He's Still Crazy, Though

 

The market performed extremely well after Trump announced by way of social media that things would be somewhat less stupid, but make no mistake, they are still fairly stupid. We still have the potential for a recession. We still have a trade war with China, and 10% reciprocal tariffs, and it's a 90-day pause, not an admission that the whole tariff scheme is stupid, and we might not even be in for 90 days of an actual pause since Trump is, in fact. nuts. 

Basically, Trump reacted to the reaction. He admitted himself that the pause was because people were "yippy." Are we looking at a case of masterful strategery on his part?  Let's just say it caught some advisers by surprise (mid-defense of Trump's policy, no less), but we're pretty sure not everyone.

I'm not sure too many people would be shocked to find there has been gambling in this establishment. 

A Very Ugly Truth

 

Despite the dark horizon envisioned Sunday evening, there was a momentary market rally on Monday based on, of all things, fake news, possibly furthered in part by a single optimistic Tweet that there would be a pause on the tariff scheme. Despite the various iterations from Trump that yes, the tariffs were going to happen anyway, there was a wonderful rally Tuesday, based on I don't even know what. Wishful thinking? 

People still seem stuck on the idea that the tariff thing is a bargaining position, not a structural reorganization based on, as near as I can tell, a near-total misunderstanding about how everything to do with the economy actually works. 

But at some dark, terrible point, you have to stare into the tan Shinola'd visage of the aging dumbfuck pictured above who did that to his hair and went out in public, as he has done for decades, and realize the simple truth. 

He's really very stupid. He's not taking some deal, even though all manner of countries have been trying to get hold of him. (70? All of them?) He's already got the deal he wants.

They are literally kissing his ass, he says. And I have told you about his relationship with ass-kissing.  It's his life support system.  He has every eye on him. People are telling him he's wrecking everything--and like a toddler wreaking havoc, he's loving it.  And he gets to prove something--he was right, and all the smarty-pants people who said otherwise will find out.

Ask Not for Whom the MAGA Bell Tolls

 

When Catturd et als on the Twitter are planning for Speaker Moses to step down or get stepped on, I guess I'm going to be pretty basic to the Asics about it--THE GURLS ARE FIIIIIIYYYIIYIIYITINGGGGG!!!! I am so glad I did my nails for this. Park me in the front row, let me see! I got my fan in my bag because this church is heated. God is GOAT and prayers are heeded. 

But no, actually this is really bad. Somehow, we have stupid little children at the wheel of the shortbus that is GOP-led Congress, because there is no adult running the show or at the wheel. Musk encouraging maximum returns to wealthy shareholders and fucking up plans for actually doing good things for people like funding cancer research and all that IS this administration's actual ethos. Trump the King, and his Regent, Elon, chose this kind of legislative ain;t shitness. Musk lies and tries to manipulate the process because he is a dumbass. This is real work that shouldn't be SPUN.

And they think somehow, some way, Democrats are supposed to get in line and save their pretend-mandate asses to preserve the economy, so Trump gets into office under ideal conditions that he absolutely did not create?

Huh!

Have you seen what happened to the stock market since Trump rang his little bell:

Trump and the Trade War He Chose

The market futures were down this morning when China announced new tariffs against American goods including automobiles, and the market did start down, but it was going to be okay--because Jerome Powell gave a reassuring speech that he would responsibly keep the economy rolling along even if he didn't give a definite date about a rate cut. Good enough for investors; things were picking up. 

Not good enough for the toddler in the White House, who proceeded to Tweet disparagements at Powell, 

As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great...

— Donald J. Trump (@realDonaldTrump) August 23, 2019

and included a useless demand for US businesses to pull out of China and delivery carriers (private companies!) to search for fentanyl in Chinese-based shipments. (This isn't how anything works.)

And swoosh! the markets were off to a downhill slalom. Because nothing gives a sense of economic security like President Queeg blowing up. Of course, because he's not just awful, but nasty, he blamed the slide on an unlikely source:

The Dow is down 573 points perhaps on the news that Representative Seth Moulton, whoever that may be, has dropped out of the 2020 Presidential Race!

— Donald J. Trump (@realDonaldTrump) August 23, 2019

which might have been read as an attempt at humor that Moulton did not deserve and that Trump was inappropriate at hell to go for at that time (the market kept falling), and then after the close of bell, he announces his get-back at China:

So much for Christmas! 

None of this seems particularly strategic at all, and it isn't. China announced the tariffs just when Trump would particularly be spooked by them, and he behaved like a spooked individual. His retaliation might show "strength" but the joke that China's tariffs are "(politically motivated)" is just dumb--what is all of his "chosen" talk about, if not politics? He's not delusional (well, he is, but this part is political), he's chalking up potential losses to rounds of a long war in which he wants us to believe we will ultimately prevail if he remains at the helm. But at the same time, his Tweets reveal insecurity and weakness. He is more answerable to public opinion than Xi, and his missteps have already demonstrated that he doesn't understand how any of this works. We may have permanently lost soybean sales in China. The US manufacturing sector has already begun to contract, and this latest round of tariffs aims right at it. This will ultimately effect profits, and jobs (usually a lagging recession indicator anyway). 

Trump was chosen by the electoral college. He chose this trade war, and is doing it badly.

Crazy Inverted Yield Curve!

I am not an economist and I don't try to play one on the blog, but yesterday's stock market results in response to a dip on the bond market are worrisome to me, not because I especially know what that means for the economy (former Federal Reserve Chair Janet Yellen says it might not even mean a recession, and she would know a whole lot more than I do), but because I have a read on how the current president deals with things he doesn't know how to handle, and it's not great:

I don't think this problem is going to be fixed by yelling on Twitter--but the man can't help himself. 

What I see is that Trump didn't learn from the last crash and deregulated the financial industry, taking off brakes that were put in place to prevent Bad Things from happening again, and his "trade war" scheme hasn't really been an all-around success for the economy. (He has, between the lines, almost admitted that the US consumer actually pays the tariffs on imported goods with his recent delay of the next round as a "Christmas present.") His goal to shrink the trade deficit has not worked. 

And as for ways we chip our way out of a recession, he's already got us in massive deficit spending. Also, he has deepened the polarization in Congress with antogonism. If things go bad, I simply don't see him as the guy to help make anything better.

Panic and Pettiness

My opinion of the people currently in charge of the US is not actually very good. I think I've made my estimation of Donald Trump pretty clear, and am heartened to know that many people have made the Donald J. Coyote/Wile E. Trump connection that I did the other day. On one hand, it's nice that I am not alone in thinking that the POTUS resembles a cartoon of a perennially ineffectual schemer who doesn't ever achieve his goals. On the other hand, we appear to have a president who is a cartoon of a perennially ineffectual schemer who doesn't ever achieve his goals. 

Retired General Jim "Mad Dog" (although he doesn't actually even like that nickname?) Mattis served his country for a good long while and sort of had a bug about Iran that made Obama accelerate his departure at Centcom. But he was actually sort of good for a Trump Administration pick. He even resigned with a kind of decency and generosity--although his resignation didn't offer any compliment for the CINC he served, he nonetheless offered to retain continuity by working in his office through to February 28, to give the President reasonable time to find a replacement. 

Alas, Trump watched enough tv this week to figure out the hidden disses of his foreign policy that were lodged deep within the hidden recesses of the Mattis resignation letter, that might have been unlocked by anyone with a fifth grade reading level. Incensed, he directed his Secretary of State Mike Pompeo to do the actual dirty business of telling Mattis to box up his shit and git. That is apparently the way he rolls.

In other news, the US envoy who was overseeing the diplomatic efforts regarding the war against Daesh, Brett McGurk, accelerated his own departure in response to Trump's precipitous decision to withdraw from Syria, and to mark this occasion, Trump saw fit to "neg" him. 

When, really, Trump should have known who this was and probably consulted with this guy before deciding on a withdrawal during a phone call with Turkish president Recip Erdogan, because even Erdogan was kind of freaked out about how quickly Trump wanted to let him go and most likely attack Kurds, or whatever. (See BBBB for his thoughts on how we are screwing over what should be our great allies once again.)

It's stupid that Trump said that he did not know his top guy doing State shit in a key area of the Middle East, but it's also stupid that his Acting Chief of Staff has to try and explain why Trump doesn't know him:

And it's because Trump doesn't "follow this topic". Which is actually seriously infuriating, because Daesh is a kind of big deal, and one Trump promised he had a very special secret plan for. Of course that was obviously a lie, but it's disgusting he doesn't cover up his failure to perform even the minimum of following through on his lie even the least bit.

In the meanwhile, everyone might have noticed that the DOW and Nasdaq and all that have not been doing the greatest, and probably chalked that up to the economic uncertainty caused by the trade war and the shutdown and so on. But in an alarming aside, Treasury Secretary Steve Mnuchin has been phoning the heads of different banks to just check in and make sure they are liquid, NOT THAT THIS IS A CRISIS OR ANYTHING, and saw fit to broadcast those conversations over social media which is very normal and not at all likely to cause anything like AN ENTIRE FUCKING PANIC. Not that we would know if there was any reason at all he should FEEL THIS WAY given that the Trump Administration has no grown ups.

The Trump agenda is motivated by pettiness, and now, panic. He blames the people around him, like his aides, or like Fed chairman Jerome Powell, for things he should look in the mirror about.

He was unqualified to begin with, and is proving to be an unqualified disaster. My disdain for those who can still support or even stomach his reign of error only grows.

Trump Slump

The last handful of days have been a little bit of heart-in-mouth time for some traders on today's market, as record sell-offs have been occurring, causing as of just today the largest drop in points in the Dow's history--which is not really saying a lot, yet. This probably is reminiscent for some of the point drop in September 2008, but that had been building for some time, and had a lot of other poor indicators--I don't know if this is the same thing at all. I don't think it's directly ascribable to Trump, although he likes to take credit for the economy, so...

Job creation has slowed here in the US--but that's not surprising as we are nearly at full-employment, and wages are going up, which did not just start happening in the Trump era, thanks, but when labor starts to have an edge, capital worries. As a wage earner myself, I like stronger wage and employment figures, and prefer my investments and pension plan to be about the long-term index, and I don't yet see a problem there...

Except the deregulation thing. See, I have noticed that Trump is trying to pry the brakes off what he sees as "the economy" because he and Republicans in general seem to think that rules make the game harder, and then nobody wants to play. However, what they do is fuss about currency and capital, and make stupid choices like tax plans that favor the rich. Companies like to take profits and pay dividends. This doesn't go into the hands of the people who will turn around and spend it--labor.

I don't know. This is a little correction. The dollar is weaker in anticipation of inflation, but the job market is still strong and the consumer confidence is there, but I feel like there is a certain level of volatility that might be political in nature.

The market doesn't like instability or insecurity. I feel like our US leadership is just a beehive of instability and insecurity, not because of the fundamentals, but because of the intangibles. Like, the current president of the US does not understand why nuclear first strikes are bad or why you invest in disease control or why sowing racial animosity here or abroad is stupid.

I'm bullish on anxiety and bearish on returns. Keep your money where it is if you are in a conservative fund. But day traders are going to be falling out in this mess at least this week.


EDIT: The Nikkei and tomorrow's futures do not really make one feel confident though.