The rewards of being the president, these days, are few and far between. Just ask President Trump. The work hours are terrible, the pay is far less than that of a corporate CEO, and you’re endlessly surrounded by shabby politicians.
What’s more, the hand towels aboard Air Force One have the shoddy over washed roughness of those at a turnpike Motel 6. But that’s not the worst of it.
Any and all efforts to remake foreign policy to address the threats of the 21st century – not the 20th century – are undermined by the intelligence community with vehement efficiency. Before you can say Jack Robinson, the leaky conduit to the mainstream media boils up the latest brouhaha to simmering pot.
Last week, for example, Trump had to fire his national security adviser for engaging in statesmanship with the Russians. Then, after that, John McCain – a Class A ignoramus – went and kvetched about Trump’s efforts from Europe. Good grief!
With the exception of being a flatus odor judge, we can’t think of a stinkier job than being the President of the United States. Can you?
There’s little privacy. Newspapers across the planet psychoanalyze your every facial expression; many conclude you’re mentally ill. You can hardly wander the halls of your own home in your bathrobe – during night hours no less – without it making front page news.
Wild And Wacky Markets
Yet, despite all this, has there ever been a President before President Trump who made the job look so doggone fun? In all seriousness, what could be more fun than getting paid to look CNN’s Jim Acosta in the eyes and telling him that CNN will no longer be referred to as “fake news;” but rather, as “very fake news?” As far as we can tell, Trump’s having a rip-roaring good time.
Indeed, publicly roasting the mainstream media – calling them the enemy of the American people – must be one of the few redeeming perks of the job. But, on balance, the advantages of being leader of the free world come up short when compared to nearly all other gigs.
Where markets are concerned, in these early days of the President Trump era, wild and wacky occurrences have become the norm. The Dow, S&P 500, and NASDAQ all set new highs practically every day. In fact, this week the Dow marked its 10th record close in a row.
You have to go back over 30 years to find the last time the DOW pulled off such an achievement. It’s breathtaking. But that’s not the half of it. The Dow jumped and jived in ways that have broken the bounds of what market technicians thought were possible.
On Wednesday, if you weren’t aware, the Dow closed 2,000 points above its 200-day moving average. For perspective, the last time this happened…was never. In other words, in the Dow’s 120-year history this has never, ever happened. What to make of it?
The Dow Speaks: “In Trump We Trust!”
Every suspicion inside of us, from our brain to our gut to our big toe, says stocks should’ve crashed long ago. They are overvalued to the extreme by all valuation measurements.
The S&P 500’s Shiller price-to-earnings ratio was 29.29 at yesterday’s close of market. That’s well above its 16.72 long term average. Likewise, the Buffett indicator – market capitalization to gross national product – ended the day at 130.7 percent. This is considered “significantly overvalued.”
Certainly a crash is eventual, but is it imminent?
Never in our lives can we recall of a market that over appreciated the abilities of one man to the extent of today’s market. The words spoken by the Dow are, “In Trump We Trust!”
Expectations of forthcoming tax cuts, deregulations, and prospects for faster economic growth, including corporate earnings growth, have been priced into the market as if it’s a done deal.
Who knows? Maybe it is a done deal. President Trump has achieved the impossible before. Who are we to say he won’t do it again?
But, on the other hand, what if Trump’s unable to his push tax cuts through Congress? Or what if his efforts to bring jobs back to America start a trade war?
What tune will the Dow be singing then?
We can already envision the teeth gnashing panic that will erupt on Wall Street when investors realize, en masse, that they’ve pushed the market well out over the ledge. Our advice, make an Irish exit from the party now while you still can.
Sincerely,