The Stock Market is gaping up this morning over 1/2% on the news that the U.S. and China have worked out a trade agreement.
In simplistic terms, it means no tariffs and more trade with China. It designed, in theory, to cut the trade deficit with China in half.
In normal times this type of breakthrough would propel the market to a larger gap. But these are not normal times.
The end game is here that our policial hacks have been playing out before our eyes.
The biggest revelation now is that the FBI had a “spy” in the Trump campaign. This is rather earthshaking news in a Democracy that has prided itself on a peaceful transition of power.
But this transition has been anything but peaceful. In simplistic terms, it comes down to a group that is hell-bent on having Trump removed from office.
There are various theories out there but make no mistake the multitude of FBI firings and resignations leave no doubt that something was afoot.
So we are at the point where Trump has indicated he is going to make a formal demand to the DOJ to investigate any involvement of putting spies into the campaign by the FBI.
And from the other side, Brennan is threatening not only Trump but also Ryan and McConnell.
No this seems a bit strange as Brennan is no longer in a position of power. He is a private citizen and a CNN commentator now.
So I must be missing something to see his threats coming across twitter.
This is the end game. People are in panic mode now. The OIG report will be out any day now. And it is likely to expose a lot of people.
Now, it much more complex than the above. I tried to capsulize it to give you some background in which the markets will be trading the next two to three weeks.
As the tide shifts back and forth between the political players I expect we will see volatility increase.
As it appears Trump is threatened the market will plunge and the safer he is the market will rally. Short term that is. Long term has different variables.
The problem with the entire political scheme we are seeing unfolding is that lines have been crossed. There is no chance at this point for a shaking of the hands and a compromise for the good of the country.
This is going to play out as I see it that Trump will either be removed from office or people are heading to prison for a very long time.
That is my take. I usually see things we a jaundiced take when it comes to politics as the very worst in human nature is almost always on display.
But even working that bias into the equation I see no out for a peaceful resolution. There will be no Kum Bay Ya and let bygones be bygones. It will be as they said in “Rob Roy” before that great sword fight, “No quarter asked and No Quarter given”
The obvious question is who is going to win this fight. I have my opinions but considering the political schism here in the U.S. I am going to keep them to myself.
But I will tell you that we will have a very good idea soon who the winner will be. When the OIG report comes out and what actions are taken by the DOJ after the report is issued will give us a hint as to the outcome.
Do not be complacent with your longs at this time. It’s best to stay on the conservative side of things until the political storm subsides. It’s going to get worse before it gets better.
I am long a core portfolio of ETFs and some equities that are primarily income driven. I also have a sizable bond portfolio. I have lightened up substantially on pure growth.
One investment I have discovered is Baby Bonds. They are traded like any equity, most are of a very short duration, and most yield over 6%. There is some screening you have to do but if you do your homework it can provide you with a very solid income source.
Let me close this morning but saying that most of you have guessed I follow the political events rather closely.
I do not follow it with any preconceived ideas of who is right or wrong. It is much too complex to have blanket opinions.
And it’s much too complex to be a Trump hater or a Trump worshipper.
If you’re stuck in one of those modes that are fine. But you will be missing out completely as to what is unfolding here in the U.S. These are very interesting times and complex times.
The issues are intricate. And the subterfuge behind the scenes beats any spy novel you will ever read. You have to have reliable people to give you the input on what is going on. And that is like finding a needle in the haystack.
I have given you in previous posts my list of people that if follow them you will have some semblance of what the issues are and the facts.
But if you only listen to the Mainstream media will you be in an alternate universe that does not closely resemble what is transpiring.
An exception is the Wall Street Journal. They are middle of the road. And is the only media publication I see that is objective in its facts and opinions.
If your an active trader and live in this delusional universe you will most likely end up losing money. Or at the very least leave a lot of money on the table.
Good Luck Trading today
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