LOVINGSTON, VIRGINIA – The public spectacle continues…
There are so many ways to look at it, we scarcely know whether to laugh or gasp.
On Friday, President Trump took the sound and fury up a notch by way of his Twitter account:
The FAKE NEWS media (failing @nytimes, @NBCNews, @ABC, @CBS, @CNN) is not my enemy, it is the enemy of the American People!
Here at the Diary, we offer no news. And no opinions. We just try to make sense of it all.
We do so by comparing what’s going on today to other events… other people… and other times.
Analogy is all we have to go on. And so far, the best match we have found for Mr. Trump is former Argentine President Juan Perón.
A colorful, larger-than-life rascal, Perón “took on the Establishment” south of the Río de la Plata.
Perón didn’t have Twitter. He didn’t have “fake news.” All he had were old-fashioned speeches and old-fashioned lies. He railed against the rich… the landowners… and the church. And he ranted against the newspapers… the bankers… and the universities.
The plain people loved it. Perón spoke for them. He stood up to the old elite.
But he didn’t drain the swamp. He didn’t even drain the sink.
Instead, he took over the Establishment’s power and used it for himself. Whatever dirty deeds Perón ascribed to the old elite, his new elite committed even dirtier ones.
North of the Rio Grande, the Establishment has concentrated more and more power in Washington and its chief executive.
To give you one illustration of how the Deep State works, we present Exhibit “A” from the weekend’s fake news: Mary Jo White, formerly regulating and policing corporate behavior as head of the SEC and, before that, defending corporations against the SEC as a partner at law firm Debevoise & Plimpton.
The woman has been through the revolving door so often, she has practically knocked it off its hinges.
When she joined the Obama team, she pledged to “retire” from her work at the law firm to serve the public interest. But this past weekend, it was reported that she’s headed back to the crony firm.
This is from the Wall Street On Parade website:
The news is also highly significant because it will mark the fourth time in four decades that Mary Jo White has spun through the revolving doors of Debevoise & Plimpton (where she represented serial law violators) to government service (prosecuting serial law violators).
The regulators and the regulated are the same people. The fake news media also tells us that Mr. Trump has appointed a new SEC head: Jay Clayton. But wait… What’s new about him?
Same caste. Same tribe. Same guild. The only difference is the law firm: Sullivan & Cromwell.
One thing Mr. Clayton may want to look into is the insider trading of Kraft Heinz stock in advance of its proposed takeover of Unilever.
As reported in the fake newspaper the Financial Times, options trading went through the roof as rumors circulated of the deal… with about 150 times more money betting that the share price would go up than go down.
This is the sort of thing that is not supposed to happen. And when it does, the SEC, bless its heart, is supposed to investigate.
But as our friend and former Wall Street insider David Stockman points out, the whole deal stinks to high heaven. It is the kind of deal you can only get when you have fake money made available to Wall Street at an after-tax, after-inflation rate of practically zero.
Both companies are already oversized conglomerates with stalled sales and heavy debt.
Kraft Heinz has $30 billion in loans outstanding. If the deal had gone forward, it would have $130 billion. And it would have priced the old shampoo and soap seller as if it were a growth company – at 25 times earnings.
But anything is possible when you have fake money fueling takeovers, buybacks, and mergers.
The fake money also funds the SEC, indirectly. Its job is to monitor the games, pretending that the playing field is level and that any mom or pop can bet against the big boys… and win.
And thanks to the accretion of crony power during White’s career, now the feds can get away with anything… even murder.
Congress interferes in domestic affairs. The Pentagon interferes in foreign affairs. The Fed conducts the grandest larceny in history while the SEC stands lookout.
And like Stalin before him, President Obama approved the assassination list – including U.S. citizens without charge or trial.
And now, the outsize power of the U.S. federal government is headed up by Donald J. Trump. Will he renounce it, cut the Deep State down to size, and make America great again?
The U.S. is an empire deeply in debt and running on fake money.
Its economy is saddled with too many insider win-lose deals imposed by the feds to reward crony friends.
Elections give Republican and Democrat insiders a chance to compete for the choicest spoils; they do not change the way it works.
A more-or-less permanent crony-zombie complex… aka the Deep State… aka “the swamp”… runs things.
Is the Establishment now running scared, trying to undermine Trump’s administration and stab him in the back?
Or is Trump just a new species of swamp critter pretending to fight the Deep State while actually going along with the system?
The insiders aren’t sure, either. They spit, chew the carpet, and plot against the president.
As Senator Charles Schumer noted, Donald Trump was “really dumb” for taking on the intelligence agencies. “They have six ways from Sunday at getting back at you,” he said.
Leaks from the FBI or NSA – fed to the fake news media – have already done in Trump’s first pick for national security adviser, Michael Flynn. And Trump’s first choice to replace Flynn, Vice Admiral Bob Harward, refused the job.
But the Deep State military-security complex has been undermining foreign governments for a half-century or more. Would it be a big shock to find it undermines our own?
BY CHRIS LOWE, EDITOR AT LARGE
Stocks and bonds are taking radically different paths…
Today’s chart looks at the performance of the S&P 500 versus long-term Treasury bonds since Election Day.
As you can see, since Election Day, U.S. stocks are up 10% while long-term bonds have plunged 8%.
This makes sense if you believe President Trump’s policies will spur U.S. economic growth.
Stocks should perform well as the economy improves. Bonds should take a hit as growth-fueled inflation picks up.
– Chris Lowe
The Secret That Central Banks Have Been Hiding for Seven Years
Central banks have tried to keep this seven-year trend hidden from the public… But for those watching, it could be a potentially huge money-making opportunity.
Why Market Forecasts Fail
We all like to make market forecasts. The problem is they are an attempt to predict future emotions… and there’s just no way you can do that consistently.
Americans Have Lost Their Mojo
According to economist Tyler Cowen, Americans have become less adventurous and more static. We’ve also become less entrepreneurial and less innovative.
What really separates the rich from the poor? That was the question on the table in Friday’s Diary. And judging by the feedback in the Mailbag, it was a big hit with readers…
Brilliant, brilliant, brilliant! Bill’s essay today on “What Really Separates the Rich From the Poor” is lucid, concise and logical. Another slam dunk…
– Mike S.
Brilliant, Bill! The most cogent, pungent, and condensed description I have ever read about why some nations – and some people – are rich, and others poor.
In particular, recognizing an economy as a learning system, wherein the most successful and advanced nations are the ones who have learned the most, and have been most effective in the feedback-and-improvement process.
– Kent A.
You have found the correct path to understanding how successful societies must operate. As you say, the market has to function as a speaker of truth to power. Failure must be punished, and success must be rewarded both without favorites. But what happens when power has distorted the market, making even small failures a threat to the entire system?
Anticipating this problem, you keep predicting the inevitable collapse and have taken steps to protect yourself and your family. You have instructed the rest of us to find a life boat and shown where some are located. I thank you for this.
– Edmund S.