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Tuesday, March 19, 2024

The Trump Error Begins!

Image result for trumpocalypseDid the Romans know it was over?  

In 476 AD, the Germanic leader Odoacer, deposed Emperor Romulus Augustulus and that was the true and official end of the Roman Empire but Rome was first sacked in 410 by Visigoth King Alaric and had limped into it's final decades.  But you have to go further back than that as the Goths killed Emporer Valens in 378 but he was only the "eastern Emperor" of Rome as the country had already split along party lines due to political in-fighting which caused Emporer Diocletian to divide the Empire into 2 halves.  Those two halves could never agree on Government priorities and the Empire essentially dissolved into chaos

Unlike today, January 20th, 2017, there was no particular day to point to and say: "Yes, that's when the Romans elected a guy who said he will change everything and he did – and then the Empire was destroyed."  We will have the luxury of knowing exactly when we made the decision that pushed America over the edge – or maybe on to greatness (again) – who's to say?

On the bright side, as noted by Samantha Bee, Trump doesn't actually do what he says.  Or, then again, maybe he does because, as he said in Michigan: "When you cast that ballot, just picture a Wall Street boardroom filled with the special interests who are bleeding your country and your city and everyplace else…"  He is certainly delivering that already, with what the Washington Post calls "the worst Cabinet in American History" – a complete and utter sell-out to Wall Street and Special Interests.  

As just one colorful example, let’s look at this report in today’s New York Times about Rick Perry, who will be Secretary of Energy. The change from the leadership under Barack Obama is already striking: the current secretary, Ernest Moniz, is a respected nuclear physicist who also came to the job with significant experience managing scientific institutions, and he’ll be succeeded by someone who advocated eliminating the department, although in his defense Perry couldn’t quite remember that it was the one he wanted to get rid of (that famous “Oops” moment).

The Department of Energy, aside from determining our vitally important energy policy, is also in charge of nuclear power plant safety and emergency response teams as well as the care, maintenance and readiness of the US Nuclear Arsenal.  Now do you understand why Putin wanted Trump to be President?  It would take decades of spycraft to reduce the US's nuclear response capability yet it happens instantly at noon today when we replace a veteran nuclear physicist with a guy who said: "Just because you have a group of scientists who stood up and said 'here is a fact' Galileo got outvoted for a spell" in his response to Global Warming evidence.  

Image result for rick perry climate change

Rick Perry is a completely ridiculous pick to head the DOE yet he will sail through the GOP-led approval process to lead the Agency he wanted to (wants to?) abolish.  Of course we will give Perry a chance (what choice do we have) but, when you want to know how the US could have let a nuclear plant melt down due to poor oversight 5 years from now – this is why.  

Betsy DeVos, the new Secretary of Education, hates public education and has funded many efforts to privatize it, having spearheaded the Detroit Charter School system, which collapsed that city's public education program.  She's a Billionaire from the Amway family who doesn't think her money should be used to pay school taxes when she can pay for a much better private school for her children – that's essentially her cause. Don't mess with her though, her brother is the founder of the military contractor, Blackwater.  

Image result for trumpocalypseAnyway, no need to go over all of them – it's far too depressing, especially for someone who has children and nephews and nieces who can't all afford to get a custom education and, even if they do, they can't afford fallout shelters so what's the point of being the smartest person in the blast zone anyway?  

Trump will be sworn in today and of course we will "give him a chance" but the signs are not good so far and the changes he is promising are drastic and destablizing so it's very difficult to do much in the markets other than hedge our open positions and make sure we have plenty of CASH!!! in our portfolios because it's not just that we don't really know what Trump will do once he is handed the keys (noon!), but that we don't know how the rest of the World (remember them?) will react to his policies.  

Trump has said, though now backing off, that he will immediately declare China a currency manipulator but Janet Yellen just spoke about our intentions to manipulate our own currency last night and Trump said he wants a weaker Dollar, which is something else you achieve by manipulating your currency so what if China declares us currency manipulators?  What if the ECB does?  Let he who is without a Fed Funds Rate cast the first stone…

Trump has said he wants to tear up the North American Free Trade Agreement (NAFTA) – imagine the chaos that would cause!  It's very hard to pick winners and losers but the disruption itself is bad for the markets – especially when the volume is so thin because you can't smoothly rotate from one sector to another if there are no buyers for the stocks you hold now. 

Volume on the S&P ETF (SPY) has been 244M for the week so far.  On June 24th and 25th, when the S&P fell 5% in two days, the volume was 565M and over 1Bn for the week.  It's very, very dangerous to trade in a thin market – it means there aren't enough buyers if the sentiment changes.  

Speaking of thin trading, let's not forget the complete scam that is the NYMEX (Rick Perry now oversees) where I told you on Monday that essentially ALL of the February Open Interest was FAKE!!!  At the time there were 197,589 contract open and, at 1,000 barrels per contract, that means that 197,589,000 barrels of oil were scheduled to be delivered to the US in February at $52.37 per barrel.  Just 3 days later, 168,963,000 barrels worth of those orders have been cancelled – depriving US consumers of oil and creating an artificial shortage to drive up prices:

Click for
Chart
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Feb'17 51.45 52.72 51.39 52.72 09:29
Jan 20

 



1.35 5333 51.37 28626 Call Put
Mar'17 52.20 53.50 52.13 53.48 09:29
Jan 20

 



1.36 198120 52.12 636606 Call Put
Apr'17 52.96 54.17 52.84 54.15 09:29
Jan 20

 



1.31 36481 52.84 180515 Call Put
May'17 53.65 54.76 53.49 54.73 09:29
Jan 20

 



1.23 14710 53.50 142026 Call Put
Jun'17 54.20 55.26 54.04 55.22 09:29
Jan 20

 



1.17 10428 54.05 259137 Call Put

And this isn't even the last day of trading – we'll be lucky to end up with 15M barrels after 3 BILLION February contracts were traded (at a cost to oil consumers) during the month.  Not only that but March FAKE!!! orders are up 72M barrels (that will never be delivered) and April is up 24Mb, May is up 12Mb and June is up 8Mb so there's 116M of the 168M "lost" orders now moved to other months in this shell game that costs American Consumers hundreds of Billions of Dollars each year.  

I'm sure Rick Perry will launch an immediate investigation…

Have a great weekend, 

– Phil

 

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