A Minister of Propaganda

By David Stockman  |  January 24, 2020

A Truth thats told with bad intent
Beats all the Lies you can invent

– William Blake, “Auguries of Innocence” (1803/1863)

Editor’s Note: I hope by now you’ve had an opportunity to catch Michael Coolbaugh’s Delta Profit Summit. Click here to view the recording. It’s well worth your time. – DAS

“As we begin the new year,” the Donald recently said at a rally in Toledo, Ohio, “our economy is booming, wages are soaring, workers are thriving, and America’s future has never, ever looked brighter.”

This is, generally, a bunch of bullshit. That is, the Tweeter-in-Chief really has no idea what he’s talking about, on any given subject, so he can’t be simply “lying.” It’s more pernicious than that; he’s preaching to his vocal, volatile base.

Of course, the Donald’s unabashed boasting should be taken with a grain of salt. That’s because he’s taking credit for a positive-trending business cycle he inherited in January 2017, when it was right in its sweet spot at month No. 90.

The real issue, though, is what’s percolating below the surface. What are the forces at work that’ll shape the coming year and decade ahead?

Trailing indicators – like the headline unemployment rate – merely reflect the cumulative gains from the entire cycle reaching back to month No. 1, day No. 1 in July 2009.

Indeed, the dubious nature of the Donald’s economic boasting was perhaps inadvertently crystallized in mid-January when he reminded, once again, that he’ll take credit for any and all good news that happens on his watch.

It doesn’t matter how outlandish, nor whether he had any hand in it, however small, whatsoever…

So, there he was, touting 2019’s continuation of a multidecade slide in the rate of cancer deaths in the U.S. Here he goes again:

U.S. Cancer Death Rate Lowest In Recorded History! A lot of good news coming out of this Administration.

Well, yes there was. The cancer death rate (per 100,000 population) for males has fallen by nearly 40%. But that’s been happening continuously without fail for 30 years running.

And the female cancer rate has been falling for 90 years.

When you’re at the terminal end of positive 30- and 90-year trends, why then every year is a new historic record. So what?

In this case, like in most else, the fact that the Donald is in the Oval Office has had absolutely zero bearing on the underlying health and treatment efficacy trends that actually account for the positive results displayed in the chart…

OK, look, given all he’s accused of by Democrats and Acela Corridor elites that he’s not remotely responsible for – such as Imperial Washington’s complete mess of a foreign policy – he’s entitled to an occasional mulligan.

But the case of the long-term cancer trends is a powerful demonstration of why context and pre-existing trends make all the difference in the world. That’s true when it comes to cancer as well as when it comes to interpreting and assessing the latest monthly economic metrics.

And if you ignore or even make light of the former, you’re likely to mistake the last green light for a runaway bus coming right around the bend.

And when it comes to Wall Street, in fact, the onrushing bus metaphor couldn’t be more apt.

Indeed, the jobs report for December 2019 is a flashing-yellow warning that the deeply impaired, artificial recovery since the 2008 crisis is heading for its end.

It’s not a vindication of Trumponomics.

Folks, the last time the unemployment rate measured in the 3.5% zone was at the end of the 1960s.

When it posted at that level a final time in December 1969, it didn’t signify that Richard Nixon had made his own primitive version of MAGA. It meant that Tricky Dick had stumbled into office at the top of the business cycle.

After a record 105-month expansion, the domestic inventory of idle labor had been used up. It was the cumulative result of a full decade of continuous economic expansion.

Most definitely, an unemployment rate of 3.5% didn’t indicate the U.S. economy was in a “good place.” Actually, in late 1969, the U.S. economy was peering into the jaws of disaster.

LBJ’s “guns and butter” fiscal profligacy and brutish hectoring of the Federal Reserve to monetize the Treasury’s bulging debt emissions had laid the groundwork for the roaring inflation and balance-of-payments disaster brewing below the labor market’s salutary metrics.

In fact, the 1970 recession commenced the very next month…

Something New Under the Sun

The 2020 election has replaced the Trade War as the primary risk for investors. That’s because, as we’ve been saying for some time now, this is the most politicized market in history.

And the Tweeter-in-Chief is still in charge. So, the situation is changing almost by the minute.

It’s “Impeachment!” in Imperial Washington and all over the Mainstream Media. It’s “Easy Money!” on Wall Street and across Bubblevision.

And it seems as if the whole world has, indeed, gone mad.

Amid this chaos, prices will continue to rise and fall, trends will continue to develop and dissipate.

Here’s where I usually say, “Well, The Stockman Letter is made for times like these.” I can say that because we brought aboard Michael Coolbaugh to update our design to help us better navigate to not only the safest harbors but also the most promising opportunities.

And he’s doing that. He’s also launched a complementary investment newsletter, Delta Profit Trader, that promises “higher frequency” engagement with markets.

Click here to view the “Delta Profit Summit,” where Michael explains his whole approach to investing in this environment.

The stakes are as high as they can be heading into 2020. Markets appear to be straining, catching up to an economy that’s been weak and getting weaker for years.

The Donald is tied up in the day-to-day movements of the major stock indexes like no president before him. The increasingly desperate incumbent will do anything he must to hold the White House.

It’s a major tipping point. And there’s no telling what the Donald’s great disruptions could do to your wealth.

You’ve got to be nimble to win in this market… and Michael’s here to help you do that.

To common sense.

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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