Investing with Bill

Trump has become the greatest bag holder maker that Wall Street has ever seen.

Four weeks ago, investment industry specialists were lining up as CBNC guests to tell the TV audience that market prices were, for the most part, too high, that the recession odds were increasing, and that the Fed could not cut its policy rate because the tariffs were causing inflation to rise.

Trump then raises the tariffs to 145% against China, and China retaliates with 125% tariffs against products made in the US. Effectively, no US-China business can be done, the ports are empty, and Trump brags that the US is not losing billions as a result. The reality is that inflation is pushed higher, the odds of a Fed rate cut drop, the odds of a recession increase, and corporate earnings will fall, pulling share prices lower.

Last week, Trump bragged that the greatest deal in history had been done with the UK. However, the UK-US business accounts for 3% of US international trade, and 40% of that is essential services, so the trade deal is minimal in the big picture, except that there is no trade deal. There is a verbal agreement to try to get a trade deal in the next 90 days. Meanwhile, Trump is helping Wall Street pump the market higher.

Late last week in Geneva, the US-China trade talks ended when the Chinese delegation abruptly walked out because of offensive comments. They returned and agreed that for 90 days, the tariffs would drop from 145-125 to 30-10. In April, 30-10 crashed the market, but today, there were double-digit gains across many stocks listed in NY.

Over many decades, when Wall Street discovered it had pushed market prices higher than the public could pay or was interested in paying, they rolled the market top, unloading stocks on buyers who believed the nonsense their analysts and sycophants were spewing. When they were ready to pull the plug by simply going ‘no bid’, the market crashed. Typically, the take-out specialist was the Federal Reserve System chairman, who Wall Street and financial media painted as evil incarnate. In 1980, the hated Fed chairman had quickly raised interest rates to an unacceptable 20% to kill out-of-control inflation. In 1986-87, the Japanese would buy up all the American real estate until Japan crashed. In 2000-2001, the bad guy was the day trader shops, until the customers realized that 90-95% were losers and had no profits to buy Caribbean private islands. In 2006-2007, it was the CNBC real-estate tour across America selling over-priced condos that would double in price annually due to foreign investors, who were either drug dealers or ghosts.

For more than 60 years, I have watched these cycles repeat, as the public got screwed out of hard-earned wealth. I have watched Humongous Banks & Brokers, market & politically savvy CEOs, and financial TV personalities get richer, and the average person fall further behind.

In recent years, I see a con artist, the greatest in my lifetime, acquire the US presidency surrounded by a cast of Reality TV characters, and with a thick, black Sharpie in hand, sign some of the most ridiculous Executive Orders and make the most deceitful, self-serving statements in American history. Yet, like the notorious John Gotti, Al Capone, and Bonnie and Clyde, this President, based mostly on charisma since it’s not brains or substance, has achieved a level of fascination and even admiration from hundreds of millions worldwide.

My point? Wall Street has its man, Trump, the Bull Trap Commander, the ultimate take-out source in what is sizing up to be the greatest pump-and-dump play in American history. In 2007, I wrote about the CNBC real estate tour that “books will be written,” and they were. This time, I’m telling you that ‘Trump and the Art of the Market Crash’ encyclopedias will be published, and they will be.

“The Bag Holder Maker — Because every bubble needs someone to leave holding nothing.”