I begin by taking care of an essential item of business: Happy Mother’s Day, everyone. Today is my first motherless Mother’s Day, which is sad, but, on a happier note, my daughter (a mother of nearly two year’s standing herself) is due any day. So there’s that.
In addition, it’s true: I don’t know why the caged bird sings. I have never read Maya Angelou’s magnum opus, and I don’t expect I ever will. What’s more (though I’m not particularly proud of this), in terms of the motivations for the warbling of the captive orinth, I have never particularly cared to find out.
That is, perhaps, until now. And here, of course, though reluctantly, painfully, I refer to the recent doings in the White House. Indisputably, the Presidential Manse is something of a cage, and its current occupant is certainly capable of both flying and singing, or, more pertinent for our purposes, tweeting, which is, after all, the type of singing in which your typical winged tree denizen engages.
I wish he’d just shut his big fat beak. His electronic croonings, long since tiresome, have now become dangerous. Case and Point: this Comey thing (sorry). When I’d heard that he canned that dissembling, misanthropic domestic law enforcement czar, I was pleased. The guy should’ve been shown the door a long time ago. Upon further immediate reflection, I decided it was a sublime political move. I mean, his recently vanquished political opponent had just emerged, in rather unseemly fashion, to inform a sequence of enraptured audiences that, but for Comey, those new curtains she picked out would be dangling from the broad windows of 1600 PA Avenue as she spoke. Of course, the other half of her rationalizations dealt with some nefarious, improbable linkage between the WikiLeaks DNC leakage, the Russians, and the Trump Campaign. I’ll go on record as opining that this is hogwash, well, part of it any way. Did the Russians hack the DNC? Probably. But so did everyone else. Were they seeking to influence our elections? Of course they were. But boys and girls, it’s time to grow up. Major nations have been messing with each other’s elections since mankind was still sporting tails, and I suspect that the most enthusiastic and effective perpetrator, for most of the last couple of centuries, is the good old U S of A.
But were the Trumpsters actively working with the Ruskies on this one? I highly doubt it. What was the nature of the alleged collusion? No one has said. And what form could it have assumed? Did Team Trump pay Putin to do this? Please. First off, Putin is, almost inarguably, through purloined riches, the wealthiest man on the planet, and the DNC Server was such a sitting duck that it couldn’t have cost very much. Did the Russians feed the data to the Campaign, for them to leak? It would seem unlikely, and one way or another, the information would’ve gotten out.
Also, it may be worth remembering that as late as dusk on November 8, 2016, the probability of a Trump victory was placed, at best, in the low double digits. The HRC triumph bash, replete with shattered glass and riverside fireworks, was all teed up. And how long do you think, after, she took her hand off the bible on January 20th, would she have instructed the Bureau to put cement shoes on her hated opponent? Not very long, I imagine. Trump’s people weren’t stupid (they won an unwinnable election after all), and I doubt they were taking any undue risks of this nature with the perfidious Russians. Plus, there was a great deal of roadkill on the President’s journey to the White House. By my count, he deep sixed at least a dozen campaign managers alone. Are there no disgruntled former insiders ready to sing a Russian ballad as a means of score evening? If so, they have yet to emerge.
But the Russian interference story lingers, used by Progressives like the drunk uses the proverbial lamp post: more for support than illumination. And, with the Dems complaining that the FBI Director who was incentivized to push this narrative was to blame for their loss, how beautiful was it to have sacked him? Had it been handled correctly, it would’ve left the, er, left, with little fodder to use against their political foes (lest they demonstrate, yet again, their seemingly insatiable acumen for hypocrisy), and, as such, might’ve disappeared from our capacity-addled attentions quicker than a Snapchat photo (or, for that matter, the valuation of the device’s corporate owner).
But then came the tweets, including perhaps the most idiotic one in an ocean of moronic 140-character brain fluffs: the one warning Comey about the potential presence of taped conversations. Now, I hate to agree with the millions that are seeking to undermine the current government at every turn, but this stunt was completely out of bounds. Just as (as pointed out by Deputy AG Rosenstein) FBI Directors do not comment on the decision factors on a case they’ve tried to drop, presidents don’t issue veiled threats at deposed FBI Directors. And now, I think everyone’s got some reason to worry. There is literally no telling what may next be issuing forth from the Presidential keyboard, and, if it gets much worse, Trump’s enemies may actually have a legal case against him.
But what offends me most is that this sequence more or less destroyed last week’s confident call for a breakout of the U.S. equity complex. These ornithological discharges made me look like a simian, and I’m not one to sit idly by in consequence. Yes, there were other contributing factors. The late reporting Consumer Discretionary Sector dropped some pretty nasty waste — at a point contemporaneous to a rather tepid Retail Sales print. There was some sort of global cyber-attack that hit about 900 countries on Friday, crippling enterprises ranging from Fed-Ex to the British National Health System. The Energy Complex is bouncing around like a billiard ball. L’il Kim lobbed another one into regional waters this weekend.
Still and all, Q1 manifested a 13.5% increase in earnings and a 6.5% jump in sales. According to the published genius of the investment class, affairs are even rosier in portions of the investment universe ranging from Europe to the Emerging Markets. Rates are low and showing no signs of busting out. Most economic models are projecting back-loaded acceleration in economic statistics. I’ve seen worse backdrops for loading up on stocks – Washingtonian nonsense notwithstanding.
But a couple of points bear mention here. First, I’m really skeptical about all this Europe love. I’ve seen the analyses that suggest the Continent is cheap relative to our own valuations, but I advise those who care to proceed to do so at their own caution. It strikes me that Europe remains the same geriatric, declining economic beast with which we’ve been contending for most of our adult lives, with high unemployment, widespread credit issues, an unworkable fiscal matrix and a measurable disposition towards redistributive socialism. Some of you pros may be well positioned to take advantage of transient upswings, but as for me, I think I’d rather keep my risk capital moored on these here shores.
On the other hand, I don’t, as a matter of policy, invest in the markets.
But even domestically, I’d be careful about where I place my bets. That a perversely disproportionate segment of gains derive from a small handful of names is a widely analyzed phenomenon that need not be rehashed in this space. For the mere mortal tickers in the stock trading universe, it’s really all about earnings, and, creeping into the dynamic, is the age-old problem of disappointers being punished more severely than delighters have been rewarded:
But with quarterly earnings substantially behind us, this is something that we arguably can ignore for a few weeks. In the meantime, it may be worth remembering that tomorrow marks the 45-day window for hedge fund redemptions, and this may perhaps cause some gratuitously violent price action, as catalyzed by an 11th hour wave of unexpected redemptions.
The latter would be particularly true if the Washington bird flu, rather than subsiding, spreads to epidemic proportions: a scenario that one can now neither rule out nor discount. As I have reviewed this wearying sequence of events, I cannot help but fear that Trump may have made the same type of early-term mistake as his two predecessors: taking a constructive action too precipitously, and with inadequate understanding of deferred consequences. W. Bush invaded Iraq at a point of maximum post-9/11 goodwill, and we’re still stuck there. Few rational folks would argue that deposing Saddam Hussein was an unholy objective. But at the time we had more pressing geopolitical problems with which to contend, he failed to form the type of broad coalition that worked well for his father in Gulf War 1, and the W presidency arguably declined in a more or less linear fashion from there.
Then there’s Obama, who rammed through a massive, poorly framed and ineptly executed re-engineering of the Health Care system at a moment when our post-crash capital economy itself was just emerging from the critical care unit. Unemployment at the time was peaking at 7.5%, and of course, he passed the bill through a reconciliation process that removed all transparency from the drafting of the final provisions (recall the Pelosi line). At that point, the Health Care system was broken and needed fixing, but the timing was terrible, and, like the Iraq War fiasco, the coalition behind the reform was self-servingly narrow. Of course, the economy slowly regained its footing in subsequent years, but ultimately, the framework at least partially imploded, and, as I’ve stated previously, I believe that the sticker shock of 2017 premium increases (disclosed in October of 2016) was, more than WikiLeaks, more than Comey, what turned the last election’s tide against his preferred successor.
As for Trump, though it’s impossible to know at the moment, it may be that he has fallen into the same trap. Comey is indeed a showboat, more interested in his own agenda/standing than in doing his job appropriately. He was not capable of running the FBI effectively and needed to be fired. Had Hillary won, I suspect she would have taken this step herself. But the timing may have been too precipitous. Like his predecessors, he might’ve been better served by waiting, maybe getting the Republican Congressional Caucus together to pass some legislation, before putting two to the head of his target. And the execution was terribly, well, executed. Why not follow the Clintonian Friday afternoon news dump and then announce something constructive to change the subject?
But no, he did this on a Tuesday and then made matters worse with his messaging. As a result, not only may he have bought himself a whole passel of problems, but also, as everyone has stated, he has rendered the path to delivering on key parts of his agenda much more problematic.
But the world is full of such improbable contradictions. Take Maya Angelou for example. She wrote (I’m told) profoundly of racism, sexual abuse and other horrors of growing up as a black female in the postbellum South. Yet she freely admitted to operating as a madam in her young adult years. Then, she settled down to accept an endowed professorship at Wake Forest University, which, though a fine academic institution, was founded and resides on a tobacco plantation that relied for centuries on slave labor.
So I’m gonna stop wondering why the caged bird sings, and can only, for the moment, pray for the sound of crickets emanating from such locales as the White House, Trump Tower and Mar-a-Lago.
TIMSHEL