After Friday’s failed health care bill, President Trump’s future tax, regulatory and fiscal initiatives will be more difficult to accomplish. I have expected this outcome for several months; others may soon come to the same conclusion…… The president has and will continue to be educated that there is a fundamental difference between the art of the real estate deal and the art of delivering thoughtful legislation when 535 partisans are involved….. am fearful that President Trump will be unable to pivot; he maintains an overly visible and vocal contempt for his opposition in the media and in the Capitol. I am not sure whether he sees his Bannon-like anarchistic approach toward governing — by tearing down Washington, D.C. — is failing. His mistake is that though the populist message resonated pre-election, it must be expanded to get legislation passed post-election. We are a nation of laws, not of personalities. There are few sherpas within the administration who can guide and shepherd bills into successful laws. Every great corporate CEO or president of the U.S. knows what they don’t know and they bring in brilliant, smarter and effective people to help them. However, even qualified Cabinet members such as Gary Cohn and Wilbur Ross have no experience on the Washington stage.
On the first day of March 2017, the combined market capitalization of U.S. nonfinancial and financial stocks reached $34 trillion. Those trillions of dollars in paper wealth filter down to the investment statements of millions of investors, reflected in quotes on computer screens and blotches of ink on paper. Over the completion of the current market cycle, we estimate that roughly half of U.S. equity market capitalization – $17 trillion in paper wealth – will simply vanish. Nobody will “get” that wealth. It will simply disappear, like a game of musical chairs where players think they’ve won by finding chairs as the music stops, and suddenly feel them dissolving as if they had never existed in the first place.
The “cyber-security” firm that everyone is depending on to make the case for Russia’s alleged “hacking” of the 2016 presidential election, CrowdStrike, has just retracted a key component of its analysis – but the “mainstream” media continues to chug along, ignoring any facts that contradict their preferred narrative……Remember, the FBI never looked at the DNC servers: they depended on CrowdStrike — which has a $150,000 a year no bid contract to perform “security” services for the agency — to analyze the forensic evidence. Shawn Henry, CrowdStrike’s CSO and head of CrowdStrike Services, is a former assistant executive director of the FBI.
As the administration attempts to put the loss behind it and, to Wall Street’s glee, pivot to the issue of tax reform, here’s a newsflash: Taxes are really complicated too…….But if the ‘Trumpcare’ debate proved anything, it was that there is little unity within the governing party itself. And the tax policies being put on the table aren’t that simple anyway. Broadly, we’re talking about sharp cuts in corporate taxes and taxes on wealthy individuals, with some additional reductions for middle-class families. But the finer details of plans floated include — potentially — a hefty levy on imports, a total rewriting of corporate tax codes, and a change in the way individual deductions are taken that could neutralize a huge windfall to homeowners.
As someone who warns about dangerous economic bubbles, one of the things that irks me the most is when politicians and business leaders praise debt-driven growth booms and the jobs that they create……What good is a debt-driven boom that creates temporary growth, but an economy-destroying crash later on? In many ways, it’s like comparing a temporary recreational drug high (and inevitable crash) to a positive mood created by healthy living and exercise – the first is unsustainable, while the latter is sustainable.
In terms of GDP, the fourth quarter was revised up slightly, but there were adjustments for prior quarters, and overall GDP growth for the year 2016 remained at a miserably low 1.6%. We’ve come to call this the “stall speed.” It’s difficult for the US economy to stay aloft at this slow speed. As Q4 gutted any hopes for a strong finish, GDP growth in 2016 matched the worst year since the Great Recession. And corporate profits, despite a stock market that has been surging for years, are even worse. A lot worse. They’ve declined for years. In fact, they declined for years during the prior two stock market bubbles, the dotcom bubble and the pre-Financial-Crisis bubble. Both ended in crashes.
The optimism over global economic growth and reflation, and eager anticipation of a Trump stimulus, overwhelmed any concerns…..But the mesmerizing recent gains mask a very scary fact: Corporate profits remain at levels first hit three years ago. As equity prices have risen since then, shrugging off everything from renewed weakness in crude oil to the quickening of the Fed’s policy normalization, cyclically adjusted equity valuations are now at levels that have only been exceeded heading into the 2000 dot-com and 1929 stock market peaks.
…….the failure of Congress to get the Affordable Care Act (ACA) repealed, much less replaced. The problem, of course, is the failure to repeal the ACA leaves in question the ability to pass other agenda based items such as tax reform, border wall construction, repatriation or immigration reform. As I noted the debt ceiling debate, which is rapidly approaching, is the next major hurdle. To wit:“With the government currently at the ‘debt ceiling limit,’ and the June 1st deadline approaching for ‘extraordinary funding measures,’ Congress will need to address the FY18 budget resolution before it can act on tax reform. This is necessary to provide the ‘reconciliation instructions’ that allow Republicans to pass tax legislation with only 51 votes in the Senate (and therefore no Democratic support). Reaching an agreement on the FY budget resolution will not be easy; in the past, conservatives have demanded a balanced budget within ten years but this would require endorsing spending cuts (in non-binding form) that some centrist Republicans might oppose along with the BAT.
Exactly three years ago, on March 16, 2014, the Crimeans were offered a choice: to rejoin Russia or to return to the constitution of 1992 that proclaimed Crimea a legal, democratic, secular state whose relationship with Ukraine was based on bilateral agreements. That constitution was unilaterally abolished by Kiev on March 17, 1995, and here’s what’s surprising: no one at that time in the West demanded that the Ukrainian government stop violating the provisions of international law and the rights of the inhabitants of the Crimean peninsula. And then in 1995, special ops forces from the Security Service of Ukraine (SBU) and the Armed Forces of Ukraine (ZSU) landed in Crimea and Sevastopol in order to establish «Ukrainian law and order», seizing the building housing the Supreme Council of the republic, where the administration of the acting president of Crimea, Yuriy Meshkov, was also headquartered, and demanding that he be turned over. Since Meshkov refused to vacate his office, they tried to poison him. Much later he described how his drink had been poisoned, and that later in the hospital he was refused proper medical care. Only an emergency evacuation to Moscow miraculously saved his life.
But churches in America are often adorned with U.S. flags and state flags as well as the flags of the church. Jesus warned against trying to “serve two masters.” But many churchgoers seem to want to give it a try. Even in our little church in Maryland, we say prayers for “our men and women serving in the armed forces” as if they were doing God’s work. Over and over, Jesus emphasized the responsibility of the individual – the Good Samaritan, for example – to do the right thing. As for government, he seemed to despise it… or at least keep his distance (“Render unto Caesar that which is Caesar’s,” he said, tossing a small coin). And at one point, Jesus was invited to join the Deep State insiders. Political power – the power to force win-lose deals on others – was offered to him………And Jesus answered and said unto him, “Get thee behind me, Satan.”