Anecdotes from the Election 2016 battleground give us clues that a sea change might be coming, causing issues for stocks and bonds. And crony capitalists.
CLEVELAND, April 29, 2016 — The Maven is up in his old home town today and Saturday morning before hightailing it back down to Washington to catch a performance of Richard Wagner’s “Das Rheingold” by the Washington National Opera. This complicated one-acter is Wagner’s opening pitch for his epic Ring Cycle, being performed in DC for the first time in its entirety.
The Ring Cycle, based essentially on the legends that also inspired “The Lord of the Rings,” is the epic story of all-powerful gods who hubristically overstepped their own bounds leading to a rise in chaos and the ultimate destruction of their rule by mere mortals, more or less. You might wonder what any of this has to do with stocks and bonds, but stay with us here.
Sitting here in the room of a once-favorite bargain hotel that’s starting to get a bit seedy around the edges, the Maven did his usual quick morning surf through a number of reliably informative sites, some of them associated with PJ Media.
Simon attended and apparently took photos at an Orange County rally for Donald Trump, who’s headed out there to campaign for California’s rich catch of delegate votes. We’ve borrowed one of those photos for our header graphic today and are sure he won’t mind. Simon’s photo and others in his piece provide visual proof of great, growing and underestimated enthusiasm for The Donald. But Simon’s words tell us even more:
Cries of “USA! USA!” went up from the growing crowd at Orange County’s Pacific Amphitheater, where a Donald Trump event is being held more than an hour before the scheduled arrival of The Donald.
Reason: In different parts of the crowd, women had stood up with hand-written posters reading “Women for Trump,” “Latinas for Trump,” and, to the loudest cheers, “Black Christian Women for Trump.” (This is probably because — excuse my horrifying sexism — she was very good looking.
Prediction: We’re going to be seeing a lot more of such signs in the future as the campaign goes forward….
This is my third Trump event to witness in person (many more on TV) and it strikes me that they are becoming “happenings” for Middle America. They are unlike political events I have seen before. The most similar I have seen were rallies I attended for Bobby Kennedy years ago. RFK and Trump had and have a real charisma….
Normal candidates cannot compete with those rare charismatic leaders when they come along. That is why Cruz and Kasich could not compete with Trump, nor could the fourteen or fifteen others once on the stage with him. It is also why I predict he will defeat Hillary Clinton, who has the charisma of a dead turtle.
Whether that is good for democracy is another question, but it is a fact of human, not just American, life.
As I write this the amphitheater is just filling up to its 8,500-seat capacity. Untold thousands wait outside.
Elsewhere on PJ Media, in a column by one of America’s most astute yet little-known thinkers, Richard Fernandez of “Belmont Club,” who used to write under the pen name of “Wretchard,” has observations on the coming tragic and almost certain to be violent endgame coming in Venezuela.
In a column entitled “Death of a Nation,” Fernandez writes that the Venezuelan government is now importing mass quantities of freshly printed “bolivars”–that Communist ruined country’s “revolutionary” currency that’s now inflating at an estimate 700+ percent.
Hugo Chavez and his successor Nicolas Maduro, with money to back them, were able to embark on a lavish program of insanity. Chavez controlled prices, showered Cuba with aid and borrowed billions from China while simultaneously destroying the ability of businesses to operate. He believed there was an eternal stash on which he could lay his hands out to fund his programs. The needle of ruin exceeded “a lot” and went on to indicate “you wouldn’t believe.” When the smoke cleared there were shortages of everything and Venezuela’s finances were on the point of collapse.
To Chavez’s many dubious achievements Maduro added more. Today there is only enough power to work 2 days a week. For the rest of the week, people are confined to their unlighted homes when they are not wandering the streets in search of food to buy. “We can’t go on living like this,” a resident told CNN….
The prognosis is probably terminal. It’s telling that Maduro has blamed God for the “low water levels at Venezuela’s giant Guri dam”. The socialist government is in the classic stages of death. After years of denial it is now consumed by anger. It is now bargaining with — someone — over its fate. Such is their predicament that “the slightest amount of precipitation around the Guri can elicit effusive praise to God Almighty” from leftist officialdom….
The Venezuelan tragedy reminds us that because collapse happens “gradually then all of a sudden” a slow decline can mask the approach of the discontinuity. Suddenly, says Victor Davis Hanson, American public policy has forgotten all the lessons of World War 2. One fine day Saudi Arabia woke up broke. OPEC has unexpectedly become an association of beggars. And China turns out to be sitting on a financial bubble. By some poorly understood process the invisible line dividing the troublesome and unendurable, the recoverable and irrecoverable is crossed without anyone noticing. It appears to happen suddenly.
Fernandez sees signs of America’s potential decline and fall in the same Trump candidacy that Simon describes in his own article. Both of them could be right, each in his own way. But it’s also possible that they are wrong.
As Glenn Reynolds has often noted, “If something can’t go on, it won’t.” What can’t go on here is the Decline and Fall of America as directed by the Marquis de Obama. What we are witnessing in the growing Trump phenomenon is a last-ditch attempt by an increasing mass of salt-of-the-earth Flyover Country citizens from both parties (ignored by statisticians and the media) who simply want to blow up the Washington monster, at least metaphorically.
The money game has been going on, but they see that they were long ago cashed out, and they’ve had it. Trump, as we’ve noted before, is the Destructor that the elites have unwittingly chosen, and more and more people are flocking to him.
And that includes black and Hispanic American citizens who see the danger to their jobs and their very lives posed by the tsunami of illegal aliens entering the U.S. every day. These working class Americans know very well whose jobs will be the first to go, though they rarely voice this in public for fear of reprisal. But many of them have voiced such sentiments privately to the Maven.
Even a growing number of conservatives are coalescing around Trump for precisely the same reason. They know full well that Trump is no conservative. But they also know that under two full terms of Barack Obama’s destructive presidency, that America has arrived at the brink of social and economic ruin. So they, too, are now wagering that blowing the whole thing up with The Donald will enable honest Americans to rebuild the national edifice in a rational, functional fashion.
Real Americans are longing to crawl out of the Galt’s Gulch where they’ve been hiding in order to make a great nation once again. Nobody really knows what Trump will do. But they know in their hearts that we probably need to start all over again. Whether Trump is really the guy to do it, no one really knows. But as folks have learned from TV’s “The Apprentice,” Trump is happy to fire people who can’t get with the plan. And that’s what they want to see.
Coming back to the money thing, the Maven is strongly beginning to believe that the dawning realization that Trump’s groundswell candidacy as a viable one is starting to make Wall Street’s crony capitalists more than a bit nervous. Ironically, they’ve all prospered under and administration that is happy to scoop up their
bribes campaign contributions even while denouncing them publicly.
None of those denunciations have ever cost these fat cats their jobs or their crony capitalist government contracts. Why shouldn’t they want this kind of regime to continue? But now, perhaps, it will not.
We’re nearly at Sell in May time and, for all its ups and downs lately, the market is overbought and very, very nervous. That’s not only because companies are no longer growing (they’ve wasted their seed corn on government and taxpayer funded stock buybacks, not R&D). It’s also due to the extreme market uncertainty that could result from a Trump presidency which, barring GOP establishment shenanigans in Cleveland this summer, could very well happen as working class Americans finally say good riddance to the crony capitalist Democrats (and unions) that have cost them their jobs.
We’ll have more to say on this, but since we’re on semi-holiday right now, it’s time to go. But let’s watch and see what the political season brings to Wall Street as this year progresses.
Today’s trading tips
We haven’t the time to adequately research any bright new ideas while we’re on the road. But again, we’d advise this market is toppy, though opportunities may exist still in oil and commodities, and beleaguered biotechs like Gilead (symbol: GILD) are attempting to rise from the dead with possibly much more to come.
We’ll be back with specifics Sunday or Monday. Meanwhile, Wall Street averages have opened down Friday morning as we suspected they would. While we won’t predict a close, things have been wobbly all week, so we’re not expecting much, save for Amazon (AMZN), which reported great numbers that are helping techs catch a bid this morning.
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