Financial Markets – Top Of The Heckling Order by Danielle DiMartino Booth, Money Strong
The Pecking Order is a natural social order process which culminates in the most pompous poultry present ascending to King Rooster and Queen Hen. The resulting social dynamic dictates all manner of chicken activity from the mundane of feeding, drinking, dust-bathing and egg laying to the supreme of mating and belting out that first crow at the crack of dawn. But it’s not all glory for the alpha roosters who have to peck their way to the top. Granted, they get their pick of the cutest chicks. But they must also risk their own lives, safeguarding the flock from predators.
Prematurely or not, the financial markets appeared to be celebrating the writing on the wall that the Heckling Order within the Republican party has been ostensibly decided. Before Super Tuesday, the equities markets were likely reflecting the uncertainty induced by one of the most embarrassing sideshows in U.S. history.
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The national polls suggest stocks’ sigh of relief in Tuesday trading stems from indications that a known known will be elected on November the 3rd. That said, lead though she may, it’s just by a point or two here and there. Investors would thus be wise to stop and consider the ramifications of the unexpected.
One thing is for certain. A huge number of voters in this country are clearly clamoring for a radical change in their leadership. We as a country have never been so desperately in need of a true leader to confront the country’s formidable challenges. If only there was a saint willing to run for office.
Regardless of your religious leanings, you’ll agree that history regards Jesus Christ as one of the greatest leaders the world has ever known. The secret to His legacy comes down to a quote attributed to the Man himself: “The one who leads should become like the one who serves.” In other words, humility.
How disconcerting it is that one of the frontrunners for the current presidential election cycle is so egotistical and arrogant that to truly serve would be far beneath him. Leave politics out of it for a moment. (That’s certainly his stated intent; he informed the accommodating press corps recently that Americans don’t care about policy.) Let’s focus purely on what’s at stake considering how crucial it is that this country elects a leader who serves its people and their interests.
To borrow a label aptly applied by the Financial Times’ Martin Wolf, who is gifted with being above the need to employ obscenities to make his point, Trump is a “narcissistic bully.” Before considering the merits of the label, which he proudly wears, consider the label itself vis-a-vis the idea of a servant. Did the words “diametrically opposite” come to mind?
Still, is Mr. Wolf being fair? Narcissists are defined as those having excessive interest in themselves and their outward appearance. Any judge would reward Mr. Wolf the right to use the first half of the description, “narcissistic,” based on prima facie evidence.
But what about the ‘bully’ part? Forget the vicious vulgarities, of which he seemingly has an endless supply and for which we the people have increasingly more tolerance. Instead, consider the backdrop of an important societal movement sweeping the nation’s schools. Bullying incidents had reached epidemic proportions until determined parents joined forces to combat the blight. They started by educating their own children at home and then campaigned to extend the lessons to every classroom within their reach. Today, even though bullying is still with us, hopefully the tide has begun to turn. We now have a handful of dedicated nationwide nonprofits and even a government organization dedicated to eradicating the scourge of bullying.
And yet somehow, a businessman renowned for his questionable practices and brutish ways has risen to quite the elevated stature. According to court records, Trump and his business partners looked the other way as hundreds of illegal, vulnerable Polish immigrants were strong-armed into demolishing a building for a wage of less than the legal minimum, with the help of the mob no less. Trump and his partners eventually paid a settlement, the details of which have been under court-ordered seal since the turn of our present century.
Should we empathize with the persecuted Poles? Yours truly is the product of Italian immigrants who proudly adopted this country as their own in 1923 and lived to tell future generations of their realized American dream. It should come as no surprise that Trump’s suggestion that we should renounce our immigrant roots is offensive to the core.
But it wasn’t just those Ellis Island upstarts. We are quite literally a nation founded by newcomers to our shores. Abraham Lincoln, one of history’s most revered Republicans, would no doubt have taken umbrage as well to the idea that our ports are closed to those who want to embrace our way of life. Captain Abraham Lincoln, the president’s grandfather, was not only a military captain during the American Revolution; he descended from Samuel Lincoln, who immigrated here from Hingham, Norfolk, England in 1637.
Compounding the Republican frontrunner’s insults are the slurs hurled in the direction of those seeking asylum and religious freedom from our sworn enemies. What’s next? A seawall ending in long stretches of barbed wire closing off access to the entire country? As if a kicker were needed, Trump vows to push through tariffs that would make both Smoot and Hawley blush.
The irony is fully two-thirds of polled Republicans say they cannot stomach voting for Trump and his closed-door policies. The implication: a huge part of the populace will be angry and rudderless, though there’s plenty of blame to go around for failing to take the rising candidate seriously to begin with.
The financial markets may have seen reason to rally hard on Tuesday. Even so, the primary season has been highly disruptive, showcasing how ignorance and anger can combine to intoxicate and toxify sufficient masses who feel their country has long since left them behind. The sad thing is so many are in their rights in feeling abandoned. But that doesn’t mean someone who goes by highly-quotable nicknames is their savior.
It will come as a rude awakening to those blindly enraptured with promises “The Donald” can never keep that the biggest victim of this campaign will inevitably be the economy. The latest data suggest uncertainty is infecting the collective mindset anew. The recent University of Michigan (UMich) survey data show what AIG calls “U.S. households’ Fear of the Unknown” jumping to 20 percent of respondents in February, a level associated with recession or periods leading up to recession.
The nebulous ‘unknown’ is derived from a question the UMich asks: “During the last few months, have you heard of any favorable or unfavorable changes in business conditions?” It goes on to ask what in particular they had heard – whether it pertained to Government, Unemployment, Lower consumer demand, Higher prices, Tighter credit, Energy crisis, Stock Market or Trade deficit. The ninth choice, however, gets checked when households just can’t pigeonhole their worries into one of those set categories, hence the fear of the “unknown.”
“We don’t go looking for bad news; this time it has found us,” Jonathan Basile, AIG’s Head of Business Cycle Research noted in a recent report. “Most of the time consumer fear of the unknown is noise. But when it spikes, it can send a signal about the business cycle.”
Can anyone imagine the animus that will be ignited in Washington if either of the two presumptive candidates prevail? That is precisely what has the rest of the world so very alarmed to say nothing of what’s behind this country’s citizens’ uneasiness.
Perhaps the greatest travesty is so many Americans yearn for this country to be a place they can economically learn a trade, skill or profession and in turn build businesses of their own. Common sense tells them they are driving down highways and over bridges that are decrepit and unsafe. But these are mammoth challenges that must be overcome by the politicians they elect. Unfortunately, all they seem to be getting is insipient infighting that gives new meaning to the word gridlock.
And so, the onus falls back on the monetary powers to solve all problems. Like modern day Marie Antoinettes, the central bankers instruct the masses to buy on credit at prices they can ill afford. “Let them buy cars!” they declare, hoping consumption carries yet another day to offset businesses’ refusal to invest in the future. The risk is that capitalism’s natural pecking order disappears into a chasm of paralysis that sacrifices an entire generation of innovation.
Financial Markets – Top of the Heckling Order