The Predictable MAGAnomic Policy Interacting Amid: Wall Street -vs- Main Street…

Everything is happening in a very predictable sequence. Few understand the MAGAnomic reset and what was predicted to happen in the space between disconnecting a Wall Street economic engine (globalism and multinationals) and restarting a Main Street economic engine (nationalism/America-First).  In 2016 CTH explained where we would be today. With current Wall Street events, perhaps it is worthwhile remembering the CTH forecast.

Originally outlined far more than a year ago. Reposted by request.

President Trump’s MAGAnomic trade and foreign policy agenda is jaw-dropping in scale, scope and consequence. There are multiple simultaneous aspects to each policy objective; however, many have been visible for a long time – some even before the election victory in November ’16.

If we get too far in the weeds the larger picture is lost. CTH objective is to continue pointing focus toward the larger horizon, and then at specific inflection points to dive into the topic and explain how each moment is connected to the larger strategy.

Today we repost an earlier dive into how MAGAnomic policy interacts with multinational Wall Street, the stock market, the U.S. financial system and perhaps your personal financial value. Again, reference and source material is included at the end of the outline.

If you understand the basic elements behind the new dimension in American economics, you already understand how three decades of DC legislative and regulatory policy was structured to benefit Wall Street, Multinational corporate interests, and not Main Street USA.  The intentional shift in economic policy is what created distance between two entirely divergent economic engines to the detriment of the American middle-class.

REMEMBER […] there had to be a point where the value of the second economy (Wall Street) surpassed the value of the first economy (Main Street).

Investments, and the bets therein, needed to expand outside of the USA. hence, globalist investing.

However, a second more consequential aspect happened simultaneously. The politicians became more valuable to the Wall Street team than the Main Street team; and Wall Street had deeper pockets because their economy was now larger.

As a consequence Wall Street started funding political candidates and asking for legislation that benefited their multinational interests.

When Main Street was purchasing the legislative influence the outcomes were -generally speaking- beneficial to Main Street, and by direct attachment those outcomes also benefited the average American inside the real economy.

When Wall Street began purchasing the legislative influence, the outcomes therein became beneficial to Wall Street. Those benefits are detached from improving the livelihoods of main street Americans because the benefits are “global”. Global financial interests, multinational investment interests -and corporations therein- became the primary filter through which the DC legislative outcomes were considered.

There is a natural disconnect. (more)

As an outcome of national financial policy blending commercial banking with institutional investment banking something happened on Wall Street that few understand. If we take the time to understand what happened we can understand why the Stock Market grew and what risks exist today as the financial policy is reversed to benefit Main Street.

President Trump and Treasury Secretary Mnuchin have already begun assembling and delivering a new banking system.

Instead of attempting to put Glass-Stegal regulations back into massive banking systems, the Trump administration is creating a parallel financial system of less-regulated small commercial banks, credit unions and traditional lenders who can operate to the benefit of Main Street without the burdensome regulation of the mega-banks and multinationals. This really is one of the more brilliant solutions to work around a uniquely American economic problem.

♦ When U.S. banks were allowed to merge their investment divisions with their commercial banking operations (the removal of Glass Stegal) something changed on Wall Street.

Companies who are evaluated based on their financial results, profits and losses, remained in their traditional role as traded stocks on the U.S. Stock Market and were evaluated accordingly. However, over time investment instruments -which are secondary to actual company results- created a sub-set within Wall Street that detached from actual bottom line company results.

The resulting secondary financial market system was essentially ‘investment markets’. Both ordinary company stocks and the investment market stocks operate on the same stock exchanges. But the underlying valuation is tied to entirely different metrics.

Financial products were developed (as investment instruments) that are essentially wagers or bets on the outcomes of actual companies traded on Wall Street. Those bets/wagers form the hedge markets and are [essentially] people trading on expectations of performance. The “derivatives market” is the ‘betting system’.

♦Ford Motor Company (only chosen as a commonly known entity) has a stock valuation based on their actual company performance in the market of manufacturing and consumer purchasing of their product. However, there can be thousands of financial instruments wagering on the actual outcome of their performance.

There are two initial bets on these outcomes that form the basis for Hedge-fund activity. Bet ‘A’ that Ford hits a profit number, or bet ‘B’ that they don’t. There are financial instruments created to place each wager. [The wagers form the derivatives] But it doesn’t stop there.

Additionally, more financial products are created that bet on the outcomes of the A/B bets. A secondary financial product might find two sides betting on both A outcome and B outcome.

Party C bets the “A” bet is accurate, and party D bets against the A bet. Party E bets the “B” bet is accurate, and party F bets against the B. If it stopped there we would only have six total participants. But it doesn’t stop there, it goes on and on and on…

The outcome of the bets forms the basis for the tenuous investment markets. The important part to understand is that the investment funds are not necessarily attached to the original company stock, they are now attached to the outcome of bet(s). Hence an inherent disconnect is created.

Subsequently, if the actual stock doesn’t meet it’s expected P-n-L outcome (if the company actually doesn’t do well), and if the financial investment was betting against the outcome, the value of the investment actually goes up. The company performance and the investment bets on the outcome of that performance are two entirely different aspects of the stock market. [Hence two metrics.]

♦Understanding the disconnect between an actual company on the stock market, and the bets for and against that company stock, helps to understand what can happen when fiscal policy is geared toward the underlying company (Main Street MAGAnomics), and not toward the bets therein (Investment Class).

The U.S. stock markets’ overall value can increase with Main Street policy, and yet the investment class can simultaneously decrease in value even though the company(ies) in the stock market is/are doing better. This detachment is critical to understand because the ‘real economy’ is based on the company, the ‘paper economy’ is based on the financial investment instruments betting on the company.

Trillions can be lost in investment instruments, and yet the overall stock market -as valued by company operations/profits- can increase.

Here’s the critical part – Conversely, there are now classes of companies on the U.S. stock exchange that never make a dime in profit, yet the value of the company increases.

This dynamic is possible because the financial investment bets are not connected to the bottom line profit. (Examples include Tesla Motors, Amazon and a host of internet stocks like Facebook and Twitter.) It is this investment group of companies that stands to lose the most if/when the underlying system of betting on them stops or slows.

Specifically due to most recent U.S. fiscal policy, modern multinational banks, including all of the investment products therein, are more closely attached to this investment system on Wall Street. It stands to reason they are at greater risk of financial losses overall with a shift in economic policy.

That financial and economic risk is the basic reason behind Trump and Mnuchin putting a protective, secondary and parallel, banking system in place for Main Street.

Big multinational banks can suffer big losses from their investments, and yet the Main Street economy can continue growing, and have access to capital, uninterrupted.

Bottom Line: U.S. companies who have actual connection to a growing U.S. economy can succeed; based on the advantages of the new economic environment and MAGA policy, specifically in the areas of manufacturing, trade and the ancillary benefactors.

Meanwhile U.S. investment assets (multinational investment portfolios) that are disconnected from the actual results of those benefiting U.S. companies, and as a consequence also disconnected from the U.S. economic expansion, can simultaneously drop in value even though the U.S. economy is thriving.

♦The Modern Third Dimension in American Economics – HERE

♦How Multinationals have Exported U.S. Wealth – HERE

♦The “Fed” Can’t Figure out the New Economics – HERE

The FED Begins to Question the Economic Assumptions – HERE

♦Treasury Secretary Mnuchin begins creating a Parallel Banking System – HERE

♦Proof “America-First” has disconnected Main Street from Wall Street – HERE

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This entry was posted in Bailouts, Big Government, Big Stupid Government, Donald Trump, Economy, Election 2018, media bias, President Trump, Trade Deal, Uncategorized, US Treasury, USA. Bookmark the permalink.

83 Responses to The Predictable MAGAnomic Policy Interacting Amid: Wall Street -vs- Main Street…

  1. Howie says:

    Ohhh, Look what they do.

    Liked by 3 people

    • Howie says:

      Its good to be here by the side. Happy as can be.
      Looking what they do.
      They can’t understand why I am glad and in the mood.
      Feelin’ good.
      Godspeed my President…Godspeed.

      Liked by 10 people

      • SwampRatTerrier says:

        Hooray!!!!

        For PRESIDENT TRUMP!!!!!!

        The DEMS said it couldn’t be done!

        Tying in with President Trump bring the American Auto Industry Back…

        Wish they would make Interest Expense on Auto Loans tax deductible once again on the individual income tax return, as it was for decades and decades before….

        Liked by 3 people

        • Joel says:

          No, save up and pay cash. Quit wasting money on interest for a depreciating asset.

          Liked by 4 people

          • G. Combs says:

            And if you can not do that BUY USED! We figure buy an old vehicle, invest $1,000 – $2,000 for needed repairs and you come out way ahead. (Have a good mechanic check it over before buying.)

            The last vehicle I bought was a 1987 Dodge ram pkup for $1,500 we have put very little into her and she is now at my mechanic for a complete overhaul after 4 years of trouble free service. (I really like that carborator vs injectors)

            Liked by 6 people

            • piper567 says:

              G. Combs, best advice evah!
              bought a used vehicle several years ago, a lease return…perfect condition w/9000 miles on it for $9000 less than a new one.
              never sorry; its now 11 yrs old, all I’ve done is maintain.

              Like

          • owlafaye says:

            Cash ONLY puts a 20% profit in your pocket for all your life. If you save 20% of your yearly income this money is FREE. Your savings are savings, not something to be spending. In a short period of time you are “cash fat”…by retirement age you are wealthy.

            Liked by 3 people

            • m3shelly says:

              Bank on Yourself account. Save the money, and then borrow from yourself – you’re your own bank. It works great. I’ve been doing it for five years, and pay cash for cars.
              .
              Like mentioned, I’d never suffer the depreciation off the lot – always buy pre-leased or lightly pre-owned, approx. 1-2 year old cars.

              Like

    • Carrie2 says:

      Howie, they are up against a real businessman who knows the score and that means they will have to be more honest or lose money and investors. Tsk! Tsk! Remember growing up with small banks and employee banks and we all could flourish without wasting so much time what the Wallstreet garbage is on an every day basis rising or falling because we know it is nothing more than glossing over whatever.

      Liked by 3 people

    • Orville R. Bacher says:

      Most Derivatives are financial bets. In effect they are insurance products without having to carry Reserves if the bet goes wrong.
      When AIG couldn’t pay Goldman Sachs the $13 billion, Goldman was bankrupt, but it was the Main Street taxpayer who was forced to give $700 billion over to shore up these corrupt banks. This, too, must end.

      Liked by 10 people

      • snellvillebob says:

        A lot of that money went to Bank of America and Wells Fargo to expand. Before obama, they did not have a single branch in Georgia, soon after obama, those two owned half the banks in the state. Financed by us. They pay .5% on a 3 year CD while charging 7% for home loans and 10% for car loans. We are paying off their loans. Take your money out of them and only use them for checking if you have to.
        Look around to better rates at credit unions and small local banks.

        Liked by 4 people

      • G. Combs says:

        AND the money US tax payers shelled out to AIG THEN got sent over to EUROPE to bail out THEIR BANKS!!!

        That is why the Fed told Ron Paul to F…k off when he wanted to know what they were doing with the tax payers money.

        The AIG Bailout Scandal

        “…Bailing out AIG effectively meant rescuing Goldman Sachs, Morgan Stanley, Bank of America and Merrill Lynch (as well as a dozens of European banks) from huge losses. Those financial institutions played the derivatives game with AIG, the esoteric practice of placing financial bets on future events. AIG lost its bets, which led to its collapse. But other gamblers—the counterparties in AIG’s derivative deals—were made whole on their bets, paid off 100 cents on the dollar. Taxpayers got stuck with the bill…..”

        75% of the US Citizens were AGAINST the bailout but America’s Ruling Class ignored us.

        More articles:
        Wall Street Journal – The Federal Reserve’s Covert Bailout of Europe: by Cerald O’Driscoll:
        http://online.wsj.com/news/articles/SB10001424052970204464404577118682763082876

        Zero Hedge – Presenting the #303 TRILLION in Derivatives That US Taxpayers Are Now on the Hook For
        http://www.zerohedge.com/news/2014-12-12/presenting-303-trillion-derivatives-us-taxpayers-are-now-hook

        Liked by 3 people

    • As I explained in an earlier afternoon drop…and possibly this a.m. that PDJT and Munchin where going to do a MODIFED GLASS-SEGAL!!! Love it…and the FED CIRCLES THE DRAIN when the mucho big money disappears before their eyes…Like Trump Magic!!!

      Liked by 9 people

  2. Minnie says:

    Thank you for the refresher, Sundance.

    And that you to whoever requested it.

    Too many nervous nellies in my immediate orbit with the market’s recent dive.

    I am in it (not my choice, retirement account) for the long haul and will continue to have faith and trust.

    Mr. President didn’t become the most astute businessman we know without taking a few knocks.

    MAGA Onward 🇺🇸

    Liked by 16 people

    • Carrie2 says:

      Minnie, my spouse worked in financial stuff and markets and we can remember when people said that Wall Street would never rise about 700, and then when it reached $26K it was lauded and when there is a slight turndown they cry and say what is going to happen to us. Get real. If we made it at 700,then any thing today is pure honey!

      Liked by 6 people

    • fleporeblog says:

      What you are seeing with the market the last two days is exactly what SD is stating. Tomorrow 3rd Quarter profits for the Big Banks will be released. Followed over the next two weeks by other Corporations selling on the Stock Exchange. Profits are going to be relatively high for a majority of them beating their estimates. Profits through the first 2 Quarters have been nearly 20%.

      However, this derivative market SD is talking about has more bets on Corporations not meeting their forecasted profit. They are the ones that are losing over the last two days in anticipation of what is to come. The market will pickup once again over the next three weeks because Corporations will be making profits above their forecast.

      When Corporations are reaching their forecasted profits, employees are the ones that benefit especially if their contract has language written into it for bonuses.

      Liked by 15 people

      • DJ says:

        “The market will pickup once again over the next three weeks because Corporations will be making profits above their forecast.”
        ———————————————————-
        That could very well be – we’ll find out soon. However, reported corp profits may very well meet or beat estimates but the stock can still be slammed.

        Why? Well, “the market” is a forward-looking beast which means that good profits this quarter are expected and already baked into current stock prices. What will matter is not the actual reported numbers, but what is said by management on the subsequent earnings conference call. If management guides lower for upcoming quarters, that is the news that will dominate pricing. So great profits reported with lower future guidance usually means lower stock prices – at least in the short term.

        Liked by 2 people

      • MB224 says:

        Thanks for that elaboration of the SD theme.

        Liked by 1 person

    • Publius2016 says:

      Liked by 4 people

    • Eris says:

      I expect anti-trust actions against the Silicon Valley Sultans sometime after the midterm elections & whatever changes President Trump will make at the DOJ & FBI are completed.

      Liked by 5 people

    • Carrie2 says:

      PUblius2016, obviously a lot of ignorant hateful democrats who can’t even see their nose let alone that are paying more taxes in blue states than we and what are the results. If like CA the money goes somewhere but not where it was voted to go, and the taxes keep getting higher and people poorer in CA. So sad so many haven’t a clue about money/taxes/or any other expenses because they have never learned to count! Jealousy everywhere, but, yes, our President is for MAGA again in spite of the brainwashed who are getting the same benefits as we, but being piggies that is never enough. Ah, well, again stupid cannot be cured.

      Liked by 1 person

  3. missilemom says:

    A retired securities lawyer who doesn’t touch the stock market, this article is genius inspired. Practiced in the 80’s when insider trading was the norm; now it is more sophisticated but still there.
    Taking over the banks was a destruction of local power and another step in globalism.

    Liked by 17 people

    • starfcker says:

      Well, banking and finance has grown way too large, no question. Should have been dismantled in 2008. Underwater mortgages should have been renegotiated. Would have bankrupted the too big to fails. But what if mortgage rates went up to 7%? I think you start fixing lots of things that way. A $200,000 30 year fixed mortgage today at 3.92% is $946 a month. That same mortgage at 7% is $1331. To get that mortgage payment back down to $946, the size of that mortgage would have to drop to $142,000. So what if the value of homes dropped relative to those numbers, what would some of the things that might have to adjust accordingly? To make this easy, I’m just going to use those mortgage number as the price of the house. So if a $200,000 house dropped in value to 142,000, the mortgage holders are going to be under extreme pressure as they were in 2008. Lots of the mortgages are going to be underwater, and should be renegotiated as they should have been in 2008. But the big benefits are you are now only insuring 142,000. You are now only paying taxes on 142,000. So there is now immense pressure on the insurance industry, and immense pressure on local government to rein in runaway costs. Starve the beast, in other words. Both are desirable outcomes from my point of view. There’s more, but that’s a good place to start

      Liked by 3 people

  4. vikingmom says:

    I have a high school diploma and a couple of years in Community College, followed by 15 years in the consumer banking industry, followed by 20 years as a homeschooling mom living on a tight budget so why do I understand all of this better than many people I know who are corporate bankers and economics majors!

    Whatever happened to common sense? How do people not see that shipping all of our manufacturing to a third world country has decimated our economy and no stock that is based on some arbitrary measurement is going to last as well as one that is based on the actual production of a tangible item?

    The politicians, the lobbyists, the race hustling grievance industry agitators, and the CEOs of “multinational” companies have gotten rich over the last 30 years, while the middle class has been systematically destroyed, and the minority communities are on the verge of killing each other, and no one is wiling to say a word for fear of being called racist! Follow the money, folks – the emperor has had no clothes for a very long time and Trump is the first one to actually say it out loud. That’s why the Left is throwing everything they can at him – they know that if they can’t take him down, he will end the rigged game they have been playing all these years!

    Liked by 30 people

  5. Thank you for helping me understand, and stop from panicking!

    Liked by 2 people

  6. DeAnna Vaughn says:

    YES! I have been saying this for years. The overall stock market is a rigged sham not based on the ACTUAL intrinsic value of a company but on the paper pusher traders that bet on bets on bets about how the company will profit or loss. Then they bundle packages of investments as derivatives and you only own a piece of the group of investments. There is no really good way to “unbundle” who actually owns what when hundreds or thousands of people own a small fraction of the whole. Insanity. Only less than 6% or our net worth is tied up in the markets. I’d rather own tangible assets. Land, cattle, equipment, soybeans. It’s a much safer investment to own something I can touch, IMHO.

    Liked by 12 people

  7. The Boss says:

    The 1300+ point drop in the past two days is contrived. Ride it out folks, Most everything I looked at is ridiculously oversold, or close to it. Time to look for bargains.

    Liked by 10 people

  8. pacnwbel says:

    Another thank you Sundance for the clearest explanation of the markets and hedge funds that this financial nincompoop has ever read. I can visualize your explanation of the descending betting to look rather like a family tree that spreads with each generation ad infinitum.

    Liked by 1 person

    • cthulhu says:

      Just as a point of historical irony, the event know by the Soviets as Red October actually occurred on November 7, 1917. It seems the Tsar wasn’t a big fan of calendar reform.

      Liked by 1 person

  9. Howie says:

    All the democrat men want their ring back. The rest jus Soy Bois.

    Like

  10. Jackk says:

    Stock market going down is when the ‘pros’ think they’ve made good profit and are cashing out.

    Liked by 2 people

  11. missycaulk says:

    One thing everyone can do is use your local community banks. I am, and when over the years they got bought out I switched to another one. Everyone knows your name, great service and doesn’t contribute to the bottom line of B of America, Chase etc.

    Liked by 3 people

    • Duke of Cumberland says:

      Credit unions, too. I’ve been with my out of state CU since 1990. Great loan rates, now getting 3% checking, full non-network ATM fee reimbursement, and great customer service.

      Liked by 4 people

  12. Duke of Cumberland says:

    I guess Bill Maher is going to be disappointed. The market may drop like he hopes, but the Main St. economy will continue to grow.

    Liked by 2 people

  13. trumpismine says:

    Like President Trump said:
    The fed(whoever that is) is going kooks!

    Like

  14. James Hilton says:

    ‘globalism and multinationals’

    Globalism is a myth. Globalization is real. Multinationals are now overwhelmingly controlled by progressives/neo-Marxists. Did you hear what the mob was shouting in Portland? Their intense hatred for white people and the West is spiraling out of control. I can assure you that progressives/neo-Marxists in governments and corporate board rooms throughout the West are in full agreement. Did you hear what Theresa May said today about forcing companies to close the supposed ethnic pay gap? OMG! She’s worse than Merkel. Two progressive fascist dogs in complete control of Western Europe.

    The radical neo-Marxist left has already eliminated borders… but only in the West. And promoted mass-migration… but only into the West. Globalism really is a myth. And please learn the difference between your fictitious globalism and globalization.

    Liked by 1 person

  15. For a decade I have been a professional trader. I trade for a living. I trade for sport. I trade to keep my mind sharp and my fingers on the pulse of the economy. Please allow me to share some observations and conclusions on what we are seeing in the markets right now:

    Stock valuation in the short term is NOT wholly based on actual value (value being defined as that price a buyer is willing to pay and a seller is willing to sell). Computers control much of the trading today, and believe it or not trading computers can read headlines and place trades based on headlines!!!!! Imagine the power “Fake News” has over the market’s near term trading ranges.

    The headlines of interest rate spikes. bond price drops, hurricane events, the Kavanaugh hearings and allegations ALL played into the volatility of the last few days of price movement.

    There is also a thing traders call “momentum”- an object in motion tends to stay in motion. This applies to asset prices. Gravity applies to prices, and it is a known fact that price climbs stairs, and falls down elevator shafts.

    There are also the games institutions play with price- remember the pros can only grow their accounts by plundering the weaker players. What would be YOU! A rout like we are seeing now is actually just a “conversion scam”- “wiping out the shoe string salesmen and weak eyed sisters”

    There is another GIANT criminal in the room- the FED! They have the biggest Larceny By Conversion scam going. They can literally create money “Ex Nehilo”- out of nothing. When they do this it’s YOUR cash that is being watered down. Let that sink in for a moment. Diluted savings- your savings being diluted by and unelected, unregulated for profit bank that is privatly owned, un audited, untaxed, and unregulated. What could possibly go wrong? (Eff you Woodrow Wilson)

    Don’t for one second doubt that Trump has pissed off these Masters Of The Universe BIGLY and they want him GONE.

    How does this all apply to us regular folks who work, postpone gratification, save, and claw our way to a brighter future for our loved ones? (HINT: End The FED!!) That’s a tough one- with a painful answer. For now lot’s focus on the short term:

    NOTHING has changed with the value, market share, profitability, and future prospects of American Companies. NOTHING! So it’s time to do what the smart money is doing: Buy stuff when it goes on sale. That would be NOW.

    Republicans are gong to CRUSH it in 25 days. Blue toilet water is swirling, and we are going to pick up seats a-plenty. TRUMP will be re-elected in 2 years. People vote MONEY first and TRUMP is making us all richer. American Companies are in great shape and getting better. Trade is in favor of the USA. Wealth is washing up on our shores. We are the only game on the planet, and to participate US Equities will be bought. Bigly.

    Don’t sweat this. It’s bullsh*t. The DOW is still above the August 15th 2018 close. Soon Mr. Market will make dizzying new highs and there will be money sloshing around everywhere. Take it from a seasoned pro. The good stuff is on sale for the brave.

    MAGA BABY!!!

    Liked by 10 people

    • amanda4321 says:

      Yes, they create money out of thin air.

      Liked by 1 person

    • amanda4321 says:

      “I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” -Woodrow Wilson, after signing the Federal Reserve into existence

      Liked by 2 people

    • G. Combs says:

      massivedeplorable,
      Nice description.

      Playing the market these days is NOT for the faint of heart. (My Mom was great at it.)

      That leave mutual funds. Problem is you buy shares in the fund and then the fund buys stocks that THEY CONTROL AND VOTE! James Glattfelder et al (comment above) mention the control is way out of proportion to the actual money. Mutual funds and pension plans are how they exercise more control than the financial institutions can actually purchase directly.

      Here is the link to the paper again. http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0025995#s3

      Liked by 3 people

    • Drake Passage says:

      I am also a trader since 2001 and agree entirely with your explanation of “trends”. Trying to explain the momentum pushing the market in either direction to the every day man will only leave them thinking that you are selling them snow during a snow storm.

      Like

    • MB224 says:

      Brilliant commentary. Thanks. I’m not a pro but I’ve studied companies and markets since I was 14 and I was thinking the same thing when the market plunged: DAMN GOOD TIME TO BUY! haha. MAGA!!

      Like

  16. Adam says:

    Nailed it again Sundance! I remember reading those previous articles like yesterday.

    It appears as if the Fed walked right into Team Maga’s plan. Now President Teflon Don has an out in this case and the Fed eats crow pie.

    I want these centralized banks to go DOWN!

    I love this President!

    Liked by 3 people

  17. So here’s the trillion dollar question: what stocks/companies/industries/investment classes will weather the storm? It sounds like the dotcom bubble where brick and mortars, dividend stocks were the destination for the flight to safety. But if I were that smart, I’d do
    My own investing.

    Like

    • :-) says:

      You SHOULD invest for yourself. There are a couple of ways to put your life experience to work…

      The best way is to start a business…or invest in an existing business where you have expertise. For example, if you spent a lifetime in construction–then focus your investments on companies that you know and understand from personal experience in your field.

      You can put your money into creating value doing something you love. Jay Leno is a great example of that. He loves cars, so he buys hulks and lovingly brings them back to life.

      You are plenty smart and life has molded you and shaped you with a unique, and no doubt hard won, experience. Just go and make something that someone else needs–or help to finance another individual or a company that is trying to do that.

      Steer clear of ANY company (especially social media) that doesn’t actually make something and that doesn’t have profits.

      Brains + raw materials + labor = new wealth creation. That can-do attitude is uniquely American.

      Liked by 2 people

  18. Milton says:

    Another one bites the dust.

    The US Governmnt is also not helping the consumer when it allows mega mergers in the health industry.

    “The Department of Justice has approved the $69bn mega merger of health organization CVS with health insurance company, Aetna. The move will make the new business one of the largest drugstore chains in the US, including a major segment in delivering key health plans to consumers across its pharmacy benefit arm.”

    https://www.healthcareglobal.com/public-health/department-justice-has-approved-merger-cvs-and-aetna

    Liked by 1 person

  19. daughnworks247 says:

    Remember when POTUS said he was going to flip military spending along with trade deficits? Sick and tired of paying to protect other countries when they are rich?
    Well……, what if…..
    Follow me for a minute here.
    Japan has approx. 1.3 trillion of our bonds. What if we made a deal with Japan that they would begin to pay for their own military (completely or up to 95%-keeping the USA on the hook as a kissing cousin) and basically hold the bonds in escrow (take the lumps out), so it would not FEEL like an expenditure to their annual GDP?
    That means Japan would NOT have to raise taxes on their citizens or companies to pay for their military for decades.
    Forget compounded interest/inflation for a moment and let’s do straight math.
    Let’s say Japan military expense is 80 billion a year, we pay 75% = 60 billion annually. Over roughly 21 years, Japan would ‘eat up’ the credit of 1.3 trillion in bonds and at the same time, 20+ years, Japan could/would be trained by US Military personal as a staunch ally.
    Of course, anything Japan purchased (weapons) might also come out of the ‘escrow’ account but still flow back to American companies/workers, who all pay taxes.
    Are you still with me?

    Result = 1.3 trillion less on our debt clock and we could strike a deal for a period certain (25years) interest rate of 2-4% on the 1.3 trillion cuz we know rates are going higher. If interest rates level at 7%, which is the historical average since 1933, we saved ourselves 3-5% or roughly 4%, on 1.3 trillion = 52 billion a year PLUS we lowered our defense expenses by 60 billion a year.
    And that’s just Japan.
    Saudi has 900 billion of our bonds.
    From what I can see, and it’s really murky, excluding China, there’s about 5-6 trillion of foreign bond debt, outstanding from multiple countries.

    If we could do it, we could freeze a substantial portion of our debt at lower interest rates, protecting that portion of our debt from interest rate increases. PLUS we could lower defense expense by about 3-400 billion a year. The savings alone could allow us to partner with other countries surrounding the China Sea, perhaps.
    OR, with a few more cuts, our annual budget would turn cash positive and begin paying down overall debt. OR, partnered with major turn in foreign trade deficits, we could turn cash positive even faster.

    Overall, it gets about 6 trillion out of control of the FED.
    Hey, I’m just thinking…… and it’s a really rough idea.
    Whaddaya think?

    Liked by 2 people

  20. cthulhu says:

    Back in the day, there was a concept called IRR, for “Internal Rate of Return”. Companies would use this to evaluate their projects. They’d map out how much it would cost to fund the project and run the project, and what the financial benefits would be over time. If the project would last 25 years, and provide a 20% rate of return over those years, the project could get funded. If the project would last 25 years and provide a rate of return of 2% over that period, it wouldn’t. This would separate smart projects from stupid projects.

    The Fed’s maintenance of essentially a 0% interest rate over the last decade has intentionally obscured the line between smart actions and stupid ones. To get back to a functional economy, the distinction must be sharp and clear…..but a great many of the projects undertaken in the last decade will turn out to have been stupid ones, and will need to be liquidated……which will lose a bunch of people a bunch of money.

    Liked by 1 person

  21. zooamerica says:

    How valuable is a BIG IDEA? I’ve always wondered how a company like Twitter, Facebook, Amazon, etc. could be worth so much when they make little or no money.

    They launch the IPO, people buy the stock and a lot of people get rich – ALL from ONE THING:

    A BIG IDEA. That’s all these companies really are…people and investors believe in the idea, or they don’t believe in the idea and bet against it.

    Uber is a great example. They’re not profitable (like Tesla and Twitter) but that didn’t prevent people in Saudi Arabia from investing $3.6 Billion in the company.

    It’s the art of the impossible….

    “You can’t get blood out of a stone.”

    ….”You can get blood out of a stone if people believe in it.”

    Our great President Trump loves BIG IDEAS, BIG companies, and BIG hearts.

    When Donald J. Trump was deep in debt, ($Billions) he turned that debt in to a beautiful instrument that made money and more.

    President Trump obviously likes Twitter. I think he likes all of these companies and he wants to see them succeed. Elon Musk was part of the Trump Team at one time…

    As for the recent sell off in the market, it’s simply called PROFIT TAKING.

    Happened back in February this year, the Dow tanked over 1,000 points, twice.

    I knew massive profit taking (selling) would happen after the market reached over 26,000 because that’s how people make a lot of money!

    America, and the world just cashed in some chips (stocks) and made a boatload of CASH.

    Buy low, sell high.

    Once the market hits the 24,500 mark….

    BUY!

    Once the market climbs to the 29,000 mark…

    SELL!

    Once the market hits the 26,500 mark….

    BUY!

    Once the market hits the 32,000 mark….

    SELL!

    Average Joe or Jane with 1,000 shares of XYZ stock make a lot of money every day by selling their stocks for a profit, cash the check, and then buy back the stock once it hits a low dip.

    It sounds easy, but it is for super computers that do most of the trading.

    Like

  22. Wow..great article…events of almost biblical proportions are taking place with Trumps intervention.

    Liked by 3 people

  23. zooamerica says:

    Here’s a lesson in MAGAnomics you can only read here at THE Conservative Treehouse.

    Let’s talk money.

    The US Dollar is the world’s first digital currency. True. Happened back in the 50’s…very shortly after World War 2. America invented the credit card.

    The US Dollar is not backed by anything but the full faith and trust in the US government.

    The US Dollar is a BIG IDEA…and it is true.

    There is a damn good reason why the US Dollar is not backed by gold or silver anymore.

    (Not related to actual profits, only popularity of the idea matters…Uber, Twitter, Facebook, Tesla…)

    When is the last time you purchased anything with gold or silver?

    Many years ago, very smart people realized that so long as humans continue to work and live freely in an open free trade capitalist system, the amount of money necessary is literally infinite.

    Gold and silver are finite – limited. Only so much to go around and that’s it. Period.

    We can mine every ounce of the gold and the silver out of the earth and there would never be enough of it to sustain the human race.

    The US government used to print millions of billions of US Dollars worth of paper bills.

    The money printing presses at the US Mint could not keep up with the demand for more money in a system of government that fosters productivity and creativity.

    Digital dollars replaced the printing press because the demand was so high.

    Trillions and trillions…literally headed toward infinity in a fair and free trading Capitalist loving world.

    So long as humans procreate, produce, and work….the world needs a limitless sum and source of money.

    Any currency in the 21st century that is backed by gold or silver is a currency that is limited to the few, not the many.

    Like

    • You should frankly do more research before posting. These are well-known fallacies. The world financial system is best served by an honest monetary standard with fixed supply. By “honest” I mean a form of money whose production is not monopolized by the political class or the financial elites but is naturally scarce. Prices of all goods and services will adjust to the supply of this money. You are conflating the “demand for money” with the desire to counterfeit it, which of course everyone would love to do to infinity but nowadays only the central banksters can do so legally. In fact no-one should be able to counterfeit.

      Liked by 2 people

  24. Just so that it is on the record, when it comes to Wall Street vs. Main Street the parallel banking system thing is all fine and good. But it is just hacking at the branches of evil and not striking the root. The root of the evil is fractional reserve ponzi lending layered onto digital debt-money whose supply is monopolized by the bankers (central or otherwise). If y’all want to supercharge the economy, at some point we will need honest money once more, to have undistorted price signals, reasonable debt levels and the abolishment of cartel institutions in our government (the Fed et al).

    Liked by 1 person

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