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04 January 2018


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You hit the state and local deduction on the head.
One of the Democrats' many hypocrisies is the SALT deduction which hits rich Democrats the most while Chuckie and Nancy dementia hysterically decry "tax cuts for the rich."


And add the fact that Keith Ellison, deputy chair of the DNC, sent out a tweet and a photo displaying his support for Antifa:


Well, good lord. The Dems should have known better than to vote this clown into a leadership position of their party. Now they'll have to live with it.


Yes, especially considering the Obama scandals of spying on domestic opposition, un masking, HRC scandals, etc., are all going to be center stage through out the year.


The Democrats are indeed counting their chickens....
The economy can do all kinds of things such as deflate when the hot money (endless levitation by the Fed) runs out, which it won't unless Petrodollar and Dollar reserve currency status come to an end. Now there is a real good chance that will happen, but probably not by November of this year, though by November of 2038 it probably will have come to pass.
I had been a Democrat since my first election in 1968, but these days what do the Democrats actually represent? If you love the idea of Stone Mountain being blown up and you're a full fledged diversity catamite or gender crybaby, then They're the virtue signalling voice of "progressivism". Otherwise what do they offer except domestic stagnation, persecution of the people who keep the lights on, and schizoid foreign intervention?
Anyone who thinks Alabama was a call to man the barricades is mistaken.Roy Moore was a stinker of a candidate, but he still made it to the one yard line.

Farmer Don

Where will the economy be at the end of 2018

too many variables for me:

Reasons for crash:
Personal debt rising starting to cause problems. Credit card debt up/Car loan defaults up
US debt rising.
US balance of trade continuing
Fed says it will quit increasing QE & may raise interest rates.
China and bricks completing parallel monetary trade and movement systems to stop US financial monopoly. Ie chinese SWIFT replacement system, Chinese credit cards, Russian increasing gold holdings compared to US$
Rents and housing most expensive compared to wages ever.
US health care costs rising

Reasons for good times
Central banks printing money and buying stocks.
Tax laws brings money back to US (more stock buybacks)
US debt ceiling seems to be an illusion
Trump great spokesman for business
Trump may use new tools to fight recession (helicopter money etc.)
Trump says he likes cheap US$
Momentum of stock markets
Trump has started no new wars. Military $$ stay mostly inside the USA
Trump gets huge infrastructure bill passed

Wild cards
Crypto currencies?
Interest rates?
Job outsourcing or coming back to USA?
Economic Black Swan from outside USA


I tend to agree that the economy is due for a crash to the limited degree I read economics news and opinion (I used to be much more interested but after forty years of waiting for the "Big Depression" which hasn't come, I've become tired.) But hoping it will happen in the next year is clearly speculative.

Bottom line is Democrats have no plan for 2018 - and therefore are likely to lose big again.


Of all the components of the tax bill (many of which are problematic--but that's mostly b/c it's a tax bill, not necessarily for ideological reasons), I thought putting a lot of tax onus on wealthy bicoastals was a stroke of genius. Having said that, things are looking in a lot of mixed directions: many people are uneasy for all sorts of reasons about Trump, but the bottom line (esp on economic matters) does not look too bad, to say the least.

In many ways, actually, the overall situation looks like Bill Clinton 2.0: people had all sorts of issues with WJC--Democrats were uneasy with him and Republicans absolutely hated him. But things were looking OK or better in general and voters weren't going to punish him for nothing that was particularly off track. I see the Democrats trying some of the same tricks. Maybe even all the way to impeachment. Unless things come apart at the seams very visibly, none of them will stick on DJT.


Perhaps Democrats have reason to be cautiously optimistic, if not assured of themselves.

They have been aided no less by Trump's former strategist. The self-proclaimed Leninist, Mr.Bannon, has stuck his little dagger into the president. I don't know what mindlessness propelled him to sit for hours with Mr. Wolffe on record and mercilessly attack the president and his family. It's possible Wolffe is playing loose with Bannon's words, but it doesn't appear that Bannon himself can recall with any certainty that he didn't say what has been attributed to him.

I assume Bannon's inner Machiavelli figured he would be quoted anonymously as a "White House source." Serves him right to be exposed like this, but he has caused untold damage to a movement he has both helped to propel and control, not to mention having forced Trump into unneeded damage control just at a time when he was getting into the swing of things and was beginning to turn the table on his enemies.

At least we now know why McMaster astutely decided to get rid of Bannon from the NSC and why Kelly had him fired. Bannon was not only a leaker, he would privately disparage anyone who attempted to stand in the way of his influence, including the president. I just hope Trump is now better served by those around him now, but that doesn't strike me being necessarily so.


The Washington Post rather surprised me when I came across this recent article:
There’s still little evidence that Russia’s 2016 social media efforts did much of anything


Some in the comments section have difficulty believing the story.



The stock market and financial asset prices in general drive perceptions of the strength of the economy. As long as financial assets prices remain in melt-up mode it will benefit the incumbents. While the Fed and the other major central banks are slowly reducing liquidity by either reducing the rate of growth of their balance sheet or reducing it outright as in the case of the Fed, there's no knowing when speculation peaks. The one thing that bulls should watch is the flattening of the yield curve.



All that is true but as a supply sider I am inclined to think that this is nothing like a bubble. pl



Bannon is an ego mad hubris driven freak. pl

Patrick Armstrong

To which all I can say is ???
and maybe !!!



Alan Greenspan famously quipped that a bubble can only be recognized after it bursts.

As you note reducing regulatory burdens and reducing taxes stimulates the economy. So we can expect improved economic performance.

Financial asset prices however, don't necessarily need an improving economy. What it needs is the perception that asset prices will increase prospectively. We have seen asset prices rise substantially after the GFC even with the weakest economic recovery since WW II. A partial explanation is the growth in liquidity by expansion of central bank balance sheets and the perception that central banks can always reflate asset prices.

The major central banks now are either contracting their balance sheet or reducing the growth rate. Increased economic activity also puts pressure on interest rates and businesses use more capital for economic activity than financial engineering. These factors will apply brakes on financial speculation. When psychology changes the smart money will start reducing exposure. What we don't know is when psychology changes and when asset prices correct.



Your ability to see through and clarify the opaque is amazing. If the economy stays the course and if Deplorables’ lives get better; yes, Donald Trump will have seven more years in the White House. The bottom of the half full glass for Donald Trump is that he must avoid a war with Iran or North Korea, a cabal of globalists led by the richest man in the world, Jeff Bezos (owner of the Washington Post), is out to get him and his Secretary of State described him as a moron.

Keith Harbaugh

I wish you were right but believe you are wrong.
1. The disastrous GOP showing in the November 2017 Virginia election.
Not only did the GOP lose all the state-wide contests,
but shockingly their control of the lower house of the VA legislature (the House of Delegates)
was cut from 66-34 to 51-49 (with some ongoing uncertainty due to recounts, etc.).
No one expected/predicted that, and it surely indicates a general dissatisfaction with the GOP brand.

2. This poll:
and similar polls.

r whitman

so is Trump.



George HW Bush was correct when he described Reagan's Supply-side Trickle-Down economic policy as - "Voodoo Economics"

Practically all of the gains in the economy for the last 40 years have gone to the top. It's one of the reasons why Trump was able to appeal to the suffering working-class, much like Bernie Sanders did, to win the Presidency. Unfortunately for them, they got suckered by the flim-flam con-man in the WH.

An unnecessary tax give-away to the already individually wealthy and rich corporations will do nothing to raise wages of working people, especially when the meager "tax-cut" for them expires and they are left holding the debt bag along with Republican Party calls to cut Social Security and Medicare.

Republicans don't give a shit about anything except their donor class.


And a drinker.
I don't know him, but take a good look:
Puffy face, veins in the nose, disheveled overall look.

blue peacock

Col. Lang

The economy can continue to improve and do even better with the recent actions of Trump & the GOP in Congress. The stock market however need not continue to rise at the rate it has over the past years.

You are correct that we don't see public participation in a frenzy as we have at the tail end of other speculative cycles. Crypto-currencies are the only asset class with that type of frenzied activity and price acceleration. We do see however price distortions - like Euro-area junk bonds yielding less than US Treasury bonds - but that can continue for some time.


the left is starting to burn out under the constant anticipation 'once X happens, Gronald Grumph will be gone.'

there's also a systemic tension mounting between the thin line of WASPs and Jews holding off, excuse me, 'representing' the coalition of the ascendant. If those factions of the party base gain control, they'll drive the Dems off the cliff (through alienating the whites the Dems still require to win elections). The agitprop the Dems are pushing through their sympathizers in the media regime are only serving to undermine them long term.

Ed S.


I too am perplexed by the expectations of the Democratic Party in the 2018 elections. Wasn't it a mere 18 months ago that we were hearing not only of an overwhelming Presidential victory but also a likely takeover of the Senate and the remote possibility of the House as well?

A few contributing thoughts:

1) You can't beat something with nothing. The Democratic Party believes that the populace so loathes DJT that they will turn out to vote them into power to do -- well I'm not exactly sure WHAT they propose to do. The expectation of the "wave" is solely that they are not DJT. Maybe they take the Senate. But even in the best of circumstances, it's a close race.

2) Gerrymandered House districts. Several years ago I looked up the margin of victory in every Congressional race. Any race with less than a 5 percent spread between candidates was "competitive" (IOW one candidate received 48 percent and the other received 52 percent for a 4 percent spread). Roughly 40 races were "competitive". Most districts are OVERWHELMINGLY drawn to favor one party or the other -- to the degree that one party will receive 65,75, or even 80 percent of the vote. Loathing DJT doesn't change that math

3) Impeachment/25th amendment/etc. Not. Gonna. Happen. The popular media has been at Russia!! Russia!! Russia!! for 14 months but there is NO evidence of any collusion or interference.

4) The economy isn't going to crash anytime soon. The tax bill is HUGELY stimulative. Growth is accelerating. The stock market is at all time highs (maybe only matters to 20 percent -- but they are all voters). If anything, the economy may be STRONGER in 8 months, not weaker. To me, it feels like 1996, not 1999. See, for example, Jeremy Grantham (https://www.gmo.com/docs/default-source/research-and-commentary/strategies/asset-allocation/viewpoints---bracing-yourself-for-a-possible-near-term-melt-up.pdf?sfvrsn=4.

5) Marginal voters matter and there has to be something to get them to go out of the house on Election Day. "We're not Trump" isn't going to do it. Yes, I've said it twice because as far as I can tell, it's the only Democratic issue.

6) Democratic bench strength. There isn't any. They need to have appealing candidates and are taking the Jones victory in Alabama to be a sign of an impending sweep. But Jones ran against an amazingly unappealing candidate and barely squeaked out a victory. There are NO "young" Democrats in the places that matter for them to take the House.

My apologies for the long comment, Colonel. I think your absolutely right and simply wanted to add a few personal thoughts


That is something I really disagree with. But if the bubble bursts during the first half of this year or next year, it may still not damage Trump. It's also not clear to me that any damage to Trump would automatically translate into political benefit for the Democrats to the degree they seem to hope for. There is historical precedent for a president not being lethally wounded by a massive stock market downturn on his watch. It's from pretty far back in the past, though (Kennedy).



It is a bubble. The market is way overvalued (up there in stratosphere so to speak). Now is the time to start rebalancing your portfolio more often.



Thanks. Our portfolio is well balanced and managed by Burke and Herbert Bank and Trust. nevertheless, I do not think the markets represent a bubble. pl

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