Thursday, March 8, 2018

Circus Clownius, The Last Emperor

There's one thing Trump excels at - blaming other people for his own incompetence...

This is a guy who already has the shallowest bench of leadership talent in U.S. history. You don't have to be a genius to see where this is all heading. And no, it won't be a buying opportunity...

Typical Trump cabinet meeting:

The reason why every right wing narrative points to the past as the "good old days" is because that was when wealthy white males predominated. EVERYONE else was their slaves - including non-wealthy white males who outnumbered the wealthy 10:1. In other words, there was no "good old days". And there never was true global balanced trade wherein one country was not accumulating massive trade surpluses at the expense of another. That fantasy period in time has never existed in human history. How do the gold worshippers think that the U.S. got its gold in the first place? Mercantilism.

Mercantilism is a national economic policy designed to maximize the trade of a nation and, historically, to maximize the accumulation of gold and silver:

Any questions?

Of course, under the new age of *free trade*, trade is only free in one direction. The "gold" today's mercantilist nations seek is not the metal, it's factories, industries, jobs, and intellectual property. All of which have been flying out the window non-stop since Reagan. Thirty eight years from the beginning of Ponzinomics, RepubliCons are finally starting to realize that trade protections were necessary all along. Closing the barn door after the horses are out. Like all late stage empires, the U.S. has erased history, and replaced it with histrionics and Caligula as president.

Getting back to the casino, ironically, the most important index right now is the "least important index", at least according to Wall Street. The widely watched Dow - because it's price weighted (versus market cap weighted) - is reeling from the effects of Donny's new trade war, unobscured by the massive "safe haven" exodus to Netflix. In the past 52 weeks, the largest contributors to Dow index performance, none are tech companies: Boeing, United Health Caterpillar, MMM, Goldman Sachs, Home Depot. The largest cap stock in the world - Apple, contributed only half as much of the Dow point gains as Caterpillar, despite having a market cap 10x larger.

The Dow is currently caught between the tax cut breakout line and the election trendline:

Needless to say a global trade war will not be conducive to further Dow point gains, given that it's overly exposed to global industrial multinationals. 

"Donald Trump’s yardstick for his own success is going rogue. That’s the Dow Jones Industrial Average, a regular feature in the U.S. president’s commentary over the past year as the equity bull market raged on"

The Achilles Heel for the Dow is clear enough: hurt Boeing by pulling orders (for example), and the Average will suffer disproportionately...the heaviest-weighted stock in the Dow is one of the biggest global users of aluminum, and derives 55 percent of its revenue from outside the U.S.

“in this game of chicken, the stock market is in the lane of oncoming traffic