WASHINGTON, June 22, 2017 – Yours truly is dealing today with a recurring and fairly painful inner-ear infection today, which tends to make him a bit irritable and irrational, not to mention causing slight miscalculations in his sense of balance.
Antibiotics should clear this up in a couple of days. But we wish we could say that for the current state of the U.S. stock market, which is behaving as if it’s having its own version of an inner-ear infection. Averages, not to mention individual stocks and investors themselves have been irritable and irrational pretty much throughout the month of June.
True, there have been some nice, bullish days, and major averages have occasionally made new highs. But most stock sectors in the broad-based S&P 500 seem, like moi, to have lost their sense of balance, wobbling to and fro, suddenly taking a nosedive, then putting the pedal to the metaphorical metal as if nothing had happened.
It’s tough to make investment decisions in this kind of market. The wealthy gurus who regularly hawk their wares on CNBC are still out there bravely pitching their “recommendations” – which recommendations they already own and are hoping you’ll buy into so they can sell them at an even higher price.
These days, we are encountering about 4 or 5 bulls for every bear, the latter group of which includes perma-bear Jim Rogers who regularly and reliably recites his tales of woe from his undoubtedly posh digs in Singapore. As in, “we’re all gonna die, but you can buy the daylights out of everything I’m shorting so I can short this stuff some more.”
But it’s all smoke and mirrors in the end, because nothing the “smart people” and elites are pitching seems to make any sense.
One example is the Fed, which is ruthlessly, relentlessly and remorselessly pushing up interest rates even though inflation is down not up, and even though they can see daily that commodity price deflation is at it again. A prime example is this week’s waterfall decline in the price of oil – remedied only slightly by today’s weakly bullish action, which recovers only pennies per bbl. against an otherwise ongoing price-decline bloodbath.
Word on that front is that U.S. refineries in East Texas and Louisiana (and anywhere else Tropical Storm Cindy is making landfall today) have been temporarily shut in, meaning that they won’t be cranking out refined product for, say, 1-4 days, assuming they sustain no damage from the currently cranky Gulf of Mexico weather situation. That event is what likely boosted oil prices a bit today. But this is an ephemeral event as such things go, and won’t have a long-term effect on current price weakness in the oil patch.
We could look to increased summer use by eager U.S. vacationers as they jump into their cars and light out for the territories to stem the crude oil price decline. But, since neither Congress nor the Fed seem much interested in helping the middle class heal the family budget as they did for large and wealthy banks and bankers after 2008, demand for gasoline may remain at current levels, depriving markets of one avenue for goosing crude oil prices. We read that stay-cations may once again be fashionable in 2017.
So where’s that long-awaited market catalyst everyone thought was on the way? It doesn’t seem to be on the horizon. Worse, neither party seems remotely interested in helping President Trump Make America Great Again.
Do-nothing Democrats continue to paralyze the Republican-led Congress, happy as they are to sit on their hands and do absolutely nothing except trash President Trump. Meanwhile, the GOP – ever the Stupid Party – thrashes about in a boring, conservative virtue-signaling contest that’s about as exciting as the bottom card on a WWE wrestling event.
Urgent Message to GOP: It took the Evil Party from 1932 to circa 2006 to bring this country to its knees via creeping socialism. Why do you imagine that it’s possible to fix all this in less than a single Congressional term. Have you morons ever heard of “incrementalism.” Can you even spell it?
We vote for these Sad Sacks every time, fearing greatly the alternative, already having endured 8 long years of Stalinism Lite under the very first U.S. President whose hatred of America was plain for all to see by the end of his second term.
But we’re still dealing with a mass of holdover “Bob Michel Republicans.” That’s a term we’ve long used to describe Congressional Republicans of the last generation who were used to caving routinely to the formerly perpetual Democrat leadership for hopes of gaining a few legislative crumbs each session for being “good boys” and behaving subserviently.
We continue to vote for these clowns, hoping against hope that a miracle will happen causing them to grow a pair and stand up – like their much-maligned TweetMaster President – against the Philistines and Stalinists in the current opposition. But, as Hemingway’s Lady Brett Ashley more or less said, “It’s pretty to think so.”
Meanwhile, back in Reality Land, Washington has returned to do-nothing stasis, at least in Congress, while the world gets more dangerous and unpredictable every day.
While markets are experiencing their typical summer of discontent, we don’t look for things to improve until someone besides President Trump actually starts pushing through some real accomplishments that will drive the still-moribund U.S. economy back to the good times. Better this than wallowing in the theoretical impossibilities that academic and governmental elites have created largely to remain in power.