Dow 25,000 today. Democrats await collapse of the economy.


Editorial comment:

I find Democratic Party optimism for the 2018 mid-term election to be odd.  It seems to rest on two expectations.

1.  The yearning of the faithful Left for some crime that could be laid at DJT's feet as a plausible basis for impeachment or "sale" to Trump supporters as a basis for voting Democratic in congressional and gubernatorial elections.  This seems an unlikely outcome to me.  In spite of all the hyper-ventilation in the MSM over every rumored "smoking gun" to come in the Russophobic investigations, there is nothing yet in evidence of a crime with which DJT could be charged in the process of impeachment and trial.  Manafort, Flynn, etc. all have profound legal problems, but they are not Trump.  Guilt by association has not yet become a chargeable offense in the US.   Removal for mental incompetence under the 25th Amendment is not a realistic possibility.  This would require a majority vote of the cabinet and with the concurrence of the VP.  Good luck on that!  AND, a hell of a lot of people across the country like Trump's actions even if they think his behavior is bizarre.  Is it seemly for a serving president to host a for profit $750/plate gala at his Florida resort?  No.  It is not but most people just don't care about that.  It is not a crime.

2.  The Democrats believe/hope that the US economy will decline between now and November and that will cause scales to fall from the eyes of the masses.  Well, pilgrims, that is a hell of a thing to hope for and that collapse in the economy seems to me to be very unlikely given the cumulative stimulative effect of DJT actions in tax law, deregulation and his various jaw-boning efforts with business.   The private sector added 148,000  jobs in December BEFORE the tax law was signed.  the DOW crossed the 25,000 frontier early today and just kept going.  Rich people in New York, New Jersey, California and other blue states were never going to vote for Trump anyway sooo … the loss of their state income tax deduction is not politically significant.  Republican Congressman Reed from western New York state was asked about this today on the Tee Vee.  He replied that he understood this would be difficult for rich people in the big cities but that in his district the average income is $42,000/year and that the continued $10,000 real estate deduction would take care of 99.9% of his constituents and so he had voted for the new tax law. 

It seems to me that the Democrats are counting their chickens mighty early.  pl 

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95 Responses to Dow 25,000 today. Democrats await collapse of the economy.

  1. tv says:

    You hit the state and local deduction on the head.
    One of the Democrats’ many hypocrisies is the SALT deduction which hits rich Democrats the most while Chuckie and Nancy dementia hysterically decry “tax cuts for the rich.”

  2. DC says:

    And add the fact that Keith Ellison, deputy chair of the DNC, sent out a tweet and a photo displaying his support for Antifa:
    Well, good lord. The Dems should have known better than to vote this clown into a leadership position of their party. Now they’ll have to live with it.

  3. Reggie says:

    Yes, especially considering the Obama scandals of spying on domestic opposition, un masking, HRC scandals, etc., are all going to be center stage through out the year.

  4. A.Pols says:

    The Democrats are indeed counting their chickens….
    The economy can do all kinds of things such as deflate when the hot money (endless levitation by the Fed) runs out, which it won’t unless Petrodollar and Dollar reserve currency status come to an end. Now there is a real good chance that will happen, but probably not by November of this year, though by November of 2038 it probably will have come to pass.
    I had been a Democrat since my first election in 1968, but these days what do the Democrats actually represent? If you love the idea of Stone Mountain being blown up and you’re a full fledged diversity catamite or gender crybaby, then They’re the virtue signalling voice of “progressivism”. Otherwise what do they offer except domestic stagnation, persecution of the people who keep the lights on, and schizoid foreign intervention?
    Anyone who thinks Alabama was a call to man the barricades is mistaken.Roy Moore was a stinker of a candidate, but he still made it to the one yard line.

  5. Farmer Don says:

    Where will the economy be at the end of 2018
    too many variables for me:
    Reasons for crash:
    Personal debt rising starting to cause problems. Credit card debt up/Car loan defaults up
    US debt rising.
    US balance of trade continuing
    Fed says it will quit increasing QE & may raise interest rates.
    China and bricks completing parallel monetary trade and movement systems to stop US financial monopoly. Ie chinese SWIFT replacement system, Chinese credit cards, Russian increasing gold holdings compared to US$
    Rents and housing most expensive compared to wages ever.
    US health care costs rising
    Reasons for good times
    Central banks printing money and buying stocks.
    Tax laws brings money back to US (more stock buybacks)
    US debt ceiling seems to be an illusion
    Trump great spokesman for business
    Trump may use new tools to fight recession (helicopter money etc.)
    Trump says he likes cheap US$
    Momentum of stock markets
    Trump has started no new wars. Military $$ stay mostly inside the USA
    Trump gets huge infrastructure bill passed
    Wild cards
    Crypto currencies?
    Interest rates?
    Job outsourcing or coming back to USA?
    Economic Black Swan from outside USA

  6. I tend to agree that the economy is due for a crash to the limited degree I read economics news and opinion (I used to be much more interested but after forty years of waiting for the “Big Depression” which hasn’t come, I’ve become tired.) But hoping it will happen in the next year is clearly speculative.
    Bottom line is Democrats have no plan for 2018 – and therefore are likely to lose big again.

  7. kao_hsien_chih says:

    Of all the components of the tax bill (many of which are problematic–but that’s mostly b/c it’s a tax bill, not necessarily for ideological reasons), I thought putting a lot of tax onus on wealthy bicoastals was a stroke of genius. Having said that, things are looking in a lot of mixed directions: many people are uneasy for all sorts of reasons about Trump, but the bottom line (esp on economic matters) does not look too bad, to say the least.
    In many ways, actually, the overall situation looks like Bill Clinton 2.0: people had all sorts of issues with WJC–Democrats were uneasy with him and Republicans absolutely hated him. But things were looking OK or better in general and voters weren’t going to punish him for nothing that was particularly off track. I see the Democrats trying some of the same tricks. Maybe even all the way to impeachment. Unless things come apart at the seams very visibly, none of them will stick on DJT.

  8. Greco says:

    Perhaps Democrats have reason to be cautiously optimistic, if not assured of themselves.
    They have been aided no less by Trump’s former strategist. The self-proclaimed Leninist, Mr.Bannon, has stuck his little dagger into the president. I don’t know what mindlessness propelled him to sit for hours with Mr. Wolffe on record and mercilessly attack the president and his family. It’s possible Wolffe is playing loose with Bannon’s words, but it doesn’t appear that Bannon himself can recall with any certainty that he didn’t say what has been attributed to him.
    I assume Bannon’s inner Machiavelli figured he would be quoted anonymously as a “White House source.” Serves him right to be exposed like this, but he has caused untold damage to a movement he has both helped to propel and control, not to mention having forced Trump into unneeded damage control just at a time when he was getting into the swing of things and was beginning to turn the table on his enemies.
    At least we now know why McMaster astutely decided to get rid of Bannon from the NSC and why Kelly had him fired. Bannon was not only a leaker, he would privately disparage anyone who attempted to stand in the way of his influence, including the president. I just hope Trump is now better served by those around him now, but that doesn’t strike me being necessarily so.

  9. blowback says:

    The Washington Post rather surprised me when I came across this recent article:
    There’s still little evidence that Russia’s 2016 social media efforts did much of anything
    Some in the comments section have difficulty believing the story.

  10. Jack says:

    The stock market and financial asset prices in general drive perceptions of the strength of the economy. As long as financial assets prices remain in melt-up mode it will benefit the incumbents. While the Fed and the other major central banks are slowly reducing liquidity by either reducing the rate of growth of their balance sheet or reducing it outright as in the case of the Fed, there’s no knowing when speculation peaks. The one thing that bulls should watch is the flattening of the yield curve.

  11. turcopolier says:

    All that is true but as a supply sider I am inclined to think that this is nothing like a bubble. pl

  12. turcopolier says:

    Bannon is an ego mad hubris driven freak. pl

  13. Jack says:

    Alan Greenspan famously quipped that a bubble can only be recognized after it bursts.
    As you note reducing regulatory burdens and reducing taxes stimulates the economy. So we can expect improved economic performance.
    Financial asset prices however, don’t necessarily need an improving economy. What it needs is the perception that asset prices will increase prospectively. We have seen asset prices rise substantially after the GFC even with the weakest economic recovery since WW II. A partial explanation is the growth in liquidity by expansion of central bank balance sheets and the perception that central banks can always reflate asset prices.
    The major central banks now are either contracting their balance sheet or reducing the growth rate. Increased economic activity also puts pressure on interest rates and businesses use more capital for economic activity than financial engineering. These factors will apply brakes on financial speculation. When psychology changes the smart money will start reducing exposure. What we don’t know is when psychology changes and when asset prices correct.

  14. VietnamVet says:

    Your ability to see through and clarify the opaque is amazing. If the economy stays the course and if Deplorables’ lives get better; yes, Donald Trump will have seven more years in the White House. The bottom of the half full glass for Donald Trump is that he must avoid a war with Iran or North Korea, a cabal of globalists led by the richest man in the world, Jeff Bezos (owner of the Washington Post), is out to get him and his Secretary of State described him as a moron.

  15. Keith Harbaugh says:

    I wish you were right but believe you are wrong.
    1. The disastrous GOP showing in the November 2017 Virginia election.
    Not only did the GOP lose all the state-wide contests,
    but shockingly their control of the lower house of the VA legislature (the House of Delegates)
    was cut from 66-34 to 51-49 (with some ongoing uncertainty due to recounts, etc.).,_2017
    No one expected/predicted that, and it surely indicates a general dissatisfaction with the GOP brand.
    2. This poll:
    and similar polls.

  16. r whitman says:

    so is Trump.

  17. Matt says:
    George HW Bush was correct when he described Reagan’s Supply-side Trickle-Down economic policy as – “Voodoo Economics”
    Practically all of the gains in the economy for the last 40 years have gone to the top. It’s one of the reasons why Trump was able to appeal to the suffering working-class, much like Bernie Sanders did, to win the Presidency. Unfortunately for them, they got suckered by the flim-flam con-man in the WH.
    An unnecessary tax give-away to the already individually wealthy and rich corporations will do nothing to raise wages of working people, especially when the meager “tax-cut” for them expires and they are left holding the debt bag along with Republican Party calls to cut Social Security and Medicare.
    Republicans don’t give a shit about anything except their donor class.

  18. TV says:

    And a drinker.
    I don’t know him, but take a good look:
    Puffy face, veins in the nose, disheveled overall look.

  19. blue peacock says:

    Col. Lang
    The economy can continue to improve and do even better with the recent actions of Trump & the GOP in Congress. The stock market however need not continue to rise at the rate it has over the past years.
    You are correct that we don’t see public participation in a frenzy as we have at the tail end of other speculative cycles. Crypto-currencies are the only asset class with that type of frenzied activity and price acceleration. We do see however price distortions – like Euro-area junk bonds yielding less than US Treasury bonds – but that can continue for some time.

  20. Lemur says:

    the left is starting to burn out under the constant anticipation ‘once X happens, Gronald Grumph will be gone.’
    there’s also a systemic tension mounting between the thin line of WASPs and Jews holding off, excuse me, ‘representing’ the coalition of the ascendant. If those factions of the party base gain control, they’ll drive the Dems off the cliff (through alienating the whites the Dems still require to win elections). The agitprop the Dems are pushing through their sympathizers in the media regime are only serving to undermine them long term.

  21. Ed S. says:

    I too am perplexed by the expectations of the Democratic Party in the 2018 elections. Wasn’t it a mere 18 months ago that we were hearing not only of an overwhelming Presidential victory but also a likely takeover of the Senate and the remote possibility of the House as well?
    A few contributing thoughts:
    1) You can’t beat something with nothing. The Democratic Party believes that the populace so loathes DJT that they will turn out to vote them into power to do — well I’m not exactly sure WHAT they propose to do. The expectation of the “wave” is solely that they are not DJT. Maybe they take the Senate. But even in the best of circumstances, it’s a close race.
    2) Gerrymandered House districts. Several years ago I looked up the margin of victory in every Congressional race. Any race with less than a 5 percent spread between candidates was “competitive” (IOW one candidate received 48 percent and the other received 52 percent for a 4 percent spread). Roughly 40 races were “competitive”. Most districts are OVERWHELMINGLY drawn to favor one party or the other — to the degree that one party will receive 65,75, or even 80 percent of the vote. Loathing DJT doesn’t change that math
    3) Impeachment/25th amendment/etc. Not. Gonna. Happen. The popular media has been at Russia!! Russia!! Russia!! for 14 months but there is NO evidence of any collusion or interference.
    4) The economy isn’t going to crash anytime soon. The tax bill is HUGELY stimulative. Growth is accelerating. The stock market is at all time highs (maybe only matters to 20 percent — but they are all voters). If anything, the economy may be STRONGER in 8 months, not weaker. To me, it feels like 1996, not 1999. See, for example, Jeremy Grantham (—bracing-yourself-for-a-possible-near-term-melt-up.pdf?sfvrsn=4.
    5) Marginal voters matter and there has to be something to get them to go out of the house on Election Day. “We’re not Trump” isn’t going to do it. Yes, I’ve said it twice because as far as I can tell, it’s the only Democratic issue.
    6) Democratic bench strength. There isn’t any. They need to have appealing candidates and are taking the Jones victory in Alabama to be a sign of an impending sweep. But Jones ran against an amazingly unappealing candidate and barely squeaked out a victory. There are NO “young” Democrats in the places that matter for them to take the House.
    My apologies for the long comment, Colonel. I think your absolutely right and simply wanted to add a few personal thoughts

  22. elev8 says:

    That is something I really disagree with. But if the bubble bursts during the first half of this year or next year, it may still not damage Trump. It’s also not clear to me that any damage to Trump would automatically translate into political benefit for the Democrats to the degree they seem to hope for. There is historical precedent for a president not being lethally wounded by a massive stock market downturn on his watch. It’s from pretty far back in the past, though (Kennedy).

  23. TonyL says:

    It is a bubble. The market is way overvalued (up there in stratosphere so to speak). Now is the time to start rebalancing your portfolio more often.

  24. turcopolier says:

    Thanks. Our portfolio is well balanced and managed by Burke and Herbert Bank and Trust. nevertheless, I do not think the markets represent a bubble. pl

  25. David E. Solomon says:

    Amen to everything you said, but I might add that the Democrats (as well) “DON’T GIVE A SHIT ABOUT ANYTHING EXCEPT THEIR DONOR CLASS”.

  26. Huckleberry says:

    The J-left is trying to meme a “blue wave” into existence.
    White women will be the key to this effort, so watch for a lot of 2nd wave feminism culture war stuff.
    Trump, unfortunately, will likely react poorly to this, taking every piece of bait laid out for him.
    But so long as he adheres to an Immigration and Infrastructure campaign, this ought to be pretty straightforward.
    The Dems may indeed take the House but their chances of taking the Senate are very low this cycle.
    Joe Manchin will almost certainly be vaporized in West Virginia and there are many red state Democrats who are going to have to go against the party’s coastal owners when it comes to immigration.

  27. rjj says:

    sounds like received opinion — CorpsMedia’s version of How-Things-Are – possibly reinforced by a personal view from within some department. Everybody else is busy holding the world together and keeping things going locally – at the moment here in the East by the neighborly clearing of snow.

  28. outthere says:

    I wish you and other investors no ill, so please don’t misunderstand what I am saying here.
    What did you think was happening in 2008?
    Were you confident then as you are now?
    As for supply side economics, again I recommend reading David Stockman, he is the grandfather of that concept.
    And he NOT optimistic today.
    Here’s a taste of Stockman’s latest:
    Personally I own no stocks or bonds at all, but that is a personal decision, I make no recommendations.

  29. outthere says:

    more and better about Stockman
    David Stockman Takes Aim at the ‘Washington War Party’
    Longtime contrarian continues to be a fly in the establishment’s ointment.
    best of all his 2013 book,
    The Great Deformation: The Corruption of Capitalism in America, a scathing indictment of the twin scourges of crony capitalism and massive governmental debt.
    on WaPo and McCain and Trump in Syria:

  30. outthere says:

    just published today
    How did the war on Vietnam, the First Gulf War to save the Emir of Kuwait’s oil wealth, the futile 17-year occupation of Afghanistan, the destruction of Iraq, the double-cross of Khadafy after he gave up his nukes, the obliteration of much of civil society and economic life in Syria, the US-supplied Saudi genocide in Yemen and the Washington sponsored coup and civil war on Russia’s doorstep in Ukraine, to name just a few instances of Washington’s putative “world leadership”, have anything to do with preserving “order” on the planet?
    And exactly how did the “benefits” of these serial instigations of mayhem outweigh the “burdens” to America’s taxpayers – to say nothing of the terminal costs to the dead and maimed citizens in their millions who had the misfortune to be domiciled in these traumatized lands?
    Likewise, have the refugees who have been flushed out of Syria, Libya, Yemen, Iraq and elsewhere in the middle east by Washington’s wars done anything for the peace and stability of Europe, where Washington’s victims have desperately fled in their millions?
    . . .
    So when candidate Trump said the Iraq invasion was a stupid mistake, that Hillary’s war on Khadafy was misbegotten, that he would like to cooperate with Putin on pacifying Syria and that NATO was obsolete, he was actually calling into question the fundamental predicates of the American Imperium.
    And that gets us to the Russian threat bogeyman, the War Party’s risible demonization of Vladimir Putin and the cocked-up narrative about the Kremlin’s meddling in the 2016 election.
    . . .
    At the end of the day, we are supposed to believe that a country with a puny $1.3 trillion GDP, which is just 7% of the US’ $19.5 trillion GDP, and which consists largely of aged hydrocarbon provinces, endless wheat fields, modest industrial capacities and a stagnant Vodka-favoring workforce, is actually a threat to America’s security.
    And we are also supposed to fear the military capacity of a country that has no blue water Navy to speak of and no conventional airlift and air-attack capacity which could remotely threaten the New Jersey shores, and that spends less in a full year than the Pentagon consumes every 35 days.

  31. Valissa says:

    Great comment Ed! (#22)
    To your item 6 I add the following.
    The next generation of Democratic leaders is, um, nonexistent
    Retirements shine spotlight on GOP term limits for chairs
    The surprise retirements of several veteran Republicans are reigniting a debate about the GOP’s self-imposed term limits for committee chairs. Some argue that term limits create a brain drain in Congress, with the most experienced committee leaders more inclined to head for the exits once they’re done holding a gavel. But while many Republicans acknowledge the potential downsides to limiting chairmanships, they maintain that it’s far better than the alternative facing their Democratic colleagues: frustration about not being able to rise in the ranks.
    “You can certainly make the argument about keeping people around longer, about the value of institutional knowledge,” Rep. Tom Cole (R-Okla.), chairman of a House Appropriations subcommittee, told The Hill. “But the reality is, for most of our members, they’re willing to run those kinds of risks in order to have the potential for upward mobility.”
    … The term-limit policy, put in place by former Speaker Newt Gingrich (R-Ga.) in 1994, was designed to keep the party from growing stale by regularly injecting new blood and fresh ideas into the mix. The term limits have offered an opportunity for younger members to climb the leadership ladder far more quickly than if the rules weren’t in place. … Lawmakers can get a waiver from the rules, though they are rarely granted. The thinking is that if a chairman can’t achieve major policy goals within six years, then it’s time to let someone else give it a try.
    … Discontent has been brewing among rank-and-file Democrats, who have been unable to crack the leadership ranks and feel shut out of important decisionmaking. The frustration in the caucus, and concern about the future of the party, has only grown since last year’s Election Day drubbing. “If you don’t have term limits, people stay forever. That’s what you’re seeing on the Democratic side,” Mackowiak said. “They don’t give the young and up-and-coming members that same leadership opportunities. There’s nowhere to go.” There have been some past efforts by Democrats to impose term limits on committee leaders, but powerful groups like the Congressional Black Caucus (CBC) have remained opposed to the idea, arguing that seniority is the best way to ensure that their members can move up in the ranks.
    Looking at the deep structural problems the Dems have, it is clear they have some major reorganizing to do if they want to start winning elections. The Republicans actually have a 50 state plan. They appear to know how to strategize better than their opponents. That’s why they have so many governorships and majorities in so many state congresses.
    Can’t find the article just now, but another problem the Dems have is that the leadership refuses to listen to the red state democrats as to how to win more elections in red states. The arrogance combined with the ineffectiveness of thy Dem leadership never cease to amaze me.
    Howard Dean was right (though maybe not the right person for the job) but the party refused to listen to him. Just look at the people who have headed the Democratic party in recent years. In addition, the base has been rendered impotent by the top down authoritarian propagandist fashion by which the Democrat party runs itself now. [Note: I refuse to call them the Democratic party anymore because they aren’t.] After all, the Dems are just as much of the plutocratic oligarchy as the Repubs are.
    I wish I dared tell my friends (all liberal Dems) that if they took even 50% of the time & energy now spent on hating Trump and put that into improving their party or into volunteering for a cause they care about and can have some impact on, then they might be able to make the world a tiny bit better of a place. One friend did this on her own. She lives in Florida and decided to take up some local Dem issues like getting ex-felons the right to vote. She goes out in grass roots fashion and gets signatures, etc., despite having a 50+ hour a week job.

  32. turcopolier says:

    I am happy that you mean no ill will to me for being an investor. I have always been that while trying to emulate Robert Edward Lee who always required his wealthy wife to live on his army pay and still save money. We rode out the the great wall street disaster with steadfast hearts and would do so again. Do you have a treasure chest full of Golden Grickels buried somewhere? BTW Qathafy had no nuclear weapons program. What he had was a quiescent chemical weapons program with his two plants shut down and a warehouse or two full of still crated equipment that would have been useful in a nuke weapons program if the Libyans had known what to do with it. GWB Bush and his clowns built the image of that up, used him as an example of how well things could go if you surrendered to the US and then the US betrayed him. I loathed Qathafy. pl

  33. outthere says:

    My personal choice of “investments” is real estate. Not fancy trusts, just simple real property that I can see and take care of, and improve for the benefit of all. I am not comfortable with paper investments in the hands of others.
    Your suggestion about gold is interesting. I think it is a good “opportunity”, a good balance, but it is uncomfortable for me personally to hold, either under the mattress or in a safe deposit box.
    I am not into bitcoin or other crypto investments, maybe too old, maybe too untrusting. Some have done well lately but I do not go where I am uncomfortable.

  34. outthere says:

    I should say that my principal “investment” is my little farm,
    I raise fruit trees, also have a few sheep. It provides most of what I eat, and there is always something productive and enjoyable to comprehend and accomplish. It does not really “make money”, but I do sell through a farmers’ market, and it could provide more income if needed. I give away as much as I sell. Most important, it is a quiet peaceful refuge for family and friends, and for me.

  35. Croesus says:

    Baby boomers who have retirement assets in the stock market are aging into period when they must withdraw those funds. Retirement funds that were tax-advantaged when they went in carry a much larger tax bill upon withdrawal. Even if the market crashes in 2018, Required Minimum Distribution (RMD) is pegged to value on Dec 31, 2017.

  36. Croesus says:

    “The Democratic Party believes that the populace so loathes DJT that they will turn out to vote them into power to do — well I’m not exactly sure WHAT they propose to do.”
    An iconic placard from the Wimmen’s March declared, YES WE WILL, in bold pink on bolder pink.
    Yes we will WHAT, exactly?
    An appended FB post explains: “We will fight and prevail for our rights and equality.”
    The couple brandishing the placard have, between them, 16 years of university schooling in some of the nation’s finest, jobs/careers grossing in the mid-6 figures, own a million home, and share a nanny for their trophy child.
    The tragedy of that protest and the so-called Resistance movement is that it diverts energy from very real outrages occurring in, and executed by the Trump administration, particularly in foreign affairs.
    Which is precisely why the Women’s Protest march & its sequelae were organized.
    For all their education and supposed sophistication, the Yes We Will generation are dupes.

  37. Jack says:

    Yes, those who have to take money out of 401Ks will need to pay taxes. They can rollover the remaining proceeds back into financial assets.
    There are many factors that can reduce speculative activity but the biggest is investor psychology. As long as psychology is positive, market returns can beget more investment. IMO, there will enough evidence when there is a change in sentiment. As I noted in my 2018 forecast if asset prices correct 20% there will be enough media hysteria due to the many leveraged structures that central banks will be forced to attempt reflation. How financial assets perform after that happens will be instructive.

  38. Phil Cattar says:

    Ed S…………..Here are a few things you might want to ponder.I did vote for Trump but he did not win the election as much as Hillary lost it………..He won Mich,Wisc and Pa by 0.8 % or less in each state……….The Black vote was 11% less in 2016 as it was in2012.After having Obama on the last two presidential tickets there was nothing exciting or interesting about the 2016 ticket of 2 whites for the Blacks.It was anticlimactic……………….In all of her brilliance,Hillary picked a nondescript,Mid West transplant ex governor of Va to be her running mate.She just needed a smiling,White Male face to be on her ticket……………As you point out because of Gerrymandering the House may stay with the Repubs…………People do not just vote for their economic interests.That is what the book”What is the matter with Kansas” was about.I have seen this in the Evangelical South.Cultural,social and religious issues will trump economic concerns…………….You are right when you write you cant beat something with nothing.However if the next presidential election was being held in2018(and I know it is not) A ticket of Camila Harris and say a Joaquin Castro I believe would beat Trump and Spence.I would not vote for them but they would bring a lot of people of people who did not vote last time.Florida is getting hundred of thousands from PR along the I 4 corridor……….Hold On!!

  39. turcopolier says:

    I am too old to be a Boomer but I took care of all that long ago. pl

  40. Jack says:

    OTOH, the sharply increased issuance of T-bills in 2018 combined with a reduction in the Fed’s balance sheet means more high-grade collateral floating through the plumbing which people can lend, borrow, rehypothecate & so on. Jay Powell’s efforts to tweak the leverage ratio with the freeing up of balance sheet, combined with increased collateral flow imply financial conditions remain loose.

  41. Anna says:

    On a question of national security, it is educational to compare the pestering of Assange versus the calm silence and inactivity by the FBI/CIA’ brass re Clinton’s handling of sensitive information. Such as, “Huma Abedin directed Hillary’s immigrant D.C. maid, Marina Santos to print out classified “call sheets” and access other sensitive Clinton emails… Marina Santos, an immigrant from the Philippines does not have the security clearance required to access such sensitive information. Santos had access to everything while Hillary Clinton was Secretary of State including top secret, CIA-prepared daily presidential briefings.”
    Again, what was that fuss about the CrowdStrike’s sensational “discovery” of Russkies’ hacking? Where the FBI & CIA brass have been while the Awans family had unencumbered access to classified information stored on Congressional computers? Comey, Clapper, Mueller, Cabe, Morell, Hayden and such have been playing political cowboys (pampered & perfumed) instead of taking care of the US national security. Looks like dereliction of duty

  42. Laura says:

    I believe that he claims never to have done alcohol or drugs….of course, he seems to prevaricate a lot.
    He could have the same look because of very poor diet and exercise regime as well. He does not diet, eats tons of junk food and soda and believes that exercise (golf from a cart is not exercise) is bad for you.
    At least that is what I read….

  43. Laura says:

    Col—I meant to reply to TV! Sorry!

  44. NancyK says:

    I thought it was lemurs that dive off cliffs? I think Democrats will do well in 2018. I’m white and they aren’t alienating me.

  45. fanto says:

    The current frenzied attack on DJT about his mental status (Yale psychiatrists etc..) are IMHO a diversion from the growing realization that Russia gate is turning into DoJ/FBI-gate –

  46. Croesus says:

    It is as difficult to find trustworthy advisors for financial matters as it is to find credible information on foreign affairs. SST is an important trustworthy source for the latter, and the institution mentioned at #25, coming from that same credible source, invites further research.
    It’s a shame there’s not a more efficient way to transfer assets to our children pre-death; they can use funds more productively and entrepreneurially than an aging person would reasonably be willing to do.

  47. robt willmann says:

    The economic situation in the U.S. is seriously bad, but both Democrats and Republicans have allowed it to happen through changes in the law going back to the 1980’s.
    Those who have been around for a while will remember the junk bond era and the savings and loan industry collapse in the 1980’s. In the 1990’s, debt took the place of income to cover the stagnation of wages and rising prices (price inflation). The North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT), with its World Trade Organization (WTO), were both passed by Congress in the 1990’s without any amendments being allowed, through the “fast track” trick. They promoted destroying U.S. jobs and sending them overseas. Then came the repeal of the Glass-Steagall Act in 1999, which removed the protections about banking practices enacted into law after the Great Depression of 1929. The Democrats and Republicans combined to pass NAFTA and GATT and repeal the Glass-Steagall law, all signed by president Bill Clinton with Hillary in the White House.
    The savings of individuals were knowingly destroyed by the Not-Federal Reserve Bank through its control of interest rates nationwide, which it reduced to next to zero, and people could no longer earn worthwhile interest on certificates of deposit and savings accounts in banks (and still cannot), and had to spend their savings on daily living. But, with the low interest rate, the cash-strapped people could borrow against the “equity” in their home through a “home equity loan” and its vicious companion, the “reverse mortage”. Credit card companies and associated banks could get financing for next to no cost from the low Federal Reserve interest rates and loan it to the unwashed masses through their “credit” cards at 18-20+ percent interest. The federal government “guaranteed” student loans made by lenders to college students, and the students left college with a large ball and chain clamped to their leg in the form of student loan debt.
    The City of Hartford, Connecticut has been on the way to bankruptcy and had to be helped by the legislature–
    The State of Illinois is effectively bankrupt, and had unpaid invoices and bills on 8 November 2017 in the amount of $16.7 billion. So the Illinois legislature authorized $6.5 billion in new debt to help pay the unpaid bills. As of 6 January 2018 (today), Illinois still has $8.75 billion in bills it has not paid–
    The level of government, corporate, and individual debt is astronomical and outrageous. And large companies on a public stock exchange are borrowing money to buy back some of their own shares of stock.
    But the gorilla in the room is underfunded pensions.
    Around a year ago, the Dallas, Texas police and firefighters retirement fund got into financial trouble, and some employees bailed out, retired early, and took a lump sum rather than relying on getting a monthly check in the future.
    Then, the City of Houston, the energy capital of the U.S.A., showed $8.1 billion in “currently unfunded pension obligations”. The Texas legislature, in its 2017 session, helped Houston by authorizing $1 billion in “pension obligation bonds” (new debt) to try to shore up the city’s retirement system. The Houston mayor wrote an open letter entitled “Pension Reform — The Path Forward”. Although its language is quite amusing, the situation is actually pathetic–
    The Democratic Party would do well to not wish for a worsening economy, thinking it will provide political advantage; the economic situation is much too fragile. The Republican Party should be very careful about its economic promises.
    The “middle class” in the U.S. as previously known is gone. There is still a spirit around for a better standard of living without debt slavery.
    We will see what happens.

  48. LeaNder says:

    White women will be the key to this effort, so watch for a lot of 2nd wave feminism culture war stuff.
    Well, Huckleberry, Karlin, whose comment on Russian versus US elections is indeed interesting, had a more general article on women and/or their votes:
    Why did you feel you had to separate white women from the brown or beige? Were exactly would you fit in Asian women?

  49. turcopolier says:

    I should mention that we are minor stockholders in this small, conservatively managed, privately held bank. I should also say that for purposes of analysis the US is for me just another country. I apply the same standards to everything. pl

  50. Babak Makkinejad says:

    “cultural, social, and religious issues will trump economic concerns…”, which is the reason that Fortress West’s Cold War against Iran, suffused with anti-religion sentiment, will never succeed.

  51. rjj says:

    Robt Willman @ 49. Reminder: our debt serfdom has been entirely voluntary.

  52. Barbara Ann says:

    Lemmings are the famous cliff jumpers. Lemurs are cute monkey-like creatures from Madagascar & not, to my knowledge, renowned for their suicidal tendencies.

  53. blue peacock says:


    The Democrats and Republicans combined to pass NAFTA and GATT and repeal the Glass-Steagall law, all signed by president Bill Clinton with Hillary in the White House.

    This is important to note. At the heart of matter both parties have in a bi-partisan manner voluntarily shipped the US industrial base overseas and Democrat president’s, Clinton & Obama have been instrumental in the financialization of the economy. Obama had a huge opportunity to right the ship when he came into office on the back of the GFC but he did everything to backstop Wall St including Holder’s “Too Important to Prosecute” policy. But the vast majority of Americans still see politics in a purely partisan lens. They continue to vote massively for the duopoly. It would seem the real problem is the American electorate.
    Your point on pension under-funding is important. Most pension funds assume a 6-8% annual return. With rates pinned to the floor these funds have to move out on the risk curve. Additionally these high rates of return assumption mean the pensions don’t have to be funded fully compared to if their return assumption was lowered. This is part and parcel of the open deceit that we see across all elements of our society. Those reliant on future pension claims can’t act surprised when the pension crisis hits with full force. They can force changes but they choose to live in lala-land.
    The growth of non-financial debt in the US continues on with huge increases in auto and student loans with rising delinquency rates. Then there is the huge growth in corporate and government debt. The reality is that massive debt growth is global. China has more than quadrupled it’s banking assets since the GFC and there’s no knowing how big the shadow banking sector has become. The leverage in the Chinese economy is unprecedented. Consumer debt in Denmark & Holland is larger than the US on a per capita basis. Japan is on another scale altogether with the BoJ holding over 40% of all JGBs.
    Low global rates and loose financial conditions for a decade with rising asset prices have now built in a bias of many leveraged speculative vehicles. This means that central banks cannot exit from asset price support. In fact the central banks have taken on a new mandate to insure financial assets. We are in unchartered waters as there is no prior experience with such a policy. In the mean time since there is so much momentum, investors have to follow Chuck Prince’s maxim of dancing until the music stops.

  54. shepherd says:

    As I’ve said here before, those ads do not seem to have been intended to influence the election. And it would be nearly impossible to attribute any changes in voting or voting patterns to them. At best you’d get some modest correlation but never causation. So the absence of evidence really means nothing, since there would never be evidence of such a thing anyway.
    The person writing the article is at the very least woefully ignorant of how influence campaigns work (or deliberately deceptive). He starts from the wrong premise and makes all kinds of incorrect assumptions, like that in order to influence an election in Wisconsin, you need to locally target ads in Wisconsin. And that every ad you send to Maryland is only seen by people in Maryland. It’s really about getting the ear of influencers, who amplify your message. One retweet by Trump from DC is a lot more important in Wisconsin than a similar RT from the mayor of Madison. A lot of the people doing the important political sharing in the US happen to live in Maryland, so it’s a good idea to target there, regardless of where you’d like to change votes or influence thinking.

  55. NancyK says:

    Of course you are right. Lemurs are very cute. I even took my grandsons to a lemurs rescue at Duke last year.

  56. Jack says:

    We have gone from $150 trillion (in global debt) in 2007 to $220 trillion and counting today.

    Leverage doesn’t matter until the margin call arrives. Loose financial conditions allow debt to be refinanced at better terms. Chinese banks are in perpetual debt rollover with some of their industrial and real estate loans. If you look at some of the recent leveraged CLO deals and the cov lite financings it is like 2008 never happened.
    There is no doubt some of these leveraged structures will blow up when asset markets take it on the chin.

  57. turcopolier says:

    I see … The markets have gone way up so … because Trump is an ass it must be a bubble, right? pl

  58. blue peacock says:

    Col. Lang,
    The chart shows that from the moment that Trump was declared the winner in the election, the US stock markets have risen significantly. Clearly the financial markets were not spooked by Trump as POTUS. In fact they have celebrated since his electoral victory. Contrary to all the NeverTrumpers who believe he is at best semi-literate and unfit to hold office.
    The word “bubble” is used a lot without anyone stating what their definition is. The one thing Tulipmania, the 2000 dotcom and 2008 mortgage credit environments had in common was frenzied public participation in the speculation. Economic historian Charles Kindleberger’s book, Manias, Panics & Crashes is still the gold standard in getting a sense of past manias. Kindleberger was a leading architect of the Marshall Plan.

  59. turcopolier says:

    blue peacock
    I don’t see frenzied public participation in this as yet. BTW if you really want to piss me off just talk down to me. pl

  60. TonyL says:

    blue peacock,
    “Clearly the financial markets were not spooked by Trump as POTUS. In fact they have celebrated since his electoral victory. Contrary to all the NeverTrumpers who believe he is at best semi-literate and unfit to hold office.”
    IMO you are a Trumper who is trying too hard. The financial market celebrated because they have a ruthless caplitalist conman in the office, not because they think he is fit to be POTUS. They knew Trump will enact policies that make benefit them, not the middle class or the poor. As simple as that.

  61. turcopolier says:

    james suffers from USDS and you from TDS. You desciption of him as a “con-man” is revealing. You are not thinking rationally about him. All presidents are to some extent “con-men.” They have to persuade the cats to move in a particular direction. You may not like the tax law, the de-regulation and the rest but that does not make him a con-man any more than the rest. pl

  62. TonyL says:

    Yes I know, I sound like I have TDS 🙂 All presidents are con-men to certain degree (Bill Clinton and Obama are the best of that con game). However, somebody got to remind people from time to time that DJT is not playing 3-D chess! what we see is what we get.

  63. turcopolier says:

    The man’s style is an abomination, but that is not enough reason to persecute him in the media four four years. pl

  64. Babak Makkinejad says:

    DJT is delivering on his promises to those who elected him. I think one may wish to consider why tens of millions of people in US have such funny notions about USA, the world, and themselves.

  65. turcopolier says:

    Which funny ideas are you speaking of? pl

  66. Babak Makkinejad says:

    Building a wall against Mexicans, for example. Moving US Embassy to Jerusalem, is another one.

  67. turcopolier says:

    Effective barrier systems retard movement. pl

  68. Fred says:

    I recognize a pattern here: Houston, Dallas what party are the mayors and what power do public employee unions have? How about Illinois and Connecticut?
    “The City of Hartford, Connecticut has been on the way to bankruptcy and had to be helped by the legislature…”
    No, they did not have to be bailed out any more than the bankrupt city of Detroit. That city decided immediatily after emeging from bankruptcy protection that they had to give the Ilitch family $186 million in tax credits to build a hockey arena. Same party, same conduct.

  69. blue peacock says:


    IMO you are a Trumper who is trying too hard.

    No, I don’t need to try hard at all, since those with TDS are already apoplectic. As a fundamental policy I never vote for the duopoly. I do like to rib those with TDS however, who abound in my mostly “coastal liberal” work & social circle. Where we disagree is their haughty & condescending attitude towards the Deplorables who can’t see the “wisdom” that their PC thought represents. It is precisely Trump’s non-PC style that many of those that voted for him like. And it is that style that drives those with TDS bananas.

    They knew Trump will enact policies that make benefit them…

    You must know that a POTUS cannot enact legislation. Please inform us which Congress & POTUS enacted legislation that benefited the “middle class or the poor”?
    It is conventional wisdom that financial markets discount the future. Their discounting of the future under a Trump presidency is rather rosy in light of how the stock market has performed since his electoral win was announced. In retrospect, it would have been wise to have disregarded the media hysteria of a collapse under a Trump presidency and backed up the truck to buy. Something that those with TDS have a hard time reconciling.
    BTW, which POTUS signed legislation that a) allowed the US industrial base to be shipped overseas; b) backstopped Wall St after the GFC & chose to not to prosecute any fraudulent activity? Two important economic policies in the recent past that have impacted the middle class & the poor rather negatively.

  70. outthere says:

    I am concerned about debt and banks and government.
    One of the best writers on this subject is Ellen Brown.
    She combines the practical with the theoretical.
    She has written about government debt, about student debt, and she advocates for public banks on the model of North Dakota’s success.
    Her website is here:
    And here is a recent piece on student debt:

  71. Valissa says:

    While surfing the net I came across this fascinating mini-lecture on game theory over at Big Think.
    How to Outfox Someone Who’s Smarter Than You (<4 min.)
    If you want to win, it’s best to think crazy like a fox. Nobody knows this better than Kevin Zollman — a nationally recognized expert in game theory and associate professor of philosophy at Carnegie Mellon University — who suggests that perhaps the best way to get ahead of your opponent is to think completely counterintuitively. This works especially well in poker, where breaking the flow (say, bluffing when you have nothing) can keep your foes from guessing your next move. A little dose of crazy goes a long way.
    I think Trumps “mini max strategy” is at least partly based on keeping as many promises to his base as he can.
    Please note this game theory discussion has nothing to do with politics. It’s rather abstract and is assuming a zero sum game scenario, which politics is generally not. And the concept of “opponent” here is also simplistic when applied to politics and bureaucracy. Nonetheless, in context of trying to discern and interpret Trump’s behavior and strategies the key points made in this video are worth considering.

  72. Babak Makkinejad says:

    Curbing the apetite for drugs in USA would help Mexico, lowering the numbers of migrants.

  73. different clue says:

    (Reply to comment 36)
    I find farming/agronomy/applied botany interesting to read about and think about. The distant-closest I come to any of it is my little 250 square feet of garden space.
    In a way, gardening and agronomy books etc. is my science fiction . . . my literature of escape. I know more about the literature of gardening and agronomy than I know about the actual practice.
    All that is a cautionary disclaimer to what I am about to write about some possibly very interesting books. Right now ( month of January) Acres USA is running a worthwhile sale of some good books through its Acres USA bookstore. They are selling all the collected papers of William Albrecht they have published ( plus a William Albrecht lecture on DVD) for $190 whereas they would amount to $270 if bought separately.
    Another good one is Mycorrhizal Planet by Michael Phillips, a professional orchardist. The website makes it look like it is selling at full price, which is not a special bargain. But the “book store section” in my January issue of the Acres USA magazine makes it look like it is still available at a substantial discount. I plan to try understanding and then applying some of the information in Mycorrhizal Planet in my own small gardening.
    Here is a little description of William Albrecht’s legacy and work, with some links to papers, in case you feel like reading it and/or them in order to decide whether you think Albrecht might be worth your time, money and attention.

  74. ISL says:

    Babak, comment 75: How about something really inexpensive like enforcing labor laws about workers being legal.
    Absent that, a wall does nothing except fatten some well connected contractors and raise the cost of hiring illegals.
    Supply and demand.
    Domestic marijuana undercuts the Mexican cartels, is popular among even a majority of Republicans, and would work better than a wall – Sessions seems not to be a free marketer, though.

  75. different clue says:

    (reply to comment 77 ),
    I understand Sessions as being a culture warfighter. His opposition to legal marijuana is a holy culture-war mission to him. He may enrage people into voting Democratic who would otherwise not have.

  76. outthere says:

    Yes thanks.
    For me the journey began with Sir Albert Howard’s famous book, An Agricultural Testament
    Then came F H King, Farmers of Forty Centuries
    Also, The Soil
    And then came the Rodale publications
    But most important has been the people who know so much more than I ever will, like the dairy farmer I bought a couple jersey cows from 40 years ago: one son raised everything they ate, another son milked all the cows, and grandpa sat in his rocking chair in the calf barn with all the heifers.

  77. blue peacock says:

    You may be interested in this interview of Tim Bergin, a proprietary credit trader.
    He echoes what you have posted about the risks of leveraged entities blowing up if there is a “melt-up” in rates and as you said, on the other side, the increased availability of high quality collateral.
    At our firm we have been reducing leverage for over a year and are now completely flat, while scaling some of the credit spread trades in Europe.

  78. different clue says:

    Babak Makkinejad,
    (reply to comment 75)
    Full re-legalization of marijuana production within the US itself, as it was before the anti-marijuanitic legislation of the Prohibition Era of the 1930s, would curb the import of marijuana from Mexico down to zero, lowering the numbers of migrants.
    Actually, what would lower the numbers of migrants even more would be the Abolition of NAFTA and the Restoration of Sovereign Protectionism, both to America and to Mexico alike. Mexico could ban the dumping onto its market of alien corn from outside of Mexico, thereby giving the Mexican corn market back to the Mexican corn producer. That might do more than reduce the numbers of future NAFTAstinian refugees trying to come here. It might even lure some of the 10 million or so NAFTAstinian refugees currently living and working here to go back to Mexico.

  79. mathiasalexander says:

    The economy crashed in the 1980s and it never came back.

  80. mikee says:

    The markets have been going up since the fall of ’08. That was 9 years ago. On Main Street USA little has changed for the better since then. It has nothing to do with Trump being an asshole.

  81. TonyL says:

    I don’t know if I have TDS 🙂 If the fact, that I think DJT is unfit for office and is a con man, got me labeled TDS then I would be in great company (our own Colonel and TTG, respectively).
    As for the question “Please inform us which Congress & POTUS enacted legislation that benefited the “middle class or the poor”? May I remind you that we are talking about DJT. His taxcut is, beyond doubt, detrimental to the middle class and the poor.

  82. turcopolier says:

    “I think DJT is unfit for office and is a con man,” Come on! All you are doing is calling him names as part of the leftist campaign against him. pl

  83. turcopolier says:

    “little has changed for the better since then.” What’s the actual evidence for the truth of this propaganda statement? pl

  84. Fred says:

    So nothing got better during 8 years of Obama? And people wonder why Trump got elected.

  85. turcopolier says:

    Where, roughly, is your farm? I am fond of Jersey cows. I lived in southern Maine when in high school. A local dairyman named Shaw had a herd of Jerseys as big as ships. His farm produced the most wonderful ice cream I have ever tasted. pl

  86. Babak Makkinejad says:

    Another silly argument.
    So, according to you, all those people in the United States prior to 1960, who considered a drug user to be a fiend, were misguided backward people?

  87. Babak Makkinejad says:

    I am inclined to agree with you; there used to be a lot of white-collar office jobs in Canada prior to NAFTA since the Canadian Law required the multinational companies to maintain local head-quarters in Canada.
    Put another way, you will create jobs through Law – such as in New Jersey or in Japan where self-service gas stations are illegal – or you have to agree to maintain to support a minimum income to every one indefinitely.
    I do not know the numbers now but 20 years ago, when EU was just 300 million souls, there were 30 million on dole (in Spain, millions were on dole but they also worked informally.)

  88. rjj says:

    Different Clue and Outthere —
    THANK YOU for Franklin Hiram King – his books and articles as well as the Albrecht papers are downloadable at links.
    Warkentin and Yong (Raymond N. Yong, Benno P. Warkentin) works are heavy-duty technical soil science — but very readable.

  89. TonyL says:

    I never consider myself a leftist! Gun to my head, I would say I am probably a liberal/libertarian in the old sense, never vote for Democrat or Republican candidates because of their party affiliation. FWIW, I do agree that the Democrats and the Borgs campaign against DJT is not good for the country (DJT is unfit for office, but the electorate has decided, so be it).

  90. blue peacock says:

    May I remind you that we are talking about DJT.

    Can’t answer the question, eh?? Yeah, it is only DJT you wanna piss on. Not your partisan messiahs Bill & Barack.

  91. mikee says:

    Look at the December 2017 jobs report.

  92. mikee says:

    In reply to Fred@#87
    This is why Trump got elected:
    Michael Moore: Trump’s election is going to be the biggest “F—ck You” ever recorded in human history…and it will feel good.

  93. mikee says:

    In reply to #92
    TonyL: DJT is unfit for office, yada yada yada
    FYI: Trump passed the fitness test. Hell Tony, even you or I can be President. Don’t ever forget that.

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