Great Trump Rally II? Is it back? Did Jay Powell and the Fed just help?
WASHINGTON – US stocks continued their slow melt-up Thursday. They seemed ready to do the same on Friday to close out the week on a positive note. (Which they did.) While the reliable McClellan Oscillator still hovers beneath the zero line and while the VIX volatility index has crept up a bit, Mr Market has yet to take a dive. So we can forgive permabulls for claiming stocks are on a roll again. So has the Great Trump Rally II resumed? Did Fed Chair Jay Powell just help with his Thursday policy change announcement?
The Great Trump Rally II. Post-coronavirus panic subsides as bulls resume summer drive to the top
Mr Market continues to confuse investors, bears and Democrats alike, although just about anything confuses the latter. Covid-19 overreaction unemployment numbers continue to be horrendous, although new unemployment applications ticked down this week, just a bit. Chunks of the economy continue to recover, though not all.
And the GOP just had its most intriguing and inspiring virtual convention ever this week, complete with a mini-Trump rally on the White House South Lawn, plus fireworks.
Enter a massive leftist troll army to shut down growing optimism
Even better, with the DC afterparty that consisted of bused-in, Soros-paid Antifa-BLM terrorists physically attacking GOP partygoers afterwards provided yet more impetus for wavering Democrat voters to finally jump over the side, hold their noses, and vote for The Donald this November. Landslide on the way? Maybe. But only if the growing pro-GOP tide can swamp the truckloads of fraudulent mail-in ballots already prepped well in advance of when they’ll be needed.
A massive seizure of violence is on tap for the Nation’s Capital this weekend, as more and more Communist thugs alight. And, promising more to come a bit later in September, with a constant and violent siege of the White House set to begin on September 17 – and continue through the evening of election night in November – there’s at least half a chance that the nation’s beautiful capital city will end up resembling what we had here after the 1968 riots burned down and destroyed the bulk of commercial establishments that once served the District’s black neighborhoods.
It’s all part of the current Cloward-Piven inspired plot to impoverish the disadvantaged people and neighborhoods that Trump almost succeeded in lifting out of Barack Obama’s long socialist nightmare. Take that, you plebes!
We’re headed for dark days indeed. And, like the announcer used to tell us on the old 1960s Batman TV show, “The worst is yet to come.”
So, given our current social Destruction Derby, why the stock market optimism?
So why is Mr Market hovering around the record numbers he put in just prior to the Wuhan flu coronavirus lockdown disaster? Why are happy days here again when even the thought of an economic recovery seems absurd?
Simple. Investors – even die-hard, super-rich Commie investors – think Trump is a shoo-in for re-election on November 3. Everyone knows that blood will be running in the streets as soon as the election is called for Trump. Commies gotta do what Commies do. But investors may have begun to sense that in Kenosha this week, as the guns on the militia side have begun to come out (just like the Second Amendment intended), that the nation is about to terminate this paid, pro-Marxist uprising, Commie states and Commie mayors notwithstanding.
And, in many ways similar to what happened in Election 1968, the GOP, as refashioned by Trump, will prove the major beneficiary of this likely turnabout. At least in terms of the White House. (Commie-Democrat “vote-gathering” will likely keep at least the House out of reach.)
The market is a forward-looking indicator, and that’s what it’s telling us right now. Given the waffling patterns of the McClellan Oscillator and the VIX, we’re likely to get some kind of correction. And soon. Particularly if the Soros-Marxist-Anarchist-Globalist thugs turn Washington into something resembling Post WWII Berlin beginning this weekend.
Jay Powell and the Fed finally break out of their Obama rut. Great Trump Rally II resumes
On the other hand, as CNBC notes, the Federal Reserve finally abandoned its last vestiges of caution at the conclusion of this week’s annual (but virtual) Jackson Hole confab.
“The Federal Reserve announced a major policy shift Thursday, saying that it is willing to allow inflation to run hotter than normal in order to support the labor market and broader economy.
“In a move that Chairman Jerome Powell called a ‘robust updating’ of Fed policy, the central bank formally agreed to a policy of ‘average inflation targeting.’ That means it will allow inflation to run “moderately” above the Fed’s 2% goal ‘for some time’ following periods when it has run below that objective.
“The changes were codified in a policy blueprint called the Statement on Longer-Run Goals and Monetary Policy Strategy, first adopted in 2012, that has informed the Fed’s approach to interest rates and general economic growth….
“In addition to the shift on inflation, the Fed also announced a policy tweak that changes the approach to employment.
“The new language says the approach to the jobs situation will be informed by the Fed’s ‘assessments of the shortfalls of employment from its maximum level.’ The prior language referred to ‘deviations’ from the maximum level.”
Washingtonspeak, Newspeak, Fedspeak: Translations needed
That’s all excellent Washingtonspeak and Fedspeak from Jay Powell, who finally seems to be getting the hang of the current monetary racket. The Fed’s plan has always been to gradually inflate the economy, in part as a sneaky way of paying down the massive Federal debt we’ll otherwise never be able to pay down. He may recognize we actually need the Great Trump Rally II to resume. And maybe a lot more.
Problem is that ever since the days of Ben Bernanke, the Fed could never persuade Congress to help them. The House could easily do that. They could simply pass meaningful stimulus measure instead of just dishing out pork to the usual suspects. These are mainly public employee and teachers’ unions. They are key constituencies of the “never compromise when you can have a campaign issue” Democrats. It’s been going on since at least Bush II. But it has worsened considerably under the cretinous Pelosi House regime. Jay Powell will have a tough time getting through to the longstanding lefty members of the House. They seem to come from some kind of legislative version of Jurassic Part.
To give Jay Powell an assist, perhaps Trump should offer Pelosi a buyout package
Speaking of Pelosi, here’s the latest on her constructive approach to helping the average American out when it comes to the never-ending coronavirus lockdowns. I’ve added a few editorial comments in italics to help explain what Pelosi won’t.
“House Speaker Nancy Pelosi and White House chief of staff Mark Meadows failed to crack a stalemate over coronavirus relief Thursday when they spoke at length for the first time in weeks.
“After a 25-minute phone call between the pair, Pelosi issued a statement saying ‘this conversation made clear that the White House continues to disregard the needs of the American people as the coronavirus crisis devastates lives and livelihoods.’ (No “conversation” here. Just ultimatums, which Pelosi knows Meadows, must refuse. Gives her an opportunity to falsely denounce the administration for the next 2 months. Like solving the immigration problem, Pelosi would rather keep the “issue” alive than solve it.)
“She said the sides stood at a “tragic impasse” after the Trump administration again did not meet her demand to roughly double the price of its aid proposal to $2.2 trillion. (Ever notice how Pelosi always “demands?” Just like Antifa and BLM? That’s a great way to get your opponent to negotiate.)
“Democrats are willing to resume negotiations once Republicans start to take this process seriously. (“Seriously” definition: Republicans need to cave Now.)Lives, livelihoods and the life of our democracy are at stake,” the California Democrat said in the statement. (Yes, we agree, all of these are indeed at stake. But Nancy doesn’t care, which is why she told Meadows to piss off. Who needs working class voters anyway?)
Well, we’ll just have to see how all this will work out. Likely, it won’t. Unless the GOP caves. Which they tend to do. However, with most RINOs heading out of Congress this fall, maybe that could change. Maybe a new Congress would actually help Jay Powell out for a change. Maybe there’s further hope for an extension of the Great Trump Rally II.
– Headline image: Cartoon by Branco. Reproduced with permission and by arrangement with Comically Incorrect.