A Look Around the Table

By David Stockman  |  June 11, 2019

When the recession happens, the proximate cause will be new tariffs and the Trade War. The inevitable downturn will really be about easy money – too much of it for too long.

It won’t matter that the collapse of this Everything Bubble is decades in the making. The Great Disruptor will be guilty.

We’re already on the slippery slope. The incoming data are uniformly bad, except for ultra-lagging indicators like initial claims for state unemployment benefits and consumer confidence.

Oh, last week was a big one for Wall Street’s permabulls. And this one got off to a similar start.

But you can almost smell the chart-monkeys’ fear that a triple-top has been put in, that the market’s internals are more than a tad worrisome, that compared to cyclical highs major subsectors are showing bearish wear…

And Bubblevision is still grasping for green shoots, though yesterday they turned to an Orange Swan for 26 minutes, 54 seconds of the most surreal live television you’ll ever witness…

It was pure vainglory that drove the President of the United States of America to call in to CNBC’s “Squawk Box.” Last Friday, he tweeted, “Dow Jones has best week of the year!”

His reelection rides on the stock market. It’s that simple. That’s the subject of the June issue of The Stockman Letter. And that’s what I’m talking about in a new video we’ve prepared, “The Donald, the Deep State, and the Undrainable Swamp.”

I mentioned it yesterday, and I bring it up again because we want as many people as possible to know what’s really happening inside the Acela Corridor – not just the “VIPs” already privy to the story.

Click here to learn more about “The Donald, the Deep State, and the Undrainable Swamp”…

Here’s the Great Disruptor’s unenviable predicament.

Obviously, Democrats everywhere are deranged by him. More importantly in the context of pure electoral politics, most Republican politicians on Capitol Hill and GOP regulars around the country don’t like him. And, most important of all, none of them owe the Donald anything.

That’s why he’ll make a great scapegoat, too, for Wall Street’s and Imperial Washington’s sins.

Indeed the U.S. House of Representatives is swarming with poohbahs, careerists, and straight-up dipshits who’ve lost their committee and subcommittee chairmanships due to the Donald Trump-inspired wipeout in the 2018 midterms.

Their Senate counterparts are savvy enough to realize that save for the calendar quirk that put 24 Senate Democrats on the ballot in 2018 (out of 33 seats up for election), they’d be sitting on the outside with their noses pressed up against the glass, too.

So, what would it take by way of stock market correction to replicate what happened the last time a Republican president faced an impeachment inquiry in the U.S. House?

For Tricky Dick, it was a 37% decline in the stock market from January 1973 through August 9, 1974, that traced his doom.

A 37% decline from present levels on the S&P 500 Index gets us just about to 2,140. That number should sound familiar; that’s where the S&P 500 stood on the evening of November 8, 2016, when the futures market had tanked after it suddenly became apparent that Donald J. Trump was on the verge of becoming the Tweeter-in-Chief.

Indeed, he did defy all the odds, rebuke all the prognosticators, and up-end all the bipartisan etiquette of the Acela Corridor’s ruling elite.

Markets, of course, reversed sharply in the wee hours of November 9, after the rumor became news. But Donald Trump never had any prospect whatsoever to Make America Great Again.

And, now, the Everything Bubble is just as much the Trump Bubble.

Wall Street and Imperial Washington may only just now dimly appreciate what he represents. They’re even rallying ’round him some, as we note in the June Stockman Letter.

Self-aware or not, he’s come to bring down this house of self-aggrandizing financialized crony capitalism and neocon/neoliberal interventionist warmongering.

And he’s well on the way toward Mission Accomplished.

Accomplish This

Desperate times call for… “common sense” measures.

And these are desperate times… Markets are corrupted by monetary central planning. They’re confused. And the road back is going to be treacherous.

We’re looking at a major re-pricing for all financial assets. And thousand-point intraday or day-to-day swings are part of that equation. Those can be frightening… for “buy and hold” investors.

I have a different approach, one that combines strategy and tactics into a plan flexible enough for you to survive and thrive amid the coming chaos. It’s called “The Stockman Model.”

All we’re after is a little stability, perhaps a chance to pocket a windfall when opportunity presents…

To common sense,

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David Stockman

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David Stockman

David Stockman is the ultimate Washington insider turned iconoclast. He began his career in Washington as a young man and quickly rose through the ranks of the Republican Party to become the Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.MORE FROM AUTHOR