- It worked for Bill Clinton…
- … How Trump’s “Monica missiles” will help pass a yuuge economic bill
- The company on the verge of a federal bailout
- Canada move pushes “Penny Pot Index” in the right direction
- Your editor suffers a graze wound in the War on Cash
- Gold asserts safe-haven role again… small-business owners’ uncertainty… reader reactions to our America Uncensored venture… and more!
Nothing like launching a few cruise missiles to get your presidency back on track.
Remember when Bill Clinton fired his “Monica missiles” on Iraq around Christmastime in 1998? It was a swell distraction from impeachment hearings in the U.S. House. A few weeks later, he survived his impeachment trial in the Senate.
Along comes Donald Trump nearly two decades later. Having shocked the establishment by winning the presidency, the establishment settles on a strategy to discredit him by painting him as a stooge of Russia’s President Vladimir Putin. Then Trump turns the tables by lobbing a few Tomahawks at Putin’s ally, Syrian President Bashar al-Assad.
Worked like a charm: “I think Donald Trump became president of the United States last night,” gushed CNN’s Fareed Zakaria Friday morning. Talk about an establishment seal of approval!
“Trump just won some badly needed political capital,” wrote Greg Valliere at Horizon Investments to his clients the same morning.
“He finally has some bipartisan support, and if he can capitalize on it, there could be a reset for his entire presidency.”
Hmmm… After Bill Clinton fired his Monica missiles and survived impeachment, he successfully pushed a Republican Congress in 1999 to pass the most significant economic legislation of his presidency — the repeal of the Depression-era Glass-Steagall Act.
Yes, it ended in tears with the banks taking insane risks and dragging us all into the Panic of 2008. But at the time, Democrats and Republicans alike were cheering a new era of “financial innovation.”
We suspect Trump will use his newfound political capital to achieve his own economic priority shared with the opposition party — corporate income tax reform.
Remember, the biggest U.S. corporations have as much as $2.5 trillion stashed overseas. As long as that money stays overseas, it doesn’t get subjected to U.S. corporate income tax rates — the highest in the developed world.
For a year now we’ve been noticing bipartisan support for the kind of tax reform that would encourage companies to “bring the money home.” Having successfully wagged the dog, Trump is now in a position to make a “great deal” with Senate Minority Leader Chuck Schumer — who’s been leading the charge for corporate tax reform among Democrats.
Corporate tax reform “promises to trigger one of the largest one-time wealth transfers in the history of capitalism,” says our Louis Basenese — who’s been part of the team figuring out the best way you can profit from the coming “moneybomb.”
And the best part about it all? “Wall Street is completely downplaying the possibility,” Louis tells us, “which sets the stage for even bigger gains.
“A recent analysis by Jefferies found the companies that stand to benefit the most from tax reform are performing the worst since the election.
Imagine for a moment how the share prices of those companies will respond whenever tax reform goes through. Louis and co. recently put the final touches on a system that could juice those gains to a phenomenal degree — turning every $2 invested into $5,744.
Corporate tax reform might not materialize immediately… but you do want to position yourself to profit starting now. As in this week. Here’s where to begin.
To the markets… where the safety trade is in play after a nothing day yesterday.
As we check our screens, the major U.S. indexes are down between a half and three-quarters of a percent, the Dow at 20,559. Treasury yields are falling, the 10-year once again threatening to break through five-month support at 2.3%. And gold is touching new year-to-date highs at $1,272 — demonstrating once again, as we pointed out last Friday, that the Midas metal has reclaimed its role as a safe haven amid “geopolitical tension.”
“Here comes Trump’s ‘General Motors’ moment,” says an email from our Byron King, recalling Obama’s auto bailouts.
Toshiba, the ailing Japanese conglomerate, issued a “going concern” warning overnight — which is what companies do as they’re about to circle the bowl. It also took the unprecedented step of publishing its books without an auditor signing off first; it was either that or blow a publication deadline.
As we’ve mentioned before, Toshiba’s being done in by its American nuclear-power subsidiary Westinghouse. Westinghouse filed for Chapter 11 bankruptcy last month. But the new warning from Toshiba makes matters more dire.
“No way will China or Russia be allowed to buy Westinghouse,” says our Jim Rickards. France is a nuclear-power leader, but the big French nuclear firm Areva has its own problems.
Who does that leave? Dan Amoss of our macro research unit suggests a bailout is likely — coordinated by the Department of Energy, Department of Defense or both.
“You can’t have a nuclear-powered Navy without Westinghouse,” Byron adds. There’s precedent with Lockheed’s bailout in 1971. You heard it here first…
Small-business owners are getting itchy about what’s happening in Washington.
The monthly Optimism Index from the National Federation of Independent Business remains near its recent post-election highs, down a bit to 104.7. But much of the survey was conducted before the Obamacare reform bill went down in flames last month.
And the “Uncertainty Index” coming out of the same survey hit its second-highest reading ever. “More small-business owners are having a difficult time anticipating the factors that affect their businesses, especially government policy,” says NFIB chief economist Bill Dunkelberg.
Thursday is the day Canada’s Prime Minister Justin Trudeau will introduce a marijuana legalization bill.
Assuming it passes — and there’s no reason to assume it won’t — recreational cannabis will be legal across Canada on July 1, 2018.
As noted in this space, news of Trudeau’s plans broke late last month… and that news gave a nice bump to penny pot shares, as depicted on the “Penny Pot Index” compiled by our Ray Blanco and his team.
In fact, the news reinforced an uptrend that’s been in place throughout the sector since late last summer…
“Price action remains fairly predictable on the whole,” says Ray. “This continues to be a ‘buy the dips’ market for pot stocks.” For access to the names Ray thinks have the most explosive potential — that is, the ones that could far outperform our index — look here.
“They really are trying to turn us into a cashless society,” said my wife after I got off the phone with our bank.
Your editor is back in Baltimore this week. After nearly a decade working at Agora Financial headquarters, I took up the telecommuting life last fall; my wife and I reclaimed our small-town Midwestern origins. The Agora Financial editors have a big meeting on Thursday, followed by a party for the entire staff and spouses on Friday.
Before setting out on the trip, we headed to an in-network ATM. The withdrawal was declined. Another in-network ATM owned by the same credit union, same problem. I called our bank and was told there was no problem on the bank’s end; it approved the withdrawal.
With only $11 cash in pocket, we hit the road. (For a variety of reasons, neither of us cares to fly, and that poor schmo on a United flight who got assaulted by Chicago airport goons only reinforces our misgivings.) We tried three more ATMs. Only on the third try did we meet with success — but at the cost of a $3.95 out-of-network fee.
I called the bank again, hoping to claw back the fee, suspecting our new chip-equipped ATM cards were causing a snag in older ATMs. Not so, said the customer service rep — who surmised that the first two ATMs were out of cash and the next two had thrown up fraud alerts as a consequence of the previous attempts. But if in the future we call the bank with our travel plans, she said, we’ll have no problem.
“So we need advance permission to get access to our own money,” my wife said as we tooled down the Ohio Turnpike.
“Sounds like,” I replied. It’s certainly a “War on Cash” first in my own 30-odd years of cross-country travels and moves…
“I love it!” a reader says of our new America Uncensored venture, described here yesterday. “I am thankful that I don’t have to try to read between the lines or wonder what part to believe.”
Many other readers are not yet receiving it but will soon… and the anticipation level is high…
“Without seeing your ambitious new news project yet, I believe the intent is spot on,” says a reader. “We are witnessing the death of mainstream media, and nature abhors a vacuum. I’m hoping America Uncensored becomes a rising star as a Fourth Estate replacement.
“Best of luck to all of you and to us as well. We need this now.”
“I’ve been thinking for a long while now that somebody that has the skills and know-how needs to come up with a service such as this,” says another.
“Why? Because people are lucky enough to have hours of time on their hands to not only subscribe to many sources but also, like myself, to read for hours and hours on end day and night about not only many investment opportunities but on the impending doom and gloom ahead for us all.
“My point is there is SO much information to absorb from SO many publications you and others put out hourly and although it is absorbed, it’s very, very hard to spread the warnings and advice and coming problems of the REAL world news and issues to close family and friends.
“It’s all so overwhelming and very hard to communicate to loved ones, being so hard to believe for most people, as these issues are not commonly talked about or shown on the fake news channels worldwide. Because this is hard for so many to accept, commonly, you’re looked at as having lost your marbles, and sometimes even told as much.
“My point is simple. Finally, someone (you guys/gals) are about to make that so much easier to convey one step at a time. Rather than find people like myself trying to download everything we’ve learned to understand to a newbie in 30 minutes, totally overwhelming and subject to the state of disbelief and fear that you’ve finally lost it…
“I’m very much looking forward to America Uncensored and wish you all my very best.”
The 5: High expectations those are. We’ll do our best to live up to them.
“It looks pretty interesting and informative,” says someone who’s already receiving it. “Did not see an issue yesterday, but I guess it was due to the Baltimore meeting,
“Two observations/comments: I didn’t know Dave had a successful media background in the past. That shows in the quality of work with The 5.
“Also, the information and opinions you guys share make me wonder if the Deep State has you on their radar. But then again, it seems most Americans are anyway. Keep up the good work.”
“I believe I unsubscribed from America Uncensored,” says a reader. “I would like to change that. I did not know it was from you guys.”
The 5: Uhhh… I guess we’re supposed to be flattered?
The 5 Min. Forecast
P.S. “We know at AT&T that if you saw tax rates move [lower] to 20–25%, we know what we would do — we would step up our investment levels,” says AT&T CEO Randall Stephenson.
That’s just a hint of the potential of the “moneybomb” that would hit the markets once corporate tax reform is enacted. Will you be ready to grab your share? For reasons you’ll see when you click here, now’s the time to act.
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