While we’ve been yammering on about how there would likely be a “turkey rally” ahead of the holiday, this is getting downright stupid.
Monday’s trading session saw a liberal dose of tape-painting – which is what you call it when one index soars while the rest are left in the dust.
Monday it was the Dow, up 0.36% while the S&P and the NASDAQ Composite were stuck in the lower fractional teens.
Today, looks like Hype-fest 2.0 with Dow futures up another 86 points. What’s interesting is how much of the present rally is based on reality and how much is based on specious claims. Let me explain:
One of our readers, who pushed an 18-wheel dump truck around Seattle for zillions of dollars, has been eyeing some of the claims about what’s being called the “Trump Tax Cut” and how it would impact him.
I can’t emphasize enough how sub-par the reporting on this is.
First, it’s no longer a Trump tax plan. See this article? Makes it sound like whatever’s coming will be Trump’s plan. This is pin-the-tail-on-the-Donald. Trump-bashing is the media’s way of punishing The Donald for going around their slanted coverage by going with direct emails daily (1600 Daily is one big list) and going Base-Direct with Twitter.
Like the stupid talking-children on television who came on after we heard the debates and insisted on “telling us what we heard” (and getting even that spectacularly wrong) the media’s liberal and pissed and independently owned and reasonably run, low monetization sites (like Urban) give people too many input choices for the owners of monopolies to support. Ego: bash Trump. But I digress.
Budget Reality: It’s as republican (*RINO) plan to give big corporations a tax break. The theory is, that if corporations get enough of a “spiff” in the Tax Code, they will come running back to the (remnants of) America, We will reindustrialize and start making our own chips again and be ready to take on China if need be to keep the corporates happy.
BUT! The reality is that while an economic argument could be made to give away tax money to fat corporate interests (and it’s a weak argument dispensed with on the subscriber side: See the Oct. 18 report on the subscriber side “Why Reagan Tax Cuts Won’t Work Now“), the REALITY is that corporations will lay out oodles of money and campaign contributions and junkets and post-office-holding gigs, to buy-off the sitting collection of buffoons pretending to “lead.”
(Wait! Did that sound bitter? Wonder why…hmmm…)
Having a do-nothing Congress, they STILL don’t read bills before voting on them (or if they do, they can’t really comprehend them because they are so gawd-awful convoluted and full of tax treats for the rich). It’s therefore no wonder why Andy is so pessimistic.
What he may fail to incorporate into his thinking is the admonishment from another reader (Bruce in Ecuador) who (paraphrasing here) says America is nuts.
- Monetizing gender? Subsidizes the plumbing industry, lol.
- Monetizing Healthcare insurance? Give those poor healthcorps some tax money!
- Monetizing social media? Ads galore…anyone who posts dick on social is supporting the corporate model!
- Monetizing government? Hire more private contractors.
- Monetizing children? Shove through ESL for all, seize parental controls, force immunizations, no parent rights…
- Monetizing Education…(the list continues some way) Get a degree and a lifetime debt! Yippe! What a fine effing plan that is…and back it up with the power of IRS to impound payments for the bankster class! Yay! Obama’s dream world is here.
And then add insult to injury by doing things like stealing public roads and turning them into toll roads and screwing We the People out of our investments?
OK, let’s toss in markets, too:
Most of the stock prices you’ll find these days cannot be justified on the basis of paying you fair rent on your money! They depend solely on finding some damn greater fool who will give more than you did for a stock.
What should the world look like? (Sure you want to know?)
We know prices are going up based on the Consumer Price Index. From the last cost bend-over: “…Over the last 12 months, the all items index rose 2.0 percent….”
Now some economic distortion readings to think about.
In the last 12 months, the M1 money supply is up a whopping 7.4%.
Where do you think that money is going?
UGLY ANSWER: Speculative bubbles. Yep, that “excess” has to go somewhere so it goes to hedge funds, banks, and the ultra-rich. And this explains:
- Why Bitcoin just hit $8,200.
- Why the Dow Jones went from 18,868 a year ago this time to 23,487 this morning.
Let me help ya’ll with the math: That’s a Dow gain of 24.48%!
And Bitcoin a year-ago was around $800 bucks, so a 10-times return.
Friends (and Andy) the world has taken leave of it’s senses.
There is no way stocks could pay a return overall of 2 percent – which would keep up with inflation.
There’s no way they could pay 1.5% – which would be dividend plus some prospects for growth.
Know how much Amazon pays as a dividend? I looked on the Yahoo Finance stock screener:
Maybe I should have picked Facebook? Oh-oh…
Don’t get me wrong: These companies have a franchise and sure, they have gobs of earnings. But those earnings just make the franchise wealthier.
I always look at stocks like railroads. Pretend it’s the 1800’s and we are railroad builders.
Would you invest in a railroad that didn’t pay you any money, but it made the owners fabulously wealthy and it became the greatest railroad profit story of all-time?
Yes, the stock prices of the railroad would go up – make no mistake. But AT THE TOP who would buy? What would be their rationale? They aren’t going to make a penny of dividends.
Maybe they could have twice as many shares to unload AT THE TOP WITH A SPLIT. But, where’s the beef? Where’s the interest paid to shareholders for running up the stock price and for taking a flyer?
No in this world.
So, no, we’re not quite at the economic long wave bottom. In fact, this is looking, once again, like another replay of 1928 – the loudest roar of the Roaring Twenties.
In place of flappers we have the LBGT and in place of Prohibition we have marijuana reform, and in place of Hoover we have Trump (both rich guys), and no one is looking down the road.
Sure is tempting to jump right it…but realize if you do that no one is going to take out a flag and wave it at the top and collapse the swindle. Everyone has skin in the game to keep it going, the government in particular.
So paint the tape and pass the gravy.
This turkey is still flying and I’ll be damned.
Meantime, in Real News
Just out from the Chicago Fed:
Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.65 in October from +0.36 in September. One of the four broad categories of indicators that make up the index increased from September, but three of the four categories made positive contributions to the index in October. The index’s three-month moving average, CFNAI-MA3, increased to +0.28 in October from +0.01 in September….
Red capes before the bulls! Run ’em up some more!
Up a hundred for the open! Bitcoin’s up to $8,250!
Where is Dorothy Provine when we need her? (Starred in the TV series The Roaring Twenties!” (and looked a bit like Elaine…hmmm…)
Some day we’ll all be in rehab with Harvey and Kevin, but not today.
Gawd, this is entertaining. Popcorn?
“Run ’em up at the open anyway – Short Turkey!”
Paint and gravy, brothers and sisters. Gimme an Amen!
Big Pharma Loves You
Which is why they don’t like stories like this one: Hormonal Birth Control Is Linked to a Higher Risk of Suicide, Study Says.
Fast Talkers But Slow Doers?
Wait: How long we been seeing tweets about the NorK’s? And just now we read Trump administration announces sanctions against North Korea?
LV Shooting Case
You know, if this ever (as some claim) had something to do with an assassination attempt involving one of the Saudi princes who was in LV at the time of the shooting, could there be a cause of action upstream and we could own the Middle East at the end of the litigation? (Lots of discussion and vids on YT) Just wondering…
Off to work on Peoplenomics for tomorrow…Back Turkey Morning… see you them.