Introducing Double Plus, by Kenneth Rapoza
Pilot episode: Trump's censure by the Party of Davos, and Ken sees a market peak. Meanwhile, Smartypants is bantering on about the isolation of the plebs in the Faculty Lounge.
Dear readers and perhaps new friends,
Some of you know me. Some of you don’t. I know I’m not like the other media stars who have left to Substack. I’m no Matt Taibbi or Glenn Greenwald, so allow me an introduction. I wrote for Salon.com when Greenwald was there. It was their heyday.
For those who saw the China angle and the anti-Davos Man spin on the Substack website, this is me: a 20+ year veteran of the mainstream press. I started out as an intern for NPR and The Atlantic Monthly, where, for the first time in my life, I felt like a true Les Mis, a deplorable; a minority. In fact, it was just me and an Indian guy that didn’t look the part. (I didn’t realize I was oppressed.)
I was a foreign corrie as a freelancer in Brazil for The Boston Globe and later The Washington Times. Veja magazine did a story about me and five other foreign reporters once. Gisele Bundchen was on the cover. That’s my four degrees of separation from Tom Brady.
I’ve been censored many times in my career, and harassed, and sued by London and DC StratCom firms representing Russians, Ukrainians and Moldovans. The Podesta Group threatened to sue me. It was terrifying. They’ve gone out of business. Revenge is sweet.
I’ve been written about (in a good way) by the late Alexander Cockburn in The Nation for my Globe reporting on the build-up to the Iraq War. That year 2001, I went from a 90s idealist from Antioch College, to a total skeptic. It’s all political theater, I have learned. Noam Chomsky’s “Manufacturing Consent” and “Necessary Illusions” are my media bibles.
I am a proud WSJ alum from Sao Paulo and moved back to the U.S. in 2010. I am a disgruntled Petrobras shareholder, robbed of money set aside for my child’s college education by a corrupt Brazilian government (and collapsing oil prices).
I was a full-timer at Forbes since 2011 until the pandemic cut their ad spend and they basically cut me. I now work for a DC think tank, investigating China. But I do this separately from all of those entities.
I had my Series 7 and Series 66 FINRA licenses with Ameriprise Financial. I know markets. I am here to tell you what I, and my colleagues and friends on the Street, are thinking about big picture politics and its impact on our investments. We are raw and unedited.
Thanks for reading.
The Coming Censure of Trump
President Trump will be gone on Wednesday, but don’t ye rest, dear Snowflakes of the Socials! The outrage will go on. The sequels of the Trump drama series are about to be released. We have gone from the Make America Great Again season to the Make the Media Love the White House Again season.
Here’s one episode that I think you’ll love!
Episode 1: “Trump’s Censure”
Senate Majority Leader Mitch McConnell could have taken up the House impeachment issue right away. And with a majority of Republicans in the Senate, he could have put it to bed today; another loss for the Democrats. There would be no indictment. Instead, Mitch said he will pass it on to the next Senate after Inauguration Day on Wednesday.
That’s when Chuck Schumer is in charge.
Unless President Biden says “enough is enough”, then Schumer will move on the House indictment against Trump for “inciting a riot/insurrection” on January 6, 2020. Censure does not need a two-thirds vote like indictment and removal of a president. Instead, all ‘Cryin’ Chuck’ needs is a simple majority for censuring someone, which he will surely get. Trump will be censured for having “supported” and “promoted” an “insurrection”.
What does it mean?
For sure, it means Trump is no longer welcome in Washington. If he was feeling wily in four years, and for some odd reason he and Melania were missing the White House, he could make a comeback. If the Senate moves to censure him, Trump is finished forever, politically. He might not even be a Republican King Maker after that.
Once Trump is censured, the Democrats will probably move on censuring all of the House Republicans that voted against the Electoral College vote (of which there are dozens) and a few key Senators, including GOP stars Ted Cruz and Josh Hawley.
All the Democrats need is a simple majority to do this. They have it. This would mean Cruz and Hawley and many newly elected Republicans in the House would not be allowed to run for office again. It would be the equivalent of a virtual guillotine.
A friend tells me:
“Two hundred years ago, a beaten Trump might have been exiled to some remote island in the Atlantic to be slowly poisoned with arsenic until his last breath. Now, his ability to wage political war may be at an end by a procedural vote in Congress.”
Sounds right.
Trump leaves a lot of damage in his exit all because of January 6. The message is clear to me: the GOP has been a party long captured by major corporate interests – mainly Wall Street, Big Pharma, Big Oil and the Department of Defense/Langley. Wall Street has since switched teams. But regardless, the people who have controlled the Republican Party since the 1980s lost it to Trump. They want the keys to their Country Club back. With the help of the Democrats, they will get them, unless elections matter in 2022 and Trump nationalists take over the House.
The Wall Street Watercooler:
Here’s Where The Market Has Peaked.
Have we hit the market peak now that we know the “dark winter” is coming and Biden is POTUS with angry Democrats running things? Let’s not forget who donated to Biden’s campaign: Wall Street and K Street. They don’t want the market to tank.
Wall Street is waiting for more stimulus. It’s the only thing keeping it going, along with low interest rates. We suspect Biden will pass a stimulus plan within his first 100 days, but if the winter of 2021 looks like the winter of 2020, expect more lockdowns, bad for small and mid-cap stocks and the economy overall. I’d look to see if stimulus includes an infrastructure bill that favors Buy American and pick the companies that can benefit, depending on what infrastructure we are talking about.
The coming Trump censure could be a long-term negative for political risk. A censure of Trump leads to a censure of the Republicans that voted against certifying the Electoral College votes. People will be angry. What will happen then? I don’t know. But you know the market hates uncertainty. A big dip would be a buying opportunity only if it comes ahead of a stimulus announcement.
The move by Big Tech to put on notice half the electorate for “wrong think” will shrink the potential pool of Twitter, Facebook and Google users. Hell, even my daughters are now officially off Whatsapp. My oldest has deleted her Instagram.
I wouldn’t touch those companies. I don’t invest in them not because of their price, but because I don’t like what they stand for and I have been weening myself of these tech giants, including Amazon.
There are better opportunities out there. I would take Mercado Libre over Amazon any day. Daddy Warbucks doesn’t need any more money. I know he’s not getting any of mine.
We may not have hit peak market, but I reckon we have hit peak social media. Punish the woke corporate censors and cash out.
The signaling from Biden is all about lowering expectations. He has been repeating the message that the "worst is yet to come" from the pandemic. Apparently he “knows something” we don’t know. (What page are we on in Event 201 pandemic disaster prep?)
On economic policy, Biden is pushing for a national $15 an hour minimum wage which the market will hate. So will Republicans. Not one state currently has a $15 an hour minimum. Around 28 states have wages below $10 per hour.
If you read the work of policy wonk Alan Reynolds, it's clear whenever the national minimum wage is raised, the poorest become poorer because hours are cut, and the time and a half weekend and holiday hours are cut.
In the U.S., I am sticking with my Post-Covid Portfolio of Six Flags, Cheesecake Factory and Southwest Airlines. I am up over 35% in each. If they fall in a Biden bummer, I’ll buy more because I know they will do well once the pandemic is over and I feel okay holding these for a couple of years if I get the timing wrong.
To any Trump supporters reading this – don’t believe his rhetoric that Biden will ruin the market. The market loves China-style stimulus. I hear Biden’s got a crush on China. But that could be fake news…
Either way, China-style stimulus is a tailwind for the market. Forget about it being “priced in”. There is no way to price anything anymore. If stimulus is announced, the market rockets.
On Isolation in the General Population, by Smartypants.
“Most of the general population recognizes that the organized institutions of the U.S. do not represent them. They do not reflect their concerns and interests. They do not feel that they participate meaningfully in the political system. They do not feel that the media are telling them the truth or even share their concerns. So they go outside of these organized institutions, rejecting the establishment if you will, in order to act out their grievances. The political system increasingly functions without public input. Not only do people not ratify any decisions in Washington, meaning they have two positions presented to them to ratify and they vote one of the two positions, but their ratifying of those two positions is highly limited. A real form of Democracy would be when the people vote and are part of the decision-making process afterward. We are far from that. We now have stage-managed elections. We have political dramas with political narratives written like movie screenplays. The keen observer can see these plot twists coming. These political dramas set the stage for profoundly contentious elections and national politics that divide the country along party lines, while a tiny group of corporations runs the tables on everyone.”
Closing Credits:
Smooth Operator
He's laughing with another girl / And playing with another heart / Placing high stakes, making hearts ache / He's loved in seven languages /
Tchau, queridos. Until next time.