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Fed, not Trump or Charlottesville, casting pall on stocks

Written By | Aug 17, 2017

WASHINGTON, August 17, 2017 – We’ve had a hard time disgorging daily columns this week due largely to the barrage of poor news, fake news and just plain weird news that has holiday-thinned Wall Street trading desks and individual investors alike in a tizzy.

Read also: Thursday stock market cliff dive might be buying opportunity

The best way to bring  you up with our cause-and-effect point of view on these various market-affecting threads is to lay them out in bullet points.

The current up-and-down market frenzy is being driven, more or less, by the following newsbits, fake or not:

  • First and foremost, stocks in general tend to fare poorly in August and September. This is not universally the case, but it is very often the case. Thus, the over-all declining tone of August 2017 is, in one sense, déjà vu all over again for veteran investors.
  • But now we get the extra “pile-on” negatives. The first and actually the most important of these is the Fed’s July minutes, which were reported, as always, yesterday, Wednesday, at 2 p.m. ET. Given that “The Boyz,” the Gnomes of Zurich, and other connected insiders (illegally) knew what was in these minutes already accounted for some of last week’s as well as this week’s early volatility. Today, however, the perception one must draw from these carefully fogged minutes is that the Fed is having second thoughts about that third interest rate hike they promised before 2017 draws to a close. That means that the nation’s central bankers are no longer convinced they’ll meet their vaunted 2 percent inflation target this year, which would justify those further increases. In turn, this is bad news with any stock that lives in or around the financial sector, which is, at least in part, what’s been leading the current market down.

According to ZeroHedge:

“The initial reactions [were] modest but directionally ‘correct’ given the dovish bias to the Fed Minutes – stocks are up, bonds are up (lower in yield), and the dollar is down. But then traders read the warnings that due to excessively easy financial conditions, ‘a tighter monetary policy than otherwise was warranted,” something Goldman has been warning about for months, and stocks sank.

“Many participants, however, saw some likelihood that inflation might remain below 2 percent for longer than they currently expected, and several indicated that the risks to the inflation outlook could be tilted to the downside.

“Participants agreed that a fall in longer-term inflation expectations would be undesirable, but they differed in their assessments of whether inflation expectations were well anchored.

“Most Fed officials saw wage-price framework still valid.”

Back to our bullet points:

  • Unfortunately, the tsunami-like media and political over-hyping of this past weekend’s demonstrations and tragedy in Charlottesville, Virginia has effectively overwhelmed the entirety of the financial and secular so-called news cycle since roughly COB last Friday. We are in no way diminishing the tragic and senseless loss of a young woman’s life in that university city. We are, however, condemning the news media’s largely phony reporting of this event as a way to slander President Trump.
  • After President Trump correctly went public to express sorrow and outrage at the victim’s death and denounce both sides of the violent Charlottesville mob scene, the media, the Democrats, America’s entire leftist-fascist cult and, of course, the RINO and #NeverTrump wing of the always stupid Republican Party attacked him with one voice, as if he were the cause of all the violence in Charlottesville when he had absolutely nothing to do about it. After making some attempt to appease this idiotic mob, he reverted, with a vengeance, to his original message on the Charlottesville events, namely, that violence from neither side was acceptable under any circumstances. Once again, a frenzy of denunciation from all sides, capped off by the mass resignations of showboating, virtue-signaling corporate CEOs from Trump’s various business committees, leading the President to announce the scrubbing of the entire idea, at least as we read this.
  • The resulting media and political chaos has isolated the President, at least for the moment, as even much of his own party as deserted him, at least for now, joining, with their usual lack of integrity, the national virtue-signaling armada of elitist Americans who don’t live in the real world. All this chaos has obscured both the Fed minutes and the actual and key fact that, again at least for now, the Trump Administration’s belligerent flag-waving, rhetoric, combined with careful backroom negotiations, has, in short order, produced a seemingly impossible U.N. Security Council sanctioning of North Korea as well as a minor cave-in by that insane country, as it more-or-less retracted its threat to wipe Guam off the map.

Ultimately, the de-emphasis of real news nationally and good news internationally by an asinine cadre of elite, virtue-signaling East and West Coasters, has added significantly to the stock market’s usual August doldrums. If these clowns don’t back off their phony, Marxist and class-struggle messaging, the markets could really get slaughtered during the remaining trading days of August.

That, of course, is exactly what this brain-dead group of “sophisticated” Americans want, the better to discredit Trump as a leader, just as they’re trying to brand him a racist for something in Charlottesville that he was never involved in. Destabilization is the key word here, and we’re getting it in boatloads this week.

Sorry about the politics, particularly the fake politics. The left learned long ago that if you trumpet a phony “fact” or story long enough and loudly enough, it will eventually become the perceived truth. That puts the truth out of range for anyone who uses reason and logic to solve intractable problems.

Taken together, the fake news is at least for now making this a fake stock market that’s hurting real investors. So we’ll be pulling out of several positions, bit by bit, at least until the crazies go back to their caves to plan the next attack on American business and American decency.

We can at least be thankful for one thing. At long last, everything that’s bad in America is no longer Bush’s fault. It’s Trump’s fault.


Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17