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04 January 2018

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David E. Solomon

Matt,

Amen to everything you said, but I might add that the Democrats (as well) "DON'T GIVE A SHIT ABOUT ANYTHING EXCEPT THEIR DONOR CLASS".

THAT IS ESSENTIALLY WHY THE VARIOUS INCOME STRATA IN THIS COUNTRY ARE AT EACH OTHER'S THROATS.

Huckleberry

The J-left is trying to meme a "blue wave" into existence.

White women will be the key to this effort, so watch for a lot of 2nd wave feminism culture war stuff.

Trump, unfortunately, will likely react poorly to this, taking every piece of bait laid out for him.

But so long as he adheres to an Immigration and Infrastructure campaign, this ought to be pretty straightforward.

The Dems may indeed take the House but their chances of taking the Senate are very low this cycle.

Joe Manchin will almost certainly be vaporized in West Virginia and there are many red state Democrats who are going to have to go against the party's coastal owners when it comes to immigration.

rjj

DES @ #26: "VARIOUS INCOME STRATA IN THIS COUNTRY ... AT EACH OTHER'S THROATS."

sounds like received opinion -- CorpsMedia's version of How-Things-Are - possibly reinforced by a personal view from within some department. Everybody else is busy holding the world together and keeping things going locally - at the moment here in the East by the neighborly clearing of snow.

outthere

I wish you and other investors no ill, so please don't misunderstand what I am saying here.
What did you think was happening in 2008?
Were you confident then as you are now?
As for supply side economics, again I recommend reading David Stockman, he is the grandfather of that concept.
And he NOT optimistic today.
Here's a taste of Stockman's latest:

https://www.zerohedge.com/news/2017-11-26/thanksgiving-2017-david-stockman-explains-why-there-no-peace-earth

http://thehill.com/opinion/finance/365905-moynihan-was-right-the-gop-tax-giveaway-will-lead-to-safety-net-cuts

Personally I own no stocks or bonds at all, but that is a personal decision, I make no recommendations.

outthere

more and better about Stockman
David Stockman Takes Aim at the ‘Washington War Party’
Longtime contrarian continues to be a fly in the establishment's ointment.
http://www.theamericanconservative.com/articles/david-stockman-takes-aim-at-the-washington-war-party/

best of all his 2013 book,
The Great Deformation: The Corruption of Capitalism in America, a scathing indictment of the twin scourges of crony capitalism and massive governmental debt.

on WaPo and McCain and Trump in Syria:
http://original.antiwar.com/david_stockman/2017/07/30/tweet-shaking-war-party/

outthere

just published today

quote
How did the war on Vietnam, the First Gulf War to save the Emir of Kuwait’s oil wealth, the futile 17-year occupation of Afghanistan, the destruction of Iraq, the double-cross of Khadafy after he gave up his nukes, the obliteration of much of civil society and economic life in Syria, the US-supplied Saudi genocide in Yemen and the Washington sponsored coup and civil war on Russia’s doorstep in Ukraine, to name just a few instances of Washington’s putative "world leadership", have anything to do with preserving "order" on the planet?

And exactly how did the "benefits" of these serial instigations of mayhem outweigh the "burdens" to America’s taxpayers – to say nothing of the terminal costs to the dead and maimed citizens in their millions who had the misfortune to be domiciled in these traumatized lands?

Likewise, have the refugees who have been flushed out of Syria, Libya, Yemen, Iraq and elsewhere in the middle east by Washington’s wars done anything for the peace and stability of Europe, where Washington’s victims have desperately fled in their millions?
. . .
So when candidate Trump said the Iraq invasion was a stupid mistake, that Hillary’s war on Khadafy was misbegotten, that he would like to cooperate with Putin on pacifying Syria and that NATO was obsolete, he was actually calling into question the fundamental predicates of the American Imperium.

And that gets us to the Russian threat bogeyman, the War Party’s risible demonization of Vladimir Putin and the cocked-up narrative about the Kremlin’s meddling in the 2016 election.
. . .
At the end of the day, we are supposed to believe that a country with a puny $1.3 trillion GDP, which is just 7% of the US’ $19.5 trillion GDP, and which consists largely of aged hydrocarbon provinces, endless wheat fields, modest industrial capacities and a stagnant Vodka-favoring workforce, is actually a threat to America’s security.

And we are also supposed to fear the military capacity of a country that has no blue water Navy to speak of and no conventional airlift and air-attack capacity which could remotely threaten the New Jersey shores, and that spends less in a full year than the Pentagon consumes every 35 days.
endquote

http://original.antiwar.com/David_Stockman/2018/01/04/war-partys-desperate-assault-america-first/

Valissa

Great comment Ed! (#22)

To your item 6 I add the following.

The next generation of Democratic leaders is, um, nonexistent https://www.washingtonpost.com/news/the-fix/wp/2016/11/16/the-next-generation-of-democratic-leaders-is-um-nonexistent/

Retirements shine spotlight on GOP term limits for chairs http://thehill.com/homenews/house/359044-retirements-shines-spotlight-on-gop-term-limits-for-chairs
The surprise retirements of several veteran Republicans are reigniting a debate about the GOP’s self-imposed term limits for committee chairs. Some argue that term limits create a brain drain in Congress, with the most experienced committee leaders more inclined to head for the exits once they’re done holding a gavel. But while many Republicans acknowledge the potential downsides to limiting chairmanships, they maintain that it’s far better than the alternative facing their Democratic colleagues: frustration about not being able to rise in the ranks.

“You can certainly make the argument about keeping people around longer, about the value of institutional knowledge,” Rep. Tom Cole (R-Okla.), chairman of a House Appropriations subcommittee, told The Hill. “But the reality is, for most of our members, they’re willing to run those kinds of risks in order to have the potential for upward mobility.”

… The term-limit policy, put in place by former Speaker Newt Gingrich (R-Ga.) in 1994, was designed to keep the party from growing stale by regularly injecting new blood and fresh ideas into the mix. The term limits have offered an opportunity for younger members to climb the leadership ladder far more quickly than if the rules weren’t in place. … Lawmakers can get a waiver from the rules, though they are rarely granted. The thinking is that if a chairman can’t achieve major policy goals within six years, then it’s time to let someone else give it a try.

… Discontent has been brewing among rank-and-file Democrats, who have been unable to crack the leadership ranks and feel shut out of important decisionmaking. The frustration in the caucus, and concern about the future of the party, has only grown since last year’s Election Day drubbing. “If you don’t have term limits, people stay forever. That’s what you’re seeing on the Democratic side,” Mackowiak said. “They don’t give the young and up-and-coming members that same leadership opportunities. There’s nowhere to go.” There have been some past efforts by Democrats to impose term limits on committee leaders, but powerful groups like the Congressional Black Caucus (CBC) have remained opposed to the idea, arguing that seniority is the best way to ensure that their members can move up in the ranks.
--------------

Looking at the deep structural problems the Dems have, it is clear they have some major reorganizing to do if they want to start winning elections. The Republicans actually have a 50 state plan. They appear to know how to strategize better than their opponents. That's why they have so many governorships and majorities in so many state congresses.

Can't find the article just now, but another problem the Dems have is that the leadership refuses to listen to the red state democrats as to how to win more elections in red states. The arrogance combined with the ineffectiveness of thy Dem leadership never cease to amaze me.

Howard Dean was right (though maybe not the right person for the job) but the party refused to listen to him. Just look at the people who have headed the Democratic party in recent years. In addition, the base has been rendered impotent by the top down authoritarian propagandist fashion by which the Democrat party runs itself now. [Note: I refuse to call them the Democratic party anymore because they aren't.] After all, the Dems are just as much of the plutocratic oligarchy as the Repubs are.

I wish I dared tell my friends (all liberal Dems) that if they took even 50% of the time & energy now spent on hating Trump and put that into improving their party or into volunteering for a cause they care about and can have some impact on, then they might be able to make the world a tiny bit better of a place. One friend did this on her own. She lives in Florida and decided to take up some local Dem issues like getting ex-felons the right to vote. She goes out in grass roots fashion and gets signatures, etc., despite having a 50+ hour a week job.

turcopolier

outthere

I am happy that you mean no ill will to me for being an investor. I have always been that while trying to emulate Robert Edward Lee who always required his wealthy wife to live on his army pay and still save money. We rode out the the great wall street disaster with steadfast hearts and would do so again. Do you have a treasure chest full of Golden Grickels buried somewhere? BTW Qathafy had no nuclear weapons program. What he had was a quiescent chemical weapons program with his two plants shut down and a warehouse or two full of still crated equipment that would have been useful in a nuke weapons program if the Libyans had known what to do with it. GWB Bush and his clowns built the image of that up, used him as an example of how well things could go if you surrendered to the US and then the US betrayed him. I loathed Qathafy. pl

outthere

My personal choice of "investments" is real estate. Not fancy trusts, just simple real property that I can see and take care of, and improve for the benefit of all. I am not comfortable with paper investments in the hands of others.
Your suggestion about gold is interesting. I think it is a good "opportunity", a good balance, but it is uncomfortable for me personally to hold, either under the mattress or in a safe deposit box.
I am not into bitcoin or other crypto investments, maybe too old, maybe too untrusting. Some have done well lately but I do not go where I am uncomfortable.

outthere

I should say that my principal "investment" is my little farm,
I raise fruit trees, also have a few sheep. It provides most of what I eat, and there is always something productive and enjoyable to comprehend and accomplish. It does not really "make money", but I do sell through a farmers' market, and it could provide more income if needed. I give away as much as I sell. Most important, it is a quiet peaceful refuge for family and friends, and for me.

Croesus

Baby boomers who have retirement assets in the stock market are aging into period when they must withdraw those funds. Retirement funds that were tax-advantaged when they went in carry a much larger tax bill upon withdrawal. Even if the market crashes in 2018, Required Minimum Distribution (RMD) is pegged to value on Dec 31, 2017.

Croesus

"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."

An iconic placard from the Wimmen's March declared, YES WE WILL, in bold pink on bolder pink.
Yes we will WHAT, exactly?
An appended FB post explains: "We will fight and prevail for our rights and equality."

The couple brandishing the placard have, between them, 16 years of university schooling in some of the nation's finest, jobs/careers grossing in the mid-6 figures, own a million home, and share a nanny for their trophy child.

The tragedy of that protest and the so-called Resistance movement is that it diverts energy from very real outrages occurring in, and executed by the Trump administration, particularly in foreign affairs.

Which is precisely why the Women's Protest march & its sequelae were organized.
For all their education and supposed sophistication, the Yes We Will generation are dupes.

Jack

Yes, those who have to take money out of 401Ks will need to pay taxes. They can rollover the remaining proceeds back into financial assets.

There are many factors that can reduce speculative activity but the biggest is investor psychology. As long as psychology is positive, market returns can beget more investment. IMO, there will enough evidence when there is a change in sentiment. As I noted in my 2018 forecast if asset prices correct 20% there will be enough media hysteria due to the many leveraged structures that central banks will be forced to attempt reflation. How financial assets perform after that happens will be instructive.

Phil Cattar

Ed S..............Here are a few things you might want to ponder.I did vote for Trump but he did not win the election as much as Hillary lost it...........He won Mich,Wisc and Pa by 0.8 % or less in each state..........The Black vote was 11% less in 2016 as it was in2012.After having Obama on the last two presidential tickets there was nothing exciting or interesting about the 2016 ticket of 2 whites for the Blacks.It was anticlimactic...................In all of her brilliance,Hillary picked a nondescript,Mid West transplant ex governor of Va to be her running mate.She just needed a smiling,White Male face to be on her ticket...............As you point out because of Gerrymandering the House may stay with the Repubs............People do not just vote for their economic interests.That is what the book"What is the matter with Kansas" was about.I have seen this in the Evangelical South.Cultural,social and religious issues will trump economic concerns................You are right when you write you cant beat something with nothing.However if the next presidential election was being held in2018(and I know it is not) A ticket of Camila Harris and say a Joaquin Castro I believe would beat Trump and Spence.I would not vote for them but they would bring a lot of people of people who did not vote last time.Florida is getting hundred of thousands from PR along the I 4 corridor..........Hold On!!

turcopolier

Croesus

I am too old to be a Boomer but I took care of all that long ago. pl

Jack

OTOH, the sharply increased issuance of T-bills in 2018 combined with a reduction in the Fed's balance sheet means more high-grade collateral floating through the plumbing which people can lend, borrow, rehypothecate & so on. Jay Powell's efforts to tweak the leverage ratio with the freeing up of balance sheet, combined with increased collateral flow imply financial conditions remain loose.

Anna

On a question of national security, it is educational to compare the pestering of Assange versus the calm silence and inactivity by the FBI/CIA’ brass re Clinton's handling of sensitive information. Such as, "Huma Abedin directed Hillary’s immigrant D.C. maid, Marina Santos to print out classified “call sheets” and access other sensitive Clinton emails... Marina Santos, an immigrant from the Philippines does not have the security clearance required to access such sensitive information. Santos had access to everything while Hillary Clinton was Secretary of State including top secret, CIA-prepared daily presidential briefings." http://theduran.com/big-trouble-for-hillary-clinton-huma-abedin-and-convicted-pedophile-anthony-weiner/
Again, what was that fuss about the CrowdStrike’s sensational "discovery" of Russkies' hacking? Where the FBI & CIA brass have been while the Awans family had unencumbered access to classified information stored on Congressional computers? Comey, Clapper, Mueller, Cabe, Morell, Hayden and such have been playing political cowboys (pampered & perfumed) instead of taking care of the US national security. Looks like dereliction of duty

Laura

I believe that he claims never to have done alcohol or drugs....of course, he seems to prevaricate a lot.
He could have the same look because of very poor diet and exercise regime as well. He does not diet, eats tons of junk food and soda and believes that exercise (golf from a cart is not exercise) is bad for you.

At least that is what I read....

Laura

Col---I meant to reply to TV! Sorry!

NancyK

I thought it was lemurs that dive off cliffs? I think Democrats will do well in 2018. I'm white and they aren't alienating me.

fanto

The current frenzied attack on DJT about his mental status (Yale psychiatrists etc..) are IMHO a diversion from the growing realization that Russia gate is turning into DoJ/FBI-gate -

Croesus

It is as difficult to find trustworthy advisors for financial matters as it is to find credible information on foreign affairs. SST is an important trustworthy source for the latter, and the institution mentioned at #25, coming from that same credible source, invites further research.

It's a shame there's not a more efficient way to transfer assets to our children pre-death; they can use funds more productively and entrepreneurially than an aging person would reasonably be willing to do.

robt willmann

The economic situation in the U.S. is seriously bad, but both Democrats and Republicans have allowed it to happen through changes in the law going back to the 1980's.

Those who have been around for a while will remember the junk bond era and the savings and loan industry collapse in the 1980's. In the 1990's, debt took the place of income to cover the stagnation of wages and rising prices (price inflation). The North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT), with its World Trade Organization (WTO), were both passed by Congress in the 1990's without any amendments being allowed, through the "fast track" trick. They promoted destroying U.S. jobs and sending them overseas. Then came the repeal of the Glass-Steagall Act in 1999, which removed the protections about banking practices enacted into law after the Great Depression of 1929. The Democrats and Republicans combined to pass NAFTA and GATT and repeal the Glass-Steagall law, all signed by president Bill Clinton with Hillary in the White House.

The savings of individuals were knowingly destroyed by the Not-Federal Reserve Bank through its control of interest rates nationwide, which it reduced to next to zero, and people could no longer earn worthwhile interest on certificates of deposit and savings accounts in banks (and still cannot), and had to spend their savings on daily living. But, with the low interest rate, the cash-strapped people could borrow against the "equity" in their home through a "home equity loan" and its vicious companion, the "reverse mortage". Credit card companies and associated banks could get financing for next to no cost from the low Federal Reserve interest rates and loan it to the unwashed masses through their "credit" cards at 18-20+ percent interest. The federal government "guaranteed" student loans made by lenders to college students, and the students left college with a large ball and chain clamped to their leg in the form of student loan debt.

The City of Hartford, Connecticut has been on the way to bankruptcy and had to be helped by the legislature--

https://ctmirror.org/2017/10/19/hartford-must-restructure-debt-to-get-state-help-to-avert-bankruptcy/

The State of Illinois is effectively bankrupt, and had unpaid invoices and bills on 8 November 2017 in the amount of $16.7 billion. So the Illinois legislature authorized $6.5 billion in new debt to help pay the unpaid bills. As of 6 January 2018 (today), Illinois still has $8.75 billion in bills it has not paid--

https://ledger.illinoiscomptroller.gov/

The level of government, corporate, and individual debt is astronomical and outrageous. And large companies on a public stock exchange are borrowing money to buy back some of their own shares of stock.

But the gorilla in the room is underfunded pensions.

Around a year ago, the Dallas, Texas police and firefighters retirement fund got into financial trouble, and some employees bailed out, retired early, and took a lump sum rather than relying on getting a monthly check in the future.

Then, the City of Houston, the energy capital of the U.S.A., showed $8.1 billion in "currently unfunded pension obligations". The Texas legislature, in its 2017 session, helped Houston by authorizing $1 billion in "pension obligation bonds" (new debt) to try to shore up the city's retirement system. The Houston mayor wrote an open letter entitled "Pension Reform -- The Path Forward". Although its language is quite amusing, the situation is actually pathetic--

http://houstontx.gov/pensions/letter-from-mayor.html

The Democratic Party would do well to not wish for a worsening economy, thinking it will provide political advantage; the economic situation is much too fragile. The Republican Party should be very careful about its economic promises.

The "middle class" in the U.S. as previously known is gone. There is still a spirit around for a better standard of living without debt slavery.

We will see what happens.

LeaNder

White women will be the key to this effort, so watch for a lot of 2nd wave feminism culture war stuff.

Well, Huckleberry, Karlin, whose comment on Russian versus US elections is indeed interesting, had a more general article on women and/or their votes:

http://www.unz.com/akarlin/female-suffrage/

Why did you feel you had to separate white women from the brown or beige? Were exactly would you fit in Asian women?

turcopolier

croesus

I should mention that we are minor stockholders in this small, conservatively managed, privately held bank. I should also say that for purposes of analysis the US is for me just another country. I apply the same standards to everything. pl

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