Beware The Ides Of March

The knives are out in Roma on the Potomac, and Caesar holds them all this time.

Following the abrupt firing of Secretary of State Rex Tillerson, officials were reportedly vague in providing details on the fate of senior White House officials that have drawn ire from President Donald Trump, including White House chief of staff John Kelly, national security adviser H.R. McMaster, and Attorney General Jeff Sessions. – Business Insider

Et tu, Donald?



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The Mother Of All Political Risk

This would definitely destabilize the “American Street.”

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R.I.P., Stephen Hawking


Hat Tip: @MitchellToy

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Two Unfortunate, Untimely, And Telling Quotes

It is  hard to post this as we personally like the guy, think he is full of grace, a gentleman, and a public servant committed to civil discourse.   We need more of his likes in the public square.

That said,  we would not want him as our doctor as he, we believe, is unqualified, just as we would not want a history major doing brain surgery on us.

Unfortunately,  these two quotes are just a few of many that indicates his lack of understanding of the underlying dynamics of a very complicated economy.

Everyone who predicts has a legion of wrong forecasts, and we understand it’s unfair to hold someone to a few bad calls.   We are, among the first, of the wrongsters of bad calls.
However, if you are flying a passenger jet with so many lives at stake,  you must be held to a higher standard.

Cheerleaders & Ideologues

Today was telling.  The cheerleaders cheering the cheerleader.

Cheerleaders are mostly right as the natural trajectory for the economy and market is to grow and move higher.   It is at inflection points, when the autopilot should be off,  asset valuations are extreme, economic and political imbalances are ubiquitous, and the storm is about to hit that you want the “grown-ups” running the show.  Grown-ups with rigor, as in Stanley Fisher.  Not interns.

A cheerleader and an ideologue creates the potential for a toxic mix.

We are growing increasingly concerned about what is happening in Washington.

A Government In Perpetual Motion

We now hear of a Bolton for H.R. trade is in the mix.  That is full neocon, folks, and a potential disaster, in our opinion.

We thought the president deplored the invasion of Iraq?  Moreover, doesn’t JB’s ‘stache disqualify him?


Now for the quotes.  Note the impeccable timing.

We leave you with some homework to determine who said it and let you decide if we are in good hands.

February 2000:   “This correction will run its course until the middle of the year. Then things will pick up again because not even Greenspan can stop the Internet economy.” 

One month later the Internet economy peaked in the form of the Nasdaq Composite losing almost 80 percent of its value in the next few years

December 2007:  “There is no recession.  Despite all the doom and gloom from the economic pessimistas, the resilient U.S. economy continues moving ahead, quarter after quarter, year after year, defying dire forecasts and delivering positive growth. In fact, we are about to enter the seventh consecutive year of the Bush boom.”

Not so resilient.   The economy was already in the midst of one of the biggest economic collapses in the country’s or world history.  

Time to really worry.



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Key Price Points And Data

The S&P500 is sitting right at and testing its 50-day moving average.  We think it’s important you have the key levels and market context.  Note the Nasdaq has fallen back through its old high.

Here you go:



Price Action_Mar14

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JFK-Trump Analog: 3 bps On The Eve Of A Big Rollover

You need to sit down for this one.

The JFK-Trump S&P500 analog is only three bps apart on Day 338 after election day.  That is only a one S&P500 point difference, folks.  Absolutely stunning.

We had almost given up on the analog after the Goldilocks wage and employment data last Friday.

The two S&P indices have been tighter only twice, on Day 38 and Day 320.

The Night Before The Big Roll

Today is significant in that it is Day 338, which marked the eve of the big rollover of the S&P500 in 1962.

Current headlines also look similar to those in 1962.  Inflationary pressures leading to a growth scare.   Big steel and nuclear missiles in the spotlight.

Other factors are at play today, including politics, especially after last night’s Democratic win in Deep Red Steel Country.

Then there’s today appointment of Larry Kudlow as head of the N.E.C. to replace Gary Cohn.  Kudlow uses the JFK economic model as a template for economic policy in his latest book, JFK and the Reagan Revolution.   Oddly,  JFK never had the chance to cut marginal taxes.

See here for background on the analog.

Right Here, Right Now

It is now make or break time for the analog.

If it is a true tracker, the S&P500 should rollover hard in the next week or two.

Stay tuned.




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Quote of the Night: Will Rodgers

If a gun toting, former U.S. Marine,  law and order,  pro-life Democrat wins a seat in Congress, maybe the party leadership has finally learned that all politics is local and the tent needs to expand.   Probably, the biggest take away from tonight’s election and powerful counter to the Trump Republican Party, where the tent is shrinking.

Will Rodgers_Mar13

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The Big Blue Wave Looms

Is that Conor Lamb on his Hobie?   By the way,  he will be one of only six millennials in the U.S. Congress.  Fresh.

Results of Pennsylvania 18th Special Congressional Election 

Not definitive yet and much, much tighter than we thought.  It’s very difficult to model the voter in Appalachia who is a first-time or occasional voter.   In fact, we heard today the Pennsylvania government was flooded with calls from voters across the state asking where their precinct was.   They had to be informed the election was not state-wide and only in one small Congressional district.


As of midnight,  Lamb has a small lead of around 579 votes with about 1,398 absentee votes still to be counted.  If our data and math are correct, to make up the 579 votes, Saccone would have to win the outstanding absentee vote by about 42 points, or 71 percent to 39 percent.

Very unlikely,  He didn’t win more than 60 percent of vote any of the the four counties.

It will smell very fishy if Lamb loses the final vote tally.

Big Win For Blue In Deep Red

The fact that a Democrat wins in Appalachia is stunning.  Moreover, steel tariffs were just announced,  Trump won the district by 20 points in 2016,  the economy is, supposedly, doing great and the stock market is close to an all-time high, should make a Republican win in Deep Red steel country a slam dunk, no?

Here is the chart from tonight’s elections that will freak out Republicans and White House.


The voters of Pennsylvania have spoken.

Though we are a still divided nation, maybe the Quaker State spoke tonight and desire to Make America Decent Again.  #MADA

See ya’ in November.

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Pas de merde…

…and wait until they internalize these numbers.

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Country Trade Balances With U.S.


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