With the kind assistance of Kellyanne Conway, I present to you a chart of the inverse-volatility fund, symbol XIV, which to my way of thinking embodies the optimism, ecstasy, and naivete of the investing public better than any other chart. You people are nuts.
I was aghast this week when I read that Trump was going to torpedo the Dodd-Frank regulations. As a people, we learned precious little from the sins that led up to the financial crisis. Famously, not a single person went to jail, and over the past eight years of “healing”, the bankers have simply become richer……..and richer……….and richer. The icing on the cake just came, with the feeble regulations that were enacted to reign them in being sent to the chopping block.
It got me thinking to the last time the government torpedoed well-meaning bank regulations, and that was with the the passing of the Gramm-Leach-Bliley act. This act of Congress, which torched the Glass-Steagall law, established a foundation for the financial crisis that would take place years later.
Economic data released today on the Chicago PMI (Purchasing Manager’s Index) shows how much the U.S. economy is urgently in need of fiscal stimulation.
With barely a whimper above the 50 expansion level, the health of its economy is set to drop into contraction territory soon (as it did in 2009 following the depressed signals forecast by similar low numbers produced in 2007/08), unless Congress begins to cooperate and focus on real issues that support its claims of being number one in the world arena when it comes to economic (and military) might, instead of playing economically dangerous political games in unnecessarily obstructing the advancement of the new Trump administration, cabinet confirmations, and economic and security agendas.
In honor of this momentous day, a clip from a very silly movie from 1980, First Family:
Then (January 19, 2008)…which was the beginning of the financial crisis, culminating in a catastrophic drop of the S&P 500 Index, along with other U.S. and foreign stock markets, to the lows of March 2009 (which was stemmed by U.S. government bailouts of the financial system)…
S&P 500 Index Monthly
Now (January 19, 2017)…
It may seem hard to believe, but this is going to be the last full week of Obama’s presidency. After eight years (long, horrible years for the bearish set), Obama’s tenure in the White House is nearing an end. His excellency President Twitter will be sworn in (placing his hand, I suppose, on The Art of the Deal) in just a couple of Fridays. There are very few guarantees in life, but I’m pretty sure of this: this is going to be a verrrrrrrry interesting administration.
Anyway, since Trump’s inauguration is coming up, I thought I’d reflect a bit on what happened in the equity markets when Obama came into office. It’s kind of interesting (I’ve also featured two images of Obama, showing how much these two terms have aged the man).
Make no mistake, the real loser of the 2016 U.S. presidential election was not Hillary Clinton. No, it was nearly the entire Western mainstream media which up to final moment last night clung to a political fairytale it tried so very hard to convince its readers over the past two years. No matter whether you are a Hillary or a Trump supporter and no matter how you feel about the 45th president of the the United States himself, this is something that should deeply upset and worry you long after your current euphoria or depression has subsided and given way to your daily routine. (more…)