As much as I abhor the need to make this declaration, I know intuitively I must, so here it is: This has nothing to do on whether I agree, or not, with the President, administration, or either political side. It has everything to do with what is, and the consequences that may, or may not, evolve which directly impacts all business, thus the economy.
There’s an old Chinese saying, “May you live in interesting times.” Then there’s the Latin, “Beware the Ides of March.” And then there’s the more recent, “History doesn’t repeat itself, but it often rhymes.” I find it intriguing that as of today all of them converge and fit properly as to sum up just how precarious everything sits, whether it’s local, regional, national, global, or any combination there of.
To use a scientific expression: these three sayings (actually warnings) seem to be the current makeup for some form of observational fractal which has now encircled the globe. e.g., The closer you look, or further you pull back – the structure (i.e., the applied sayings) is the same.
The inherent problem with all of this is that it puts everything from small town business to global trade and economies simultaneously into wildcard status. And if someone says they know precisely what will or, will not happen next? My advice is to run, rather, than just walk away. For it appears we are all in unchartered waters once again.
Everything is up for grabs – from financial meltdowns – to political showdowns – even a nuclear standoff. Everything is now in flux with contagion risks to numerous (and consequential) to count. And anyone arguing that as “crazy” or “conspiratorial tin-foiled cap talk” either hasn’t been paying attention – or hasn’t a clue. Period.
To express just how interconnected it all is, and how that “fractal” reference ties into it, I’ll use the current situation (and situations) mounting here in the U.S. to demonstrate it. For I believe that “fractal” structure I allude to coincides with another fractal of sorts which also begins and emanates from here. e.g., Monetary hegemony. And like it or not – it connects everything.
Unlike the Vegas tagline “What happens here stays here”, what is possibly about to be unleashed both of the political and monetary here in the U.S. will be all too known, felt, reverberate, and bring about repercussions far too numerous and yet still unknown to argue in one sitting. For it’ll be global in nature picking up steam and ferocity at an unrelenting pace should it get going. And it has all the tell-tale signs one wrong move is all it’s going to take to get it rolling.
And that “move” may in fact have already taken place.
So let’s begin with what we do know, along side with what has taken place, and what’s been telegraphed to be forthcoming. And again just to reiterate – if you feel I’m picking on, or siding with one side or the other? Refer to my opening statement.
President Trump was elected on the basis of two ideals. One: He was a political outsider and vowed to shake up the current system. And two: Not only did he proclaim he knew how to make deals, and deals that would work. He was unabashed in declaring he would jettison any deals made prior to his election and renegotiate from scratch therefor ending in either win-win agreements or – none at all. e.g., Deal, or no deal.
Not only was this the genesis and argument for a pro-business, pro-U.S. stance. It was also the verbal fodder for an anti-establishment standpoint, and call for action. i.e., Repealing and/or replacing the Affordable Care Act (e.g., Obamacare), regulatory overburden relief, taxation relief, true infrastructure spending, and more.
And within his first month or so things had the appearance of just that. i.e., Fulfillment of said (or implied) campaign promises. And the “markets” along with the highly skeptical ranging from the electorate in general right across the business world in earnest felt that maybe, just maybe – this time was different, and campaign promises might actually be more than just promises made only to be broken.
This coincided with global happenings such as Brexit, and more bolstering what appears to be a repudiation of the globalist or elitist fueled machinations. The wind (and arguments) seemed to be at the backs of this movement, both here in the U.S. and globally.
Then – last week happened.
For anyone paying attention a sudden ominous warning or writing appear within the walls of the U.S. congress. And it appeared written in political “blood” rather than paint. And as ominous as that was there appeared something else far more sinister that suddenly rose on the horizon, rising up slowly and looking strangely reminiscent of the not fully completed, yet fully operational Death-Star straight out of a Star Wars® film.
Then it fired delivering what many might consider as its coup d’état: The Republican version to replace and repeal Obamacare.
The “Empire” (i.e., the entrenched political elite) seemed to strike, and all but killed, any chance for further political maneuvering (on anything) outside of their purview and wishes. Why?
The President appeared so eager to fulfill his expectations of a campaign promise seems to have blindly walked right into a trap. The reasoning? His own words of praise and his actions. i.e., Both himself along with others (V.P. Mike Pence has already done so in KY) are going to go out campaigning for it and its passage. The real issue?
Those who have laid eyes or heard what’s proposed are aghast at what’s contained within. i.e., It’s all just more of the same putrid slop served up by a different set of chefs with a few less or different ingredients wrapped in used papers tied with a filthy ribbon that states – bon appétit.
Everyone from business owners, to the business minded knows intuitively and precisely what it really is: Sh_t on a Shingle.
Said differently: Obamacare just became Trumpcare which is really Obamacare-lite. The difference? Think instead of using “animal fat” as one of the ingredients – they’ll now use “palm oil.”
That’s not the type of change people were arguing (and voting) for.
With one laser-like shot, along with its timing, they (i.e., the entrenched elite) managed to make millions of small and medium-sized business owners, along with the myriad of solo-practitioners, entrepreneurs, both current and hope to be, cry out in terror when it was announced that “repeal and replace” meant “the same as it ever was” with just a few finely tuned changes as to fit the legal definition of “changed.”
Yet, just like the Star Wars reference, those screams and voices suddenly fell silent in unison when they heard the President endorse it.
It was in that moment when it became clear for those who understand both politics, and business, along with being able to connect a few dots, and square that up against where we are in time, what is coming down-the-pike, and what can, or can’t, be moved further based on that empirical evidence, that indeed – the “Empire” just might have struck a death-ray into any semblance of further or actual “deal making” going forward. And here’s why…
Regardless of your political feelings of House Speaker Ryan, or Senate Majority Leader McConnell one thing is unquestionable: They are establishment members first.
All you’ll ever witness from these two individuals is how “the rules” are to be used to ones advantage. It’s never really “the people” (although that’s always the rally cry) rather, it’s always something parliamentary, or the counting of caucus votes, or some other inside baseball reason or excuse why something can, or can’t, be done.
Overgeneralization? Yes. But I feel it fits and explains the point best, for it’s this type of politician that needs to be understood when talking about politics in the sense of getting things through congress. In other words: They like the control, and don’t like it when they feel they are no longer the ones controlling what they deem is theirs. i.e., If they control the chamber – they control the government. And just because Mr. Trump wishes it – they’ll decide how, when, and why it will go forth. If they decide at all.
If you think I’m off track on any of it, just look to any responses they’ve given of late as to anything needing congressional approval for change: They either state: “We can’t do it based on _______” (insert arcane rule #X here) or, “We haven’t drafted ________” (insert specious reasoning #Y here.) Case in point: 6 bills sent to Mr. Obama to repeal Obamacare. Suddenly there was nothing to send Mr. Trump?
The danger now shaping up is all that political relativism is going to meet a myriad of stone cold, fervent opposition from both sides of the political aisle, with establishment politicians (again from both sides of the aisle) whether by coincidence or concerted effort directly opposing the President and his agenda with the new found argument “We can’t afford it.”
And that will be the go-to argument because the now growing chorus is that “debt matters.” When for 8 years “debt matters” was only relative term.
Are you beginning to see how the “legs” for any further Trump inspired legislation has been swiftly taken off at the “knees?” Or said differently: The “Empire” regains all control – once again. And the new administration will be left holding any and all “bags.” And the repercussions, once fully understood, will be swift if my assessment is anything close to being correct. For instance:
Everything which is now baked into the “markets” and economy bolstered with increased expectations fueled by such as the latest “jobs” report, and the seemingly unshakable “markets” hovering at all time highs are at risk of suddenly falling apart – if – the aire of “economic relief is coming!” hopes and dreams are dashed by the political deal-of-the-day.
And if this past week is used for any clues into the future, with what has been witnessed via this latest repeal/replace revelation? The possibly of “if” moving from possible to probable maybe already known, jumping from what “if” directly into “WTF!” status.
If that conclusion does in fact show up? The resulting chill that will surely follow has the potential to derail everything (and I do mean everything) not only proposed, but also, considered as finally stabilized. e.g., The economy and “markets.”
There’s another old saying: Markets take the stairs up – but the elevator down. And we could be on the top floor as the door opens to the next stop: The Federal Reserve.
On March 15th it has now reached 100% expectations that the Federal Reserve will indeed raise interest rates again, just 90 days since their last raise.
If you think (let alone believe) the economy is ready for another hiking so soon, and the Fed. is doing this out of “data dependence?” Then please square this circle: The Atlanta Fed. has once again slashed its estimate for Q1 GDP from a paltry 1.8% to an abysmal 1.3%, to now where it sits at 1.2%
And the data dependent Federal Reserve wants you to believe aggressive rate hikes into both this ghastly economic forecast, along with the unknown of what is possibly forthcoming by way of fiscal stimulus, of any kind, is just the prescription needed.
If you either can’t stop laughing, or you’re just left slack-jawed and bewildered in the presence of such abject lunacy? Congratulations – you’re normal. Yet, the consequences of such actions combined with the above have all the makings for anything that will be considered funny or laughable going forward as I’ll contend the exact opposite is what will be the case. Here’s more of my reasoning…
In conjunction with near unanimous sentiment that the Fed. will indeed raise on the 15th. There’s another event happening simultaneously: The U.S. debt ceiling freezes in at $20 Trillion. i.e., All the resolutions as to allow the government to bypass and operate unencumbered vanishes. Or said differently: Can I get a warm welcome round of applause for the triumphant return of “Government Shutdown Headlines Galore!”
No one has been pounding the airwaves (and keyboard) more about this topic and its ramifications than president Reagan’s former Budget Director, David Stockman.
If one takes the conclusions of Mr. Stockman (and should for he has actual apples-for-apples experience) and buttress them with the understanding that once the Fed. does indeed raise – the gridlock chorus of “we can not afford” based on the Fed. superimposing its will as to raise the borrowing costs of all known debt, will be the mana-from-heaven every political insider, and establishment wannabe (welcome back “Empire”, yes?) on both sides of the aisle using it to feed the “do nothing” congress and stop any – and all – Trump initiatives and incentives – D.O.A.
And Mr. Trump has ventured into that political fray (much like Caesar) believing he still possesses the upper hand (i.e., as witnessed via his accepting of this latest repeal/replace catastrophe in the making.)
I’m afraid that acceptance may have already politically mortally wounded him and his agenda – he just doesn’t know it. But all the tell-tale signs are there if one dares to look and connect the dots of possibilities. How (or if) he’s able to recover is anyone’s guess lest short of an immediate jettisoning of the proposal.
Again: Once Mr. Trump appeared so quick and willingly accepting of the current Obamacare-lite proposal, many of his most staunchest supporters (especially those of the business community whom I spoke with) immediately became dispirited.
Why? Because many understand not only the political ramifications, but also, the economic. i.e., Everything they believed, hoped, and voted for was disappearing (once again) back behind a cloud of political smoke-and-mirrors. For this has all the appearances of being Mr. Trump’s “Mission Accomplished” banner moment. Remember how that all worked out for W? They do.
Although Mr. Trump did in fact campaign on a more inclusive insurance system than many of his party cared for. The one thing that was almost universal in thought (and action based via votes) was the near complete (if not its entirety) repealing of the regulations imposed (and more still forthcoming) over the last few years that are currently killing any future business formation or expansion, along with killing existing businesses outright.
And this Obamacare-Lite aka Trumpcare 1.0 is the first sign that Mr. Trump may in fact have been politically outmaneuvered via the Elites, Deep State, Political Insiders, Empire, K-Street, Wall Street, _______(fill in the blank.)
It is quite possible that the Trump administration, along with the President is a political “dead man walking” and has yet to realize they are the ones that furnished the political daggers themselves.
Once the President allowed himself to be seen in the light of publicly endorsing the making of this “deal”, a deal that for anyone (i.e., those in business in-particular) whom are watching closely know intuitively this is one deal that should not be made. A lot (and I do mean a-lot!) of political goodwill went down the drain along with much hopes for other promises such as tax reform and more.
Why? Because just as Mr. Ryan supplied the now disdained healthcare reform option, Mr. McConnell has signaled much the same for other proposals such as taxes and more. Already the tone (and signaling) is – not now – maybe later. Much later. Say 2018 or so.
If the “Empire” has indeed succeeded with a pinpointed laser-shot on healthcare, coupled with the timing of the debt ceiling, the raising of interest rates, and getting the President to outwardly seeming to sign on to their proposals, rather than something that seems more in-kind to a sticking with his own guns or proposals? Then the “Empire” strikes back reference certainly does fit.
The real issue happens when it is fully grasped and consequences realized around the rest of the world (and “markets”) along with the resulting chaos once it comprehends the ramifications that all the hoped, wished, and priced in valuations currently sitting at lifetime highs meet the staunch revelation – that it’s all quite possibly just another dream vanished into the ether, much like a recent IPO’s investment advice and dollars. There’s no need to start shopping for a sequel.
Far too many of us have seen this movie before, and the only thing that’s worse? We not only know how it ends – we dislike it ever-the-more with every viewing.
“May you live in interesting times”, “Beware the Ides of March”, “History doesn’t repeat itself, but it often rhymes.”
Unknown, scary, and recurring. Sure seems to sum it all up perfectly.
© 2017 Mark St.Cyr