The Devil is Indeed in the Details – Beware !

Investor’s first read – Daily edge before the open
DJIA: 22,381
S&P 500: 2,510
Nasdaq  Comp.:6,453
Russell 2000: 1,488
Friday,  Sept. 29, 2017   9:06 a.m.

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      Sooo, what’s the deal on taxes ?  Good for some, not so good for others ?  A deficit buster ? Another Trump administration disappointment ?  Trump’s first “win” ? The last hurrah for an overvalued stock market ?  An extension of the bull market, already up 275% in 8+ years ?
…………Or is this a once in a lifetime opportunity for Republican “extremists” to undo the legacy of Roosevelt and Johnson ? .. a back door ruse for the “starve the beast” gang, a ploy to explode federal government deficits so much that it justifies big slashes to Social Security, Medicare and other social services ?
      The details of the administration’s tax reform efforts and the debate that follows will be known in a matter of months, its impact won’t be known for years.
      The assumption that economic growth will offset the federal government’s estimates $1.5 trillion shortfall in government revenues as a result of  tax reform is flawed  – voodoo economics.

      In reality, there are people who have made it, some sort of made it, and other who will always be struggling just to survive.
       One  of the things all have in common – all people spend ?  For the barely making it and those not making it, anything that comes in goes out immediately.  That is the real driver of the economy.  That is why social programs are invaluable.
TODAY
       The Street believes tax cuts are bullish.  How much of this has already been discounted by the 17.3% move in the S&P 500 since the November elections is anyone’s guess.  My guess, a lot !
        Since the Street doesn’t know the details of the tax plan, they can only assume the market has further to go.  As I have noted before, they would love to run the table one more time, maxing the gains on their highly leveraged positions before sneaking out the side door.
         As I have noted before, they can’t make their exit all at the same time.  I believe some locked in gains as good Q2 earnings were reported, others as the market rose in anticipation of this multi-state sales pitch for the administration’s tax plan.
        A blow-off in stock prices is still a possibility.  There is enough hype  to trigger it.  Be very careful.  The downside from here is so much greater than the upside.  This administration is imploding internally.  People are leaving, key departments still unstaffed.  Criminal indictments may come down any time.  Our country is increasingly  becoming isolated from long-standing relationships. In short – President Trump is a mistake, a wrecking ball, and we will have to pay a price for that. One place for that has to be CONFIDENCE IN THE FUTURE, and that is what comprises the difference between the current level of the stock market and one that trades at significantly lower levels.      
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SUPPORT “today”: DJIA:22,356;S&P 500:2,508; Nasdaq Comp.:6,471
RESISTANCE “today” DJIA:22,416;S&P 500:2,513;Nasdaq Comp.:6,471
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CORPORATE EARNINGS (updated Sept.  22, 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +11.1%. For 2017 as a whole growth is projected at a plus 9.6%.  Currently, the P/E on forward  earnings is 17.6 x. That compares with a 10-year average P/E of 14.1.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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 POLITICAL/STOCK MARKET
CRIMINAL CHARGES: The Palmer report.com reports on a Sept. 27 MSNBC Brian Williams interview with George W. Bush, former Asst. Atty. General, Jimmy Gurule, who lists criminal charges he expects will be levied on Trump team members, without mentioning names. Included are obstruction of justice, violations of Computer Fraud and Abuse Act, violations of Federal Campaign Act, IRS tax laws, and possibly money laundering. Only Congress can put President Trump on trial, but Muller can ask a grand jury to name Trump as an unindicted co-conspirator, which is what happened to President Nixon in the Watergate scandal.
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CLUELESS !  House Republicans propose$10 billion for Trump’s border wall. Great timing, great prioritizing !  At a time when parts of Florida and Texas and all of Puerto Rico have been decimated by hurricanes and when huge tax cuts to that stand to sharply reduce Federal government  revenues, these clueless legislators want a silly wall as a top priority. 
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WHAT ?   TRUMP WANTS ANYONE WHO DOESN’T STAND FOR THE NATIONAL ANTHEM TO BE “FIRED”   ?
Personally, I would find another way of expressing my 1st Amendment opinion, like here in this blog, but I think not standing for the National Anthem IS NOWHERE NEARLY AS UN-AMERICAN AS TAKING  5 (five) DEFERRMENTS TO AVOID MILITARY SERVICE, WHICH IS WHAT TRUMP DID DURING THE VIETNAM WAR ERA.  Deplorable !
      Other un-American activities Trump champions would be using the Presidency to divide and polarize  Americans against Americans, to foment racial and gender prejudice, to endorse violence, and to destabilize a world that is struggling to peacefully cope with a host of issues, none the least of which is more WAR !
      In my opinion the Trump presidency is a huge mistake, and when you make huge mistakes, you pay a huge price.
      In time, I believe we will learn that the Trump team either colluded or enabled Russia’s meddling with our election. Ballot boxes are not fool proof, either.
       Evidence is mounting to indicate the biggest political/business scandal ever will become news, with a lot of Trump people taking a big hit.
       Expect Trump to attempt to pardon anyone he wants, including himself. It’s a way out of facing responsibility very much like dodging the draft. Like when he justified his numerous bankruptcies, saying he only used U.S. laws to his advantage.  Well, “pardons” are his prerogative, in many, not all cases. He would take advantage of whatever loophole to avoid consequences, sort of like dodging the draft, or did I already say that ?
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President Trump’s retweet of  a meme Sunday that spliced Him teeing off and driving a golf ball that was edited to appear it smacked Hillary Clinton in the middle of her back as she boarding a plane knocking her to the ground    — Childish ! What else can be said ?
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In a Sunday tweet to South Korea President Moon Jae-in, Trump referred to North Korea’s president Kim Jong-un as “Rocket Man.”   This from “mockit man,” comes as no surprise.
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First, do no harm.  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control, as well as a firewall against single payer healthcare. It would have to be moved via the budget reconciliation process which allows the bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1 which means no debate, no CBO analysis.
      If the Republicans succeed, they would then own healthcare with a national system that will allow states to opt out of certain ACA regs. like charging sick people more, not honoring pre-existing conditions, and defund Planned Parenthood for a year. Additionally, it would eliminate Medicaid expansion. Starting in 2020, states would receive a block grant, capped per beneficiary.
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.  It didn’t
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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TAX REFORM   – We should get details this week.  AXIOS. COM published leaked data over the weekend, but why not wait a day or two for it to be official. What troubles me is early estimates project tax cuts will cost the U.S. government $1.5 trillion over ten years, but the administration expects economic growth to offset the shortfall. Growth ?   We are into out ninth year of an economic recovery that is showing signs of weakness in certain areas.  Truth is, part of tax reform is really a back door excuse to slash social programs. Tax cuts really don’t benefit a majority of tax payers and corporations only pay  top rate of 25% after deductions.  (see below)
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya, Oleg Deripaska all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Reform – How Much Already Priced into the Market ?

Investor’s first read – Daily edge before the open
DJIA: 22,284
S&P 500: 2,496
Nasdaq  Comp.6,380:
Russell 2000:
Wednesday,  Sept. 27, 2017   9:18 a.m.

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      Tax reform – tax reform – tax reform !   Details forthcoming, some mouth-watering, some too complex, others controversial.
      This too will be political. Republicans hope with better results than their repeated attempts to repeal ACA.
       There will be proposals for corporate and individual tax cuts, incentives for corporations to return the U.S. some $2.6 trillion offshore earnings parked abroad, incentives for corporations to invest in capital goods rather than stock buybacks.
        All this will get a lot of press coverage  and should boost stocks, at least in the early stages until reality sets in that compromises will reduce the beneficial impact on corporations and individuals.
        Expect the hype to hit new highs, if not the stock market.  A lot of this has already been priced into a market that has risen 17% since the November elections.  Profitable small companies tend to pay a higher tax rate than big companies, so they may be bigger beneficiaries.
         Republicans are counting on the resulting economic growth generated by  tax cuts to offset the shortfall in U.S. government revenues that would result for major cuts.  That is a huge stretch, since our current economic expansion is in its ninth year, well beyond the average of five years going back to the end of World War II.  The Republicans have a safety valve for this dilemma  –  slash government expenditures, especially those benefitting people in need.
         The extremist Republicans want to erase any trace of Roosevelt and Johnson, both with flaws, but fortunately with a social conscience that benefitted so many over the years.  Republicans want it all for themselves ?
TODAY
         With hype on tax reform, the market “should” go up to new highs with all the press hoopla than accompanies both tax hype and a rising market. If it can’t rise a bit further, the message is TROUBLE.
          Even with tax reform, the market is very overvalued, and especially in light of its rise in prices over the last 10 months.  Bull markets can reach unbelievable extremes before topping out. Tops are rarely easy to call and usually occur when everyone, including first time buyers think the party will last forever.
          The Street will do everything it can to extend this bull market a bit further. If they can’t do that in this environment, they will realize it is time to exit.
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SUPPORT “today”: DJIA:22,256 ;S&P 500:2,493; Nasdaq Comp.:6,368
RESISTANCE “today” DJIA:22,339;S&P 500:2,502;Nasdaq Comp.:6,395
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CORPORATE EARNINGS (updated Sept.  22, 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +11.1%. For 2017 as a whole growth is projected at a plus 9.6%.  Currently, the P/E on forward  earnings is 17.6 x. That compares with a 10-year average P/E of 14.1.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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 POLITICAL/STOCK MARKET

WHAT ?   TRUMP WANTS ANYONE WHO DOESN’T STAND FOR THE NATIONAL ANTHEM TO BE “FIRED”   ?
Personally, I would find another way of expressing my 1st Amendment opinion, like here in this blog, but I think not standing for the National Anthem IS NOWHERE NEARLY AS UN-AMERICAN AS TAKING  5 (five) DEFERRMENTS TO AVOID MILITARY SERVICE, WHICH IS WHAT TRUMP DID DURING THE VIETNAM WAR ERA.  Deplorable !
      Other un-American activities Trump champions would be using the Presidency to divide and polarize  Americans against Americans, to foment racial and gender prejudice, to endorse violence, and to destabilize a world that is struggling to peacefully cope with a host of issues, none the least of which is more WAR !
      In my opinion the Trump presidency is a huge mistake, and when you make huge mistakes, you pay a huge price.
      In time, I believe we will learn that the Trump team either colluded or enabled Russia’s meddling with our election. Ballot boxes are not fool proof, either.
       Evidence is mounting to indicate the biggest political/business scandal ever will become news, with a lot of Trump people taking a big hit.
       Expect Trump to attempt to pardon anyone he wants, including himself. It’s a way out of facing responsibility very much like dodging the draft. Like when he justified his numerous bankruptcies, saying he only used U.S. laws to his advantage.  Well, “pardons” are his prerogative, in many, not all cases. He would take advantage of whatever loophole to avoid consequences, sort of like dodging the draft, or did I already say that ?
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President Trump’s retweet of  a meme Sunday that spliced Him teeing off and driving a golf ball that was edited to appear it smacked Hillary Clinton in the middle of her back as she boarding a plane knocking her to the ground    — Childish ! What else can be said ?
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In a Sunday tweet to South Korea President Moon Jae-in, Trump referred to North Korea’s president Kim Jong-un as “Rocket Man.”   This from “mockit man,” comes as no surprise.
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First, do no harm.  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control, as well as a firewall against single payer healthcare. It would have to be moved via the budget reconciliation process which allows the bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1 which means no debate, no CBO analysis.
      If the Republicans succeed, they would then own healthcare with a national system that will allow states to opt out of certain ACA regs. like charging sick people more, not honoring pre-existing conditions, and defund Planned Parenthood for a year. Additionally, it would eliminate Medicaid expansion. Starting in 2020, states would receive a block grant, capped per beneficiary.
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.  It didn’t
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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TAX REFORM   – We should get details this week.  AXIOS. COM published leaked data over the weekend, but why not wait a day or two for it to be official. What troubles me is early estimates project tax cuts will cost the U.S. government $1.5 trillion over ten years, but the administration expects economic growth to offset the shortfall. Growth ?   We are into out ninth year of an economic recovery that is showing signs of weakness in certain areas.  Truth is, part of tax reform is really a back door excuse to slash social programs. Tax cuts really don’t benefit a majority of tax payers and corporations only pay  top rate of 25% after deductions.  (see below)
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya, Oleg Deripaska all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

Rally Must Hold

Investor’s first read – Daily edge before the open
DJIA: 22,296
S&P 500: 2,496
Nasdaq  Comp.:6,370
Russell 2000: a,451
Tuesday,  Sept. 26, 2017   9:08 a.m.

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      Stocks took a hit yesterday morning on news that North Korean foreign minister Ri Yong Ho’s  accusations that President Trump was declaring war on his country with warnings at the United Nations that the United States would “totally destroy North Korea,” that Kim Jong-un’s regime ”won’t be around much longer.”
      Ri warned the U.S. that North Korea had the right to shoot down U.S. strategic bombers, even in international waters.
      This is a good example of how dangerous reckless warnings at these high levels of governance can be.  Tough talk is one thing, but the potential for misunderstandings rises as the exchanges heat up.
      The sharp drop on the news is an indication how vulnerable the market is to news
       I seriously doubt the Street’s computers can account for the unpredictability of President Trump and the fact he is so confrontational, offensive, divisive, and unfit for the job.
       I think he is the most dangerous president ever to occupy the office of Presidency and we will eventually pay a big price for electing him.
        A war with North Korea is not likely, since it would also destroy South Korea.
        This market will tank if the Street perceives the Republican stimulus will be a ho-hummer, or parts of it won’t happen at all, or simply that the economy will grind to a halt after 8 years of pained recovery and in face of steady increases in interest rates by the Fed and the unwinding of its $4.5 trillion asset portfolio.
         Normally, the Street sees these things coming three months ahead of time and sells. With its reliance on computer algorithms to make its decisions, there’s a question whether that will happen this time around and the Street’s selling will be sudden, all at once.
TODAY:
        The market will open on the upside.  The key to the future is how aggressively the Street will step to grab lower prices created yesterday by NOKO scare.           
       The bulls should benefit from administration  promises of tax cuts and a 13-state road show. If that doesn’t goose the market, there are big problems ahead.
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SUPPORT “today”: DJIA:22,261 ;S&P 500:2,493; Nasdaq Comp.:6,361
RESISTANCE “today” DJIA:22,349;S&P 500:2,503;Nasdaq Comp.:6,391
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CORPORATE EARNINGS (updated Sept.  22, 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +11.1%. For 2017 as a whole growth is projected at a plus 9.6%.  Currently, the P/E on forward  earnings is 17.6 x. That compares with a 10-year average P/E of 14.1.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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 POLITICAL/STOCK MARKET

WHAT ?   TRUMP WANTS ANYONE WHO DOESN’T STAND FOR THE NATIONAL ANTHEM TO BE “FIRED”   ?
Personally, I would find another way of expressing my 1st Amendment opinion, like here in this blog, but I think not standing for the National Anthem IS NOWHERE NEARLY AS UN-AMERICAN AS TAKING  5 (five) DEFERRMENTS TO AVOID MILITARY SERVICE, WHICH IS WHAT TRUMP DID DURING THE VIETNAM WAR ERA.  Deplorable !
      Other un-American activities Trump champions would be using the Presidency to divide and polarize  Americans against Americans, to foment racial and gender prejudice, to endorse violence, and to destabilize a world that is struggling to peacefully cope with a host of issues, none the least of which is more WAR !
      In my opinion the Trump presidency is a huge mistake, and when you make huge mistakes, you pay a huge price.
      In time, I believe we will learn that the Trump team either colluded or enabled Russia’s meddling with our election. Ballot boxes are not fool proof, either.
       Evidence is mounting to indicate the biggest political/business scandal ever will become news, with a lot of Trump people taking a big hit.
       Expect Trump to attempt to pardon anyone he wants, including himself. It’s a way out of facing responsibility very much like dodging the draft. Like when he justified his numerous bankruptcies, saying he only used U.S. laws to his advantage.  Well, “pardons” are his prerogative, in many, not all cases. He would take advantage of whatever loophole to avoid consequences, sort of like dodging the draft, or did I already say that ?
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President Trump’s retweet of  a meme Sunday that spliced Him teeing off and driving a golf ball that was edited to appear it smacked Hillary Clinton in the middle of her back as she boarding a plane knocking her to the ground    — Childish ! What else can be said ?
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In a Sunday tweet to South Korea President Moon Jae-in, Trump referred to North Korea’s president Kim Jong-un as “Rocket Man.”   This from “mockit man,” comes as no surprise.
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First, do no harm.  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control, as well as a firewall against single payer healthcare. It would have to be moved via the budget reconciliation process which allows the bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1 which means no debate, no CBO analysis.
      If the Republicans succeed, they would then own healthcare with a national system that will allow states to opt out of certain ACA regs. like charging sick people more, not honoring pre-existing conditions, and defund Planned Parenthood for a year. Additionally, it would eliminate Medicaid expansion. Starting in 2020, states would receive a block grant, capped per beneficiary.
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.  It didn’t
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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TAX REFORM   – We should get details this week.  AXIOS. COM published leaked data over the weekend, but why not wait a day or two for it to be official. What troubles me is early estimates project tax cuts will cost the U.S. government $1.5 trillion over ten years, but the administration expects economic growth to offset the shortfall. Growth ?   We are into out ninth year of an economic recovery that is showing signs of weakness in certain areas.  Truth is, part of tax reform is really a back door excuse to slash social programs. Tax cuts really don’t benefit a majority of tax payers and corporations only pay  top rate of 25% after deductions.  (see below)
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya, Oleg Deripaska all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

………………………………………………………………………………

George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

Tax Cut Hype Time

Investor’s first read – Daily edge before the open
DJIA: 22,349
S&P 500: 2,502
Nasdaq  Comp.:6,426
Russell 2000: 1,454
Monday,  Sept. 25, 2017   9:08 a.m.

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     This is the week for the big hype of tax reform.  That should be well received on Wall Street. The Republican Congress justifies the negative impact tax cuts will have on deficits by claiming increased economic growth will close the gap. 
      That’s nonsense !  Our economy is in its ninth year of expansion, well beyond the average of 5 years going back to 1945.  What isn’t said here is Congress plans to slash social programs to make up the shortfall, but then that would be assuming Republicans control Congress for years going forward.
       A better solution would be to employ modest tax cuts and simplification, saving bigger tax cuts for the next recession, when the Fed won’t have enough room to cut interest rates to do the job.
       How much of the anticipated Trump “stimulus” is already priced into the market, up 17% since the November election  ?
        We will have to wait until the final bill is passed to get that answer.  That’s when the Street will be able to calculate how big an impact tax cuts will have on S&P 500 earnings. Bear in mind, at 17.6 times forward earnings, the overvaluation of the “500” already discounts some if not all of the benefits. The 10-year average is 14.1 times earnings.
        What can go wrong ?   Plenty, starting at the top.   
        How about the unfolding of the biggest political/business scandal of all time ?  No guaranties, but anyone paying attention can see it is looming.
         The Street can proceed with its tunnel vision, shutting out reality for only so long.  The BIG money, aka smart money, didn’t get that way because it stumbled around with blinders on. They will quietly exit ahead of time, and may already have started. 
         Market tops are more easily recognized in hindsight.  This one will be no different.
         OK !  Enough !  If you got this far, you clearly agree with me, or hate me.  I see far more downside risk than upside risk and feel readers should be aware of this, since that awareness tends to vanish as late-stage bull markets press higher.
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SUPPORT “today”: DJIA22,323:;S&P 500:2,500; Nasdaq Comp.:6,419
RESISTANCE “today” DJIA:22,402;S&P 500:2,508;Nasdaq Comp.:6,441
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CORPORATE EARNINGS (updated Sept.  22, 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +11.1%. For 2017 as a whole growth is projected at a plus 9.6%.  Currently, the P/E on forward  earnings is 17.6 x. That compares with a 10-year average P/E of 14.1.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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 POLITICAL/STOCK MARKET

WHAT ?   TRUMP WANTS ANYONE WHO DOESN’T STAND FOR THE NATIONAL ANTHEM TO BE “FIRED”   ?
Personally, I would find another way of expressing my 1st Amendment opinion, like here in this blog, but I think not standing for the National Anthem IS NOWHERE NEARLY AS UN-AMERICAN AS TAKING  5 (five) DEFERRMENTS TO AVOID MILITARY SERVICE, WHICH IS WHAT TRUMP DID DURING THE VIETNAM WAR ERA.  Deplorable !
      Other un-American activities Trump champions would be using the Presidency to divide and polarize  Americans against Americans, to foment racial and gender prejudice, to endorse violence, and to destabilize a world that is struggling to peacefully cope with a host of issues, none the least of which is more WAR !
      In my opinion the Trump presidency is a huge mistake, and when you make huge mistakes, you pay a huge price.
      In time, I believe we will learn that the Trump team either colluded or enabled Russia’s meddling with our election. Ballot boxes are not fool proof, either.
       Evidence is mounting to indicate the biggest political/business scandal ever will become news, with a lot of Trump people taking a big hit.
       Expect Trump to attempt to pardon anyone he wants, including himself. It’s a way out of facing responsibility very much like dodging the draft. Like when he justified his numerous bankruptcies, saying he only used U.S. laws to his advantage.  Well, “pardons” are his prerogative, in many, not all cases. He would take advantage of whatever loophole to avoid consequences, sort of like dodging the draft, or did I already say that ?
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President Trump’s retweet of  a meme Sunday that spliced Him teeing off and driving a golf ball that was edited to appear it smacked Hillary Clinton in the middle of her back as she boarding a plane knocking her to the ground    — Childish ! What else can be said ?
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In a Sunday tweet to South Korea President Moon Jae-in, Trump referred to North Korea’s president Kim Jong-un as “Rocket Man.”   This from “mockit man,” comes as no surprise.
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First, do no harm.  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control, as well as a firewall against single payer healthcare. It would have to be moved via the budget reconciliation process which allows the bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1 which means no debate, no CBO analysis.
      If the Republicans succeed, they would then own healthcare with a national system that will allow states to opt out of certain ACA regs. like charging sick people more, not honoring pre-existing conditions, and defund Planned Parenthood for a year. Additionally, it would eliminate Medicaid expansion. Starting in 2020, states would receive a block grant, capped per beneficiary.
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.  It didn’t
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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TAX REFORM   – We should get details this week.  AXIOS. COM published leaked data over the weekend, but why not wait a day or two for it to be official. What troubles me is early estimates project tax cuts will cost the U.S. government $1.5 trillion over ten years, but the administration expects economic growth to offset the shortfall. Growth ?   We are into out ninth year of an economic recovery that is showing signs of weakness in certain areas.  Truth is, part of tax reform is really a back door excuse to slash social programs. Tax cuts really don’t benefit a majority of tax payers and corporations only pay  top rate of 25% after deductions.  (see below)
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya, Oleg Deripaska all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

Company Stock Buy-Backs Fuel Bull Market

Investor’s first read – Daily edge before the open
DJIA: 22,359
S&P 500: 2,500
Nasdaq  Comp.6,422:
Russell 2000: 1,444
Friday,  Sept. 22, 2017   9:08 a.m.

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     A New York Post analysis concludes $4 trillion has been employed by corporations buying back their own stock since 2008.
     “It has massively manipulated the market,” Richard Bowen told the Post on August 19.  Bowen, a former Citi executive credited for blowing the whistle on the bank during the subprime mortgage crisis in 2008,  senses a potential financial disaster, “This market scares the crap out of me,” he said.
      Because shares repurchased are retired, the buyback reduces shares outstanding thus enhancing the company’s bottom line.
      It is a double whammy for CEO’s who are not only rewarded  at bonus time, but by the buoyancy a stock gets from the open market purchases.
      Low interest rates have enabled companies to fund buy backs through borrowings.
      The big question is, with the market hitting new highs, up 275% from the bear market low in 2009, will buybacks make sense going forward ?
      So far this year, buy backs are down 20% year/year.
      The prospect of tax cuts, deregulation and a big government spend on the infrastructure or military has pushed  the market higher over the last 10 months, which is probably the reason for a drop in  buybacks.
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TODAY
      
The Street needs a couple days to digest the Fed’s current position on interest rates and its portfolio unwind.  The prospect of lower taxes, deregulation and a big spend still has the speculative juices flowing, but a 17% rise in the S&P 500 since the November election discounts much of that, especially taking into consideration the uncertainty of how much of this promise can be achieved, as well as the fact the market was overvalued by conventional standards in November, and is more so now with the S&P price/earnings ratio at 17.6 times vs. a ten year average of 14.1.
       Bull markets don’t die easily. We will just have to wait for this “think-alike” Street to tip its hand. I expect them to buy as a group or sell as a group.
       On a given day, they may be a no-show. That would be trouble for a “notch-up” market pattern.       
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SUPPORT “today”: DJIA:22,321;S&P 500:2,491; Nasdaq Comp.:6,405
RESISTANCE “today” DJIA:22,380;S&P 500:2,505;Nasdaq Comp.:6,436
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CORPORATE EARNINGS (updated Sept. 8 , 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.5%, and Q4 at +11.2%. For 2017 as a whole growth is projected at a plus 9.6%.  Currently, the P/E on forward  earnings is 17.6 x. That compares with a 10-year average P/E of 14.1.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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 POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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President Trump’s retweet of  a meme Sunday that spliced Him teeing off and driving a golf ball that was edited to appear it smacked Hillary Clinton in the middle of her back as she boarding a plane knocking her to the ground    — Childish ! What else can be said ?
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In a Sunday tweet to South Korea President Moon Jae-in, Trump referred to North Korea’s president Kim Jong-un as “Rocket Man.”   This from “mockit man,” comes as no surprise.
………………………………………………………………….
First, do no harm.  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control, as well as a firewall against single payer healthcare. It would have to be moved via the budget reconciliation process which allows the bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1 which means no debate, no CBO analysis.
      If the Republicans succeed, they would then own healthcare with a national system that will allow states to opt out of certain ACA regs. like charging sick people more, not honoring pre-existing conditions, and defund Planned Parenthood for a year. Additionally, it would eliminate Medicaid expansion. Starting in 2020, states would receive a block grant, capped per beneficiary.
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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AXIOS reports that the Freedom Caucus , 35 ultra conservative House Republican capable of blocking legislation , have leaked some details of their tax reform plan.
      It would reduce corporate taxes to 16% from 35%, double the standard deduction and scrap “revenue neutrality,” (reform can’t contribute to deficits In addition, it would extend tax cut expiration to 20 years from 10 years. True to form, the Freedom Caucus will be duking it out with the Big Six of the Republican Party, which is crafting their own tax reform.  The six include, Ryan, McConnell, Brady, Hatch, Mnuchin, and Cohn.
      The Freedom Caucus, (IMHO Constitutional anarchists) is demanding unrealistic goals and could trash passage of any reform. One Republican insider commented, “It make me wonder why these guys run for Congress if they don’t want to get things done.” 
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
………………………………………………………………………………………………….
TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

………………………………………………………………………………………………
WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya, Oleg Deripaska all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

As Long as No One Breaks Ranks

Investor’s first read – Daily edge before the open
DJIA: 22,412
S&P 500: 2,508
Nasdaq  Comp.:6,456
Russell 2000: 1,445
Thursday,  Sept. 21, 2017   9:18 a.m.

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      At her news conference yesterday, Fed Chief Janet Yellen’s confirmed the Fed plans to raise rates in December and three times in 2018. Its federal funds rate has been  1% to 1.25% since its June 14 meeting.
      She also indicated the Fed plans to begin reducing the size of its $4.5 trillion asset portfolio in October with $10 billion a month, then increasing that rate by $10 billion every three months to a maximum pace of $50 billion a month or $600 billion a year, according to MarketWatch.
      Yellen described the move to shrink its balance sheet as gradual and predictable, obviously hoping the unwind, the first in nine years, will not disrupt the markets.    
       While low interest rates served a purpose coming out of the Great recession, low interest rates have robbed a huge portion of America of added income from fixed income and money market accounts that would surely have driven day-in and day-out  spending higher.
       It has clearly been a private party.  The stock market has rewarded  people of means, but the rest of America is getting NOTHING on its fixed assets.      
       Corporations haven’t needed low rates, except to borrow for the  repurchase of their own shares and max bottom line results and power stocks higher and higher for the benefit of management and – people of means.
        What happens if our eight year economic expansions craps out and a recession develops. The Fed’s low interest rate policy and bloated balance sheet renders it helpless to stimulate a recovery from a recession.
         It gets worse if the Republicans get a tax cut and their big spend on the military and/or infrastructure. While that may possibly extend the economic expansion, those are tools that would be needed to reverse a debilitating recession. 
         Worth noting, nine of the last 10 recessions have come with a Republican in the White House. The one Democrat recession was under Carter (6 months).  
TODAY
      UNCERTAINTY once spelled trouble for the stock market. It deterred buyers and triggered selling. Not so now. We are in a cruise control bull market that so far is bullet proof to any adverse news.
      However, without corrections along the way, (a pressure valve),  there is a build up in potential selling which then stands to happen all at once.
      All it takes is for a major institution to decide the market is becoming fundamentally too overpriced and wants to lock in its gains and …whoosh !
      As long as no one breaks ranks, the market will ratchet up.
      This is all setting up another perfect storm at some point – only worse.
       Q3 earnings will start to flow in October.  Factset  presently sees a gain for the quarter of 4.5%, that’s down from its projection of a gain of 7.5% at June 30. 
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SUPPORT “today”: DJIA:22,358;S&P 500:2,505; Nasdaq Comp.:6,436
RESISTANCE “today” DJIA:22,457;S&P 500:2,511;Nasdaq Comp.:6,467
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CORPORATE EARNINGS (updated Sept. 8 , 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.5%, and Q4 at +11.2%. For 2017 as a whole growth is projected at a plus 9.6%.  Currently, the P/E on forward  earnings is 17.6 x. That compares with a 10-year average P/E of 14.1.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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 POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
President Trump’s retweet of  a meme Sunday that spliced Him teeing off and driving a golf ball that was edited to appear it smacked Hillary Clinton in the middle of her back as she boarding a plane knocking her to the ground    — Childish ! What else can be said ?
………………………………………………………….
In a Sunday tweet to South Korea President Moon Jae-in, Trump referred to North Korea’s president Kim Jong-un as “Rocket Man.”   This from “mockit man,” comes as no surprise.
………………………………………………………………….
First, do no harm.  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control, as well as a firewall against single payer healthcare. It would have to be moved via the budget reconciliation process which allows the bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1 which means no debate, no CBO analysis.
      If the Republicans succeed, they would then own healthcare with a national system that will allow states to opt out of certain ACA regs. like charging sick people more, not honoring pre-existing conditions, and defund Planned Parenthood for a year. Additionally, it would eliminate Medicaid expansion. Starting in 2020, states would receive a block grant, capped per beneficiary.
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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AXIOS reports that the Freedom Caucus , 35 ultra conservative House Republican capable of blocking legislation , have leaked some details of their tax reform plan.
      It would reduce corporate taxes to 16% from 35%, double the standard deduction and scrap “revenue neutrality,” (reform can’t contribute to deficits In addition, it would extend tax cut expiration to 20 years from 10 years. True to form, the Freedom Caucus will be duking it out with the Big Six of the Republican Party, which is crafting their own tax reform.  The six include, Ryan, McConnell, Brady, Hatch, Mnuchin, and Cohn.
      The Freedom Caucus, (IMHO Constitutional anarchists) is demanding unrealistic goals and could trash passage of any reform. One Republican insider commented, “It make me wonder why these guys run for Congress if they don’t want to get things done.” 
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
………………………………………………………………………………………………….
TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
………………………………………………………………………………………………
Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
……………………………………………………………………..
CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
……………………………………………………………………….
ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

………………………………………………………………………………………………
WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya, Oleg Deripaska all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

Trump’s War Dance

Investor’s first read – Daily edge before the open
DJIA: 22,370
S&P 500: 2,506
Nasdaq  Comp.:6,461
Russell 2000: 1,440
Wednesday,  Sept. 20, 2017   9:18 a.m.

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TODAY
       Little has changed from Tuesday’ post.  Futures are trading little changed as we head into the open.  So far, the Street is not spooked by anything per its disinterest in President Trump’s war dance at the United Nations yesterday. This from the man who got five draft deferments not to serve in the military during the Vietnam War raged.     
       We will see if the Fed has any impact on the stock market today, as Fed Chief Janet Yellen gives her press conference at 2:30 today, following the Fed’s release of last month’s meeting.  She is expected to shed light on when the Fed will begin unwinding its $4.5 trillion balance sheet and if it will affect it plans to raise interest rated  this year and three times next.
       The market could get a further lift if the Fed backs off that policy.
       Ford’s decision to halt production at five of its plants to give it time to work off excess inventories confirms my concerns about a prolonged slump in the auto industry.
        Trump’s rant about North Korea was expected, but referring to Iran as “a murderous regime” and the 2015 nuclear deal an “embarrassment,” suggests he has once again demonstrated he is unhinged, dangerous, a human wrecking ball.
       The conservative, Washington Examiner, referred to the Iran nuclear deal as,” What used to be the world’s most opaque and worrisome nuclear program is now the world’s most transparent.”  Defense Secretary,James Mattis, national security adviser H.R. McMaster and  Secretary of State Rex Tillerson have encouraged Trump to certify Iranian compliance in October, which is done four times a year. Trump has done so twice to date, but his rhetoric suggests he is considering reneging in October.
      The International Atomic Energy Agency (IAEA) conducts frequent inspections at 30 Iranian sites, some under 24-hour video surveillance.  Signing the treaty with Iran in addition to the United States were, Britain, France, China, Russia and Germany.  What is he thinking ?
       At some point, this kind of recklessness will come home to roost, and that will jar Wall Street.
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Tuesday, September 19, 2017
      The Street has to triage a whole bunch of issues going forward. President Trump is at the United Nations to tell 193 sovereign states how to be more efficient, who to dump on and what to do to give the United States its money’s worth.
       Wednesday, the Fed will shed light on its schedule for normalizing its $4.5 trillion balance sheet. What are the consequences ? Depends on who you ask, probably not a big deal.  Unless you weren’t paying attention for the last six months, unwinding its balance sheet  comes as no surprise.
        Who could possibly guess what North Korea’s Kim Jong-un’s response  will be  now that he is branded as “Rocket Man.” Could be any number of things: “Jiralhanae, ” “Geseki,” “Babo, ” “Toejora,” “Kochu,”  “Yu_ _ _ _.”
        Then there is the 13-state, 7-week pitch on tax reform, which should get the Street’s juices flowing.
         And of course, we have Congress’ 71st attempt to kill Obamacare.  If successful, the Republican Party will then “own” healthcare, and from the looks of it, that possession will be its undoing, since it will create enormous confusion, be disruptive, hurt millions of people and  simply not work.  Could be loss of control of Congress – both Houses.
         Ah, who could forget Bobby Mueller, quietly chipping away at the multi-faceted issue of certain American’s enabling the Russians to decide who became our President.  Who does the laundry in the White House is another issue ?  Can’t be an illegal, there aren’t any left in the U.S., just ask a contractor or a farmer. “Crooked” Donald, or Manny ? We need a nickname for Mueller – Mauler ?, party pooper ?  piñata man ?
          Whatever happens, may not matter.  The Street’s computer algos are in buy-mode……until the day they aren’t !
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SUPPORT “today”: DJIA:;S&P 500:; Nasdaq Comp.:
RESISTANCE “today” DJIA:;S&P 500:;Nasdaq Comp.:
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CORPORATE EARNINGS (updated Sept. 8 , 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.5%, and Q4 at +11.2%. For 2017 as a whole growth is projected at a plus 9.6%.  Currently, the P/E on forward  earnings is 17.6 x. That compares with a 10-year average P/E of 14.1.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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 POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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President Trump’s retweet of  a meme Sunday that spliced Him teeing off and driving a golf ball that was edited to appear it smacked Hillary Clinton in the middle of her back as she boarding a plane knocking her to the ground    — Childish ! What else can be said ?
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In a Sunday tweet to South Korea President Moon Jae-in, Trump referred to North Korea’s president Kim Jong-un as “Rocket Man.”   This from “mockit man,” comes as no surprise.
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First, do no harm.  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control, as well as a firewall against single payer healthcare. It would have to be moved via the budget reconciliation process which allows the bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1.
If the Republicans succeed, they would then own healthcare with a national system that
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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AXIOS reports that the Freedom Caucus , 35 ultra conservative House Republican capable of blocking legislation , have leaked some details of their tax reform plan.
      It would reduce corporate taxes to 16% from 35%, double the standard deduction and scrap “revenue neutrality,” (reform can’t contribute to deficits In addition, it would extend tax cut expiration to 20 years from 10 years. True to form, the Freedom Caucus will be duking it out with the Big Six of the Republican Party, which is crafting their own tax reform.  The six include, Ryan, McConnell, Brady, Hatch, Mnuchin, and Cohn.
      The Freedom Caucus, (IMHO Constitutional anarchists) is demanding unrealistic goals and could trash passage of any reform. One Republican insider commented, “It make me wonder why these guys run for Congress if they don’t want to get things done.” 
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Battle of Bull Run

Investor’s first read Daily edge before the open
DJIA: 22,331
S&P 500: 2,503
Nasdaq  Comp.6,454:
Russell 2000: 1,441
Tuesday,  Sept. 19, 2017   9:18 a.m.

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      The Street has to triage a whole bunch of issues going forward. President Trump is at the United Nations to tell 193 sovereign states how to be more efficient, who to dump on and what to do to give the United States its money’s worth.
       Wednesday, the Fed will shed light on its schedule for normalizing its $4.5 trillion balance sheet. What are the consequences ? Depends on who you ask, probably not a big deal.  Unless you weren’t paying attention for the last six months, unwinding its balance sheet  comes as no surprise.
        Who could possibly guess what North Korea’s Kim Jong-un’s response  will be  now that he is branded as “Rocket Man.” Could be any number of things: “Jiralhanae, ” “Geseki,” “Babo, ” “Toejora,” “Kochu,”  “Yu_ _ _ _.”
        Then there is the 13-state, 7-week pitch on tax reform, which should get the Street’s juices flowing.
         And of course, we have Congress’ 71st attempt to kill Obamacare.  If successful, the Republican Party will then “own” healthcare, and from the looks of it, that possession will be its undoing, since it will create enormous confusion, be disruptive, hurt millions of people and  simply not work.  Could be loss of control of Congress – both Houses.
         Ah, who could forget Bobby Mueller, quietly chipping away at the multi-faceted issue of certain American’s enabling the Russians to decide who became our President.  Who does the laundry in the White House is another issue ?  Can’t be an illegal, there aren’t any left in the U.S., just ask a contractor or a farmer. “Crooked” Donald, or Manny ? We need a nickname for Mueller – Mauler ?, party pooper ?  piñata man ?
          Whatever happens, may not matter.  The Street’s computer algos are in buy-mode……until the day they aren’t !
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LESSON ON EXPLOITING  MARKET EXTREMES
      This is a chance for the Street to run the table, to drive an overvalued market to yet a more overvalued level, maxing the gain of highly leveraged positions before passing the toxic baton off to investors and professionals who think the party will never end. 
       The end of bull and bear markets is obvious in hindsight when the human element is no longer captive to fear and greed. What happens in late-stage bull and bear markets is a ratcheting of emotions to extremes. I have called it the, “I can’t stand it anymore” effect, when investors simply go all-in, even borrowing to leverage positions as a bull market ages, or selling out in bear markets, fearful that a decimated market has further downside.
        The key is to anticipate such extremes and begin raising cash as a market becomes overvalued by conventional yardsticks, and  begin  accumulating stocks in small amounts when news headlines preach doom.  Not easy !  Human emotions of fear and greed get in the way.
        So, what’s the big deal ?  Looking back, bull markets always followed bear markets with new highs. All one has to do is hold on.  That’s a tough sell when a portfolio is down 50% and all forecasts for a recovery are gloomy. Then too, the question of age enters the equation. Can one afford to wait several years to recoup losses ?
        By conventional. time-tested yardsticks, this stock market is historically overvalued, running on the fumes of hollow promises and expectations with the prospect of the Mueller investigation uncovering an unprecedented  scandal at the highest levels of the Trump administration.  Both the economy and bull market have exceeded the historic norm by a wide margin.
         Worse yet, the NYSE margin debt, borrowings from brokers to buy stocks, is hitting all-time highs, well in excess of the peak at the 2007 bull market peak, indicating excess leverage, which indicates a reduction in future buying power, as well as heightened risk once a market turns down.
     The difference this time around, is the whole investment process is computer algorithm driven, a think-alike buy-mode mentality that essentially creates its own bull market…….until someone breaks ranks and sells.
       The price/earnings ratio is one of the standard measures of stock value. At 17.5 times earnings projected ahead 12 months, the S&P 500 sells at 17.5 times earnings, which is significantly  higher than the ten year average of 14x.
       Analysts are quick to point out that the market has been this overvalued on only two occasions, before the 1929 crash and the bubble burst of dot-com stocks in 2000.
       Bloomberg reports that value investor, Seth Klarman, manager of $30 billion for Baupost Group, plans to return an unspecified amount of funds to clients simply because he cannot find  a reasonably valued stock to invest in.
       The frenzy created by  a rising market that appears to be bulletproof to all negatives is almost impossible for investors to keep in perspective. Clearly this is a new era, one is led to think.
       For weeks preceding the 2007 – 2009 bear market bottom, I urged readers to prepare for a buying opportunity, knowing full well the fear created by a market that was down 50 % in face of a global financial and fiscal meltdown would make it nearly impossible for anyone to believe an unprecedented buying opportunity happening. 
      It really didn’t matter that I issued a “buy” on March 10 after the DJIA hit 6,805.  What was most valuable was the lead up to that, the logic and rationale for going contrary to the crowd, contrary to what a reasonable human being would feel like doing, so opportunity would be more believable when the turn came.
       Take what I am writing as a warning that there is a vulnerability here.  Missing a bottom is one thing, missing a top can really hurt.
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SUPPORT “today”: DJIA:22,291;S&P 500:2,497; Nasdaq Comp.:6,431
RESISTANCE “today” DJIA:22,376;S&P 500:2,510;Nasdaq Comp.:6,475
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CORPORATE EARNINGS (updated Sept. 8 , 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.9%, and Q4 at +11.4%. For 2017 as a whole growth is projected at a plus 9.7%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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 POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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President Trump’s retweet of  a meme Sunday that spliced Him teeing off and driving a golf ball that was edited to appear it smacked Hillary Clinton in the middle of her back as she boarding a plane knocking her to the ground    — Childish ! What else can be said ?
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In a Sunday tweet to South Korea President Moon Jae-in, Trump referred to North Korea’s president Kim Jong-un as “Rocket Man.”   This from “mockit man,” comes as no surprise.
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First, do no harm.  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control, as well as a firewall against single payer healthcare. It would have to be moved via the budget reconciliation process which allows the bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1.
If the Republicans succeed, they would then own healthcare with a national system that
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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AXIOS reports that the Freedom Caucus , 35 ultra conservative House Republican capable of blocking legislation , have leaked some details of their tax reform plan.
      It would reduce corporate taxes to 16% from 35%, double the standard deduction and scrap “revenue neutrality,” (reform can’t contribute to deficits In addition, it would extend tax cut expiration to 20 years from 10 years. True to form, the Freedom Caucus will be duking it out with the Big Six of the Republican Party, which is crafting their own tax reform.  The six include, Ryan, McConnell, Brady, Hatch, Mnuchin, and Cohn.
      The Freedom Caucus, (IMHO Constitutional anarchists) is demanding unrealistic goals and could trash passage of any reform. One Republican insider commented, “It make me wonder why these guys run for Congress if they don’t want to get things done.” 
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin Debt Hitting All-Time Highs

Investor’s first read – Daily edge before the open
DJIA: 22,268
S&P 500: 2,500
Nasdaq  Comp.:6,448
Russell 2000: 1,431
Monday,  Sept. 18, 2017   9:18 a.m.

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      This is a chance for the Street to run the table, to drive an overvalued market to yet a more overvalued level, maxing the gain of highly leveraged positions before passing the toxic baton off to investors and professionals who think the party will never end. 
       The end of bull and bear markets is obvious in hindsight when the human element is no longer captive to fear and greed. What happens in late-stage bull and bear markets is a ratcheting of emotions to extremes. I have called it the, “I can’t stand it anymore” effect, when investors simply go all-in, even borrowing to leverage positions as a bull market ages, or selling out in bear markets, fearful that a decimated market has further downside.
        The key is to anticipate such extremes and begin raising cash as a market becomes overvalued by conventional yardsticks, and  begin  accumulating stocks in small amounts when news headlines preach doom.  Not easy !  Human emotions of fear and greed get in the way.
        So, what’s the big deal ?  Looking back, bull markets always followed bear markets with new highs. All one has to do is hold on.  That’s a tough sell when a portfolio is down 50% and all forecasts for a recovery are gloomy. Then too, the question of age enters the equation. Can one afford to wait several years to recoup losses ?
        By conventional. time-tested yardsticks, this stock market is historically overvalued, running on the fumes of hollow promises and expectations with the prospect of the Mueller investigation uncovering an unprecedented  scandal at the highest levels of the Trump administration.  Both the economy and bull market have exceeded the historic norm by a wide margin.
         Worse yet, the NYSE margin debt, borrowings from brokers to buy stocks, is hitting all-time highs, well in excess of the peak at the 2007 bull market peak, indicating excess leverage, which indicates a reduction in future buying power, as well as heightened risk once a market turns down.
     The difference this time around, is the whole investment process is computer algorithm driven, a think-alike buy-mode mentality that essentially creates its own bull market…….until someone breaks ranks and sells.
       The price/earnings ratio is one of the standard measures of stock value. At 17.5 times earnings projected ahead 12 months, the S&P 500 sells at 17.5 times earnings, which is significantly  higher than the ten year average of 14x.
       Analysts are quick to point out that the market has been this overvalued on only two occasions, before the 1929 crash and the bubble burst of dot-com stocks in 2000.
       Bloomberg reports that value investor, Seth Klarman, manager of $30 billion for Baupost Group, plans to return an unspecified amount of funds to clients simply because he cannot find  a reasonably valued stock to invest in.
       The frenzy created by  a rising market that appears to be bulletproof to all negatives is almost impossible for investors to keep in perspective. Clearly this is a new era, one is led to think.
       For weeks preceding the 2007 – 2009 bear market bottom, I urged readers to prepare for a buying opportunity, knowing full well the fear created by a market that was down 50 % in face of a global financial and fiscal meltdown would make it nearly impossible for anyone to believe an unprecedented buying opportunity happening. 
      It really didn’t matter that I issued a “buy” on March 10 after the DJIA hit 6,805.  What was most valuable was the lead up to that, the logic and rationale for going contrary to the crowd, contrary to what a reasonable human being would feel like doing, so opportunity would be more believable when the turn came.
       Take what I am writing as a warning that there is a vulnerability here.  Missing a bottom is one thing, missing a top can really hurt.
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SUPPORT “today”: DJIA:22,236 ;S&P 500:2,496; Nasdaq Comp.:6,441
RESISTANCE “today” DJIA:22,344;S&P 500:2,508;Nasdaq Comp.:5,459
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CORPORATE EARNINGS (updated Sept. 8 , 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.9%, and Q4 at +11.4%. For 2017 as a whole growth is projected at a plus 9.7%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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TRUMP STIMULUS  – OVERRATED – i.e BULL S_ _ _ !    
      The Street has been buying stocks since November heartened by expectations that the big Trump stimulus tax cuts, deregulation, big infrastructure spend  will justify an already overpriced stock market.
TAX CUTS    
      President Trump is out hyping tax cuts as the catalyst for increased economic growth.  That all sounds good, but a closer examination suggests it’s more smoke and mirrors to please his base.
      Conservative, Gary Shilling’s Insight * reminds readers that 52% of American households pay no income tax, that it is the higher income people who benefit most and additional income doesn’t translate into additional spending.   
      According to the liberal non-partisan, Center For Budget & Policy Priorities, the bottom four-fifths of U.S. households would lose under Trump, adding that half of the tax cuts would go to the top 1% of households where annual incomes exceed $3.4 million annually.
      The GOP argues that the U.S. corporate tax rate makes us uncompetitive with comparable companies worldwide.  Not so, when accounting for loop holes and tax breaks, U.S. company’s tax rate is well below 35%.  The average tax rate on new investments made in the U.S is 24% vs. 21% for G-7 industrialized, democratic countries weighted by size.
DEREGULATION  
      Insight notes that every president since Jimmy Carter has been unsuccessful in reduce  the financial cost of regulations.
      Republicans plan to  undo regs. affecting power plant emissions, banks and other financial institutions, water quality, labor,  telecommunications and healthcare. 
      The dereg process can be so complicated in the case of water and carbon emissions a whole new rule making process would have to be pursued, it would be easier to just not enforce regs. or defund them. How’s that for the party of law and order ?
      Also according to Insight, the large banks don’t want to dismantle Dodd-Frank, the cost would be prohibitive on top of the huge cost to comply.
INFRASTRUCTURE SPEND
       The big spend for the infrastructure won’t hit for years.  The administration can allocate the funds, but spending occurs at the state and local level where it encounters bureaucratic hurdles. The need is undeniable, but “shovel ready” not yet.
       The American Society of Civil Engineers (ASCE) compiles a report card on the nation’s infrastructure components.
RATINGS ARE: 
Rail  –  “B”,
Bridges, Ports, Solid Waste  – “C+”,
Energy, Hazardous Waste, Waste Water, Parks, Schools – “D+”
Air Transport, Dams, Drinking Water, Inland Waterways, Roads – “D”
Transit – “D -“           
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 POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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TRUMP’S poll numbers got a bump last week, probably as a result of his outreach to the Dems.  Trump friendly Rassmussen puts his favorable at 44%, Gallup sees him stuck at 38%.
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YET ANOTHER ATTEMPT TO ZAP ACA !  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control, as well as a firewall against single payer healthcare. It would have to be moved via the budget reconciliation process which allows the bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1.
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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AXIOS reports that the Freedom Caucus , 35 ultra conservative House Republican capable of blocking legislation , have leaked some details of their tax reform plan.
      It would reduce corporate taxes to 16% from 35%, double the standard deduction and scrap “revenue neutrality,” (reform can’t contribute to deficits In addition, it would extend tax cut expiration to 20 years from 10 years. True to form, the Freedom Caucus will be duking it out with the Big Six of the Republican Party, which is crafting their own tax reform.  The six include, Ryan, McConnell, Brady, Hatch, Mnuchin, and Cohn.
      The Freedom Caucus, (IMHO Constitutional anarchists) is demanding unrealistic goals and could trash passage of any reform. One Republican insider commented, “It make me wonder why these guys run for Congress if they don’t want to get things done.” 
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Reform Center Stage….Unless

Investor’s first read – Daily edge before the open
DJIA:22,203
S&P 500: 2,495
Nasdaq  Comp.:6,495
Russell 2000: 1,423
Friday,  Sept. 15, 2017   9:08 a.m.

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TODAY
      Yesterday’s market was a non-event.  The DJIA was up marginally, but the S&P 500 and Nasdaq Comp. were down.
Monday, September 25 is set for the release of the core elements of tax reform.  Bloomberg Television reports that the President is pitching “tax relief for the middle class, not for the rich.”
       More than half the middle class doesn’t pay any income tax at all. A budget resolution must be reached in order to employ the procedure that would enable passage of a tax bill with 50 Senate votes, thus avoiding a Democratic filibuster.
       The bill will largely be a product of the Big Six administration and Congressional members , including House Ways and Means Kevin Brady, House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Senate Finance Chair Orrin Hatch, Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn.
       That’s about all that’s worth mentioning now – things will change, opposition will surface, and deadlines will be missed.
       What is important here is the media hype.  Will the Street drive stocks higher in face of corporate tax rate cuts, which at the end of the day won’t have a great impact on most big company bottom lines.
        Look for a mixed-to-soft open.  The key will be if institutions use any weakness to buy.
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SUPPORT “today”: DJIA:22,148;S&P 500:2,492; Nasdaq Comp.:6,405
RESISTANCE “today” DJIA:22,232;S&P 500:2,497;Nasdaq Comp.:6,445
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THURSDAY’S POST
When does a correction start ?

       I  thought it would start on August 17 with the DJIA at 22,024 (S&P 500: 2,468) when I headlined, “Catharsis Needed – Raise Cash , and followed with the same on August 24 and a “SELL” August 29.
       I was Wrong !        
       However, my reasons for bearishness stand, nothing wrong with my logic, but it didn’t happen when I thought it would, i.e. timing.  While the market averages have only gone against me by less than 2%, support for the market has stabilized, due to the big tax reform launch.
       It will be more difficult for the market to plunge from here. One of the first lessons serious investors and especially analysts who put projections in print for all to see is, recognize a miscall as soon as possible, and admit it.
       My “raise cash/sell” call may look great a month from now or two, but for now, the Street will not be denied, they want  to party.
       Center stage this week is very dynamic 13-state, 7-week, Tax reform road show was announced this week, giving the Street new hope. This will get a lot of press. The Street will salivate.
       The RISK of a severe correction is REAL. It can happen at any time, So buyer beware !
       The outcome of the Mueller investigation, Congressional and FBI investigations could be a game changer.  The S&P 500 dropped 50% in face of the Watergate scandal, though the OPEC Oil Embargo also had a hand in the carnage. A huge scandal now should have a big impact on the market and the ability of the Republicans to govern.
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      THIS IS A CHANCE FOR THE STREET TO RUN-THE-TABLE, TO DRIVE AN OVERVALUED MARKET TO YET A MORE OVERVALUED LEVEL, MAXING THE GAIN OF HIGHLY LEVERAGED POSITIONS BEFORE BAILING OUT.  That’s what this is about now, that’s what it has always been about in late-stage bull markets.
      The only difference this time around, is the whole investment process is computer algorithm driven, a think-alike buy-mode mentality that essentially creates its own bull market…….until someone breaks ranks and sells.

       The price/earnings ratio is one of the standard measures of stock value. At 17.5 times earnings projected ahead 12 months, the S&P 500 sells at 17.5 times earnings, which is significantly  higher than the ten year average of 14x.
       Analysts are quick to point out that the market has been this overvalued on only two occasions, before the 1929 crash and the bubble burst of dot-com stocks in 2000.
       Bloomberg reports that value investor, Seth Klarman, manager of $30 billion for Baupost Group, plans to return an unspecified amount of funds to clients simply because he cannot find  a reasonably valued stock to invest in.
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CORPORATE EARNINGS (updated Sept. 8 , 2017)  – Factset.com
      Q2 earnings growth  is projected at +10.3%,up from 6.5% at June 30. Q3 is projected at +4.9%, and Q4 at +11.4%. For 2017 as a whole growth is projected at a plus 9.7%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry.
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TRUMP STIMULUS  – OVERRATED – i.e BULL S_ _ _ !    
      The Street has been buying stocks since November heartened by expectations that the big Trump stimulus tax cuts, deregulation, big infrastructure spend  will justify an already overpriced stock market.
TAX CUTS    
      President Trump is out hyping tax cuts as the catalyst for increased economic growth.  That all sounds good, but a closer examination suggests it’s more smoke and mirrors to please his base.
      Conservative, Gary Shilling’s Insight * reminds readers that 52% of American households pay no income tax, that it is the higher income people who benefit most and additional income doesn’t translate into additional spending.   
      According to the liberal non-partisan, Center For Budget & Policy Priorities, the bottom four-fifths of U.S. households would lose under Trump, adding that half of the tax cuts would go to the top 1% of households where annual incomes exceed $3.4 million annually.
      The GOP argues that the U.S. corporate tax rate makes us uncompetitive with comparable companies worldwide.  Not so, when accounting for loop holes and tax breaks, U.S. company’s tax rate is well below 35%.  The average tax rate on new investments made in the U.S is 24% vs. 21% for G-7 industrialized, democratic countries weighted by size.
DEREGULATION  
      Insight notes that every president since Jimmy Carter has been unsuccessful in reduce  the financial cost of regulations.
      Republicans plan to  undo regs. affecting power plant emissions, banks and other financial institutions, water quality, labor,  telecommunications and healthcare. 
      The dereg process can be so complicated in the case of water and carbon emissions a whole new rule making process would have to be pursued, it would be easier to just not enforce regs. or defund them. How’s that for the party of law and order ?
      Also according to Insight, the large banks don’t want to dismantle Dodd-Frank, the cost would be prohibitive on top of the huge cost to comply.
INFRASTRUCTURE SPEND
       The big spend for the infrastructure won’t hit for years.  The administration can allocate the funds, but spending occurs at the state and local level where it encounters bureaucratic hurdles. The need is undeniable, but “shovel ready” not yet.
       The American Society of Civil Engineers (ASCE) compiles a report card on the nation’s infrastructure components.
RATINGS ARE: 
Rail  –  “B”,
Bridges, Ports, Solid Waste  – “C+”,
Energy, Hazardous Waste, Waste Water, Parks, Schools – “D+”
Air Transport, Dams, Drinking Water, Inland Waterways, Roads – “D”
Transit – “D -“           
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 POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TRUMP’S poll numbers got a bump last week, probably as a result of his outreach to the Dems.  Trump friendly Rassmussen puts his favorable at 44%, Gallup sees him stuck at 38%.
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YET ANOTHER ATTEMPT TO ZAP ACA !  Senators Lindsey Graham, Bill Cassidy, Ron Johnson, and Dean Heller just introduced a new health care repeal bill – here we go again.
The bill would allocate federal funds to each state (block grant), the idea being local control,as well as a firewall against single payer healthcare. It would have to be moved via te budget reconciliation process which allows te bill to pass the Senate with a simple majority, avoid a Democrat filibuster.  Problem here is, it would all have to be done before October 1.
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Chief of Staff, John F. Kelly has muzzled President Trump.  Can’t last long.
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A huge White House attempt to smear former FBI director, James Comey is underway. Looks like Special Counselor, Robert Mueller is getting under someone’s thin skin.   Will Acting Attorney General, Rod Rosenstein be told to initiate procedings against Comey. If he doesn’t, will he be fired ?
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AXIOS reports that the Freedom Caucus , 35 ultra conservative House Republican capable of blocking legislation , have leaked some details of their tax reform plan.
      It would reduce corporate taxes to 16% from 35%, double the standard deduction and scrap “revenue neutrality,” (reform can’t contribute to deficits In addition, it would extend tax cut expiration to 20 years from 10 years. True to form, the Freedom Caucus will be duking it out with the Big Six of the Republican Party, which is crafting their own tax reform.  The six include, Ryan, McConnell, Brady, Hatch, Mnuchin, and Cohn.
      The Freedom Caucus, (IMHO Constitutional anarchists) is demanding unrealistic goals and could trash passage of any reform. One Republican insider commented, “It make me wonder why these guys run for Congress if they don’t want to get things done.” 
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IS PRESIDENT TRUMP BROKE ? Bill Palmer, Palmerreport.com thinks so.
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REPUBLICAN NATIONAL COMMITTEE – WHAT GIVES ?
Sara Armstrong, RNC’S chief of staff, is leaving. This marks the sixth RNC staffer to leave in a month.
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We have a new head of the Justice Department’s criminal division. It’s Brian Benczkowski, previously an attorney for Russia’s Alfa Bank.   hmmmm !
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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PARDON ME, but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      Trump campaigned in  Missouri last week for  tax reform, including middle-class tax cuts,  and a simpler tax code. Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
      An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level. Referring to a corporate tax rate for developed nations of 24%, Trump says…”We have no choice….we must lower our taxes.
       Facts from mic.com: In 2016 the Government Accounting Office (GAO) found at least two-thirds of U.S. corporations did not pay federal income tax between 2006 and 2012.  One-fifth of America’s largest profitable corporations didn’t pay any income tax in 2012.
      Another study released earlier this year found the effective tax rate for consistently profitable Fortune 500 companies is 21.2%
      All told, U.S. corporations pay slightly less  in overall taxes than companies  in comparable countries.
      This begs the question of how much impact would  corporate tax cuts have on the S&P 500.       
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      Right winger and Breitbart grad, Sebastian Gorka is now gone,  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter  cuddler. 

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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

       Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.

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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.