Welcome to the World of Nonsense

By: 
Al Jacobs

On Wednesday, May 17, 2017, the Dow Jones Industrial Average fell 372.82 points, the largest single-day slump in eight months. The cause of this drop did not relate to some particularly bad news by any of the nation’s major corporations, nor was it brought on by a natural catastrophe or outbreak of armed hostility between nations. Its cause proved to be the result of far more insidious goings-on. Let me describe how it all came about.

Peg the onset to November 8, 2016, with the election of Donald Trump to the presidency of the United States. Over the 228 years since implementation of the office, a more unlikely long shot never became elected. During his campaign for the nomination, wherein he eventually bested 17 other Republican candidates, he systematically provoked and demeaned many of them. Thereafter, in his contest against Democrat Hillary Clinton, all polls indicated he would finish far behind. Exactly how he managed to achieve an electoral victory is a subject to be analyzed and reanalyzed for many years to come.

Following Mr. Trump’s inauguration on January 20, 2017, many observers expected him to assume a “presidential” demeanor and conduct himself with the propriety expected of the nation’s chief executive. It’s fair to say his conduct since assuming the presidency is much the same as beforehand. Except for several well-prepared and delivered speeches, his utterances, often just spontaneous responses to criticism, seem to reflect the same indifference contained in his campaign rhetoric. Evidently this went over splendidly with the mass of frustrated voters who relished the charges and promises thrown about indiscriminately, but since then the banter evokes little enthusiasm for persons trying to conduct meaningful lives.

The kickoff of the current controversy started with the forced resignation on February 11th of the president’s National Security Advisor, Michael Thomas Flynn, a retired lieutenant general with a distinguished 33-year army career, just 24 days after his appointment. The cause: controversy over reports of his relations with representatives of the Russian government. Although the matter was probably handled as properly as possible by the administration, it didn’t take long for Trump detractors to lever this into a conspiratorial episode.

The next phase of the brouhaha involved a conversation on February 14th between Trump and then-FBI Director James Comey. Though there’s no verifiable record of the one-on-one meeting, Comey contends Trump said to him: “I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go.” Trump replied he never suggested anything of the sort. The only evidence is a memo written by Comey which then appeared in an article in The New York Times.

The third charge against Trump is, while hosting Russia’s foreign minister Sergey V. Lavrov and Ambassador Sergey I. Kislyak at the White House on May 10th, he shared information about a threat from the Islamic State, a group both countries oppose, which might somehow be objected to by the source of the information. Though mostly conjecture, the presumption and resultant castigation of Trump assumed a life of its own.

The final piece of the jigsaw puzzle concerns what may be referred to as the Russian Connection. The pervasive rumor circulated that Russian President Vladimir Putin attempted to influence the 2016 presidential election in a way to help Donald Trump. The impetus of this was Hillary Clinton’s accusation against Trump, during their third presidential debate in October 2016, when she claimed: “The Russians have engaged in cyberattacks against the United States of America, that you encouraged espionage against our people, that you are willing to spout the Putin line … because he has a very clear favorite in this race.”

Though there are a substantial number of Republicans, particularly officeholders, with little personal regard for Trump, the vitriolic hatred of him harbored by Democrats, because of his victory over their chosen candidate, is in a different category. Essentially, the mainstream media, an affiliate of the Democratic Party, is off and running, with the following sorts of assertions to be found on a daily basis.

Los Angeles Times – “Trump’s downward spiral … the result is an administration that has lurched from one crisis to another. The larger issue is that Trump’s unintended intelligence leak fits into a broader pattern of general incompetence, compounded by hubris. The chaos that is being created by the lack of discipline is creating … worrisome environment. Trump has created his own troubles, and they are far from over.”

Associated Press – “The disclosure to Russia appeared to violate an intelligence-sharing agreement that provides the U.S. critical information about threats to the nation. The fact that the secrets went to Russia, an adversary of the U.S. and many of its allies, was especially alarming.”

The New York Times – “’I hope you can let this go,’ the president told Comey, according to the memo. The existence of Trump’s request is the clearest evidence that the president has tried to directly influence the Justice Department and FBI investigation into links between Trump’s associates and Russia.”

The Washington Post – “Former FBI Director James Comey’s allegation that President Donald Trump pressed him to shut down the bureau’s investigation into former national security advisor Michael Flynn provides the strongest support yet for a criminal obstruction-of-justice case against Trump, legal analysts say.”

Is it then any wonder on Thursday, May 18th, the Business Section of the Los Angeles Times reported: “After days of brushing aside the political turmoil engulfing Trump’s presidency, Wall Street finally took notice and sent stocks reeling Wednesday in their worst drubbing in months”?

As a postscript, Associated Press put the finishing touches on the castigation with the following lines: “The growing political drama in Washington rattled Wall Street on Wednesday, knocking the Dow Jones industrial average down more than 370 points and giving the stock market its biggest single-day slump in eight months. Investors worried that the political turmoil that has enveloped the White House may hurt President Trump’s ability to see through his pro-business agenda.”

As a final thought, I can provide no suggestions to investors – in view of the nonsense being perpetrated – on how to hedge their investment portfolios, for I don’t know what’s coming next. It’s my belief “ninety-five percent of everything is nonsense,” and that to prosper in life, you must try to relegate your activities to the five-percent which is essentially rational. Unfortunately, when the persons and organizations with the ability to promote and safeguard our economy choose, instead, to wreak havoc on it, there may be no place to hide. We’re now in the midst of a conflict where the losing party in the 2016 elections is attempting to reverse the outcome. There’s no way to predict how this will all turn out.

Al Jacobs, a professional investor for nearly a half-century, issues a monthly newsletter in which he shares his financial knowledge and experience. You may view it on http://www.roadwaytoprosperity.com

 

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