Several of my friends and former clients have contacted me during the last few days to get my thoughts regarding how they should invest their money right now. The markets hit all time highs a few weeks ago but since then the bottom has fallen out of everything and the coronavirus has changed the world and the economy. I do believe in investing for the long term based on a model but sometimes it is very hard–and perhaps not so smart–not to tweak that allocation due to what is going on in the world.
I think that over the coming days, weeks, or months most Americans will come to realize that Donald Trump is much more like Bernie Madoff than he is like the stable genius that he describes himself to be.
Madoff was on top of the world for a very long time and he had thousands of adoring clients who thought he could do no wrong. There were doubters out there who thought that it was impossible for him to be generating the kinds of returns he did and one guy in particular who wrote an article in Barron’s documenting that Madoff had to be a fraud based on what Madoff himself had actually said. But his fans didn’t want to hear it and didn’t believe it. Until the day that reality and facts imposed their will as they always do. Eventually.
Trump has spent three years trashing everything that Barack Obama had built including policies and programs that were essential to most working Americans. Tens of millions who had never had health care coverage before were able to get it under Obama and for that reason alone Trump ripped it apart. The Iran Deal was working according to Trump’s own experts but he blew it up anyway because it had Obama’s name on it. He has systematically done his best to destroy any and all legislation to protect the environment and government policies that served as safety nets for the most vulnerable among us.
Meanwhile, he claimed that everything he was doing was working for the economy and rich Americans. But he accomplished that by first cutting taxes on the rich and running huge budget deficits during a time of economic prosperity. Now he has badgered the Federal Reserve to lower interest rates to zero in a strong economy which will leave the Fed powerless to help when a real emergency or recession occurs. Similarly he fired our government’s top experts on pandemics two years ago and didn’t replace them and destroyed the entire infrastructure–including the budget of the CDC every year so he could divert more money to his wall that most people oppose and to spend hundreds of millions on his frequent golf trips to his own clubs on which his family makes a huge profit.
But the stock market stayed up and there were no emergencies that revealed that America had become in worse shape than a third world country due to Trump’s ego and lying and incompetence and mismanagement.
Now the bills are coming due and, like Madoff, Trump can no longer pull off his charade. Due to the virus and the resulting economic catastrophe he has revealed that his only concern was not saving American lives but rather to keep his “numbers” from looking bad. He has cheated on the golf course and cheated in business and lied through his teeth his entire life but now he is about to be exposed.
I take no pleasure in that. The fall in the stock market has hurt me financially and I don’t really care about Trump personally one way or the other. But we now are facing a true economic crisis (not of Trump’s making but one that will be far, far more painful because of Trump’s policies of running huge deficits and pushing rates down during the good times to make himself look and feel better) and he has no bullets left to fight it and has no credibility and the dictators and murderers he has sucked up to for years are not going to help him one bit.
The stock market crashed in 1987 but it was due to computer trading and market-related games so it came back within a year. But when the market crashed after 9/11 and again in 2008 it was due to real fundamental reasons that created a real economic and financial crisis. And in those cases the losses were much bigger and the comeback was much, much slower.
Trump’s enablers and apologists have been loyal to a fault and there are tens of millions of them.
I am sad to say that I believe things on a broad range of economic fronts are going to get far, far worse for tens of millions of Americans before they start getting better and, unlike under past presidents who were not so egocentric, greedy and unstable and who kept smart people around them to advise them, our current president is about to preside over something very ugly which he is simply not educationally or temperamentally equipped to handle.
For the last three years, Trump has taken personal credit for the rise in the stock market–even though it went up far less under Trump than it did under Obama.
How many times has he rhetorically asked his carefully-sanitized cult following rally crowds “how is your 401-K doing?”
How many times have you heard him ask that rhetorical question in recent weeks? And he will never ask that question to an adoring crowd again because all of his “questions” are rhetorical and he neither wants nor listens to any of the answers.
Egomaniacal leaders who take credit for the good stuff when people are happy and bask in the glory are not psychologically equipped to take the blame for the bad stuff. They end up firing people around them and blaming the media and all sorts of mythological enemies for their own failings. But Trump is by far the most damaged leader our country has ever had in that regard.
Just last week he assured the country that the 15 cases of coronavirus in our nation were on their way to zero and this would be no big deal. He said today (surrounded by stunned doctors who did not confirm his lies) that every single American who wanted a virus test could get one.
But as is ALWAYS the case with Trump that is clearly not true. My son told me of a friends whose child had returned from Asia suffering from pneumonia and was unable to get that child tested here for the virus. We now rank last in the world in tests given per person because we have a leader who is more worried about his “numbers” than he is about saving lives. He framed concern about this disease as a Democratic and media hoax just a few days ago.
A friend of mine forwarded an article today suggesting that Trump will dump his most loyal defender Mike Pence in favor of Nikki Haley in November. He uses people, commands and gets their loyalty, and then lets them go to jail or throws them out like yesterday’s garbage. And now he has put the completely loyal but unqualified Pence in charge of our virus response team so when things work out badly he can dump Pence instead of taking any blame himself.
In our health care system, which he gutted and decimated in the name of free markets and anti-socialism, there is no readiness whatsoever for whatever is coming. And in our financial markets and economy he wasted all his emergency supplies and ammo throwing parties during the good times and now that we really will need them there is nothing left.
As a diabetic, I always have a bunch of candy or granola bars around in case my blood sugar crashes. Without it I could die as I almost did four months ago. If I eat all that stuff at times that I am just hungry or want something sweet it means that if I really have a problem I won’t have the tools I need to fight it and save my life.
Trump has done that with health care. He has done that with the budget. He has done that with his climate change denial and his pressure on the Fed to cut rates when lower rates will do no good has done that to the economy.
Now the bills are coming due and our nation is facing a real potential catastrophe and huge paradigm shift.
I hope and pray that I am wrong.
In any event, I hope this answers the questions of those who have asked what I thought.