This is the opening segment to this week’s edition of Notes From the Rabbit Hole, NFTRH 421, a 48 page work-through of the immediate post-Trump landscape. While we had fun with the Trump hysteria throughout an ultimately serious analytical report, I look forward to marinating in the post-hysteria atmosphere and coming up with well defined market directions, whether they be born of new macro fundamentals to be, or contrary sentiment driven possibilities, which are also in play…
People who have read me for years know that all sorts of buzz phrases (Inflation onDemand, Armageddon ’08, etc.) and some off color writing can find their way into my work, especially when writing publicly. I do not think highly of the Federal Reserve system, the average politician or even many US Presidents through my lifetime. Formally, I do respect the office and ultimately by extension, even a President I may not happen to like. It’s been that way much more often than not, after all.
Looking at the front page of nftrh.com I count the word “Trump” in headlines 3 times with several more Trumps in the text of various posts. I think in one week Trump has been written more than “Obama” was in his entire 2 terms. The material… oh the material we have to work with now that such a cartoon-like figure has ascended to the most important position in the world. For me, writing just got a lot more fun and quite possibly, the market got even more manageable. The two can go hand in hand.
I understand that I will offend, and probably have offended a few people but that’s the way it goes. My job is to help us manage the stock and asset markets, not to win popularity contests. As noted, I’ve lost subscribers and public readers and incurred the wrath of many a hard ass gold bug over the years. But Trump, unlike the gentle and well spoken Obama, helps me be me. I am realizing that I needed Trump in some ways.
The title of the segment popped into my head the moment I reviewed last week’s opening title, “The Election”. It almost had to be, folks. My apologies. :-)
But here is a great example of what I mean. nftrh.com had fun with all sorts of talk about Trump Towers and pants tents. Doctor Copper got as excited as anyone at the prospect of the great new infrastructure play that may come to be out in the future, but the frisky Doctor instantly discounted economic growth and then reversed course on Friday.
Copper and other building materials look forward to big time infrastructure spending per the candidate’s promises and of course the erection of a big wall in the southwest. Trump is a media and TV star and the Average American watches a lot of boob tube, with a particular taste, based on the preponderance of these shows, for the sleazy and/or cheesy reality shows, like the one Trump is an alumnus of. People buying this hype are going to be punished, sooner or later, before any real fundamentals come into play.
Still, when an impulsive move happens, even if stimulated by hype, it should be respected. Dial back to early in the year when we noted that the gold sector’s big surge was a launch, not a blow off. The thing in copper above, looks more like a launch out of its long-term downtrend and short-term sideways trend than it does a blow off.
Let’s also recall that other things that have been launching are bond yields and yield spreads, like the 10yr-2yr yield curve. This has been inflationary signaling. But I think there is a case in play where the big tank job in gold and silver, the items that led the entire inflationary macro backdrop, could be signaling an interim flaccidity in not only the ‘inflation trade’, but also the US stock market, where some indexes could be in ‘blow off’ mode.
If the last week showed us nothing else, it showed us that Alice was right. If I’ve not already exposed myself as weird enough, I am going to tell you something else. I have tattooed on my right inner forearm a lovely picture of Alice, the Red Queen and the Rabbit. On my left inner forearm is the script “What is, it wouldn’t be. And what it wouldn’t be, it would. You see?”
I don’t just write about this stuff; I try to live it and see it for what it is.
After this bit of fun NFTRH 421 then goes on to a full slate of timely analysis in managing week 1 of what comes next.
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