Treasury

After Kavanaugh

By David Stockman  |  October 8, 2018

Imagine the Donald… but “emboldened.”

That’s a prospect a JPMorgan “cross-asset strategist” posed a couple weeks ago amid “U.S. economic and equity market resilience despite tariffs.”

Well, the benchmark 10-year U.S. Treasury note has spiked since then. It’s up to 3.23% amid a bond-market selloff that’s stretching into its third week.

And the major stock indexes are all firmly in the red today. That makes a mini-trend, including last Thursday and Friday.

The “fear gauge,” meanwhile, is up 20%. The CBOE Volatility Index is at levels we haven’t seen since late June.

Bubblevision will, of course, chalk this one up to Columbus Day. They’ll explain that volume is light because some have used it to extend their weekends.

It’ll be reduced to a “Bulls vs. Bears!” mano-a-mano…

As for “the Donald, emboldened,” it’s safe to say it’s happened.

The Great Disruptor – as quickly as you can say “Kavanaugh… Kavanaugh? Kavanugh!” – has what he needs to ignite the GOP heading into November’s midterm elections.

And literally nothing else matters – to him – between now and then…

It is, indeed, the First Monday in October.

That means, by statute, it’s time for another term of the Supreme Court of the United States.

This particular one is special, of course.

Because the campaign to get the 113th Supreme Court justice confirmed may finally have united “movement” conservatives as well as rock-rib Republicans under the “MAGA” banner.

There will always be a “Never Trump” element. But it doesn’t matter. What does is holding a majority in the Senate in January. The House is probably lost.

But keeping the upper chamber means the Donald gets to run again in 2020.

He’ll be at countless rallies over the next month, among his most adoring acolytes.

They’ll celebrate Kavanaugh, beer, and boys… maybe not all the way to an across-the-board win in November but at the very least one the Donald will gin-up into the “greatest midterm performance by any president in the history of America, better than Lincoln in ’62, they told me…”

“Now” is the time to brace for a big boo-boo…

“The Freewheelin’ Bob Dylan” is unquestionably an all-time great. The Freewheelin’ Donald Trump may indeed be good for “MAGA” in the very shortest term.

But prepare for four very long weeks.

To paraphrase that JPMorgan analyst, the Great Disruptor risks a major campaign trail miscalculation that’s tough to calibrate.

There are plenty of minefields out there…

In fact, Imperial Washington – mind you, the world’s No. 1 arms exporter – recently announced the imposition of new sanctions on China for buying fighter aircraft and missiles from its neighbor, Russia.

This provocation stirred an immediate and militant rebuke from Beijing, which is not disposed to toe empire’s line right now.

This is, of course, on top of the escalating tit-for-tat on tariffs.

Now, we presume to tell the second-largest economy in the world from whom it may procure weapons for its military.

Keep in mind the fact that the U.S. has China surrounded with upward of 100,000 troops stationed in East Asia. That includes the massive firepower of the Seventh Fleet of the U.S. Navy – 80 ships, 140 aircraft, thousands of cruise missiles – stationed at Yokosuka, Japan.

This latest shot across its bow surely put Beijing to thinking the Donald’s Trade War might not be the half of it.

Consider that the Great Disruptor has picked a fight with Canada.

Now, be forewarned about the calamity brewing with the Red Ponzi…

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David Stockman

Former White House Budget Director: 50% Crash Coming!

The horrible start to October has investors on high alert. This market bubble – inflated by the Fed’s low interest rates and Republican tax cuts – may have finally run its course.… Read More
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.MORE FROM AUTHOR