WASHINGTON, July 6, 2017 – Our columns have been a bit infrequent of late. That’s due as much to the Independence Day break as it has been to the slow and agonizingly indefinite trading that’s been taking place over the last several trading days.
Our best example of this is the tech sector. It’s been weak for quite some time now, with investors and funds clearly reaping some notably high profits for bragging rights as Q2 drew to a close on June 30. But, as traders, investors and everyone else who has a job went back to work on July 5, bingo! We had a nifty rally in all those beaten-down tech stocks.
Unfortunately, like that prankster roommate of yours who threw a glassful of ice water on you this morning as you were taking a shower, that moment of pleasure was snatched away in an instant, just as it was for tech stock holders who thought their shares had just bottomed out. This morning, we returned to the same old, same old, with tech stocks taking it in the ear once again.
That, in turn, has clobbered the averages, taking the bulk of stocks down across the boards. And that’s been the story, sector after sector, since “Sell in May” season began this year. Various reasons for the nonsense that we hear from the blow-dried punditocracy include:
- Zero progress by the Republican-led legislature on Obamacare “repeal and replace” and zero progress on any kind of tax reform as well. Ergo, the promised Trump Stimulus has yet to arrive, when in the spring, traders thought it was imminent.
- This week’s preliminary employment/unemployment numbers look indefinite at best in advance of Friday’s government figures. Is the economy really robust? Who knows?
- The Fed’s Wednesday minutes, released yesterday, amounted to a vague nothingburger, much like the CNN and Democrat myths surrounding the nonexistent Trump-Russia controversy. It seems the Fed still wants to keep raising interest rates and wants to start clearing up its bloated balance sheet even though inflation has yet to meet or exceed its once-vaunted inflation target of 2 percent. If you make up rules and then ignore them, you lose trust.
- Speaking of losing trust, ECB head Mario Draghi, famed for making promises he never keeps, now claims they’ve licked inflation over in the Eurozone despite the fact that huge numbers of European workers are still on the dole. That’s Mario’s way of saying, “We’re thinking about raising interest rates soon.” It’s another example of the utter disconnect between Western government elites and the long-suffering citizens that keep electing these self-serving and arguably ignorant clowns.
- The North Korea thing has gotten completely out of control, which has far less to do with the Trump Administration than it does to the utter fecklessness of a series of previous administrations that kept sweeping the outrages perpetrated by the Stalinist Kim dynasty under the rug, leading to the point where the current violent nutcase Kim could very well destroy South Korea and maybe Anchorage before we turned the Norkies into a collective cinder. Given the lack of cooperation between the U.S., Russia and China on this issue, the U.S. will be forced to go it alone, with potentially disastrous consequences for the world itself. Unsurprisingly, this is making investors nervous. Very nervous.
- Re: The above. Given the touchy international situation, we continue to be surprised that gold and silver aren’t in their glory days, as they usually are when the world gets tense. That’s not happening now because either the world’s central banks, the Gnomes of Zurich, or all of the above have been working quietly with mega-banks et. al. to keep the price of precious metals flat to maintain the phony value of national currencies. Like the situation in North Korea, this will not end well.
- Finally, the news is, there ain’t no news. What we mean here is that the news media – so-called – has become so thoroughly unreliable that the average citizen simply doesn’t know what to do any more. From science to entertainment to commercials, to governments, to the judiciary, to education, and to the body of information itself, sources have become politicized in the extreme and therefore no longer reliable. Individuals and nations are pretty much on their own now, and this loss of local and national connectedness – mightily encouraged by globalist elites – contains the seeds of instability, violence and destruction. Hardly encouraging for the bulls.
It’s a certainty that we’ll pull out of this summer funk at some point. But in the longer run, there’s a lack of confidence in the direction of life, which ultimately leads to people stuffing their money in their mattresses and not saving it or investing in a future they’re not sure will really come.