How The Trinch Stole Christmas

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Let me throw a hypothetical at you. Let’s say you work for a company, any company. It isn’t even Labor Day yet, and you’re still finishing up the shopping for the last back-to-school things for the kids. You go to work one day to find that the company’s CEO has sent out a letter to all of the employees. The letter says; “I hope everybody had a great summer vacation! Right now, our company is the greatest company in the history of the world. We have the greatest bottom line in history, and things are only going to get better. I want you all to give everybody lots of cell phones, video game consoles, electronics, and shoes for Christmas this year. Because, starting on February 15th, I’m going to have to cut everybody’s pay by 10%. Happy holidays, and keep up the good work!”

Don’t laugh, because that’s basically what our Moron in Chief just did. On Monday, the stock market took a shaving cut, dropping 400 points on fears of a recession fueled by China de-valuating their currency in retaliation for Trump’s idiotic trade war. I wrote last week that His Lowness was gift wrapping a recession to wreck the retail industry by hiking tariffs timed to go into effect at the start of the holiday shopping season. It’s nice to know he reads my stuff, because on Tuesday he finally admitted that Americans actually pay these tariffs, and announced that he was delaying the tariffs until December 15th, so that people would spend oodles for the holidays. Wall street immediately breathed a sigh of relief, and stocks clawed back 470 of those 400 points. Then yesterday, two lines crossed each other on a piece of paper, and the market took an 800 point bloodletting.

You see my point? It takes 6-8 weeks after imposition for tariffs to be felt by consumers. Trump’s original tariff date would have raised prices by 10% between October 20th and November 15th, right at the start of shopping season. By proudly announcing that he was delaying the tariffs on popular Christmas items until December 15th, he basically wrote my 1st paragraph letter to the American people. Enjoy Christmas, because in February I’m cutting your paycheck by 10% when you go shopping. You’re an American consumer, ask yourself this question. If you know that you’re going to take a 10% hit in the pocketbook starting in February, are you going to go out in a Butch Cassidy and the Sundance Kid blaze of glory for Christmas, before settling down to eat box mac-n-cheese and generic hot dogs for the next year, or are you going to pull back for the holidays, and save up for that upcoming “rainy day?” Yeah, me too.

For a bunch of people who are supposed to be the greatest financial minds in the world, Wall Street seems to be filled with some of the dumbest sumbitches I’ve ever seen. These people are considered as failures if they aren’t “making a phone number” (i.e. a 7 digit salary), and yet they hang on every word this bankruptcy baron says. First they spent over a year pinballing the Dow average all over hell’s half acre based on every brain dead tweet Trump shit out. Then they spent a year ignoring him like people ignoring the dog barking to come in out of the rain until a commercial comes on. But now, finally, they have hard statistical analyses and inverted curves to pay attention to. And it ain’t pretty.

A recession was always in the cards anyway, Wall Street itself has an aphorism, “Trees don’t grow to the sky.” We’ve had a 9 year expansion, and nothing goes on forever. But Trump’s brain dead fiscal boondoggles have likely moved the upcoming recession up from an originally projected 18-24 months, well after the 2020 election, to 8-10 months, according to the last estimate I saw. Which would be just in time for the nominating conventions and the general election cycle. And did I mention that the booming economy is the only thing that the GOP had to run on in 2020? Trump was the economic savant who created this gluttony of avarice if you listened to him for the last three years, so who will take the fall when it all comes crashing down around our ears?

Thanks to Trump’s transparent buffoonery, the recession is likely to hit sooner than later, for two reasons. The first is you and me, the American consumers. Remember this, more than 50% of the American population has no investments in the stock market. Unlike the cash station cowboys playing Vegas roulette with Other Peoples Money, we can’t afford to “ride out” an economic downturn. We don’t watch our investment portfolios, we watch our checkbook balances. If Americans fear a coming downturn, they’re going to start saving up for it now. Brick and mortar retail stores are already hurting in the world of Amazon and Walmart, and the holiday shopping season is their make-or-break for the entire year. A crappy holiday season could force more store closings, and an increase in unemployment in the only sector that is anchoring lower wage middle class jobs, the service sector.

The second reason that the recession is probably coming sooner is China. If there’s one man on the planet who has the same voracious ego as Donald Trump, it’s Xi Jinping. For the last 2 1/2 years, Trump has been cuffing China around like a puppy that missed the newspaper. Jinping has dreams of China replacing the US as the dominant global economy, and for the last 2 1/2 years Trump has been a constant pain in his ass. The Chinese place a high value on “face,” and Trump hasn’t been letting them save any lately.

But Xi Jinping can read American polling as well as you and I can, and he can see that Trump is in trouble. If Xi decided he can get a better deal with a new President, he has two innate advantages in dealing with the economy of the US that can wreck Trump. The first advantage is China’s economy itself. Xi can institute price controls in China, and manipulate its currency at will to put pressure on the American economy at will, something that Trump cannot do, either in retaliation, or to compensate for China’s moves. The second is popularity. If Trump wants to be reelected, he has to maintain at least a minimal popularity with the American people to do so. In China, Xi is under no such constraints. The peasants don’t elect the President of China, his political cronies do. Jinping can unleash some short term discomfort on the population with no negative blowback to his power.

And here’s one more raindrop for your parade. When the recession gets here, it isn’t going to be easy to climb out of, and here’s why. If you follow the news with anything more than passing curiosity, you’ve heard new commentators and economists expressing shock and alarm at Trump’s blatant interference with the Federal Reserve Board’s handling of interest rates. Normally, when the economy is strong, the Fed incrementally raises interest rates as a break against inflation taking off. It also gives them an ace-on-the-hole, as they can lower interest rates when the economy slows, to pump more money into the system without printing it.

But Trump has spent months now bitching at Fed Chair Jerome Powell to cut the interest rate to as close to zero as possible. Why? Because Trump is the self proclaimed “King of Debt.” The lower interest rates go, the less Trump pays personally in interest on all of those loans he has on his properties, loans that are already over average since he’s such a poor credit risk. His demands that the Fed cut interest rates is purely a matter of personal greed. The problem is that once the recession hits, the Fed will no longer be able to lower interest rates to boost the economy, having already cut them to the bone. Which doesn’t bother The Orange Julius any, he’ll just default on his loans. Unfortunately, so will you and I.

So, there you have it, Dr Seuss’ How the Grinch Stole Christmas, updated for 2020. Sadly, in this version of the timeless classic, you and I aren’t Cindy Lu Who, teaching the Grinch the true meaning of Christmas, we’re his fucking dog Max, and we’re just along for the ride. And to all a good night!

 

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Lone Wolf
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Chinese Premier PingPong has to know Trump is a fucking moron, the self proclaimed, ‘bankruptcy baron’ as you put it, so why would he even seem to be slow footing and let the dotard screw with him and just pounce on the fucker once and for all, full well knowing we the people, the real people not the racist, bigoted, neo Nazi loving trash, won’t take much more of his stupid shit? Fuck him, Lock him up and throw away the key. HEY, there ya go, we can buy Greenland and put him and his merry gang there, then turn… Read more »