WASHINGTON. In a recent column, I hinted that the Deep State has formulated its Election 2020 #NeverTrump endgame. Having stepped out into the open under the Obama presidency after decades of subterfuge and underground activity, the wealthy and powerful pro-faux-socialist Deep Staters just went public with their latest Destroy Trump strategy via an astonishing Bloomberg op-ed penned by none other than former Federal Reserve official Bill Dudley. Dudley openly and seditiously suggested that the “independent” Deep State run Federal Reserve wreck the US economy in 2020, the better to defenestrate Trump from the White House in next year’s election.
Another Deep State coup attempt?
Via ZeroHedge, Michael Every of Rabobank provides the astonishingly brazen details of this brand new potential coup attempt. (Italics and bolding via ZeroHedge.)
“And in ‘Stranger Things 3’ yesterday former Fed member Dudley made a public missive via the Bloomberg opinion page titled ‘The Fed Shouldn’t Enable Donald Trump.’ This argues that ‘…trade war with China keeps undermining the confidence of businesses and consumers, worsening the economic outlook. This manufactured disaster-in-the-making presents the Federal Reserve with a dilemma: Should it mitigate the damage by providing offsetting stimulus, or refuse to play along? If the ultimate goal is a healthy economy, the Fed should seriously consider the latter approach.
Dudley, Fed to sink Trump beneath economic jampile?
“‘Such a harder line could benefit the Fed and the economy in three ways. First, it would discourage further escalation of the trade war, by increasing the costs to the Trump administration. Second, it would reassert the Fed’s independence by distancing it from the administration’s policies. Third, it would conserve much-needed ammunition, allowing the Fed to avoid further interest-rate cuts at a time when rates are already very low by historical standards…’
“‘I understand and support Fed officials’ desire to remain apolitical. But Trump’s ongoing attacks on Powell and on the institution have made that untenable. Central bank officials face a choice: enable the Trump administration to continue down a disastrous path of trade war escalation, or send a clear signal that if the administration does so, the president, not the Fed, will bear the risks — including the risk of losing the next election.’”
“The implications here are simply staggering. We have a former Fed official lobbying sitting Fed officials to deliberately damage the economy and move away from their stated mandate in order to either force a policy change from an elected president, or to force that president out of office!”
Turning a fake recession meme into the truth via media amplification?
Having failed with the clearly seditious Russia Collusion Hoax. Having fumbled the Mueller-Weissmann “obstruction of justice” fabrication game in the House. And having badly overplayed its hand in the ra**st-White Sup**macy smear against a majority of American voters, the Deep State has decided to jump the shark and initiate its fiscal Final Solution: Engineering a 2020 recession. And the outrageous remarks of Bill Dudley are the initial tell.
Since a full-fledged recession will inflict major damage on a majority of regular Americans, that, the Deep State figures, will finally defenestrate Trump in next year’s election. Seems the Deep State and Dudley favor putting any compliant Communist in the White House for the next 8 years. They want to complete Barack Obama’s plan to
destroy fundamentally transform the America we know and love.
CNBC piled on to this increasingly hysterical Trump Recession meme Tuesday with the following fun but perhaps misleading factoids.
“The closely watched spread between the 10-year Treasury yield and the 2-year rate briefly fell to negative 6 basis points Wednesday. The move extended losses from the previous session when the spread registered its lowest level since 2007.
“A 10-year rate below the 2-year yield is viewed by fixed income traders as an important recession prognosticator, marking an unusual phenomenon as bondholders receive better compensation in the short term. Meanwhile, the U.S. 30-year Treasury yield fell to a new record low on Wednesday.”
Re: Yield curve inversion: Sanity may yet prevail
On the other hand, the same CNBC article provided this bit of counter-perspective.
“…MRB Partners strategist Prajakta Bhide thinks recessionary fears may be overblown.
“‘The yield curve’s inversion this year is a symptom of external growth stress and powerful distortions in global bond yields and does not reflect restrictive Fed policy,’ he said in a note. “Thus, it does not warrant a bearish economic interpretation.
“‘Even if the inverted yield curve captures investor’s uncertainty about worsening global growth … a balanced perspective would still suggest that the odds of a recession in the next 12 months are no higher than 20%,’ Bhide added.”
In other words, there’s other weird stuff going on here despite the look and feel thrown off by the yield-curve inversion. We’ll wait and see how this works out. But this economic goose is not yet cooked.
And how’s Wall Street faring this pre-Labor Day Friday?
We started writing this article on Wednesday, August 28. But a topsy-turvy Wall Street kept messing with the conclusions we were attempting to draw.
Now it’s Friday, half an hour past noon ET. After two surprisingly strong days, stocks seem hell-bent on turning in a mixed performance before the long Labor Day weekend. The Dow Jones Industrials are up approximately 35 points at the moment. But they’ve played the yo-yo game all morning. Ditto the broader-based S&P 500, which hugs the flatline – 0.00 – at the moment, after spending most of the day slightly in the red.
The tech-heavy NASDAQ on the other hand has consistently remained in the red-zone thus far, off 25+ points at the moment. Not a problem, yet. Considering this average rallied pretty hard on Wednesday and Thursday.
Bottom line: We’re seeing iffy action today, as many investors don’t want to take chances over a long holiday weekend where anything can happen. And right now, investors believe that “anything” they can think of would be bad. So why risk new positions.
Headline risk grows by an order of magnitude over a long holiday weekend
But when the market reopens Tuesday, God alone knows what scare headlines the networks will treat us to next. With the Russia Collusion narrative finally in full-failure mode (despite MSNBC’s abortive attempt this week to revive it). With the Mueller Report’s Obstruction of Justice Caper fizzling. And with the brand new Trump Recession (fake) news off to a flying start, the temptation is there to go whole-hog on this non-story over the weekend and into next week.
European telecoms attractive? Perhaps… But, Brexit…
Maybe it’s best to remain 40 percent or so in cash right now in our collective portfolios here. We’re tempted yet again to get into a couple of European telecoms for the stability and yield. But the best of them now, the UK’s Vodaphone (trading symbol: VOD) remains wobbly, likely due to Brexit fears. But also due to their big, dicey investment in India. Like all investments in that strange yet seductive economy, India’s paranoid government continues to do its best to sabotage this one. Go figure. Today’s governments (including our own) are no longer capable of learning from their mistakes.
Other reasonably attractive Euro telecoms include Orange (ORAN), the former French Telecom; and Spain’s multinational Telefonica (TEF). On the other hand, the Eurozone is such a confusing, bloody mess, we’re never totally confident in this sphere.
Anyhow, it’s time to go. Have a happy and safe long weekend. And remember: With a Washington administration that finally supports both business and American workers 100%, it’s time to really celebrate this Labor Day. And also, to think ahead to Election 2020. Do we really want to return to the Obama-Clinton Axis of Evil in 2021. Just when all us Deplorable Americans are finally getting the chance to leave 2008 behind?
– Headline image: Cartoon by Branco. Reproduced with permission and by arrangement with Legal Insurrection.