Economy

Let’s Call It “The Donald Claus”

By David Stockman  |  August 13, 2019

Argentina’s MERVAL – short for “Mercado de Valores,” or “Stock Market” – fell 48% on Monday. According to Bloomberg, that’s the second-steepest single-day slide for any stock market since 1950. The peso has also crashed in South America’s second-largest economy.

Oh, and the Hong Kong airport still might – or still might not – be operating right now. And it has nothing to do with hemispheres or time differences or anything as prosaic as that. The people are marching…

Demand For Democracy

And you know what? Over on that precious island they’re carrying American flags to express their desire for more democracy.

Our iconography’s still strong because our founding principles endure, however much work we must do to maintain the pursuit and perfection of them. However, apparently, much work we do to spoil this glorious experiment in self-determination, too…

Nothing is given.

Everybody understands that – instinctively, intuitively, by way of the school of hard knocks. One way or another, you meet reality or reality meets you.

Maybe that’s why “contagion” made its way through Bubblevision early today.

Argentina and Hong Kong are about uncertainty – financial, economic, social, political. Uncertainty creates fear for many of us.

And then there’s the Donald, of course, who, with a single tweet, can move markets perhaps like no other single force ever before.

Tariffs On Chinese Imports 

U.S. equity futures looked grim early in the a.m., before the Orange Swan’s entourage announced the delay until December 15 the of imposition of new tariffs on Chinese imports that were set to take effect on September 1.

Here’s why the Dow Jones Industrial Average is up more than 400 points as of the lunch hour:

“We’re doing this for the Christmas season,” Trump told reporters on an airport tarmac around noon Tuesday. “Just in case some of the tariffs would have an impact on U.S. customers.”

“But so far they’ve had virtually none,” the president added. “But just in case they might have an impact on people, what we’ve done is we’ve delayed it, so that they won’t be relevant to the Christmas shopping season.”

That’s nonsense.

Where do your thoughts dwell today?

“Fear of missing out”? Is it the FOMO that makes you BTFD? Is that why stocks are up nearly 2% today, of all days?

Or do you fear the collapse of Bubble Finance?

Let’s look at the problem another way.

Preserving and Building Our Wealth

As we’ve discussed in recent days – and as I detail in the August issue – we’re making some large-scale moves with the way we execute on The Stockman Model in The Stockman Letter.

The major thing is, we’ve brought on board an experienced trader who understands the macro landscape and is capable – extremely capable – of turning that understanding into actionable advice.

We’ve been “field testing” Michael Coolbaugh’s system since August 1. As you well know, it’s been a volatile month. So far, however, Michael’s numbers are encouraging – extremely encouraging.

I’ll simply note that, while the S&P 500 Index was shedding 2.75% from August 1 through August 8, across nine “paper” trades we’re down just 1.12%. And that includes a single trade with a nearly 19% loss.

As I noted yesterday – and will continue to note – “preservation of wealth” is and will always be our No. 1 priority. But we’d like to “make a killing” in the next big move, whether that move is up or down.

Michael helps us accomplish the twin goals of preserving and building wealth over the long term.

Irrational Economic Summit

I look forward to sharing more of what we’re doing with Deep State Declassified and The Stockman Letter at the upcoming Irrational Economic Summit, hosted by Dent Research.

I’ll be delivering the Keynote Address at this year’s Summit, the seventh annual gathering of Harry and his team, along with an impressive list of speakers – thinkers, really, who like to share ideas.

Ironically enough – given it’s the focal point for much of the uncertainty that animates markets these days – we’re getting together at National Harbor this October 10-12, just outside the famous Beltway that surrounds Imperial Washington.

It’s actually a lovely setting, right on the Potomac, with some of the greatest sunsets you’ll witness on the East Coast. Not even the swamp up the river spoils it…

Here’s all you need to know to get there for what promises to be an invaluable source of ideas heading into probably the most consequential election since 1860.

Do I exaggerate? I’m sure we’ll find out…

One True Gift

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…

Revealed: What Really Goes on Behind Closed Doors in D.C.

Former White House Budget Director, David Stockman is stepping forward in his new project, The Stockman Letter to warn everyone about the serious danger facing our country! Click here to find out the… 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. After leaving the White House, Stockman had a 20-year career on Wall Street.MORE FROM AUTHOR