Bear Markets Start 6 to 12 Months Ahead of Recessions

INVESTOR’S first read.com – Daily edge before the open
DJIA: 25,201
S&P 500:2,775
Nasdaq Comp.:7,695
Russell 2000:1,676

Thursday, June 14, 2018     8:01 a.m.

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 March 10, 2009 Special Bulletin (DJIA: 6,805) BUY !
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This volatility is EXACTLY what I meant when I Warned:
“2018: The Wildest One in Years.” December 27, 2017
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“No one is bearish, and that’s BEARISH…Odds favor a 12%-18% correction” – Jan. 22, 2018: DJIA:26,214.  (A 14-day 12.2% correction started 4 days later.)
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What’s so Christian about favoring the rich over the poor ?

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SUMMARY:         I Can’t say it any better than this, it makes no sense to say the same things in different words. Re-read anyhow just in case you may pick up something you missed the first time.
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     While I believe we have seen the top of the 2009 – 2018  bull market, I have noted  for months the possibility April/May would produce a Q1 earnings rally.
      That rally featured a run in April that gave most of its gain back the same month, followed by another rally which also ran into headwinds in May, which has now turned into a panic by shorts and investors racing to buy the Street’s hottest growth stocks  Netflix (NFLX), Amazon (AMZN), Facebook (FB),  Microsoft (MSFT), Apple (AAPL), Google/Alphabet (GOOG).
      This scramble drove Nasdaq to new highs.
      The small company Russell 2000 is also on a tear and reflects a classic speculative blow off so characteristic of the final stage of a bull market.
      The DJIA and S&P 500 lag, but may possibly go to new highs as speculative fever rises.

       Bull markets are hard to shut down. Simply put, the Street and investors don’t want the party to end and keep buying, some fully aware the stock they are buying is overvalued, but they expect to sell it to someone else at a higher price, a greater fool.  This spawned the “greater fool theory,” which is resurrected by journalists in late stage bull markets.
       Unlike bear market bottoms, Bull markets are hard to call. Greed is harder to measure than fear. 
        What I can say with confidence is that  economic, seasonal, psychological and technical indicators are at levels so extreme compared with other bull market tops, it is just a matter of time until the BIG money pulls the plug, or a piece of jolting news shatters the craving for yet fatter portfolio values.
        One of the most wrenching emotional decisions investors with cash on hand is to watch others make easy money buying overpriced stocks, hoping to sell it to someone else at a higher price before “last call.”
         If you are a normal human being, you will go all-in, and when you least expect it, end up in a hole.  IF YOU MUST, and see a stock you absolutely have to own, buy a tiny position, then look around for stocks you think have had an unjustified run and sell half.  I find that “hope” of any move in a stock, up so you can sell, or down if you want to buy at a lower level, is a warning sign that it won’t happen.

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      Factset projects a Q2 earnings gain of  18.6%, that’s up from its projection of +17.1% on March 31.  For 2108 they see a gain of 19.6%.
      Thomson Reuters pegs Q2 earnings gain at +17.8% and something a bit above +19% for the year as a whole . HOWEVER,  it presently projects Q1 2019 at +4.1%, Q2 at +8.5%.  Could it be the 19% jump in 2018 earnings is already  factored into the market ?
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POSITIVES:
        S&P 500 earnings projections for Q2 earnings growth is currently running a bit above +18%, 2019 is a different story. Thomson Reuters sees Q1 2019 earnings growth at +4.0, and Q2/Q3  +8.5%.  These numbers always change, but the year of double digit earnings growth ends this year. With price/earnings ratios extended well beyond historic norms, there is little justification for the market averages to expand from here.
NEGATIVES:

      RISING INTEREST RATES:
      The 10-year treasury bond
has been rising sharply over the last two weeks and now stands at 2.90%.  The prospect for higher rates  is one reason for buyers’ hesitation to chase stocks.
OVERVALUED MARKET
     Thompson Reuters reports the S&P 500 sells at 18.8 times earnings and 16.7 times a year from now. All this versus a 10-year average of 14.3.
      The Shiller P/E runs much higher at 32.6  times earnings versus a mean of 16.9.  Shiller’s P/E is based on  inflation adjusted earnings over 10 years.
      The S&P 500 price to sales ratio is 2.2 vs.  an average of 1.49.  Before the 2007-2009 bear market it stood at 1.5 x.
POTENTIAL INTERNATIONAL FINANCIAL CRISIS
      Italy’s economic, financial and political woes contributed to global plunges in financial markets recently..
      Victories in March’s parliamentary election by the populist Five-Star Movement and the far-right League could put the survival of the eurozone and euro at risk, leading to an international financial crisis comparable to that seen in 2009 – 2010.
      Italy is a big player. It is the eurozones third largest economy and has the  world’s third largest sovereign debt  currently $2.5 trillion. At 133% of GDP, it is the second most-indebted nation in the Eurozone  with non-performing loans at 15% of the banking system’s balance sheet. Worse yet, it has not fully recovered from the 2007 -2008 financial crisis. Default on debt, withdrawal from the Eurozone and euro would be unthinkable, yet loss of political control to a populist group could lead to that result.
      Expect Italy’s crisis to come and go as a threat to financial market stability.
AGING BULL MARKET:
      The bull market is now  nine years and three months old (109 months).  That’s 3.5 times the average of the last 15 bull markets.
AGING ECONOMIC EXPANSION:
      The current economic expansion has lasted 108 months. That’s 48 months (1.8x) longer that the average expansion going back to 1945.  Nine out of the last 10 recessions have occurred with a Republican in the White House.
      The onset of bear markets have led the beginning of recessions by 8.5 months going back to 1956, so don’t look for a recession to signal a bear market. The longest lead time was 13 months (1968 – 1969) The “mode” (most frequent) is 12 months.
TRUMP’S TRADE WAR TANTRUM:
       He’s  a human wrecking ball, blustering without forethought of the consequences of  his actions. 
       New York Times’ Neil Irwin summarized the end result of Trump’s tariff  blundering. Irwin noted that prices of inputs like steel fluctuate all the time, and businesses are generally good at adapting.  Those supply chains managers and logisticians, he says, are good at their jobs. He adds, “It is that the administration’s trade policy is displaying  an erratic, improvised, us-against-the-world quality that is anathema to business that must make long-term decisions about how to deploy capital.”
      Bottom line: UNCERTAINTY !   That’s always been bad for stocks, this time it will be bad for  future business, as well.
TRUMP ADMINISTRATION IMPLODING:
      Will he fire Rosenstein, then Mueller ?  Resign ? Create a series of constitutional crises ? Will, Mueller release devastating information about him ?
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TODAY    
 What’s important here is so most economic and stock market indicators are at unsustainable historic highs.  That has always been a sell signal.
     To summarize some points made above.
The Shiller S&P 500 Price/Earnings ratio (P/E) is 33.1 times earnings. The mean P/E is 16.9.
The S&P 500 Price/Sales ratio is 2.26 times sales. The mean is 1.49.
The Total Market Value/GDP ratio is 153%. The market becomes significantly overvalued at 115%.
      These measures of stock market values are extreme, suggesting little room to become more extreme.  
      No one is bearish………. that’s bearish !
       We are due for some bombshell announcements coming out of the Mueller investigations.
That can have an impact IF it creates enough uncertainty about the future control of  Congress and survival of the Trump/Pence administration.
       I am upset by this administration’s 180 degree shift to favoring long-standing enemies/unfriendlies at the expense of long-standing friends, especially Canada and Europe.
      This is what happens when you let the fox into the henhouse.
BREAKING:  The market shook off an expected bump in the Fed’s benchmark federal funds rate, and was encouraged by fedspeak that the economy was strong. Really !  They can’t say anything negative for fear of triggering a panic.  Pay attention to what they do not what they sa >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”:DJIA:25,097;S&P 500:2,764;Nasdaq Comp.:7,641
RESISTANCE “today” DJIA:25,276;S&P 500:2,781;Nasdaq Comp.:7,709

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POLITICAL/STOCK MARKET
TRUMP EXIT STRATEGY: The most important thing for King Donald is his image.  Currently he is scrambling to initiate as many perceived accomplishments as possible (taxes, anti-immigrant, anti-allies, deregulation, North Korea, Iran, ISIS, unemployment). This way, if he is impeached, defeated in 2020, or forced to resign, he can claim to have been the greatest president of all-time – he’ll tweet it relentlessly, deviancy-downed Americans will believe it and every network in the country, whores that they are, (including MSNBC and CNN) will scramble to cover his tweets.  IMHO: he won’t risk losing in 2020, just not run – declare he has accomplished his mission and walk away.
      Trump does what you would expect him to do.  What is needed to preserve our republic is for the voter to better understand what is at risk here, study the issues without bias and vote responsibly. NOT GOING TO HAPPEN !   Our only hope is that his “base” is smaller than he thinks, that in the privacy of the voting booth, Trumpism is rejected. Beat these jackasses at the polls, they’ll disappear, never to show up again.
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G-7 meeting got ugly …. Cracks surfacing in Eurozone economies ……………………………………………
TRUMP’S LIES and misleading statements has reached 3,000 since taking office, according to the Washington Post.
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Wake up out there. These aren’t Republicans, they are anarchists, extremists  who have wrested control of the Republican party over the last 20 years and are intent on a party rule with no checks and balances.
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DEVIANCY DOWN:  A term originally used by the late Senator Patrick Moynihan to warn voters against accepting bad behavior, stupidity, demagoguery, lying, ignorance as the “norm.”
      Bloomberg’s Albert Hunt, wrote about it on May 14, 2017, referring to Trump critics being in awe when Trump gives a speech that is reasonably coherent or takes sensible action on something.  Suddenly  critics treat it as a momentous occasion, when in fact, it is what presidents are expected to do.
      Essentially, it is the dumbing down of a person’s behavior. This is partly responsible for Trump supporters and Republicans in Congress  accepting Trump’s obnoxious behavior, uncharacteristic of past presidents.  In spite of all of Trump’s nonsensical bluster and tweets, even his critics are relieved when he has a moment of sanity, hopeful that a new Trump has emerged, one who acts presidential. Why is inferior behavior acceptable ? Don’t know, but my guess is people feel less inferior when a high level official like Trump acts inferior too.
      Steven Brill’s new book, “Tailspin,” calls the election of Trump a “Revolt Against Meritocracy,” a political term  reflecting the belief that things like economic goods or power should be vested in people with high level skills, talent, training, education and achievement, NOT in people lacking these merits, ergo Deviancy Down..
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National security adviser, John Bolton, has added two  loyalists to the National Security Council, CNN reposts, referring to Sarah Tinsley and Garrett Marquis. Both have been associated with Bolton for years. Considered a hawk on international affairs, Bolton appears to be positioning his team to back up Trump in any military strike he sees would please his base, possibly in time for the midterm elections. Putting the country on a war footing tends to rally the country behind a president.
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POSSIBLE ! That the blue wave won’t happen in November.  Why? The American voter is still zoned out about what is happening – too busy with other stuff, not capable of  objectively analyzing issues accurately without bias.
     The result: The extremist Republicans and their president will run the economy, a constructive foreign relations policy, and America’s quality of life into the ground.  In order to get the American voter’s attention, we have to hit bottom first.
      That means an extended recession, a fiscal crisis (unable to pay bills), a 65% drop in the stock market and,  national unrest greater than that which the Vietnam War attracted.
       We are witnessing the unfolding of  the biggest scandal in our country’s history, including illegal financial transactions, vote tampering and  untethered collusion and obstruction of  justice at the highest level.  This may take years to unravel.
      Again, I say “possible,” not probable..  Probable would be all that but not as severe.
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Corporations got a 40% tax cut, John and Jane Q get a 1.2% – 1.8% cut, even so, Trump plans to introduce a “rescission package” to cut $15 billion in already approved spending on the Children’s Health Insurance Program (CHIP), the Center for Medicare and Medicaid Innovation program, as well as 30 other programs. The  U.S. House will likely approve his  rescission  package, the Senate may not.
ANOTHER TRUMP BLUNDER !
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According to Bloomberg.com, 1,100 economists warn that Trump is repeating one of the biggest mistakes of the Great Depression – tariffs and trade protectionism. The warning came in a letter from the conservative-leaning National Taxpayers Union.
      China loves it !  Trump opened the door, China entered, capitalizing on Trump’s regressive “America First” mantra, with its far reaching Belt and Road outreach with investments encompassing infrastructure, education, construction materials, rail and hi-way, auto, real estate, power grid and iron and steel investments to 68 countries, 65% of the world’s population and 40% of global GDP.
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      Kim took Trump’s war with North Korea option off the table, so looks like Trump now has his sights set on IRAN – to please his base, of course, in time for the mid-terms, of course.
      None of this would happen if we still had the military draft.
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Corporations got a 40% tax cut.  What did you get ? 1.2%, 1.5%?
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North Korea give up nuclear weapons ?  Never !  Kim wants a global stage, so does Trump, who will not risk being embarrassed by the little tyrant. Trump will bail.  He needs a villain to trash to please his base. Kim has what he wants, the recognition as a nuclear power, and he can thank a blundering Trump for it. If Trump deserves credit for the recent lovefest between the two Koreas, then is entitled to it.  Currently, he is taking 100% credit.  I think he has been played like a harp.  
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Impeachment of Trump unlikely with this Republican House. Trump has surrounded himself with newly appointed Cabinet members, so Section 4 of the 25th amendment is not a reality.   What’s left ?  A deal with Mueller for his RESIGNATION ?
      He could
tweet forever how he accomplished tax cuts, deregulation, a big spend on the military. He could claim that though he was mistreated by the press, he will still go down in history as the best President ever.
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Must Read: “Will Christian Nationalism Drive Trump’s Base to the Polls in November ?”  Truthout April 15, Bill Berkowitz. This explains why his base of Christians votes for an immoral person, one whose behavior is the antithesis of the teachings of Christ.
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Will Trump  Fire Mueller ?

LOOK FOR THIS  TIP-OFF:

      Trump can’t fire Mueller directly, it must be done by the Department of Justice.  Trump would have to find someone to do it.  Nixon did it in 1973 when he had to work through two attorney generals until  his solicitor general, Robert Bork fired Special Prosecutor Archibald Cox. 
     
Deputy Attorney General Rod Rosenstein isn’t going to do it, so Trump must find someone from DOJ , or someone outside who has already been confirmed by the Senate who will do it.  Rachel Brand, a conservative who supported Sen. Cruz in 2017 would be in line to take over from Rosenstein, but she just announced she is resigning from DOJ (2/9/19)      
       DOJ’s Dana Bounte’s resignation last October and his recent  appointment by FBI Director Christopher Wray as general Counsel  for the FBI takes him out of the running, though it is doubtful he would have fired Mueller.   He served as the U.S. Attorney General from the Eastern Dist. of Virginia, as well as, acting assistant attorney general  for the National Security Division of DOJ and may be a valuable source of information for the FBI, since he had an inside view.     
      Unconfirmed rumors are that EPA’s Scott Pruit (already confirmed) has shown an interest in the DOJ, is a possibility for a post there.  We now know that is a stretch given the baggage he carries. Attorney General Jeff Sessions has recused himself from the Russian/Trump  “investigation” March 2017.
       Philip Bump, Washington Post (WAPO) April 10, did a great job outlining possibilities in, “Why Trump can’t fire Mueller – at least not directly.”  I can only touch on a few of his points here.
       In his article, Georgetown University’s professor Paul Butler raises the interesting point that  firing Mueller may not be necessary if  Rosenstein is replaced by someone hostile to the Special Counsel’s investigation.  He would simply force a stall with lots of demands, even leak information to the White House.   
       REASONS NEEDED TO FIRE MUELLER: Trump would have to have  good reason to fire Mueller.  Grounds must be, misconduct, dereliction of duty, incapacity, conflict of interest, or other good cause, including violation of policies of the Department of Justice, and failure to follow Justice Departments guidelines and violation of applicable canons of ethics.
       CAN TRUMP RESCIND  SPECIAL COUNSEL REGULATION ?  Yes, it’s possible but many legal hurdles  would make it difficult and possibly so time consuming as to make the action worthless. There is no clear cut answer. This would be decided in court, the legal ramifications just very complex.
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FISCAL CRISIS LOOMS IN FUTURE:  Headlines:“Federal debt primed to explode”….”U.S. Deficit to Surpass $1 Trillion Two Years Ahead of Estimates”….”This Year’s budget deficit to hit $804 B after tax cuts and spending hikes”….
       This is all a Republican scheme to justify massive spending cuts to social, health, educational  and safety net programs. It is called “Starving the Beast,” and will lead to debilitating and prolonged recession/bear market, increased crime, rioting and civil unrest.  Republicans set the stage with massive, unnecessary tax cuts and a big budget spend (see below: “Corporate Tax Cut Irresponsible”)
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Sinclair Broadcast Group  (BEWARE !)

One of my greatest concerns has become reality – Sinclair Broadcast Group is using its clout as owner of  193 television stations as a lever to manipulate local station viewers’ minds pitching it’s right wing propaganda. Viewers tend to trust local stations programing over national networks.
       I called attention to this danger in my September 1, blog, warning that Sinclair’s reach to 80 markets gave it unfettered power. In recent days, Sinclair required news anchors in 200 of its local TV stations to warn viewers that unnamed media are always biased, and publishing fake news. This is a classic example of “projection” where one guilty of doing something wrong actually accuses another of that deed. Sinclair accuses liberal media of manipulation when in fact it is the one doing it.  
         What is more, conservative, Ajit Pae, appointed to FCC Chair by Trump, is trying to push FCC approval of Sinclair’s acquisition of Tribune Broadcast Group which would greatly expand its reach into New York, La and Chicago markets with an addition of 42 more stations. Currently, the FCC is weighing  the pros and cons of such an acquisition.  Reportedly, if Sinclair is compelled to divest of a number of stations to bypass  anti-trust issues, Fox Broadcasting may be the company to pick them up ???

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TRUMP – A human Wrecking ball ?   My headline  on January 3, 2017
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Cambridge Analytica (now in bankruptcy) is center stage again. Palmer.com  reports  someone behind the scenes is trying to block  Britain’s  Channel 4 News from airing an expose  into Cambridge’s role in using  Facebook (FB) to influence voters to vote for Trump and not Clinton.  On Friday,  Facebook  banned Cambridge’s access.  Palmer speculates the Mercers are behind the  attempt to prevent Channel 4’s expose.  I was on  Cambridge’s case back on June 22, 2017,  noting that billionaire Robert Mercer was connected to Cambridge through Canada’s Aggregate IQ through an intellectual property agreement and worked to influence voting  in the Brexit referendum.  Aggregate is a data mining company.  While Aggregate denies any connection,  the story won’t go away. Palmer sees a connection between Cambridge and John Bolton’s SUPER PAC.  Palmer notes that UK Parliament is investigating  the connection between Cambridge and Brexit and documents referred to by Cambridge whistleblower Christopher Wylie reveal  the firm gave stolen Facebook  user data to Bolton’s PAC  (receiving stolen goods ?), though it is not known how Bolton used the data if his PAC even received it.  (See below: Mercer on the run ?)

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Remember the name Felix Sater, former business associate of Trump, convicted  Russian mafia money laundering figure, and key FBI informant.
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Another name to watch is Ted Malloch who Palmer.com reports was served a subpoena relating to the Trump/Russia probe.  Malloch is a U. S. citizen living in London with close tire to Roger Stone, Brexit leader Nigel Farage and the Trump campaign.  As noted above in Cambridge Analytica, there is a connection to parties involved in Brexit and Trump’s campaign.
George Nader, Who he ?  Possibly a key source of information. This is highly complicated with new information pending. Nader has long-standing ties in the Mid-East and Washington over many years.  What appears to be important here is he is cooperating with the Mueller probe not as a wrongdoer, but as a source of information.  He has had ties with the Trump administration through Steve Bannon  and reportedly attended a meeting in the Seychelles Islands January 11, 2017 along with Blackwater founder and former Trump associate, Eric Prince, and Kirill Dmitriev head of a U.S. sanctioned investment firm with close ties to Putin.  Reportedly Nader represented United Arab Emirates’ Crown Prince Mohammed bin Zayed Al-Nahyan.
      I referred to the Seychilles meeting on April 5, 2017 noting  the Washington Post reported the meeting was intended to encourage Russia to curtail support for Iran and Syria (Trump wish list) in exchange for lifting U.S. sanctions on Russia.
We’ll see.
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Protecting guns and profits have become more important than protecting the lives of young people” Henry A. Giroux, Truthout ,  March 4.
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TRUMP ADMINISTRATION IMPLODING.  TRUMP SETTING STAGE FOR FIRING SESSIONS .
      When the boss starts to find fault with an employee for little things, out of nowhere, and for little reason, it’s lights out.
      It looks like a death spiral for this administration is unfolding, 30 aides just lost top secret clearance; communications director, Hope Hicks, resigned . My guess is she has struck a deal with Mueller, who is ratcheting up the pressure on the big Kahuna.
      Is this how General Custer felt in the last hour at Little Big Horn ?
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Why are so many Americans beholden to guns ? It could be their sense of security was rocked by 9/11 plus the Great Recession/Bear Market.  Then it could be racial, a fear that people of different colors will eventually outnumber them, prompting  the need (in their paranoid minds) to stage a forceful change in governance (revolution).  This makes little sense, but from their point of  simplemindedness, they feel more secure with a dozen guns and cases of ammunition in house just in case.
     What these whackos don’t understand is they can’t use their guns outside of their homes for fear of injuring or killing an innocent person which not only sends them to jail, but opens them up to a lawsuit where they lose their stock portfolio, car, house and all those “blankies” that  go bang.  ………………………………………

 

A quasi-fascist state would give Trump the untethered power he craves.
Read: The Ghost of Fascism in the Age of Trump

http://www.truth-out.org/news/item/43529-the-ghost-of-fascism-in-the-age-of-trump
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U.S. Ranking globally and domestically is plunging under Trump
      Global approval of U.S. leadership from 134 countries has plunged to 30% from 48% in just a year.  Clearly, Trump isn’t making America Great Again in the eyes of all other countries. 
The downside of this is we need the support of those countries.  Our nationalistic policies are opening doors throughout the world for China. A Gallup poll shows Germany replacing the U.S. as the top-rated power in the world.
      Under Trump, the United States has dropped to 11th place in the Bloomberg Innovation Index, which in addition  to  R&D spending, includes post secondary, or tertiary, education-efficiency category, which includes the share of new science and engineering graduates. Value-added manufacturing also dropped.  South Korea ranked first, followed by Sweden, Singapore, Germany, Switzerland, Japan, Finland, Denmark, France, Israel.
       Also under Trump, Americans’ trust in institutions (government, companies and the  media) has suffered the greatest loss on record according to a poll conducted by Edelman New York. The poll, including 33,000 “informed” individuals showed the U.S. dropping to 43 out of a possible 100, down 23 points in a year.  He is a human wrecking ball.
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SOLUTION for our nation’s problems: Deport Trump’s base. Not the Republicans who vote their party because they are genuinely conservative, but the racist, violent, abusive element that opts for dumbing down solutions for issues because experienced and intelligent people remind them how incapable they are of emotionally and mentally developing rational, unbiased conclusions for issues  without bias that serve the best interests of all Americans.
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According to the Washington Post, Trump’s false or misleading statements (lies) now exceed 2,000 after his first year.
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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 per day, 2,000 lies since his inauguration on January 20 ?.
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CORPORATE TAX CUT IRRESPONSIBLE
“It's pure fantasy to think that the tax bill will lead to significantly higher wages and growth, as Republicans have promised,” Bloomberg continued. Had Congress actually listened to executives, or economists who study these issues carefully, it might have realized that. The tax bill is an economically indefensible blunder that will harm our future” –   Michael Bloomberg – billionaire business man former mayor NYC

      I don’t doubt some corporations need, and deserve a tax cut, but to reduce the rate from 35% to 21% is inexcusable, reckless, unjustifiable, and outright subversive to the best interests of America.
      Corporate income taxes comprise 9% of federal government receipts. If corporate taxes are slashed by 40% (from 35% to 21%), the government’s receipts from corporations are reduced by 3.6% from 9%.
      Individual income tax payments comprise 47% of  federal government receipts
. At this point, I have no idea how much of an impact  Congress’ tax cuts will have on this source of federal revenues, but it stands to be significant.
      The Republican administration expects economic growth will be triggered by a sudden change in heart by corporations to abandon stock buybacks and the repatriation of billions stashed abroad to plug the big hole left in federal receipts by tax cuts with a surge in hiring and capital expenditures.
      That assumption is flawed. For one, why would a corporation  go on a hiring and cap-ex spending spree  with an economic expansion that  is 8-1/2 years old, 3 years longer (73%) than the average over 65 years (1945 – 2009).
      For another, are they naïve enough to assume there will be no recessions within the next 10 years ?
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RED STATES NEED FED’s HELP THE MOST

       The twelve most federally dependent states are Kentucky, Mississippi, New Mexico, Alabama, West Virginia, South Carolina, Montana, Tennessee, Maine,  Indiana, Arizona, Louisiana.
      The twelve least federally dependent states are Delaware, Minnesota, New Jersey, Illinois, California, Kansas, Nevada, Massachusetts, Connecticut, New Hampshire, and Utah, and Nebraska.
  Red states (Republican) are 67% more dependent on federal government aid than Blue States (Democratic).
So why all the whining about the Feds being in their space ?  Want to go it alone ?   Careful
what you wish for   
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Mercer on the run ?  Bannon and Breitbart bankroller, Robert Mercer is rapidly severing financial ties to Breitbart News and support of Steve Bannon and alt-right’s Milo Yiannopoulos. Mercer was a major supporter of Sen. Ted Cruz’s effort to gain the Republican nomination last year, but switched his allegiance to Trump when he won the nomination.
      In my March 21 post, I wrote, “Years from now, I suspect Mercer will be relaxing at his Long Island waterfront retreat, Owl’s Nest, or on his 200-foot yacht, Sea Owl, and look back over his illustrious career tarnished  by one regret – he backed the biggest con job in our nation’s history.”
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Six states (Arkansas, Indiana, Kentucky, Maine, Utah, Wisconsin),  are planning to require poverty stricken people on Medicaid  to get jobs  or lose the coverage. Maine, Utah and Wisconsin want to put a time limit on coverage, the latter wants to drug-test people. Excluded: People with long-tern disabilities, the elderly, and children.  Isn’t it bad enough these people are in poverty ? 
      Vox Media reports that 9.8 million Medicaid recipients  don’t have jobs  due to: Illness/disabled (35%), retired (8%), taking care of home or family (28%), going to school (18%), cannot find work (8%). The remaining 60.2 million Americans on Medicaid work full-time of part-time.  I’m not sure what’s the Republican beef here.
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TRUMP’S PARDON POWER
    
The President has the power to grant conditional pardons; to commute sentences; remit fines and forfeitures; and grant amnesty. This power can be exercised at any time after the offense has been committed, before conviction of after. Pardons cannot be limited by or controlled by legislative action (US legal.com)
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 ?
     The President cannot pardon people for “state” crimes, and it is doubtful he can pardon himself.
      Can the Mueller investigation survive Mueller’s firing ?
Slate.com’s July 21 article, “Trump can’t Escape the States,” says “YES.”
1-A state [NY] could hire Mueller and team.
2-State attorneys general could use their quo warranto power to investigate Trump’s organization for fraud and money laundering from Russian sources.
3-A Congressional committee (Senate Intelligence Committee) could hire Mueller or create a Joint select Committee.
4-Congress could pass a new veto-proof independent counsel statute.
FINALLY: If Trump resigns and Pence takes over, Pence could pardon Trump, as Ford did Nixon.
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THE GREAT AMERICAN EXPERIMENT UNDER SEIGE:  Not since the Civil War has the spirit and future of our nation been at such great risk, from within.  This  administration, Congress and U.S. Supreme Court is surgically dismembering  efforts over many years to ensure the safety  and well being of “all” Americans.
     The sooner, Americans recognize these are not genuine Republican conservatives, but extremists determined dismantle that which has been achieved over the years and replace it with “their” brand  of a  quasi-fascist state.  Ben Franklin was right when asked what kind of government  the Founding Fathers had given us.  “A Republic, if you can keep it,” was his response.
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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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WHAT 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. These are people were part of the Trump team, or in a position to know information relating to activities before or after the 2016 election, though  not necessarily in any way guilty of any wrongdoing.
       Nigel Farage – President Trump- Hope Hicks, 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 T. Flynn – Michael G. Flynn ( son)  – 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 – Brad Parscale – Sam Nunberg – Dan Scavino – Keith Schiller –  Alex Van Der waan – Ted Malloch -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.
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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.  
        However, as “Business Insider.com” noted on Jan. 9, 2018, Trump could simply fire the Cabinet members who voted to oust him from office.
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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.” Initially, 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.

 

 

 

 

 

 

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