on bubbles…

Donald only makes the best bubbles, believe me. No other president has made bubbles as good as mine. Sad!

So now we have a market correction. A market correction is an event where a certain kind of amateur investor – call him Joe – loses his shirt and impoverishes his family. The Joes of the world fund bubbles by always buying what they’re told to buy, and they imagine that they’re getting rich while the bubble inflates. (They also imagine that they’re investment geniuses but that’s another story.) Sooner or later the market needs to drive the Joes out, and does. Poor Joe, and poor Mrs. Joe and little Joe Jr and Josephine as well. Life on the outer edge of a bubble is exciting but brief. Surface tension is easiest to detect when it’s stretched beyond its limit and just lets go.

Presidents get the credit for inflating bubbles and they get the blame when bubbles pop. Presidents really can do things that cause or burst bubbles but it’s often the wrong president who gets the credit or blame. Bill Clinton’s incredibly foolish but thoroughly bipartisan deregulation of banking eventually caused a huge amount of misery worldwide but he doesn’t get nearly the blame he deserves (largely because Hand-worshipers cannot say bad things about deregulation). Bush took the credit for Clinton’s bubble and fueled it some more with his off-the-books war spending. Obama did some but not all of what was necessary to stop Bush’s collapse and then left before most of the Joes saw his own bubble start to grow. But Trump – Trump is something else.

Trump owns this loud pop in a way few presidents ever have. He claimed all the credit for Obama’s bubble, which in itself is not so unusual. But two aspects of it were unusual in the extreme. First, his untempered braggadocio and his insistence that he alone owned the emerging Obama bubble. Second, the vast amount of greenhouse gas he really did blow into that bubble.

Trump’s gas was of two different but hard to distinguish kinds. First were the bubble-growing things he really did, mostly hope for that tax cut and then the cut itself. But second…ah, but second was his unrestrained and relentlessly repeated promise to the Joes that now, now and for the rest of his time in office, the bubble, which he always claimed was his bubble, his personal bubble, could not burst. The economy would grow because he was a business genius who knew the secrets of growth and would never do any of the things that stifle it. And some Joes believed him and plunged in with everything they had or could borrow. And other, just barely wiser Joes knew better but went along for the ride because they saw the bubble growing and knew it for what it was but figured they’d know when to pull out – and almost nobody ever knows exactly when to pull out (we’re talking markets, Madame, markets).

A whole lot of Trump’s Republican-but-not-Republican-base support was entirely down to his wonderful, personal bubble. I don’t know how much of it but I know it had to be a lot. It had to be a lot because the Republicans always own the voters who put their own investments before anything else (just as the Democrats used to own the voters who put their wages first). So this inevitable correction is a threat to his standing, and he and his people know it. And that 80% Republican support is all that’s keeping him in the white house and he and his people know that too. They have to do something to solidify that 80% and they have to do it fast. This will get very interesting very soon.

(Ed note: I bumped this piece up from previous comment thread to where it rightfully belongs)

32 Responses to on bubbles…

  1. bluthner says:

    Who knows where the markets are going, not I, but I do wonder if Republicans have to do all that much for the current market to settle down at not much lower than it was a month or two ago, for a while. Push that too much forward into time, say as far as the summer when he wants his ridiculous parade, or the midterms… that’s a different story. What’s at least easy to predict is nothing is going to be predictable. And the little guys, as you say, Nat, in that good post, are going to get burned, if they don’t watch it, if they haven’t been burned already. Losing 10% isn’t burned. Unless you were investing on margin, which a lot of people were doing who really shouldn’t have been. Bad news for those Joes am a’comin. And it’s going to come faster and thicker as the months go by.

  2. Expat says:

    Bluth is right. Who knows where markets are going. But we do know where they have been and it has been a wild ride. As a long term, steady as you go, 401k/IRA mutual fund type investor – like many people who invest I guess – my retirement savings gained a this can’t possibly be real, nose bleed 25% plus from the end of 2016 through the recent peak before dropping back to 20% in the last week. It would be interesting to see how many retail Joes pumped money into the waining days of the bubble. I remember investment clubs back in the late 90s and early 2000s when people met for drinks and nibbles, and to discuss their stock strategies. I was never invited. I haven’t been aware of any amateur market fever this time around. But hey, I don’t get invited.

  3. NatashaFatale says:

    Expat,

    Of course nobody knows where markets will go and, especially, when they’ll go there. And that’s exactly why it’s so foolish to play retroactive King Canute and say “Wow, see that spike? The market did that because I told it to.” It’s like saying “Hey look, it’s mid-December and it hasn’t snowed yet. That’s because I decided we’d have a snow-free winter this year!” Either claim, someday you’ll have to explain why your prophesy has stopped coming true. But it almost seems like Trump refused to believe that that day was coming.

    When I started up with the Deep State Slump or such, I really thought I was exaggerating. And then the hard-right press took me up on it. And that’s what we now call a “wedge strategy”, albeit an entirely inadvertent one. It pits the Trump base (the Trump Rump?) against GOP-leaning people a lot like you who actually know how markets work. And that’s political insanity, from a guy who up till then had pushed all the right political buttons.

  4. Expat says:

    I’ll need to look for the Deep State Slump out there in the hard-right press Nat. It’s a good job that you and Bluth know what’s going on there otherwise I’d be in the dark. Unless you mean the WSJ?

    I, and I am sure lots of others, dismiss much of Trump’s utterances as the bluster and puffery of a showman. I’m not even sure if he believes it. Although sometimes I do wonder.

  5. bluthner says:

    Two wife-beaters slink away in one week! That Trump, he sure can pick ’em!

  6. NatashaFatale says:

    Expat,

    I cited a couple-three examples on Feb 6 at 2:38PM on the brass ring thread. Since I got them from Alex Jones / Infowars I didn’t include links – our host has asked us not to invite those boys in.

  7. bluthner says:

    I came across this, written by a journalist in 1964, about Goldwater campaigning down South:

    These were not really political rallies–they were revels, they were pageants, they were clebrations. The aim of the revellers was not so much to advance a candidacy or a cause as to dramatize a nood, and the mood was a kind of joyful defiance, or a defiant joy. By coming South, Goldwater had made it possible for great numbers of unapologetic white supremacists to hold great carnivals of white supremacy… [Goldwater] did not, to be sure, make any direct racist appeals. He covered the South and never, in any public gathering, mentioned “race” or “Negroes” or “whites” or “segregation” or “civil rights.” … He talked about those realities all the time, in an underground, or Aesopian, language–a ckind of code that few in his audiences had any trouble deciphering. Int he code, “bullies and marauders” means “Negroes.” … “States Rights” means “opposition to civil rights.” “Women” means “white women.” This much of the code is as easily understood by his Northern audiences as by his Southern ones… Goldwaterites do not suggest that the “Eastern press” is Communist in sympathy. It is enough for them that it is Eastern, and in their view, predominatnly “liberal.” The code word for it is not “Communists” but “liars”.

    Isn’t it comforting to know we have moved on so far from those dark days of white backlash.

  8. NatashaFatale says:

    Bluth,

    I remember ’64 very, very well. All white farming town 35 miles from the South Side of Chicago, seven miles from the black ghetto of Joliet. The Civil Rights Bill is coming, it’s inevitable if Johnson wins, and Goldwater is our very last chance to save the country. They will come and there will be nothing we can do to keep them out. The local paper prints a fuzzy photo of some trash in the gutter. It explains that this is an empty bottle of the kind of narcotic cough syrup favored by civil rights marchers: they’re not only coming, they’re already here! My best friend Ron’s mother runs screaming into the back yard: The N-words are marching down Route 59! Everybody’s supposed to get their guns and meet at the village green! Ron’s big brother says Now Ma… and the crisis passes. But inside the high school there’s no talk of invading N-words or invisible doped-up rioting rapists – inside the high school there’s only talk of Freedom. Because that’s what Goldwater’s really about: Freedom, pure and simple. Wink. Nudge. Smirk. Leer.

  9. NatashaFatale says:

    And an even older blast from the past: boxes of surplus food for the families on relief. Pick them up right on the main drag, where everyone can see just who the real deadbeats are. Here you go, Mrs Jones. Here’s your fourteen pound block of American cheese, here’s your fifty pound sack of instant mashed potatoes and your five loaves of week-old Wonderbread. No, sorry, no coffee, ma’am, American food only. But here’s your big jar of peanut butter, just as good as Skippy if you drain the oil off it, and…

    And that’s just one more thing we’re making great again. A whole shitload of biz people are going to be furious with Trump over this. In some areas, and I don’t just mean well-known sinks of poverty, he’ll have cut retail food sales by 30 or 40% – enough to put any number of grocery chains out of business and any number of low-paid people out of work. Plus truckers, warehouse-men, and so on, but here’s the thing: agri-biz never really cared a whole lot about that end of the food chain. Agri-biz is about agri-biz, and it would seem that at long last agri-biz has got its prime seat at the big people’s table back again. It all just gets better and better and better.

  10. Squirrel says:

    All that mouldy cheese: it’ll do wonders for the Wisconsin economy, I imagine.

  11. bluthner says:

    American cheese does NOT go mouldy. Not for years. And even then it just sort of dries out and turns into something akin to Bakelite. You could safely caulk a clinkerbuilt boat with it. Do you remember that experiment in school where you made yarn from milk? It’s a lot more than halfway there.

  12. NatashaFatale says:

    Sq,

    In the US the government used to classify things-that-are-called-cheese according to how much milk went into them. (Maybe it still does. If so, Trump’s cheese bosses are a bit late turning in their homework.) At the top of the things-that-are-called-cheese hierarchy was “cheese” – what you would call cheese, I mean; we really do make some of that. At the very bottom was “cheese-type food.” The substance called American Cheese was “cheese-type food.”

    But you nailed it about Wisconsin. The dairy industry (and it is an industry) once controlled Wisconsin so tightly that it was illegal to sell margarine that had been dyed yellow. It had to be white. So that when you served it, everyone would know you were too cheap to buy the real thing. Agricultural states used to fight viciously over how much of their money crops went into the po’ folks’ mandatory diet. Back when we were great before, I mean.

  13. Squirrel says:

    I think I’m getting flashbacks about spray-on orange cheese . . .

    Do you remember that experiment in school where you made yarn from milk?

    Er, no. Not nohow.

  14. NatashaFatale says:

    Sq,

    Madame informs me that it was you who long ago introduced her to the horror that is Spray-on Orange Cheese.

  15. Squirrel says:

    So, Trump’s lawyer says he (magnanimously and charitably, no doubt) paid a porn star money out of his own pocket, and didn’t get it back from Donald Trump.

    Well, of course he didn’t.

    But he didn’t say whether he expected to.

    Meanwhile, repeat after me (again!):

    ‘Guns don’t kill people.
    People kill people.
    People with guns kill people.’

    19 schoolkids killed (in schools) so far this year, I think. (It’s only halfway through February!) Number of Americans of any age killed by Immigrant Islamic Terrorists so far this year: 0.

  16. bluthner says:

    It’s such a small price to pay for the 2nd Ammendment. Other people’s children, I mean. Their lives. Also other people’s lives. Because it will never be real American lives, nossir– apart from the real American children of course- ’cause real Americans be carrying. And no one who carries ever gets taken out by one of these shitbags. Ergo- if more Americans were more American, and not children, none of this would be happening.

    I think that’s how the ‘thinking’ goes.

    What I want to know is did that lawyer just happen to write off a $130k donation to one of the false flag Trump ‘charities’ somewhere, or else did he manage to plump up his other bills to the Hairball, or did he get a discount on a condo, a sack of Krugerands, etc. No way in seven hells did he hand over 130k out of the kindness of his heart. Believe that you’ll believe Trump never laundered money for the mob or tried to shut down the FBI investigation into his campaign’s ties with Russia, nor ever violated Emoluments, nor ever broke the racketeering laws or the Foreign Corrupt Practices act of 1977, nor is laboring under threats of ugly revelations by Vlad P., nor ever took a bribe, nor ever once told a lie.

  17. Squirrel says:

    According to the Governor of Florida “there’s a time” to discuss why the school killings happened and what to do about them.

    But it isn’t today; it wasn’t yesterday. It wasn’t five years ago; it won’t be tomorrow. It won’t, probably, be any time in the next five years, either.

    Almost anywhere else, there would be shocked calls for a government inquiry and one that would come up with some attempt, at least, to find a solution. One has to admire what seems to be an infinite American capacity to absorb a disaster involving death, blandly cover it with ‘thoughts and prayers’ which have no visible or foreseeable consequences or results whatsoever, and then ignore it.

  18. Squirrel says:

    No way in seven hells did he hand over 130k out of the kindness of his heart

    Surely, even in the hardest lawyer’s heart (even one of Trump’s) there is just a tiny little space —like maybe a week’s income—for altruism, generosity, self sacrifice and compassion?

  19. bluthner says:

    Surely, even in the hardest lawyer’s heart (even one of Trump’s) there is just a tiny little space —like maybe a week’s income—for altruism, generosity, self sacrifice and compassion?

    Have you met any lawyers? I mean the kind who would have Donald Trump for a client.

    Good news is that by making that admission, the lawyer has invalidated the Porn Star’s contract not to discuss sex with the Hairball. Which she is now ready and able to do- and her agent’s phone is ringing like mad. Every talk show on U.S. TV will want to hear all about it. She can go into all the repulsive details, as far into them as she pleases. And will.

    Unless the Hairball now pays her off even more. Which is always an option I guess. Though he’s going to have to offer a very large sum to top the offers the agent is fielding this morning.

  20. bluthner says:

    Also, that lawyer is digging his own self a tunnel right out of being admitted to the Bar if he ain’t careful.

  21. bluthner says:

    Why O why doesn’t any reporter ever ask these bastards ( I mean the Fla. gov) “So when will be the time?” It’s never the right time, according to them. Ever. And people keep voting for the fuckers. So I guess they must really prefer to see more children dead.

    Or maybe the bastards just don’t want to talk about how much money they have taken from the Russian mob supported NRA?

  22. NatashaFatale says:

    That kid could have been found in any high school in the world. We had one, call him Larry. I watched him get steadily uglier from kindergarten through the 8th grade. Then I went away for a couple of years and when I got back he’d gone from unpleasant to seriously threatening. Finally he whacked another kid in the head with a baseball bat and injured him badly – he was out of school for two or three months. Larry was expelled of course and I never saw him again. We all figured he’d wrecked his life about as well as anyone could. What none of us, especially Larry, knew was that he could have made himself immortal with a shotgun or two. He wouldn’t have got nineteen of course, but two or three should have been easy. It just never occurred to any of us. It wasn’t enough of a temptation.

    Tell me this is a mental health problem and I will impatiently agree with you. The world has been failing its Larrys for as long as they’ve been failing the world. But somehow, to some people (especially governors), this is the only mental health problem worth addressing. I wonder how that happens.

  23. bluthner says:

    The one at my high school he had a slightly different name, but almost exactly the same story.

    But Florida does address the problem of mental health on a grand scale and proactively these days. What they do is find trumped up charges to arrest all the most dysfunctional mentally ill people in the state, and then send them to (private, for-profit, little-to-no-oversight) prisons for the mentally ill. Where they are beaten and raped and abused as badly or worse than the inmates in the big insane asylums that were all cleared shut down in the 70s. They don’t even get their own cells FFS, but live on vast wards full of angry violent madpeople. Cattle on the way to the slaughterhouse have better legal protection than people do once they enter those places, often never to come out again. So easy to get charged with more crimes inside. It’s a beautiful system, works like a dream, and makes a tidy sum for the cronies who win the contracts to build and run those places.

  24. Squirrel says:

    “People don’t know how this happened, who this person is, what motivated them, how did they get ahold of the weapon to carry out this attack,” Rubio said. “I think it’s important to know all of that before you jump to conclusions that there’s a law we could have passed that could have prevented it and there may be but shouldn’t we at least know the facts?”

    “We can always have that debate,” he continued.”But if you’re going to have the debate about this particular incident, you should at least know the facts before you run out and prescribe some law you claim could have prevented it.”

    Well, the facts are quite simple: this ex-pupil legally got hold of an automatic weapon, walked into a school, started shooting and 17 died.

    What is not a fact, yet, is “So many signs that the Florida shooter was mentally disturbed” [Trump], but in a matter of hours, it will be, and this will just be another example of a lone wolf loony, so nothing really to worry about.

    “Guns don’t kill people.
    Lone wolf loonies kill people.
    Lock up loonies, not guns.”

    (Bluthner, your description appals me, and I trained in one of those old Victorian insane asylums in the UK that had secure wards for what were once called ‘the criminally insane’.)

    A clearly exasperated BBC reporter, asked (pointlessly, really) if this would start up a gun control debate again, agreed (“Democrats will suggest it, Republicans will block it”) but added “after Las Vegas, it lasted about a week.”

  25. Squirrel says:

    Why O why doesn’t any reporter ever ask these bastards “So when will be the time?”

    I really don’t know. Maybe they do but the only answer they ever get is ‘not now’. Maybe their problem is they stop asking after the first day.

  26. Squirrel says:

    I think I really mean that after a week, the ‘news’ has used up all the kids’ phone videos, the Instagram or Facebook accounts, the stories of “How I knew X and realised when he was only two what a mass-murderer he was going to be” and film of crying parents and school kids and flowers and teddy bears at funerals.

    So after that, it’s like Oklahoma. There’s no ‘there’ there. No news.

  27. Squirrel says:

    Oh, for fuck’s sake. I am so tired of making sarky jokes that come true. Locking up possible, potential, would-be, may-be lone-wolf loonies is what I’ve just heard the local Sheriff suggesting.

  28. bluthner says:

    Squirrel,

    If you have a strong stomach this pretty well describes the kinds of places where those lone-wolf loonies will be incarcerated in Florida. It’s pretty much beyond appalling.

  29. Squirrel says:

    Well, I do have a strong stomach, or I wouldn’t have survived training where I did. But yes, it is not just appalling, it’s disgusting, it’s depraved.

  30. Meanwhile, in other news, Stormy Daniels has apparently been saving a dress all these years, and plans to have it tested for Trump’s DNA.

    Oh, and Ted Cruz is already complaining that Dems are trying to “politicize” the Florida shooting, and anyway, he says, it’s all Obama’s fault. Brother Ted, of course, has taken more campaign cash from the NRA (in 2016) than any other single member of Congress. Either House. And that’s saying something.
    Gun rights groups contributed almost $6 million to GOP politicians in the 21016 elections cycle. And $106K to Dems.
    A coincidence I’m sure.

  31. NatashaFatale says:

    9k,

    I wonder how many of those Dems weren’t named Joe Manchin? (I really do wonder, but not enough to look it up.)

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