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Sunday, 21 January 2018

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Understanding Politics & What Mkt "Tells" It Might Offer

Welcome! Forums The Big Picture Understanding Politics & What Mkt "Tells" It Might Offer

This topic contains 1 reply, has 2 voices, and was last updated by  HENSE E. 4 years, 10 months ago.

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  • #17642

    HENSE E.
    Participant

    It is actually possible to understand how politics works, and when one does, there are things it can tell us about the future. I worked in State government for 10 years or more, and I’ve been a student of the “political process” since I was 7 years old and, with my father’s encouragement, posed as a “Walking Billboard” for Richard Nixon’s 1968 Presidential campaign. A 1ST RULE of political analysis: Being insecure egotists at heart, a politician’s #1 goal is to protect and promote himself/herself. When pushed to a corner, when forced to make a choice, their own self-interest always wins. Or course, if they can simultaneously promote their ideological goals and denigrate those of their opponents, then so much the better, however, their primary foucs is self-aggrandizement. A 2ND RELATED RULE: Politicians never say what they mean, but they DO SAY SOMETHING. In other words, almost everything they say IS FOR A REASON, with that reason almost always being to directly/indirectly foster their own “brand”, their image, their popularity, and hence, their power. In politics, orchestration is the constant goal and the paramount skill. Hence, to glean anything actionable from their typical pronouncement, one must learn to read ABOVE, BELOW, AROUND, INSIDE, AND BETWEEN the lines of what they say.

    These basic rules of political analysis established: Let’s consider the current and well-worn debate over the “Sequester”. Obama has campaigned across the land against it, even though it was his idea in the 1st place. He’s blamed it on Republicans; he’s warned about its so-called disasterous effects, and he claims that–with just a few more tax hikes, its ill-effects will magically evaporate. Now, we all know that he’s campaigning against his own idea, that he means virutally none of what he’s saying, and that he’s proposing a solution he knows will never be accepted by House Republicans, who just caved and gave Obama a huge tax increase on 97% of Americans in the last round of budget negotiations. So, why did he just waste millions of dollars and hundreds of hours on trips across the land to make ‘meaningless’ campaign speeches that he knew would not alter the outcome of the sequester debate? Well, in light of the 1ST RULE set out above, it’s actually almost EZ to understand the political WHY of his words/actions. The answer is that his speeches had nothing to do with the sequster issue . . . and everything to do with self-protection.

    Dick Morris, who is neither Republican nor Democrat, understands politicians and why they do what they do. After all, he has and does advise them to do it. (Morris is the guy who helped Bill Clinton make fools of the Repubs and maintain power for 8 years, despite a previously unseen series of scandals.) In the video linked below, Morris explains the political ‘rationale” behind Obama’s approach to the sequester issue. Pay attention to what Dick says about the economy b/c that is the part that affects us as investors.

    http://www.dickmorris.com/obamas-secret-sequester-strategy-dick-morris-tv-lunch-alert/

    Now, having viewed the video, imagine this: Obama first meets with his own economic advisers, who explain that the world and US economies are slowing, AND, b/c of the huge tax increase that Obama just championed into law and the sequester that was his brainchild, the economy will slow even more. After all, the economy already contracted in Q4/2012; and there’s no economic reason it should suddently strengthen (outside what Bernanke is doing, and even Bernanke admits he can’t do it all by himself). Then, after Obama gets the bad news from his Econ unit, Obama meets with his political advisers. These guys aren’t idiots: They know the facts before them. Their job is to “overcome” said facts, to get out ahead of them, to transfer blame for them onto someone other than Obama. This team of advisers is equivalent to a modern day jury trial team of lawyers, jury consultants, and PR experts.

    Conclusion: Thoroughly analyze Obama’s reaction to the sequester issue, and learn that people inside our own govt don’t like what they see coming down the economic tracks: The “Blindside Rescession” to which Chris has often referred, the collapsing corporate profit margin phenom that Henry Blodgett just described a few moments ago on CNBC.

    Facts are as stubborn as ever, and just b/c a politician refuses to admit them in public doesn’t mean they aren’t still there. In fact, a politico’s actions (versus his/her words), can often tell us exactly what these facts are.

    What draws me to the BPFO approach is that it is FACT-BASED; yet, maintains an appropriate humility about its knowledge of the facts. Pride precedes most falls . . . including falls of 5,000 points on the DOW.

    Hense II

    #18038

    CLIVE R.
    Participant

    Only 5000 points on the DOW? An optimist for sure. Perhaps you mean the DOW will be 5000. J

    I like your observations.

    When I was at university, I learned some engineering, some economics of the Samuelson sort, some Chemistry, basic stuff. It helps a bit in knowing what will happen when pulling certain levers and mixing smelly ingredients, but I learned the most in the “classics”. For two years, my professor was Dr. Michael Arnheim, Cambridge don and only a few years older than I was then. He taught me, amongst others in class, how to read Cicero”s Caesarian orations, the political speeches of the great general Julius Caesar … great in that he conquered other tribes, aggrandized himself, stole their wealth and enslaved their people. We learned that what was said was not necessarily what we heard, and certainly not what he meant, at least from a literal reading. Knowing more about the context, who he was talking to, when and why he said it revealed more complex messages. From thinking that Caesar was a great leader, we started to think he was a great self centered manipulator who destroyed many peoples lives for his own glory. Brutus and the boys did the right thing. Many “leaders” were not stopped soon enough … Khan, Napoleon, Hitler and many current examples come to mind.

    Dr. Arnheim became a friend and visits me for a few days a year. He practices as a barrister in London and recently wrote a Dummies book on the US Constitution. It is certainly not for dummies. It is a funny and clear explanation of concepts such as the Second Amendment, a subject he will talk about to a group when he visits me this month.

    I still call him first when I need clarification of any political speech or situation. He continues to reveal things I never think of. He also has some choice words for politicos and bankers who manipulate our economies, and some very nasty words for the Supreme court Justices who manipulate our laws (lives).

    Thank you Hense for reminding us that we need to watch what our leaders do, not listen to what they say. President Obama and Chairman Bernanke are both smart men, probably better informed than we are, even with Bill’s, Chris”s and Rob’s help. They know what we know and more. They have their positions to uphold, legacy businesses to support (pay off), things that have little to do with doing the right thing for the common good of the nation. Avoiding ruin in their world is not easy.

    These are the ingredients that make investing so interesting. The Family Office long term view which includes our behavior patterns and the values we pass on to our descendants about how we balance immutable natural forces against the short term manipulations of our “leaders” is a delicate business. Surviving our leaders plans is key. The unified manipulations of the world’s central bankers is impressive, backed by politicians and the propaganda of Wolf, Friedman (T.L., not Milton). Market reactions are remarkable. I believe that natural forces of a world wide market are still more powerful than the manipulations of the Davos dilettantes. Sudden downdrafts are really dangerous for balloons and bubbles. The banks have been making some money on US fossil fuels, an explosive bubble, but the rising cost of energy is likely to be a game changer. Fricking fracking is a short term scam, good up front for a while and economically disastrous over time, like within this year.

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