Tuesday, July 30, 2019

The Emperor Has No Brain

Trump figured out a long time ago that if he speaks in front of a large enough audience and tells them what they want to hear, people will believe anything. Except the truth...

The two countries that created Globalization are getting set to explode it in every direction. The prevailing belief among today's consumption Borg is that Globalization was only good for Third World factory sweatshop workers. And all bad for the shop-a-holics. This lesson will be in the "unaffordable" price range...

Trump has convinced people that trade wars are good and easy to win, and rate cuts are a sign of a strong economy. He's good at what he does:

"Americans feel much better about the economy than the Fed does"

"The 'Conomy is strong"

Trump is riding a dangerously manic Twitter high. He's using the exact same arrogant overreach that imploded his last four casinos. It's abundantly clear that Trump is now using trade policy to manage the Fed. Yesterday he said that the Dow would be 10,000 points higher without the Fed rate hikes. Therefore a major rate cut is now appropriate, in order to increase the size of the bubble. At the same time he reminds us that this is the strongest economy in history so no worries:

“Fortunately, I’ve made the economy so strong that nothing is going to stop us”

This level of conmanship we've never seen before. Where he alternates between demanding more monetary stimulus while praising the strong economy. 

Judging by consumer confidence, clearly his "formula" has worked. 

Today - already predicting that he won't get the "large" rate cuts he wants - he is back to bashing China on Twitter. This is all very similar to what happened in May: Fed not dovish enough for Trump, followed by trade war escalation.

Markets are just now starting to realize this guy is an incompetent jackass focused only on re-election. 

Here is where it gets interesting:

Semiconductors - ground zero in this trade war, have been rallying into the FOMC meeting deja vu of May:

They are arriving at overbought status at the same time that FANG (Facebook, Amazon, Netflix, Google) are all rolling over post-earnings. AND, software stocks are losing momentum as well. Which leaves just one major Tech company to report tonight:

"Apple heading toward a sales downturn for the year, which has only happened once since 2001"

Meanwhile, China Tech is rolling over again, even as consumer staples leader Procter & Gamble makes another all time high:

Speaking of arrogant fools, this guy is playing high stakes poker with a pair of fours:

"I'm warning you"