Well, who ya gonna believe, me or your own eyes?
– Chicolini (Chico Marx) to Mrs. Gloria Teasdale (Margaret Dumont), “Duck Soup” (1933)
This is the day an anonymous “senior official” inside the executive branch announced – via the op-ed section of The New York Times, of course – an in-progress coup against the duly elected President of the United States of America.
It hit the wires late Wednesday night.
Futures markets barely budged. Stocks were basically flat at the open.
The yield on the 10-year U.S. Treasury note was steady around 2.9%. The U.S. dollar showed zero signs of even ordinary distress.
The CBOE Volatility Index – also known as the VIX, also known as the market’s “fear gauge” – was a little more jumpy.
It rose from just about right at the historically low levels it’s plumbed for months to just a little bit above the historically low levels it’s plumbed for months…
The Mainstream Media, meanwhile, always jonesing for a Deep Throat of their very own, couldn’t be more pleased. They love the parlor games.
Every day, we get deeper into Bizarro World. But both ends of the Acela Corridor are zombified.
Nothing disturbs Wall Street’s easy-money complacency.
And – as is now plain for all to see – no one disrupts Imperial Washington’s self-satisfied-yet-still-impotent noblesse oblige.
The Donald’s wrong about a lot of things.
His short-term utility is one of them.
There are pretty sure signs the market will not, in fact, “crash” if he “ever got impeached.”
At the same time, there are strong forces in play that require only a spark.
We’ve addressed the Donald’s Trade War. The GOP’s Fiscal Debauch, that’s baked in, too.
Sure, “quantitative tightening” is just another piece of the Federal Reserve’s normalization plan.
But QT – plus $1.2 trillion of new U.S. borrowing, plus the inflationary impact of a plethora of new tariffs – means interest rates will go higher.
And we’re still talking about a historically weak and a historically old economic expansion.
The Fed – also engaged in not a little institutional preservation – is creating “dry powder” for the next crisis.
In short, interest rates have to go higher now so they can go lower after the shit hits the fan.
In addition to being a “low interest” man, the Donald is a scorched-earth scapegoat artist. We await his impending attack on the Fed.
Maybe that’ll rattle Wall Street.
That’s the thing with the Donald: Who knows?
North Korea? That would make a darn good dog to wag. Iran? That’s even better, if John Bolton’s in the room…
Despite what we’re seeing – fiddling all over the Acela Corridor, by the players and the watchers – the Donald, never a “stable genius,” does have all it takes to trigger a political, financial, and economic crash-landing.
As the Deep State’s campaign to exfiltrate him from the Oval Office advances, his impetuousness grows more and more threatening.
He’s flat-out losing it.
And that begs this question…
Why would the Deep State/the Resistance put the nation it aims to save in peril by antagonizing a Tweeter-in-Chief whose “amorality” and irrationality it openly proclaims?
The Deep State is about the Deep State. The Resistance is about the Resistance.