BALTIMORE, MARYLAND – A fight with the Fed one week. A trade war with China the next.
And now, it’s a war with the Democrats.
Donald J. Trump knows how to keep the cameras rolling.
President Donald Trump staged a confrontation Tuesday with the two top congressional Democrats before television cameras in the Oval Office as the dispute over funding for his border wall turned publicly acrimonious.
The drama may raise the chances of a partial government shutdown when funding for some agencies runs out after Dec. 21. The televised back-and-forth between the leaders will likely figure prominently as politicians seek to assign blame for any disruptions that result.
The sturm and drang keeps the groundlings entertained. If you want to draw a crowd, pick a fight. The Donald picks fights and draws crowds. And he plays his role well. He is a “big man.” Confident beyond reason. A winner. The cock of the walk.
But behind the scenes, the situation is more complicated.
Russian leader, Vladimir Putin had it figured out long ago. “It works like this,” he told reporters (here, we paraphrase and elaborate). “A president comes into office. Some guys in suits come to visit. They tell him what he can and can’t do. No, he can’t cut military spending. No, he can’t cut entitlements. Yes, he must keep the debt bubble expanding.”
After that, it’s all showbiz. But what makes showbiz so interesting and entertaining? Doesn’t it tell us something about real life?
Big Daddy, the jealous husband, the power-mad dictator, the corrupt businessman, the scheming step-mother, the flirt, and the saint – all the stock characters have their real-life counterparts. You find them in bars and malls… in churches and in prisons.
But humans are never fully reliable. They often flub their lines and go off-script. Or they play their parts so faithfully, they bring about – in real time – the catastrophes that were only intended to be entertainment.
Like a Peacock
Yesterday, we were wondering how it works. Specifically, we were thinking about sex. Not like a teenager sitting in a dark room with his computer screen, but like an adult, trying to dope out what makes men so foolish, vain, and murderous.
That is, we were trying to understand why people so easily resort to win-lose deals… and why staged spats in the White House still capture viewers’ attention – as if they were real!
Win-win deals don’t make the headlines. But in the Diary, we have shown why they are better for everyone. They are more efficient. They produce honest information about what people want and what they are willing to give up to get it. They increase wealth and limit claptrap.
People don’t always get what they want or what they expect, but at least they get what they deserve… which is about the best we can do in life.
The reason win-lose deals persist, we concluded yesterday, has to do with man’s lust for sex. After his survival was fairly assured – after he had learned to herd cattle and plant wheat – man turned his attentions to sex.
Then, much of what he did, even if he didn’t realize it, was done for one, single-minded purpose – to make himself more attractive to the opposite sex.
Like the peacock, he spread his colorful feathers to draw attention to himself. Like the antelope, he locked horns with other males to find out which was stronger and braver. And like a medieval scholar, he retreated to his workshop, trying to turn base metal into gold.
But there were two possible avenues of approach: Self-improvement… or destruction.
Either he made his rivals worse off – by stealing from them, deceiving them, or killing them, thus leaving himself in a superior position.
Or he made himself better – by smiling, lifting weights, dieting, studying ancient Greek, or winning a Nobel Prize in medicine.
Love Thy Neighbor
In the Old Testament, God favors the first approach. He tells his chosen people to go and kill their competitors, take their land, and burn their cities. “Don’t even leave their pets alive,” He says to His people.
But in the New Testament, God shifts to the second approach. “It doesn’t matter who you are,” He seemed to say. “You’ll get no special favors from me.” Instead of killing, man had to “love his neighbor” and be a better person.
Win-win deals – do unto others as you would have them do unto you – were a great success. They brought civilization, growth, and progress.
But win-lose deals are deeply rooted in the human dirt. Why? Sex.
We are bred to mate. But with whom?
Therein hang a million tales. Stories of treachery and violence. Fights for love and glory. Cases of do or die. Stories with happy endings. And stories of monumental success… or abject failure.
Genghis Khan, for example, is said to have had his female captives paraded before him. He selected a different one every night.
We can imagine that the young women recoiled at the thought of being used for the pleasure of the Mongol chief. But maybe not.
Females face a different biological calculation. They can only bear a few children. In theory, it pays for them to be choosy… and to be chosen. So they would want to be chosen by the Genghis of the day – the richest, most powerful, strongest male in the group.
How many of them lowered their eyes coquettishly as they passed the Great Kahn? How many of them straightened their backs and swelled their chests?
Being selected helped guarantee that their children were winners, too – partly because they had a winner’s genes… and partly because their father might protect them as children and help them along in life later on.
And apparently, it worked in practice. Genghis sired so many children that one out of every eight males now living in the lands he conquered have him as an ancestor.
Genghis, wasn’t he one of the biggest win-losers of all time… and one of sex’s greatest winners?
MARKET INSIGHT: A TALE OF TWO CRYPTO MARKETS
Editor’s Note: Regular readers know that Bill is skeptical of cryptocurrencies. He once described bitcoin as “a puzzle with the pieces scattered across the floor.” But we know that many Diary readers are invested in these crypto-assets.
So today, we invited Teeka Tiwari, one of the world’s foremost cryptocurrency experts, to explain what’s causing the recent downturn in cryptos… and reveal why he’s still bullish on the crypto future.
By Teeka Tiwari, Editor, Palm Beach Confidential
When it comes to cryptocurrencies, it’s a tale of two markets right now. What do I mean by that?
First, we’ve got this “external” market, where all this forced selling is just hammering prices.
Since November 13, the market capitalization of all cryptocurrencies has fallen 47%. Two of the bigger cryptocurrencies, bitcoin and ether, have fallen 46% and 56%, respectively, during that time.
This pullback has been spurred by the Securities and Exchange Commission (SEC). The SEC recently decided to treat just about every initial coin offering (ICO) that’s ever been done as a security.
The SEC is taking the position that virtually every single initial coin offering (ICO) has issued a security and should, therefore, register as a security. So it’s hitting these people with fines.
What you have to understand is that there were only two funding currencies for these ICO projects: ether or bitcoin.
Now, we have widespread panic among the companies behind these ICOs that they’ll have to pay huge fines… married to the fact that they’re some of the largest holders of bitcoin and ether on the planet. So you can understand why ether and bitcoin have dropped so violently.
Remember, these companies are not dumping these crypto-assets because they want to. They’re dumping them because they have to. They need to raise cash to pay their legal teams and potentially pay fines.
So you’ve got this mass, forced liquidation – almost identical to what we saw in the Great Financial Crisis of 2008… Back then, hedge funds, brokers, and banks were in such desperate need of liquidity, they had to dump their equities at any price.
That’s how amazing companies like American Express dropped over 80% to below $10 per share. Today, it’s back over $105.
We’re seeing the same thing happen in the crypto space. Forced selling is bringing down prices.
But what I call the “internal” market is wildly bullish. For instance, did you know that transactional volume on the bitcoin network is exploding?
So more people are actually using bitcoin, even as the price is coming down. On top of that, not a single major institutional player has deviated from its stated desire to open its trading platforms to bitcoin.
In fact, the Nasdaq – the world’s second-largest stock exchange – went out of its way to confirm it will still launch a bitcoin futures contract sometime in early 2019.
And the owner of the New York Stock Exchange (NYSE) had to delay the launch of its bitcoin exchange by a month – the demand for the service was so high, it needed to spend more time training its customers.
So the piece that has to do with usage and adoption is thriving. And as we move forward, these “internal” levers will begin to impact the “external” market and, ultimately, drive the market to new highs.
– Teeka Tiwari
P.S. Before you go, I’d like to alert you to one more thing. The massive selloff in the crypto market may be nerve-wracking. But it’s also unearthed a very profitable opportunity. There’s a particular niche in the crypto market that I’m finding wildly interesting.
It’s an area I think can make investors a lifetime of income as the market recovers.
That’s why tonight at 8 p.m. ET, I’m going to have a special online event to discuss this very specific opportunity. Click here to save your spot.
The Unionization of Amazon Warehouses
E-commerce giant Amazon recently opened a new fulfillment center in Staten Island, New York City. The massive warehouse has one purpose: to ensure packages get from point A to point B. But the company is facing an unexpected challenge: The workers want to unionize.
How to Profit From American Gambling
Last May, the Supreme Court handed down a decision: Sports betting is no longer illegal in the United States. As states rush to implement gambling operations, investors need to take notice.
Should a Successful Company Be “Good?”
For centuries, businesses have existed to accomplish one task: to provide a product or service at a profit. But in 2018, some companies are considering another goal: making the world a “better place.”
In the mailbag, climate change talk continues…
Bill, you did it! You are the ONLY other person (at least with a public voice) to utter the words I have been saying for over a decade: “Plants like carbon dioxide” (actually, I use the word “need). As always, a very well-reasoned article, and one with unnecessary modesty, but it’s appreciated nonetheless.
I only wish that of all of the conclusions that you touched upon, you had added the obvious: if plants like/love/need carbon dioxide, then it stands to reason that a warming planet due to rising levels of carbon dioxide would mean more plants. And, since plants spew forth oxygen, does it not also stand to reason that the Earth would cool as a result, and we would simply find ourselves back to these temperatures at the conclusion of this very natural cycle?
– Joseph J.
Who wants to go back to polluting cars? I remember how car companies and oil companies sent teams to Washington, D.C. to try to kill smog regulations, saying it would make cars unaffordable and put them out of business. As a result of the smog regulations, we have cars that easily go 200,000 miles with no overhaul. That benefit was not seen at the time. Now, let’s work on global climate change and reap the unknown side benefits. It’s worth the cost!
– Paul L.
Yes, the Earth has been warming since the Little Ice Age. There have been previous warmer and cooler periods. The cause is natural, not man-made. The present alarm over global warming is a scam. Follow the money. Who stands to benefit from this? The swamp creatures in the United Nations. The UN wants developed nations to sign up to paying the UN billions each year. This money would then be spent by the UN helping developing nations overcome the effects of global warming. The swamp creatures in the UN would, of course, siphon off money from this great, big slush fund for their own private enrichment, as swamp creatures always do.
– Warren C.
Meanwhile, conversation turns to the “Chinese Franz Ferdinand”…
As a Canadian, I wonder if the arrest of the Huawei CFO is even on a valid charge… A democratic country’s laws are made by a group of elected politicians… So my question is: were the sanctions imposed by the U.S. made by Congress and the president, or simply imposed by the president?
– Patrick M.
I don’t disagree that the U.S. is a financial bully, but if not the U.S., who would you prefer? Also, was this case not more about using HSBC to avoid U.S. sanctions, which, if true, she [Meng Wanzhou] should have known better? The part about the Chinese using this Huawei equipment to spy, if true, would warrant caution against U.S. use anyways. We only know what we know. Who knows? Maybe that is your point.
– Michael C.
I don’t think it is generally a good idea to go around arresting people because of international politics, but your claim that the rest of the world is just fine with Iran is stupid. Your inference that somehow, Zuckerberg and Gates might be targeted by evil forces is downright ludicrous. They are the evil forces. They are anti-Constitution, mind-enslaving villains. No one with bad intentions would attack them. They don’t need your intervention.
IN CASE YOU MISSED IT…
If you’re wondering what will happen with cryptocurrencies in 2019, you’ll want to go here.
World-renowned crypto expert, Teeka Tiwari, is hosting a free webinar tonight at 8 p.m. ET. He’ll reveal what he believes is behind the current crypto bear market, and show where he sees the market going in 2019. Reserve your spot here.