers. That's when we'll get the latest looks at trends in international trade, import and export prices, consumer sentiment and the current state of the federal budget deficit.

Action to Take: It's a strange time. There are ample reasons for bullishness and bearishness, and with the economy right on the line between tepid growth and improving growth, investors need to stay sharply attuned to the economic tea leaves. The +70% gain from the March 2009 nadir is partially attributable to expectations that the economy will get better and better with each passing quarter. And right now, that's not sure thing. In this kind of market, it's wise to take profits when you can on any short-term moves while sitting tight on your long-term core holdings.

Stocks drop on European debt concerns; Dow off 110

Stocks fall as concerns about Irish bailout package overshadow strong retail sales 

 

NEW YORK (AP) -- Stocks fell sharply Monday afternoon as concerns about the European debt crisis overshadowed a strong weekend of holiday sales.

The euro fell to a two-month low and investors flocked to the safety of the dollar and Treasurys after the European Union agreed Sunday to provide nearly $90 billion in rescue loans for Ireland. The move is designed to shore up Ireland's cash-strapped banks, but it does little to relieve investors' concerns about other European countries, including Portugal and Spain.

"The good news is they're making progress with Ireland," said Alan Gayle, senior investment strategist for RidgeWorth Investments. "The concern is that there is more work left to do for the EU going forward."

As a result, traders largely ignored the upbeat news on holiday retail sales in the U.S. The National Retail Federation, a trade group, estimated that 212 million shoppers visited stores and websites during the first weekend of the holiday season, up from 195 million last year.

Online spending also rose more than 14 percent from Thanksgiving Day through Saturday, according to IBM's Coremetrics. Shares of online retailer Amazon.com rose $1.51, or 0.9 percent, to $178.73 in the afternoon of what's known as "Cyber Monday," a day when shoppers return to work and buy items online.

A fuller picture on spending will come Thursday when retailers report November sales. Investors have been hoping that consumers, who have generally been spending cautiously since the recession, would feel more comfortable about shopping during the holidays. Many economists believe that consumers will have to spend more freely for the economy to put together a stronger recovery. However it's too soon to tell if sales will remain strong through Christmas.

The Dow Jones industrial average fell 110.35 points, or 1 percent, to 10,981.65 in late morning trading. It was the first time since last Tuesday that the Dow surrendered the 11,000 level in intraday trading. Twenty-five of the 30 stocks in the average fell.

The Standard & Poor's 500 index fell 9.60, or 0.8 percent, to 1,179.59. All 10 industries in the S&P 500 fell. The technology-heavy Nasdaq composite index dropped 26.71, or 1.1 percent, to 2,507.82.

Bank stocks were some of the best performers. JPMorgan Chase & Co. rose 0.7 percent, while other banks, such as Bank of America Corp., Wells Fargo & Co. and Regions Financial Corp. all rose more than 1 percent.

Dick Bove, a banking analyst at Rochdale Securities, said investors realized that some U.S. banks had little exposure to European debt issues. He added that U.S. companies could also benefit if European banks are subject to stringent new capital requirements, making it tougher for them to do business.

"When people sit down and think about the situation in Europe, it is clear that the American banks emerge in a much stronger position," he said.

Elsewhere, FedEx Corp. rose $3.06, or 3.5 percent, to $90.56 after a Credit Suisse analyst raised his investment rating on the shipper, predicting growth in global industrial production.

In corporate news, Wal-Mart Stores Inc. fell 23 cents, or 0.4 percent, after the company said it is buying a 51 percent stake in South African retailer Massmart. The transaction, worth about $2 billion, will cost Wal-Mart $20.71 per share. It gives the retailer access to the growing South African economy.

European stocks traded sharply lower. In London, the FTSE 100 index was down 2.1 percent. Germany's DAX fell 2.2 percent. The CAC-40 index in France fell 2.5 percent.

Oil prices rose $1.83 to $85.61 a barrel. Gold for February delivery rose $2.70, or 0.2 percent, to $1,367 an ounce.

The dollar rose 0.7 percent against an index of six other currencies.

Bond prices rose as investors shifted money out of riskier assets like stocks and commodities and into defensive investments. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.83 percent Monday from 2.87 percent Friday.

Investors were also cautious as they awaited the week's economic reports, including the government's monthly employment report due out on Friday. Also due this week are the Conference Board's survey of consumer confidence on Tuesday, and the Institute for Supply Management's assessments of the manufacturing and services industries.

Markets doubtful as Germany, France say euro saved

By Erik Kirschbaum and Daniel Flynn

BERLIN/PARIS (Reuters) - Germany and France said on Monday that Europe had acted decisively to save the euro by rescuing Ireland and agreeing the basis of a permanent debt resolution system, but financial markets were unconvinced.

The euro's respite rally was brief in the early hours of Monday's trading and European shares closed at a seven-week low, with banks among the losers as investor optimism over Ireland's debt bailout faded.

Yields on Irish government bonds were higher than Friday's close and off their lows seen in early trade after the agreement was sealed on Sunday. The spreads between Spanish and Italian bonds versus their German equivalent widened to euro-lifetime highs as optimism for the Irish deal waned.

Credit default swap costs on Portugal and Spain both hit record highs on Monday on fears they may be next in line to struggle with their debt.

"The benefits to Portugal and Ireland can be seen, but they're marginal. On the other hand, there is concern about the rest, with the spreads for Belgium, Italy and Spain all widening," Monument Securities strategist Marc Ostwald said.

"It just goes to reinforce the point that the market says 'when is the next problem going to occur?' And that is not going away," he added.

Under pressure to arrest the threat to the euro and prevent contagion engulfing Portugal and Spain, EU finance ministers on Sunday agreed an 85 billion-euro ($115 billion) package to help Dublin cover bad bank debts and bridge a huge budget deficit.

They also approved the outlines of a long-term European Stability Mechanism (ESM), based on a Franco-German proposal, that will create a permanent bailout facility and make the private sector gradually share the burden of any future default.

"ABSOLUTE DETERMINATION"

"This is a measure which is not simply a single shot taken in response to an important crisis, it forms part of the absolute determination of Europe -- of France and Germany -- to save the euro zone," French government spokesman Francois Baroin told Europe 1 radio.

German Finance Minister Wolfgang Schaeuble said calm and reality should return to financial markets and French Economy Christine Lagarde said "irrational," "sheep-like" markets were not pricing sovereign debt risk in Europe correctly.

Markets were unmoved by their urgings.

"I think it is almost impossible now to stop the contagion," said Mark Grant, managing director of corporate syndicate and structured debt products at Southwest Securities in Florida.

"PREVENTATIVE BAILOUT"

Portugal is widely seen as the next euro zone "domino" at risk and business confidence data for November added to the gloom. It fell for the second straight month on poor prospects for the economy due to austerity measures designed to calm investor concerns about its creditworthiness.

Portugal's Labour Minister Helena Andre said the government was preparing to start talks with firms and unions on reforming the labor market to increase competitiveness.

Nouriel Roubini, the U.S. economist who warned of an impending credit crisis before 2007, told the Diario Economico business daily that Portugal would likely need a bailout.

"Like it or not, Portugal is reaching the critical point. Perhaps it could be a good idea to ask for a bailout in a preventative fashion," he said.

Troubles in Portugal could spread quickly to Spain because of their close economic ties, and the Spanish government is seen as having to pay more to lure investors to Thursday's three-year bond offering.

Roubini said that while Spain had better budget and debt positions than other euro periphery states, high unemployment and the collapse of a property bubble meant that, like Ireland, its banking sector could need emergency aid.

"The question is whether it could happen in Spain. The official funds are not sufficient for also bailing out Spain," he said, and the fiscal cost of cleaning up its financial system would be bigger than government estimates.

NEW SAFETY NET

Under its bailout, Ireland was given an extra year, until 2015, to get its budget deficit down below the EU limit of 3 percent of gross domestic product, an acknowledgment that austerity measures will hit growth in the next four years.

Greece has been given a six-year extension to 2021 on loan repayments linked to its rescue, said Finance Minister George Papaconstantinou, at the price of a higher rate of interest.

The new European Stability Mechanism could make private bondholders share the cost of restructuring a euro zone country's debt issued after mid-2013 on a case-by-case basis.

Germany's Schaeuble, in comments aimed at calming markets, said it will take about five years from 2013 before a majority of outstanding euro zone bonds carry clauses to include private sector liability in future bailouts.

The lack of detail in an earlier Franco-German deal on a crisis mechanism, agreed last month, and talk of private investors having to take losses, or "haircuts," on the value of sovereign bonds, helped drive Ireland over the cliff.

Debt fears have driven the crisis for the past year, denting confidence in the 12-year-old euro currency and producing a showdown between European politicians and financial markets.

The proposed permanent crisis resolution mechanism, to be finalized in the coming weeks, is intended to prevent Europe having to rush like a fireman from one blaze to another.

North, South Korea exchange fire; 2 marines killed

INCHEON, South Korea – North and South Korea exchanged artillery fire Tuesday after the North shelled an island near their disputed sea border, killing at least two South Korean marines, setting dozens of buildings ablaze and sending civilians fleeing for shelter.

The clash, which put South Korea's military on high alert, was one of the rivals' most dramatic confrontations since the Korean War ended, and one of the few to put civilians at risk, though no nonmilitary deaths were immediately reported. Sixteen South Korean soldiers and three civilians were injured and the extent of casualties on the northern side was unknown.

The skirmish began when Pyongyang warned the South to halt military drills in the area, according to South Korean officials. When Seoul refused and began firing artillery into disputed waters, albeit away from the North Korean shore, the North retaliated by bombarding the small island of Yeonpyeong, which houses South Korean military installations and a small civilian population.

"I thought I would die," said Lee Chun-ok, 54, an islander who said she was watching TV in her home when the shelling began. Suddenly, a wall and door collapsed.

"I was really, really terrified," she told The Associated Press after being evacuated to the port city of Incheon, west of Seoul, "and I'm still terrified."

South Korea responded by firing K-9 155mm self-propelled howitzers and dispatching fighter jets. Officials in Seoul said there could be considerable North Korean casualties. The entire skirmish lasted about an hour.

Each side has threatened the other against another attack.

South Korean President Lee Myung-bak, who convened an emergency security meeting shortly after the initial bombardment, said that an "indiscriminate attack on civilians can never be tolerated."

"Enormous retaliation should be made to the extent that (North Korea) cannot make provocations again," he said.

South Korea holds military exercises like Tuesday's off the west coast about every three months.

The supreme military command in Pyongyang threatened more strikes if the South crossed their maritime border by "even 0.001 millimeter," according to the North's official Korean Central News Agency.

A statement from the North said it was merely "reacting to the military provocation of the puppet group with a prompt powerful physical strike," and accused Seoul of starting the skirmish with its "reckless military provocation as firing dozens of shells inside the territorial waters of the" North.

Government officials in Seoul called the bombardments "inhumane atrocities" that violated the 1953 armistice halting the Korean War. The two sides technically remain at war because a peace treaty was never signed, and nearly 2 million troops — including tens of thousands from the U.S. — are positioned on both sides of the world's most heavily militarized border.

The clash, along with continuing worry about the fallout from Ireland's debt crisis, was a factor in pushing Asian and European stock markets sharply lower. Wall Street opened lower.

The exchange represents a sharp escalation of the skirmishes that flare up along the disputed border from time to time. It also comes amid high tensions over the North's apparent progress in its quest for nuclear weapons — Pyongyang claims it has a new uranium enrichment facility — and six weeks after North Korean leader Kim Jong Il anointed his youngest son, Kim Jong Un, as the heir apparent.

"It brings us one step closer to the brink of war," said Peter Beck, a research fellow with the Council on Foreign Relations, "because I don't think the North would seek war by intention, but war by accident, something spiraling out of control has always been my fear."

Columns of thick black smoke rose from homes on the island, video from YTN cable TV showed. Screams and shouts filled the air as shells rained down on the island just south of the disputed sea border.

Yeonpyeong lies a mere seven miles (11 kilometers) from — and within sight of — the North Korean mainland.

The United States, which has more than 28,000 troops stationed in South Korea, condemned the attack. In Washington, White House Press Secretary Robert Gibbs called on North Korea to "halt its belligerent action," and said the U.S. is committed to South Korea's defense.

China, the North's economic and political benefactor, which also maintains close commercial ties to the South, appealed to both sides to remain calm and "to do more to contribute to peace and stability on the peninsula," Foreign Ministry spokesman Hong Lei said.

Stephen Bosworth, the Obama administration's special envoy to North Korea, said he discussed the clash with the Chinese foreign minister and that they agreed both sides should show restraint. He reiterated that the U.S. stands firmly with its ally, South Korea.

Gen. Walter Sharp, commander of U.S. forces in South Korea and the U.S.-led U.N. Command, said in a Facebook posting that the U.S. military is "closely monitoring the situation and exchanging information with our (South Korean) allies as we always do."

Yeonpyeong, famous for its crabbing industry and home to about 1,700 civilians as well as South Korean military installations. There are about 30 other small islands nearby.

North Korea fired dozens of rounds of artillery in three separate barrages that began in midafternoon, while South Korea returned fire with about 80 rounds, South Korea's Joint Chiefs of Staff said. Naval operations had been reinforced in the area, the JCS said early Wednesday, declining to elaborate.

Two South Korean marines were killed and 16 injured, it said. Island residents fled to some 20 shelters on the island and sporadic shelling ended after about an hour, according to the military.

The Koreas' 1950s war ended in a truce, but North Korea does not recognize the western maritime border drawn unilaterally by the United Nations at the close of the conflict, and the Koreas have fought three bloody skirmishes there in recent years.

South Korea holds military exercises like Tuesday's off the west coast about every three months.

In March, a South Korean warship went down in the waters while on a routine patrolling mission. Forty-six sailors were killed in what South Korea calls the worst military attack on the country since the war.

Seoul blamed a North Korean torpedo, but Pyongyang denied responsibility.