Is Wall St. behind the border wall stonewalling?

Let’s look at an alternative view of why the Democrats are fighting so hard to not fund the Mexican border wall.

As I have written before $5-$6 billion in funding is equivalent to running an aircraft carrierĀ  group for a week, so it’s not about the money.

Let’s look at the principals behind this stonewalling (pun intended). Sen. Chuck Schumer is the voice of Wall Street banking in the Senate. Rep. Nancy Pelosi has Silicon Valley just to her south. In this matter it’s the newer financial products, which allow digital transfers, that have a vested interest in cross-border payments.

What would a wall do to the money flows over the border? How would the wall change cash inflows to the US banking system?

President Trump in his Oval Office address last week said: “The border wall would very quickly pay for itself. The cost of illegal drugs exceeds $500 billion a year. Vastly more than the $5.7 billion we have requested from Congress.”

Well all that cash winds up in the US banking system eventually.

So between legal and illegal trading profits moving over the border and US banking firms counting on that additional liquidity to fund other revenue streams, you could make a case that larger forces are at play over the funding of the wall to keep the status quo.

This explanation makes more sense from the point of view of the protracted stalemate going on right now.

What’s that old expression? Follow the money.

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Chinese Apple news is hard to digest

So as I wrote yesterday about the Trump Administration’s hard-line on tariffs with China and its muted effect on US firms.

Well Apple CEO Tim Cook gave the company’s first earnings warnings for the this quarter. Cook cited the slowing Chinese economy, the strong dollar and other economic headwinds. Cook neglected to mention directly that the company is having big troubles trying to sell iPhone models retailing for more than $1,400.

Apple makes good products, but the product line is limited. If you keep bolting new gear onto an older product and jacking up the price, then you will see consumers uninterested in these upgrades.

As my son — soon to be a finance graduate — cited Wednesday night when we were discussing this said: “Apple walks the fine line between utility and luxury,

Well clearly the luxury aspect is suffering since the high-end models are not selling and consumers are keeping their older phones much longer — cracked screens or not.

As the Chinese economy repositions itself an equal trading partner without all the beneficial pricing power it enjoyed from lopsided trade agreements over the last 30 years there will be some pain. But that certainly is better — in the long run — than continuing the status quo.

Maybe the Chinese economy has taken a step back in its progress and many can’t afford $1,400 iPhones or even a $1,000 model. That’s on Apple to come up with a different plan or product for the market.

While I see this as an Apple problem, the stock market will sell off roughly 300 Dow points again on the open Thursday morning on the earnings warning.

I recall something about a butterfly flapping its wings over the Yangtze River and Wall Street feels the storm. It should be short-lived however.

US market’s Chinese take out fueled by globalists

US stock futures are suffering a continuing hangover after Monday’s 265 Dow point rise. Dow futures are looking at a 300-point decline at the open.

Pundits cite China’s slowing economy. How can these analysts not understand that China’s economy is slowing because of the Trump’s Administration’s tough stance on trade.

The Chinese have for decades relied on such favorable pricing on goods sold in the US there was never a reason to employ proper business processes. Merely loading a ship with iPhones or steel guaranteed big profits. This is the new normal when it comes to Chinese economic growth.

So the tariff crackdown to level the trade playing field will have to run through a few quarters to get year-over-year numbers showing slowing growth to get Wall Street’s attention. The Street is not looking at US firms, which are benefiting from the more balanced trade situation.

The globalists are also playing up a slowing China as being catastrophic for the US economy to get Trump to back off from punishing their investments in Chinese firms.

Playing hardball with China on trade, on stealing technology, on Taiwan are all good tactics to benefit US firms and Americans in general. Don’t tell me China’s economy is more important than the US for world economic growth.

The US drives the world economy and the sooner Wall Street eschews the globalist’s sky is falling narrative, the better for all Americans and US stocks.

Are the markets a tell on the midterms?

Are we seeing real-world exercises being conducted as a result of President Trump’s ongoing battle with the Deep State?

All of a sudden last week large institutional investors woke up and decided that the bull market was coming to an end and the Federal Reserve, which has been begging for the last decade to get the inflation rate close to 2 percent, discovered that runaway inflation was a real concern and said it would raise rates “aggressively” to combat it.

Now admittedly no market only rises with no corrections or pullbacks and it may be a little early to attribute the latest equity choppiness to anything more than profit taking and it being October, but the timing is curious.

The markets also have international concerns in Italy and China, which could be the contagion to hurt US growth and need to be watched carefully, but not to the degree we are seeing right now.

Trump did pick Fed chief Jerome Powell and he has reigned in the number of voices in the Fed speaking on the economy. Under ex-chief Janet Yellen it seemed even the maintenance staff at the Fed were allow to opine on monetary policy for TV audiences.

The President on Wednesday questioned the Fed’s rhetoric on inflation to reporters saying he thought it was crazy for Powell & Co. to be so aggressive in its stance on raising rates.

You see the Fed doesn’t really have to raise rates to curtail growth right now. The threat alone is enough to squeeze lenders into jacking up loan rates or to call in more questionable loans, which all dampen continuing growth. And as markets fall margin calls can steepen the decline as investors sell what they have to cover other bets.

So let’s keep an eye on this as the midterms near. I’m sure The President will have much to say should this sell off continue.

Trump’s trade talks are simple, if you want a strong US

As I wrote in the late spring when the tariff war talk started, this is truly the art of the deal for President Trump.

By the actions of numerous previous administrations, the world and China particularly, took on the task of being our manufacturing base for better or worse.

So Trump said if they have to sell to us, which they do, then we need to get better terms. A business mentality, not a pie-in-the-sky globalist view of trade.

Look no further than the deal Trump has worked out with the EU. Trump told EC president Jean-Claude Juncker, if you want Mercedes and BMWs in our driveways, then you have to give us this and this. Leveling the playing field had to win the day, the Germans had too much riding on staying competitive with their cars.

Look at China as the perfect example. Since the initial $50 billion in tariffs was floated, its stock market has tanked and its currency, the yuan, has cratered to a 13-month low. This despite the yuan being pegged to the US dollar, which has not moved that much over the same time frame.

China has far too much invested in migrating its people from the countryside to the cities to create its nascent middle class of manufacturing workers to walk away from US trade.

Is Foxconn going to sell knockoff iPhones to Nokia?

To be honest it’s not even a fair negotiation on these tariff talks. Oh, sure China and the EU can be boastful and full of bluster about Trump’s tactics, but at the end of the day these products need to be here or else those widgets have no other natural market on the scale of the US.

Anyone of the last five presidents could have done this deal if they wanted to, but that’s the problem, they didn’t. They were beholden to globalist espousing one world government and currency.

So if you come at trade from an America First point of view, you get the best terms possible, like the EU paying us to ship their cars to the US, which is essentially what this new deal is because they took tariffs off our exports to the continent.

It’s really easy to get your terms when you acknowledge that there are borders to countries and they are there for a reason and we will defend ours both economically and militarily.

China has seen that and right after Labor Day it will capitulate to our terms in order to feed their people over the winter. Trust me on this, as TrumpĀ  says.