Easy Does It !

INVESTORS first read.com – Daily edge before the open
DJIA: 25,509
S&P 500: 2,853
Nasdaq Comp.:7,891
Russell 2000: 1,690

 Friday, August 10, 2018    9:11

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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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Trump – a human wrecking ball (1/3/17)
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What’s so Christian about favoring the rich over the poor ?

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“Accuse the other side of that which you are guilty.”
                                         Joseph Goebbels, Nazi propaganda minister.
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The Market Today
       The market will open lower today, thanks to  sanctions imposed by the U.S. and financial instability in Turkey that some think may cause a Eurozone crisis.
       Then too, it’s Friday and some traders are locking in profits and the flood of  institutional buy orders that is normal in the early days of the month is tapering off.

      Good Q2 earnings are the only thing holding the market up. Earnings this year should increase 21%, but that is built into the market.
       Next year they may only increase 6% – 8%. When the Street gets a sell signal everyone will get it at the same time, since most follow the same indicators.
       The S&P 500 price to sales ratio is 40% higher than in 2007 before the devastating bear market, and is even higher than in March 2000 before the dot-com bubble burst leading to a bear market. Both bear markets dropped 50%.
      What’s more, The Shiller P/E runs 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 Total Market Capitalization to GDP  stands at 147.3%, anything above 115% is  considered “overvalued.”
      Bottom line – Ultra high risk – Cash reserve essential. When this one breaks, it will be straight down, starting out with a plunge of 12% – 18% in a matter of days.
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SUPPORT “today”:DJIA:25,387;S&P 500:2,843;Nasdaq Comp.:7,875
RESISTANCE: DJIA:25,486; S&P 500:2,851 ; Nasdaq Comp.:7,887
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RECENTLY
      The job numbers are strong, companies are scrambling to fill slots they should have filled a year ago instead of buying back stock. While wages should be increasing under these conditions, they haven’t so far.
       Housing stocks have been in a prolonged slump since January. The iShares  home construction ETF has dropped 19.3%, as interest rates rise.
       Not only is it  major employer, its health affects other industries, especially furniture and appliances.
      Fed balance sheet unwinding behind schedule for mortgage-backed securities (MBS) holdings.  Catchup may add upward pressure in interest rates.
      Unit vehicle sales has been slipping since July 2017, as well as auto stocks.
      Jamie Dimon, CEO J.P. Morgan Chase,  thinks the benchmark  10-yearTreasury note , now 2.95%, should be 5%. The rate impacts lending for autos, mortgages and businesses.
      Trump to put the U.S. on a war footing going into the elections to orchestrate patriotic support ?   Bomb Iran ? North Korea ? Washington Post ?
      We are seeing the late stages of a bull market and business expansion. The difference between this bull market and those in the past is it is so heavily computerized from stock selection to order execution. Most institutions will get a sell signal at the same time, resulting in a vertical plunge in stocks.
      Personal loans have soared   18% to  a record 120 billion, Personal savings as percent of disposable income at 3%, down from 9% in 2012.
      Low interest rates have encouraged US companies to go on a debt binge, amassing  $6.3 trillion. With rates on the increase, refinance will get more costly, according to S&P analyst, Andrew Chang, who points out that this amounts to $8 for every $1 in cash.

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SUPPORT “today”:DJIA:25,526;S&P 500:2,850;Nasdaq Comp.:7,867
RESISTANCE: DJIA:25,701; S&P 500: 2,866; Nasdaq Comp.:7,895
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>Manafort – Hung Jury ??
It really shouldn’t happen, he’s guilty.  While every juror is sworn to consider the facts of the case,  if one juror doesn’t see it that way or is an outright (or “closet”) Trump AINO, he/she could hang the jury (nullification). This jury is comprised of six men and six women out of a pool of 65, where the prosecutors and defense used most of their allowed “strikes” to challenge.
      As absurd as the possibility of a hung jury in this slam-dunk case is, ideological emotions  are running at a fever pitch. While the prosecution is trying Manafort on charges not directly related to Trump, every juror knows that a guilty verdict is a loss for Trump.
      Trump would tweet repeatedly that a hung jury was confirmation that  Mueller’s investigation is merely a witch hunt and should be terminated.
      The foundation that we are a nation of laws was seriously eroded on January 20, 2017.  Yes, hung juries (6% of criminal cases) are legal, but our republic will only survive if its leadership and citizens play by the rules.
      Manafort will be tried in a different court in September for money laundering, jury tampering, and not registering as a foreign agent.
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>Gaslighting: persistent psychological abuse technique used  to patiently establish control over another, ultimately causing that person to doubt themselves, their identity and self-worth. It involves persistent lying, denial of the truth, confusion, and projection  where they accuse a person of that which they are guilty. This is a classic  control mechanism.

Orwellian: George Orwell’s 1984 wretched society was controlled by denial of the truth,  misinformation, propaganda, and surveillance, i.e., Big Brother is watching.
“Just remember what you are seeing  and what you are reading is not what’s happening.” Trump to VFW July 24
“The party told you to reject the evidence of your eyes and ears…” George Orwell’s  dystopian novel – “1984”  published in 1949.
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>Should we be afraid of Trump’s base ?  Well, if you are wearing a Biden T-shirt at one of his rallies – YES  !
      But the numbers suggest otherwiseA recent Gallup poll shows  how  people polled  would vote if the election were held today
Democrats      30%
Republicans   26%

Independents 40%
      From what I gather many Independents are leaning Democrat, especially now that they see our treasured institutions undermined, time-tested global alliances traded in for sleeping with the enemy, the rule of law dissected piece by piece, and  the office of the Presidency disgraced by daily  lies.
       The best thing Republicans have going for them is the economy and less so, the stock market.  Voters tend to vote their pocketbooks.
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>Special Counsel Robert Mueller  must comply with regulations, rules, procedures, and policies of the Department of Justice as set forth in  28 CFR 600. He can only be removed for misconduct, dereliction of duty, incapacity, conflict of interest, or other good cause, including violation of the Department’s policies.

>Trump’s tariff tiff costing  US companies a bundle:
         Politico’s Doug Palmer noted in July  that Trump would have to have the U.S. government shell out $39 billion, $27 bil. in addition to the $12 bil. for farmers, if he wanted to cover the current cost of his tariff tiff.
         U.S. Chamber EVP, Neil Bradley, blogged yesterday that the damage extends to manufacturers, input suppliers, fishermen, and numerous businesses who are finding it more difficult to sell abroad.
         More specifically, auto, parts and motorcycle mfrs. would need $7.6 bil.; chemical mfrs. $960 mil.; prepared food $884 mil.; fishermen/crabbers $822 mil.; soap mfrs. $725 mil. beverage mfrs. $765 mil.; shipbuilders $632 mil.; furniture mfrs. $567 mil.
       WSJ’s McGroaty and Tita pointed out yesterday that consumers are beginning to see higher prices on beverages, recreational vehicles and products sensitive to an increase  of 33% in steel and 11% in aluminum

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>Tax Cut and GDP jump Doesn’t help the average American. 
     
Vox’s Emily Stewart noted on July 29, that after tax cuts were enacted between Q1 and Q2, real wages fell 1.8%. Adjusted for inflation wages have fallen 9.3%.
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 Companies are buying back their own stock at a record clip, according to CNN Money.
      Why then are insiders selling $8 of stock for every $1 of stock they buy ?
       “They’re buying back from the front door, and shoveling shares out the back door,” says John Mousseau, CEO of Cumberland Advisers, a firm managing $3 billion.
      “Large US companies have become cash machines for top insiders who run them,” explains David Santschi, director of liquidity research at TrimTabs Research.
      “Insider selling accelerates immediately after buybacks are unveiled,” notes SEC’s, Robert Jackson, adding its study in 2017 and early 2018 found the percentage of insiders selling stock more than doubled immediately after buyback announcements.
      Buybacks  reward investors, and corporate executives whose  compensation is heavily leveraged in stock by supporting a stock’s price, as well as run it up higher.
The process inflates earnings by reducing shares outstanding. 
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BULLISH CASE
     
Corporate earnings are the only positive. Earnings reports will begin to flow in July and they will be good, 20%  for the S&P 500 over a year ago.
      But these earnings have been largely discounted by high stock prices. The Street will soon be looking out to 2019 when earnings increases will be 4% – 7%.
       Factset projects a Q2 earnings gain of  24.0%.
       Thomson Reuters pegs Q2 earnings gain at +21.5% and something a bit above +21% for the year as a whole . HOWEVER,  it presently projects Q1 2019  increase at +5.0%, Q2 at +7.2%. Q3: +9.3%. Could it be the 19% jump in 2018 earnings is already  factored into the market ?   
         If the Democrats gain control of the House or Senate, or both, it could offset the fact that  we are in a tailspin, financially, economically and morally. It could be a game changer, though we are heading for a recession.
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BEARISH CASE
RISING INTEREST RATES:
      The Fed is persistently raising its benchmark interest rate (federal funds), as well as reducing its inflated balance sheet,  which will drive other rates higher, which will adversely impact interest sensitive industries.  Banks will love it, but it will send shivers throughout the housing industry, which is reeling from the impact of tariff-induced higher lumber prices. 
      The 10-year treasury has been rising steadily and now stands at 2.856 %, it has recently been a smidge above 3%.
      Inflation is accelerating faster than expected with the core PCE rising to 2.0 in May, suggesting the Fed may ramp up its tightening. While  average  hourly earnings are not keeping pace, Friday’s Employment Report may show some catch up.
       The yield curve is flattening as short-term treasuries rise faster than long-tern governments just another warning sign of impending recession.
      Home prices have risen recouping most of losses incurred since the Great Recession, making houses even more unaffordable. Limited inventories of houses available for purchase is pushing prices higher.
      New buyers missed their once in a lifetime opportunity to buy when mortgage rates were at historic lows, they will have to pay-up to buy a house, if they can get the financing.
      OVERVALUED MARKET
     Thompson Reuters reports the S&P 500 sells at 19.1 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 2.24 vs.  an average of 1.49.  Before the 2007-2009 bear market it stood at 1.5 x.
      The Total Market Capitalization to GDP  stands at 147.3%, anything above 115% is “overvalued.”
       It looks like stock buy-backs are the only thing holding the market up. It was hoped that the 40% tax cut would trigger spending in capex.  Not yet, companies are buying back their own stock, pushing prices higher enhancing executive stock options.
       Corporate debt relative to GDP (45%) is higher now than before the 2007-2009 meltdown
       Corporations set a record in Q1, using benefits of tax cuts to buy back $189  billion of their own stock, beating the prior record of  $172 billion set in  the summer of 2007 right before the Great Bear Market/Recession.  This is a sign of speculative excess, as is a record amount of margin debt, investor borrowings to buy stock.
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.
      1,100 economists WARN Trump is repeating biggest mistakes of Great Depression – tariffs, trade protectionism, according to conservative National Taxpayers’ Union.
      Former Fed Chair, Ben Bernanke, says economy to fall off a cliff in 2020, thanks to the $1.5 trillion corporate and individual tax cut and $300 billion increase in spending.              C
      Consumer spending slipped in May, as did Consumer Expectations and Consumer Confidence. It’s summer, maybe this slowing  is meaningless.
*******The Eurozone is in a slump. The IFO Business Climate Index has been soft all year, GDP is also sliding in face of a slump in retail sales.
      CNN.com reports Corporate America took advantage of low interest rates to load up on debt in recent years for acquisitions and to buy back their own stock. Excluding banks, the tally is $6.3trillion. The downside of this comes when these companies will need to refinance this debt at higher interest rates when it comes due.
      Existing home sales slumped in Q2, and are down in 5 of first 6 months
TRUMP’S TRADE WAR TANTRUM:
       He’s  a human wrecking ball, blustering without forethought of the consequences of  his actions. 
       Economists are minimizing the impact of  the flurry of tariffs, saying their impact is not significant. Perhaps when looking at the big picture but pain is being felt around the country as the stories roll in.
       This tariff jousting changes every several days.…..No one knows where this is going, and on top of aging economic expansions here and abroad, that’s scary.
        I crash-coursed this subject in recent days, as I  have done so many times with issues since Trump took office.   I am certain of one thing,  I do not know enough about this vast subject, nor could I condense what I know here to make any sense.
       What I do know is, today’s businesses are complex, especially supply chains that can involve a thousand parts that make up a whole product, many of which are sourced from different countries, sometimes crossing back and forth across the same border a number of times.
     Throw a wrench into the works and the gears start to gnash.  Managers are pressed to seek other sources, other outlets.  Efficiency and profitability begin to plummet.
      In fact, it doesn’t have to go that far.  Uncertain of the future, unable to plan, budgets get cut, sales orders construction projects cancelled, managers find planning more and more difficult.
      Enter the domino effect, and the pain spreads to other industries and finally to households threatened by unemployment, budgets there are cut, as well.    
      Trump’s hostility to globalization is ruining the U.S. as a place to do business, even invest.     
  
      Trump considering leaving World Trade Organization (WTO).
BREAKING: Trump and European Commission’s Jean-Claude Juncker agreed yesterday to hold off further tariffs and work toward eliminating present tariffs and barriers to trade
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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POLITICAL/STOCK MARKET
Trump has made 4,229 false (lies) and misleading claims since his inauguration, or an average of 7.6 per day- (Washington Post). Economic issues, trade, jobs account for 30% of these thoughtless utterances.
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What Trump and his base have in common: They both deplore the same people – people of color, the handicapped, liberals, foreigners.
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VOTES FLIPPED for TRUMP  in Key States in 2016
     
I am not  a conspiracy advocate, but I  suspect that not only did the Russians hack voter files, but they, or someone, tampered with the actual votes, also known as flipping.  Take one vote away from one candidate and give it to the other candidate and the net is two votes.
      Not to anyone’s surprise, Daily Kos’ Aldous Pennyfarthing (Pen name for Tom Breuer)  gave reasons in Alternet.org, July 27, why he thinks the Russians [or someone] flipped votes for Trump in 2016.
      The basis for this conclusion was comparing exit polls with actual out- come in North Carolina Pennsylvania, and Wisconsin.
      The differences between exit polls and the vote count in those states is pronounced.
Pennsylvania: Exit polls Clinton 50.5 – Trump 46.1.  Result: Clinton 46.1 –   Trump 48.8.
Wisconsin: Exit poll Clinton 48.2 – Trump 44.3  Result: Clinton 47.6 – Trump 48.8.
North Carolina: Exit poll Clinton  48.6 – Trump 46.5. Result: Clinton 46.1 – Trump 49.9.
      An FOI suit by Bradley Moss (cybersecurity lawyer) brought against the government  revealed Russians hacked inside voting systems in seven big states , which U.S. intelligence  denied at first then confirmed, but Homeland Security failed to report it to the states  for eight months.
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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.
  This is  a bloodless coup.
If  they can lock up control of both Houses, the Presidency, Supreme Court and strategic lower court appointments, and a major news media broadcaster, survival of our republic will depend on whose side the military and police forces take.  They already have a head start on internment camps
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 Sinclair Broadcast Group  (BEWARE !)   
      On July 16, 2018, Ajit Pai, appointed to FCC Chair by Trump, rejected  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, saying he had serious concerns about the deal.
       Trump quickly criticized regulators for deferring their decision for the obvious reason, Sinclair is a right wing media  group  reportedly  intent on spreading its ideology across as much of America as possible.

      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.   EXPECT Sinclair to play a bunch of shell games to eventually get its way.
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      Sinclair Bank (no relation to the broadcast  group) has surfaced as a lender to Michael Cohen, Jared Kushner, his father and Trump.  Ivanka Trump no longer on board. 
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       U.S. Constitution: Article 3, section 3: Treason, briefly defined levying war against the U.S., or in adhering to its enemy, namely aid and comfort, also defined as any act that deliberately strengthens or tends to strengthen enemies of the U.S. or that weakens the power of the U.S. to resist and attack such enemies.
       Briefly, it requires a confession or matching testimony of two witnesses to conclude that an overt act occurred, but not to include “intent”. Congress decides one’s punishment.  
        Is Trump guilty of treason ?  Congressional Republicans that blatantly support him ?  
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TRUMP’S BASE:  Some are those voting because they always vote Republican, others hoped for a different outcome.  Then there are those whose opinions are based on emotional disorders, those who will never accept the truth no matter what (Confirmation Bias); those who accept bad behavior as the norm (Deviancy Down); and those who while stupid, ill informed who actually believe they are highly intelligent, competent (Dunning Krueger). These people don’t have enough knowledge to know they don’t have enough knowledge, i.e.,too dumb to know they are dumb.(alternet.com 7/23/18)
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 Russia’s Vladimir Putin coming to Washington in the fall ?  Is he running for office ?  He can count on support from the Republicans.
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July 19, 2018: Republicans refuse to renew election security funding over Russian hacking – Democrats livid, as all of us should be. Is this really happening ?  
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What !  John Bolton slashing Trump’s cybersecurity agent ?    Trump’s hawkish national security adviser is trying to abolish the role of special assistant to the president and cybersecurity coordinator held by Rob Joyce, according to someone who didn’t want their name disclosed.
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Follow this one closely: The Dept. of Justice charged a Russian national, Mariia Butina, of illegally trying to influence American politics using the NRA, religious organizations and the National Prayer Breakfast  as a means of gaining backchannel access to the highest levels of the Republican Party.  Mother Jones says  Butina acted as a covert Russian agent, an unregistered foreign agent, participating in a multiyear conspiracy to infiltrate conservative political groups, including the NRA. The depth of her ties to Republicans and the NRA appear to be significant.  According to USA Today, Russian billionaire, Konstantin Nikolaev provided funds for a gun rights group Butina started years ago.

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      Since Deputy Atty Gen’l Rod Rosenstein would not fire Special Counsel Robert Mueller, Trump needed to find someone in the Dept. Of Justice who would assuming Trump first fired Rosenstein.
     On November 8, I noted Brian Benszkowski was nominated by President Trump in June [2017] to be U.S. Assistant Attorney General for the Criminal Division. Along party lines, he was confirmed by the Senate recently, raising the question would he fire Mueller if Rosenstein was fired and he  was appointed in his place. He said he would not recuse himself from  questions in the Mueller investigation.
     The big question mark here is that Benczkowski had represented Russia’s Alfa Bank at some point in the past and had no prosecutorial experience.  He had worked for Atty Gen’l Jeff Sessions and the Bush administration and was not opposed by Rosenstein.

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A “MALEVOLENT FOOL” – Lt. Col. , Ret’d, Ralph Peters, ex-Fox analyst referring to Trump.   Malevolent: evil, harmful, injurious.
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Kavanaugh nominated for Supreme Court not to  overturn Roe v. Wade, but because he has written that a sitting President should be exempted from criminal prosecution, and investigation, including questioning by prosecutors.
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HEADS UP !   A majority vote in both the House and Senate can change the number of Justices on the Supreme Court. The number is fixed by statute, not by the Constitution. It has ranged between 6 and 10 since 1789.
       The question now is, will the Republicans attempt it to increase it in order to head off  any attempt by the Democrats in the future.
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Trump an agent of Russia ?  His actions suggest it. Read following:
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Un-American ! Trump claims writers of U.S. Constitution treated Him unfairly, adding we have the worst constitution writers in the world…Russia has better constitution writers than we do, says Trump . “I talked with Putin, and he said their constitution never gives him problems.” Andy Borowitz, (The Borowitz Report).
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      WE DON”T WANT TO GO THERE !  The Trump administration is taking the United States straight to a place none of us wants to be – civil unrest,  an extended recession, a fiscal crisis where we can’t pay our bills, ergo the need to slash healthcare, safety net programs, a host of programs that have improved our quality of life.
      This administration’s actions on trade (tariffs, TPP
), the intentional divisiveness of America along racial lines, and abandonment of our long-time allies have opened the door for China to dominate the world, economically and militarily.  That’s Un-American.  This has to be stopped.
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Republican strategist, Steve Schmidt, leaves Republican Party after 29 years, saying the party is “corrupt, indecent and immoral,” and with a few exceptions  elected  Republicans are “feckless cowards who disgrace and dishonor the legacies of the party’s greatest leaders.” Others quitting Republican Party: George Will, “Morning” Joe Scarborough. To date, 35 senior Trump advisers have left.
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Immigrants and separation: It’s 90% Stephen Miller, a Breitfart alum, and acknowledged racist.. Former senior vice president of public affairs at Duke University where Miller attended said, He is the most sanctimonious student I ever encountered…absolutely sure of his own views and correctness of them, and if you were in disagreement with him , there was something malevolent or stupid about your thinking.
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President Donald Trump is NOT pro-business, he’s pro-Trump
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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..
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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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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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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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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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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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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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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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Red states In need of Fed government help the most

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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