Hurricane Bearing Down on the Casino
Following the Comey firing, Washington will be swamped by investigations of Russia-gate and the reasons for Trump’s action. Washington will be embroiled in bitter partisan warfare and the splintering of the GOP between its populist and establishment wings.
Stockman discusses the Obamacare repeal and replace plan; a 2018 budget resolution; Wall Street, which is in the business of justifying an ever-rising market; the Fed, on a tightening cycle for the worst of all reasons; China on the brink of a massive credit implosion; and market volatility that is at a 24-year low, despite the unprecedented convergence of political, fiscal and monetary policy risk—to say nothing of foreign policy hot spots from Ukraine to Syria and the Korean peninsula. The casino, Stockman writes, is completely unhinged.
Other than the five FAANG stocks (Facebook, Amazon, Apple, Netflix and Google), the market has been silently collapsing since March 1st. Since then, the FAANGS have gained $260 billion in value, while the other 495 companies in the S&P 500 have lost an identical amount.
There is a radical narrowing of the market, and it is also evidence that the eye of a financial hurricane now sits atop Wall Street.
When the market narrows to a handful of names, it’s all over but the shouting. As in the case of the Nifty Fifty back in the early 1970s, a crash is just around the corner.
In short, these five giant companies essentially account for the last spasm of a monumental financial bubble that has been building for nearly three decades. Get out while you still can!