Market Schizophrenia
Even as the GDP sinks to 2% growth (anyone remember when they predicted over 6% while “recovering” from the China Virus?), the markets continue to advance. Yesterday the Dow briefly hit a new high of over 35,800. After profit taking, futures are up again, despite a bleak GDP outlook.
What gives?
Remember that markets are driven by, as Keynes said, “Animal spirits.” In the past, these were often thought to be purely economic—-profit and loss. But in the last 30-40 years, social justice poison has infected every aspect of America, from the military to the intelligence services to the boardrooms. Especially in marketing/sales departments, those who are the keepers of the statistics, an SJW-motivated executive and his department can sway almost any CEO.
So there is no small amount of residual hopium from the left-leaning marketers and hedgies now that Orange Man Bad is gone. To some degree, I think, they still believe that no matter how good Trump was for business, Mr. Mean Tweets harmed the economy. Because, you know, it can’t be good for business to Tweet Meanly.
But certainly that’s not the main driver here. It is some of it. These people wanted the Demented Pervert Biteme to succeed like you can’t believe. It is eerily reminiscent of the sports media with its investment in quarterback Donovan McNabb in the early 2000s. Performance be damned, we’re gonna have a good market.
Or not.
What else is driving the advance? First, there continues to be a general, if possibly unfounded, assumption that surely the U.S. has to come out of the China Virus age. And when that happens, life will be back to normal, and bidness, as Rush Limbaugh used to say, will be good.
The problem with this view is that from the left’s perspective, there is never a time to go back to normal, because they would lose a significant amount of control over everyday Americans’ lives. From school boards to travel, from hospitals to police forces: back to normal is bad for the left.
Nevertheless, the sense among many in the financial and other markets is, “we have to go back sometime.” Still, almost everyone admits that already we have serious inflation in food, energy, and other products. Going “back to normal” will put that inflation on steroids. Experts are becoming whirling dervishes trying to dance around inflation, admitting it will be bad but then at the same time saying it won’t be “that bad.”
One obvious reality is that the faster inflation sets in, the lower the Rutabaga’s polls go and the greater Americans’ discontent with everything the DemoKKKrat Party does. And you know what that means.
The Revenge of the Trump. Already 2022 is shaping up to be a loss of the House and probably the Senate for the DemoKKKrats. The only question is, “how bad of a loss?” Some 10 DemoKKKrat House members have already announced they won’t run for reelection. Remember 2018? That same dynamic among Republicans was what presaged a 40+ seat D takeover, which the nation is still paying for.
Mark my words, even a narrow Youngkin loss in the VA governor’s race would be a clarion call for DemoKKKrats that a meteor is coming. And the more parents have to fight with school boards over Communist Racist Theory (CRT), vaxxes, masks, and the rest, the more they will in frustration vote GOP. All this is known.
But the U.S. economy is not coming back soon. The supply chain issues, which have not abated at all, can only get worse. The fewer trucks that roll, the more truckers that find other jobs; the older the truck fleet becomes (needing repairs, with parts stuck somewhere on those cargo ships).
The scene is oddly similar to “Black Hawk Down,” where UN food distribution trucks arrive—-but too late—-and mobs just swarm them. How long till small pirate boats begin to swarm container ships and unload smuggled goods to be delivered by unvaxxed and unmasked patriots?
Not long.