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March 23, 2018 | Begging

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

So stock markets laid an egg again Friday. They’ve rolled back to last-November levels. The S&P just had the worst week in two years. The Dow, too. Bay Street has shed 6% this year. Investors finished the week looking for tables to crawl under. Bonds went up. Gold, too. Volatility spiked.

Thank goodness for those with a balanced portfolio. Stock cowboys? They’re getting gelded. With bolt cutters.

What’s going on? Well, here are the major ingredients of the current mayhem. See if you can connect the dots.

  • President Trump, against advice, announces steep tariffs on imported steel and aluminum. Experts warn this will save no US jobs and raise consumer prices, hurting the economy. He ignores them.
  • President Trump announces surprise tariffs on $50 billion worth of Chinese goods. Business leaders warn this will raise prices, inflame a major trading partner and raise consumer prices. He does it anyway.
  • President Trump is warned by world leaders, including those in Europe, that he threatens inciting a global trade war which will impale growth and hurt everybody. He Tweets “trade wars are good, and easy to win.”
  • President Trump’s moves against China are met with retaliatory actions as that country’s leaders say they will impose their own tariffs, boycott US goods and possibly stop buying US debt, upon which the American government relies.
  • President Trump’s 2016 election campaign, it is revealed, used vote-swaying data from a company that Hoovered 50 million personal accounts on Facebook. People are outraged. Facebook stock is hammered for a $50 billion loss. The tech sector tanks. The Nasdaq loses over 7% in a week.
  • President Trump fires his august, respected and leveling Secretary of States, Rex Tillerson, in a Tweet. The ex-oil executive leaves town in shock.
  • President Trump fires his national security advisor, Gen. H.R. McMaster.
  • President Trump fires the deputy FBI director two days before he is set to retire. Trump is also rumoured to be ready to fire Robert Mueller, heading the Russia probe, igniting a Congressional crisis.
  • President Trump calls Russian leader Vlad Putin to offer personal congratulations on having won an election during which the main rival was arrested, then banned, and in which evidence of vote-stuffing was widespread. His advisors strenuously ask that the president not do this. He ignores them.
  • President Trump makes it clear he’s not going to honour the Iran nuclear deal, and likely reinstate heavy sanctions, including shutting off Iranian oil exports. Crude prices spiral higher as a result, increasing costs of businesses and consumers, helping drive stocks lower.
  • President Trump’s serial infidelity to his wife, Melania, is displayed in nationally-televised interviews with a former Playboy bunny and cinematic porn star who offer evidence of lengthy affairs while he was married. Trump’s lawyer paid one of them money not to talk. The other says the man offered her cash for sex on their first date. She cried. The news trends wildly.

A Horror Week for the Dow,” the Bloomberg headline Friday night read, “has Investors Begging for Trump Respite.” Of course, you can add in rising interest rates. The Fed raised its benchmark Wednesday and indicated there are five to seven more increases coming in the next two dozen months – thanks in large part to the Trump-fueled stock rally and the Trump-created tax cuts.

Trump, Trump and more Trump. All Trump all the time. Observers now worry there are no adults left in the White House, with a quixotic prez randomly firing key figures responsible for national policy with global implications. The trade war this week was the last straw. Protectionism, barriers and walls lead to nationalism, tribalism and jingoism. They choke off the free flow of capital, making everything more expensive, less efficient and lowering the global standard of living. It’s what turned a financial event (a stock market crash in 1929) into an economic disaster (the Depression).

Moreover, Trump’s tax cuts – celebrated by investors who foresaw romping corporate profits as a result – are not coming with spending cuts to match the revenue loss. Economists say flatly deficits will grow like weeds and the federal debt explode. If China is no longer willing to buy US bonds – since Trump is jamming tariffs up its wazoo – guess who loses?

When elected, Trump stood for politics unusual, an end to the insiders club, a voice for the voiceless and a saviour of that dispirited throng – middle-aged, under-employed, pissed-off white dudes. In a world of rapid change and migrating jobs he said whoa to globalization, giving hope to the deplorables and savaging the elites. He made it okay to discriminate, disparage, bully and taunt. It was just fighting back. Supporters love him for common sense and overlook the ego and giant character flaws. Donald Trump is the improbable evidence that a TV-enhanced, bunny-philandering, property billionaire can stand for the downtrodden.

But he’s also proven – this week at least – to be the single most dangerous man on the planet.

Let’s hope Melania spanks him good.

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March 23rd, 2018

Posted In: The Greater Fool

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