Trump in ABC interview: Wall to be built within months, torture ‘absolutely’ works - MarketWatch (on torture, see Senate Intelligence Committee report on CIA torture-absolutely did not work)
Trump Threatens to Cancel Mexico Leader’s Visit Over Wall - Bloomberg (Mexico's President stated in a video speech once again that Mexico will never pay for the GOP's wall)
Trump responded with a Tweet (foreign policy by Tweet is the New Normal): "If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting." CNN
Mexico's President of course cancelled the meeting with our Dear Leader. Mexican president cancels meeting with Trump - CBS News
In my life, I do not recall a single President, other than Trump, threaten to cancel a foreign leader's visa, unless that leader first agrees to U.S. demands. The GOP applauds this approach to diplomacy. The U.S.A is the Center of the Universe and All Countries Need to Dance to Out Tune or Else.
A negotiation that starts with one side making a non-negotiable demand that is clearly unacceptable to the other is not a negotiation.
Trump is a dogmatic and naturally authoritarian person who will not tolerate any criticism, no matter how inconsequential.
And, without question IMO, he has zero interest in acquiring anything remotely resembling complete and accurate information before forming an opinion. He is the most dangerous person by far ever to be elected President.
The Age of Alternate Facts is now upon us in full bloom, and it does have a Nineteen Eighty-Four feel to it, more than just a little bit.
It is hardly surprising that his chief advisor, Steve Bannon, has told the free press to keep their "mouth shut". Trump Strategist Steve Bannon Says Media Should ‘Keep Its Mouth Shut’ - The New York Times The GOP has been trying to marginalize a free press for several decades as a source of accurate information in order to acquire and maintain power.
Mexico is the second largest importer of U.S. goods. (U.S. Census Bureau Data)
Trump calls U.S.-Mexico trade one-sided — and here’s the reality - MarketWatch
More Mexicans Leaving Than Coming to the U.S. | Pew Research Center (the reverse will occur when U.S. factories are forced to abandon their Mexican factories; a wall will interfere with that migration back to Mexico; and a 2000 mile wall will be breached in numerous places continually)
After Mexico refused to voluntarily pay for the GOP's wall, Trump purportedly endorsed "a 20 percent tax on imports to the United States.
The funds collected "from Mexico" will be used to build the GOP's wall. After that proposal created a firestorm, the White House backtracked a little saying that was one option on the table.
A tariff on goods is not collected from the country of course, but the Trump True Believers will swallow hook, line and sinker any Trump statement that Mexico is paying for the GOP's wall through a tariff, when in reality they are paying for it through higher prices and higher inflation. It is far easier to go through life as an ignorant person, probably more blissful too since doubts never come into being and shades of gray are never seen. Being informed takes time, an open mind, and work.
It does not bother me to pay more for imported goods, but perhaps a few Trump supporters will have a light bulb go off before the next election and will be less than pleased with the reality of who is paying for the wall. The Mexican government will not pay to build the GOP's wall.
Those adverse consequences might even include the loss of their job when Mexico retaliates in kind. There is a rough form of justice that sometimes goes around. The top 1% do not have to worry since massive tax cuts are coming their way, and they certainly paid good money to the GOP for that result. Maybe something will trickle down to the blue collar middle class that voted for the Orange King in droves.
Sure, Mexico's economy will be hurt more in a tariff trade war, given the relative size of the two economies and Mexico's greater dependence on the U.S.
U.S. would lose jobs as well. The hurt will be on both sides.
Mexico would also likely end all cooperation on drug trafficking and counter-terrorism matters. Why bother to help the U.S. on those issues when the U.S. government is openly hostile to Mexico's interests?
More important for the future, China and Russia may quickly develop closer trade ties with Mexico replacing the U.S. as Mexico's largest main trading partner. Chinese leaders are not stupid. They can readily see the openings (more than one) being created by Trump that advance their economic and political interests.
Relations with several European nations will be damaged as well since their manufacturers have located plants in Mexico to serve the entire North America market for their products. Trump IMO is doing whatever he can to break up the EU into pieces, praising BREXIT and criticizing traditional allies that remain in the EU. (the latest: As May heads to U.S., Trump’s guy in Europe expresses deep pessimism - MarketWatch)
The Sun King Louis XIV would be proud of his soulmate the Orange King.
When Obama issued Executive Orders, the republicans were up in arms and many renewed their talk about impeaching him and throwing him into the slammer.
If Hillary had won, the GOP House of Representatives would have started impeachment proceedings as soon as her hand was lifted off the Bible. It is all about maintaining power for economic reasons anyway, democracy just gets in the way of the "right" result. Chants of "lock her up" were even heard at Trump's inaugural when her name was mentioned casually. ‘Lock her up!’ chant by Trump supporters against Clinton - The Washington Post
It is far different when the Orange King issues Executive Orders that requires a great deal of borrowed money to spent. You will not hear a peep from the True Believers about the Executive Order to build a wall along the 1,954 mile border with Mexico. Tens of millions (62.979+M to be precise) are cheering about that EO. It is only EO's issued by a Democrat that are unconstitutional.
A copy of that EO can be found at Quartz.
How exactly is Trump going to build that wall in months? Will Congress be called upon the vote on any legislation and appropriations relating to that construction and the roughly $500M per year maintenance.
Pooh on those elected representatives. The Orange King has spoken. Build that Wall or pay the consequences.
The GOP believes that they have found a way around the Senate Democrats use of a filibuster.
The idea is to fund the construction, which Mexico will later reimburse us for certain according to our Great Leader, under an existing piece of legislation called the Secure Fence Act of 2006: Text - H.R.6061 - 109th Congress (2005-2006): Secure Fence Act of 2006 | Congress.gov | Library of Congress
By 2009, the U.S. built 613 miles of fencing under that Act, but Congress thereafter failed to pass legislation to fund additional construction.
The Secure Fence Act of 2006 would be a Congressional authorization to finish the fence, provided the GOP can find a way to fund that construction without allowing the Senate Democrats to filibuster, but there is a major legal problem in following that path.
That law requires the Department of Homeland Security to find that the construction is "necessary and proper" (clause A).
In a 5 to 4 decision, the Supreme Court held in MICHIGAN v. EPA (J.Scalia) that "necessary and proper" language in the Clear Air Act required that agency to perform a cost/benefit analysis first. It is not enough that the agency find that the action is "necessary".
In a matter of weeks, Trump will find out more about the U.S. legal system and how opposition groups and their competent lawyers can throw monkey wrenches into his plans.
There will be a lawsuit filed that will require a cost/benefit analysis to be performed before any additional fencing is built. The Democrats will select a friendly Federal District Court in a friendly Appellate court district as the GOP has done in the past as well. If the lower courts follow the Michigan decision, and they have no choice in the matter, an injunction would be issued against the government until that study is completed and then there will be court challenges as to its sufficiency.
There is already a large body of evidence that the existing border wall has not been effective. People go under and over it.
Trump's immigration tab: $166 billion - POLITICO
As Donald Trump Calls for Wall on Mexican Border, Smugglers Dig Tunnels - The New York Times
What's More Effective Than a Wall on the Border? | The Report | US News and World Report
Feds Frustrated by Illegal Immigrants Passing Through Holes in New Border Fence | Fox News
Trump’s dubious claim that his border wall would cost $8 billion - The Washington Post (probably the same kind of cost estimate that Bush and Cheney gave us prior to launching the Iraq Invasion).
The cost benefit analysis will not be decided by Trump signing an Executive Order where he orders the wall to be built.
I wonder what Trump would say about a judge that dares to defy him.
We already know that he attacked a judge of Mexican descent when rulings in that Trump University fraud cause did not go his way. And that was a fraud by the way.
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Trump says he is an environmentalist and claims to have won many environmental awards:
Trump’s unsupported claim he has ‘received awards on the environment’ - The Washington Post;
Donald Trump Says He’s “An Environmentalist,” Promptly Announces Plans to Destroy the Environment | Vanity Fair
So far, no one has been able to locate one of those rewards.
Has it occurred to anyone that Trump is unequivocally delusional?
Trump has found several ways to protect the environment from pollution.
He has appointed an anti-EPA person as the EPA's Administrator, gagged the EPA's employees, blocked the EPA's new research efforts, approved two new oil pipelines, and held out a carrot to the U.S. automakers that will allow them to pollute the air more in exchange for more U.S. jobs. We are now officially in an Alternate Universe where Reality Creations or Alternate Facts are the New Normal.
If Trump wants to adopt policies that will create a few more jobs in exchange for substantially more actual and potential pollution, then he needs to at least drop his asinine claim of being an environmentalist and to accept that he is precisely the opposite.
He will not do so since the True Believers will never question any assertion made by the Great Leader. Truth is no longer relevant. Accurate information is per se false when it calls into question reality creations.
In case there are any super models who regularly read this blog, and want to know more about the OLD GEEZER, he used to # play shortstop for the New York Yankees, regularly runs five miles a day in just twenty minutes and performs a warm up exercise each morning of 300 push-ups with each arm to keep his slim and muscular body in top physical condition for a man of his age-just 21 by the way, and has so much hair on the top of his head that he regularly donates some to those less fortunate. Oh, forgot to mention, the OG won the Nobel Prize in Economics for his groundbreaking work titled "Efficient Markets Theory as BullShit: How True Believers and RBs Influence Irrational Pricing in Stock Prices" ( # ALTERNATE FACTS )
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I may to cut back on my Trump, Pseudo Conservative and True Believer comments to avoid getting kneecapped on my way to the mailbox or having the full power of the U.S. government, which is no longer constrained or restrained by facts, unleashed on me. The GOP is not a conservative party.
Trump has used litigation as a means to bully and browbeat others into submission and to avoid paying what he owes to small firms and blue collar workers according to many news reports.
USA TODAY exclusive: Hundreds allege Donald Trump doesn’t pay his bills;
Dozens of lawsuits accuse Trump of not paying his bills, reports claim | Fox News;
Donald Trump Has a History of Not Paying His Bills. That Offers Some Insights Into His Personality;
Donald J. Trump Is A Libel Bully But Also A Libel Loser,
Fearing Trump, Bar Association Stifles Report Calling Him a ‘Libel Bully’ - The New York Times;
How ‘thin-skinned’ Donald Trump uses insults, threats and lawsuits to quiet critics - The Washington Post;
Rule of Trump vs. Rule of Law - The Washington Post;
The Miss USA hopeful sued by Trump: 'There are ways to stand your ground' | US news | The Guardian; Trump used $258,000 from his charity to settle legal problems - The Portland Press Herald;
New York Times responds to Trump's lawsuit threat | PBS NewsHour
Donald Trump says he'll sue sexual misconduct accusers - CNNPolitics.com
Trump voters and supporters have no concerns. I do.
Trump now has the full power of the federal government behind him and sycophants willing to do his bidding without questions or reservations. The reactionary Jeff Sessions as the attorney general does not alleviate my concerns. Did Jeff Sessions forget about how he wanted to execute pot dealers? It is for the best to have a foggy memory about repeatedly calling a black "boy". He memory losses are a matter of convenience.
It is precisely those kind of reports from a free press that need to be stifled, suppressed or at a minimum completely ignored in what is now a Pavlovian response to accurate information by tens of millions.
I was only half serious about being kneecapped by a Trump Acolyte, since I doubt that the True Believers read my blog.
At the White House's website, there are two "We the People" petitions that one or two readers may view as worthwhile signing.
One calls for Trump to release his tax returns in order to comply with the Constitution's Emolument Clause. What is the ‘Emoluments Clause’? Does it apply to President Trump? - The Washington Post
The other calls for Trump to divest his business interests or place them in a blind trust. He will of course ignore both.
He never had any attention to release his tax returns. There are many likely reasons, and none are positive, including what I suspect to be a total lack of charitable giving, the use of offshore accounts, business ties with less than pleasant foreign countries and individuals, and the failure to pay taxes after losing a billion dollars when he actually tried to operate businesses rather than making boatloads of cash licensing his name.
Petition the White House on the Issues that Matter to You | We the People: Your Voice in Our Government
Trump Made No Donations To 9/11 Charities | The Smoking Gun
Donald Trump may have lied about donating to 9/11 charities - NY Daily News
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Trump's Press Secretary Sean Spicer, now called here at HQ the "Alternate Facts Guy", claimed that it was necessary to freeze federal employment due to their the "dramatic expansion in the federal workforce".
That claim was rated "mostly false" by PolitiFact.
During Obama's 8 year administration, the number of federal employees grew from 2.78M to 2.8M or about 1% in 8 years. The use of the word "Dramatic" to describe that increase is a deliberate lie.
The Trump administration just told a whopper about the size of the federal workforce - The Washington Post
It is probably safe to assume that the Alternate Facts Guy is lying whenever his mouth appears to be moving, unless proven otherwise by real facts as opposed to his abundant reality creations told with an earnest face. The press should just laugh at him. Better to laugh than cry as my grandma use to say.
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Reduction in Stock Allocation Is Now In Progress
I do not believe the stock market is correctly assessing the risks of a Trump presidency including the repercussions of his protectionist policies. From a geopolitical standpoint, he is providing important openings for China and Russia in both the Asia-Pacific region and in Mexico and possibly other Latin American countries as well who will react negatively when the U.S. wields its Big Stick to beat one or more of them into submission.
I am starting to sell into the current parabolic stock rally that is based on a belief, expressed with 100% certainty, that Trump's policies will in fact turbocharge the U.S. economy for many years to come.
As I noted earlier, I would lighten up on my stock allocations based on current valuations and my capital preservation focus anyway.
I will invariably sell into parabolic price spikes anyway.
The market has been good to me since March 2009. I have no financial need to push the envelope further.
As in 2007, most of the stock allocation reduction will be done first in U.S. stock funds.
The stock fund slash actually started in late 2006 and continued for about a year. I generally take my time but may be quicker than usual now.
I will not sell any shares in T. Rowe Price stock funds as previously discussed which by itself maintains a meaningful allocation to U.S. stocks.
I will continue to maintain meaningful stock exposure in Vanguard mutual funds, but at a significantly lower level than now.
The largest existing fund position is over $50K in the Vanguard Equity Income Fund-Admiral Class (VEIRX). I bought that position for my mother back in the early 1990s and I inherited it when she passed away in December 2015.
The cost basis was stepped up to the price as of her DOD, so all of the profit from the original purchases will not be taxed up to that stepped up cost basis when I sell shares.
As noted in previous comments, I have already pared the position by $9K late last year and will continue paring in $3K increments. I will stop paring when the market goes down meaningfully. A bear market decline (> 20%) that takes the S & P 500 below 2000 will probably result in a return to dividend reinvestment and small adds spaced in time.
VEIRX Vanguard Equity-Income Admiral Fund VEIRX (rated 5 stars by Morningstar).
I may eliminate my vintage position in the Vanguard STAR (VGSTX) due to valuation and risk concerns involving both stocks and bonds. So far, I have only sold a few shares purchased with reinvested dividends. I initiated a position in that fund in 2009, along with several others, when I rotated out of cash and short term bonds into stocks and longer term bonds. 2. Pared Highest Cost Vanguard Star Fund shares Bought With DIVIDENDS: Update For Portfolio Management And Positioning As Of 10/24/15 - South Gent | Seeking Alpha
I will not be including snapshots of the profits here since that would be misleading given the stepped-up cost basis. I will simply note that I have pared again by $3K.
I am turning off the reinvestment option in all Vanguard stocks funds as I have already done with the T. Rowe Price funds.
Stock CEFs will probably be the first funds that will be jettisoned.
I will discuss some of those stock fund dispositions in the next blog. I mentioned in the last blog paring ADX.
When I start this paring process, the first to go will be recently bought fund shares, selling at whatever profit is then available. Those shares were bought deep into a long bull market cycle, the second longest in history without a 20+% decline.
11/16/16 Article: Why the 2,826-Day-Old Bull Market Could Be a Headache for Trump - Bloomberg (add more days to date)
I believe the longest run ever without a 20% correction started after the 1987 crash and ended with the 1990 bear market.
It has also been a long time by historical standards since the last recession. nber.org/cycles The last one officially ended in June 2009. It is possible that the slower than normal recovery from a recession has prolonged the business cycle. The slower recovery was expected by me and others due to the conditions that caused the last downturn compared to a garden variety U.S. recession where housing and automobile sales lead an economic burst out of a relatively short term slowdown that lacks far reaching implications. Recoveries from financial meltdowns take much longer. Recovery from Financial Crises: Evidence from 100 Episodes (Reinhart and Rogoff/Harvard University)
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Reduction of Potentially Long Duration Bond and Preferred Stocks Is In Progress But Slowing to A Trickle For the Time Being
Inflationary pressures are already building in the economy. I do believe that Trump and the republican Congress will add to those pressures through their trade policies, tax cuts and increases in federal spending. The Border Tax would add to inflationary pressures as would more specifically targeted tariffs for countries currently paying zero or close to it.
Until there is more clarity, I want to heavily weight my bond allocation in short term bonds and CDs.
An interest rate spike, greater than currently anticipated, in the short and intermediate term maturities would be an important consideration for buying more of the same as those short term instruments mature and pay off. That likelihood would increase with a dicey Big Picture environment where I view the risk of other asset classes to outweigh the potential rewards taking into account my capital preservation goal with income being the secondary objective.
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Vanguard Accounts: Treasury Bills/Low Yielding Short Term Bonds vs. Vanguard Prime Money Market:
The Vanguard Prime Money Market fund is back up to a .79% yield as of 1/26/17: Vanguard - Vanguard Prime Money Market Fund The yield will likely go over 1% when the FED raises the FF rate by .25%, probably in the summer IMO.
In my taxable account, I bought $5K in treasury bills at auction that will mature soon. I will not roll them over. The MM fund will provide me with a higher short term yield.
I also see no reason to buy short term corporate bonds in my Vanguard accounts for the same reason.
Those purchases are concentrated in two taxable accounts where the brokerage companies pay next to nothing for idle cash: Schwab and Fidelity.
Fidelity money market funds have always had higher expense ratios than Vanguard. The Vanguard Prime has a .16% expense ratio while the Fidelity Government MM Fund, one of the two funds now available to individual customers, has a .42% expense ratio and invests in lower yielding securities. The result is an acceptable in the current environment .17% yield. SPAXX - Fidelity ® Government Money Market Fund | Fidelity Investments
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1. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 1 Kraft Heinz Food 2% Senior Unsecured Bond Maturing on 7/2/18:
Vanguard Roth IRA Account: Commission $2 Per Bond
FINRA Page: Bond Detail (prospectus linked at Finra page)
YTM at Total Cost (100.4) = 1.716%
At least the income is tax free when paid into the ROTH IRA.
Moody's Rating
Baa3 (04/25/2016)
Standard & Poor's Rating
BBB- (06/16/2015)
Fitch Rating
BBB- (09/27/2016)
Moody's Assigns Baa3 rating (5/10/16)
Fitch May 2016 Report
S&P Assigns 'BBB-'
Kraft Heinz SEC Filings
B. Bought 2 WFC 1.4% CDs (monthly interest payments) Maturing on 8/1/18.
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