Tag: Donald Trump

Tale of ‘The Tape’

The markets referred to daily in the financial press are composed of Wall Street trading on regulated stock exchanges, less formal Over the Counter (NASDAQ) markets, organized commodity exchanges worldwide, and specialized trading in major financial centers across the globe.

Old timers often refer to price reporting as “the tape”, a reference to a 19th century telegraphic system that reported individual security transactions. By extension, one “fighting the tape” meant going against factual trends (i.e., the markets are poised to remain positive) because he presumes to be better informed. This also would be known as a contrarian.

In a vast industrial sector, price levels are indicative of anticipated corporate performance. Recent markets that have risen to record breaking levels have given huge thumbs up to GOP economics and the leadership of President Donald J. Trump.

High speed electronic data transfers have sent Edison’s ticker tape to museums. Modern trading desks are where authority to assume billions of dollars of risk is granted to alert young people who may not have reached their 30th birthdays.

Many believe the free market performance in a competitive marketplace driven by perfect competition is the most reliable indicator of future pricing of equities and commodities. Perfect competition is defined as the situation prevailing in a market in which buyers and sellers are so numerous and well informed that all elements of monopoly are absent, and the market price of a commodity is beyond the control of any single individual buyer or seller. It is a classical economic theory.

The world’s trading in wheat, crude oil, strategic metals and international markets for a nation’s currency, provide spot pricing (today) or a fixed future price defined by delivery at distant point of time. A user of cotton, for example, will set his raw material cost by purchasing a given amount of the commodity at a fixed price for future delivery. Sellers of cotton, farmers for example, eliminate market risk by selling their anticipated production for future delivery.

There are many investors who enter the market as speculators and their risk is their own capital based on an individual analysis of market conditions. Publicly traded stocks anticipate corporate earnings and dividends and a rising equity price indicates belief in an enterprise’s growth over time. Collective wisdom, many economists believe, has a superior predictive capability.

So, today’s “tape” is saying that tax reductions, less regulation and decentralization of decision making is good for most Americans. Anticipated growth seems to be a more laudable goal than redistribution, espoused by the left.

Let’s turn to the anti-Trump political climate that emanates from believers in progressivism. They believe so strongly in government control they are unrealistic in their analysis of public data. They are fighting the tape.

The Trump assertive leadership, while something new to Washington, has found favor among Americans. Wall Street performance says so and all the tales of gloom and doom from the disciples of the FDR New Deal and the Johnson Great Society are clearly backward looking using faulty economic logic. Similarly flawed logic was expressed, ahead of Trump’s election, by Pulitzer Prize-winning New York Times columnist Paul Krugman, who predicted that a Trump victory would trigger an economic collapse from which the United States might never recover.

Current Democrat party leadership has adopted a policy they have called “The Resistance.” This is proving to be not very useful thinking to combat international threats stirring in North Korea and Iran to world peace and prosperity. It is a policy risk that is devoid of constructive thinking at a time when it may be clear to voters that policy changes are urgently needed.

The party of Sen. Chuck Schumer (D-NY), California Gov. Jerry Brown, and Rep. Nancy Pelosi (D-CA) is not the party of FDR, Kennedy, or even Barack Obama. It offers no ideas about production and preaches consumption with fairness predicated on a system that buries individual responsibility.

American success is due to creative individuals who shoulder responsibility, show up on time and take pride in a job well done. Collective performance leads to collective prosperity. Yet the Democrat Party continues fighting the tape.

– Walter B. Bull, Jr.
 

The 2018 challenge

It is no secret that North Carolina will be targeted by outside Democrat funding in next year’s mid-term elections. In their quest to retake a majority in the U.S. House and state General Assembly, Democrats need to shake up North Carolina. But there also is a not-so-well-kept secret that will confound this effort. Like many thriving states governed by Republican-controlled legislatures, North Carolina’s economic engine is roaring and it’s prospects for growth are soaring.

In 2011, when Republicans won their General Assembly majority, North Carolina’s unemployment rate exceeded 10 percent, House Speaker Tim Moore recalled during a recent address before the Moore County Republican Men’s Club in Pinehurst. Moore’s message certainly resonates with Republicans, who have seen that rate plunge to around four percent, but it’s difficult to comprehend how Democrats will be able to disparage this and other economic data points on the 2018 election stump. But disparage they will.

Listening to Moore’s summation of the state’s dynamic economy, we could not help feeling a tinge of melancholy as well. This same story of prosperity and growth was making headlines in 2016 but Republicans and, specifically, Governor Pat McCrory’s re-election campaign, managed to underplay it. This is mind boggling in retrospect.

Let’s not repeat this mistake during the 2018 campaign. If the campaign narrative is about the economy, N.C. Republicans should continue to be well represented in Raleigh and Washington. But messaging discipline and clarity can’t be taken for granted. The key points shared by Speaker Moore are these:

  • The state’s tax structure and regulatory environment are attracting new businesses and encouraging established businesses to expand.
  • 89,000 new jobs were added during a 12-month period ending September 2017.
  • North Carolina has seen a $4 billion swing from debt to savings in six years and has achieved a Triple-A bond rating from the three major agencies. Only 11 other states share this top rating.
  • The state’s unemployment insurance tax fund carries a surplus, which is part of $1.8 billion in “rainy day” reserves.

Strong economic data, while difficult for Democrats to refute, is frequently misrepresented by Democrat Governor Roy Cooper, and others, as resulting solely from the repeal of the so-called “bathroom bill” (HB2) after Cooper was sworn in last January. A complicit mainstream media is more than willing to let them get away with overlooking the fact North Carolina has been turning around since 2011 under Republican majorities in the state House and Senate. Consider this exchange between Cooper and CNBC after the network said Amazon should select multiple North Carolina markets as the home of Amazon’s planned HQ2 headquarters.

A CNBC reporter sat down with Gov. Roy Cooper on Monday to ask about (HB2 repeal). Cooper said moving beyond HB2 and his election a year ago demonstrates to the business, sports and entertainment sectors that North Carolina is a welcoming state.

“We’re sending a strong message we’ve taken a big step,” Cooper said. “That’s why these companies have come back on my assurances that North Carolina is moving in the right direction.”

My assurances? Absurd, of course. But look-ahead polling earlier this year suggests Democrats are eager to give Cooper and their 2018 candidates credit for, well, everything. Democrat enthusiasm is partially fueled by Donald Trump backlash.

In the May 18, 20-21, 2017 Civitas Institute Political Parties NC poll (N=600) — the most recent statewide poll — when asked, “If the election for North Carolina State Legislature were held today, would you be voting for the Republican candidate (32%), the Democratic candidate (47%), Neither one/Other/Independent (8%), or Don’t Know/Undecided/Need More Info (13%). These are the highest percentage for Democratic candidates (47%) for the State Legislature and the lowest percentage for the Republican candidates (32%) in the 34 polls conducted for Civitas since October 2010.

The stakes in 2018 are staggeringly high. That, too, is no secret.