NASDAQ Hits Record
Stocks are again moving to record highs as earnings beat expectations.
As former Fed chief, Ben Bernanke noted in a recent NYT interview, the euphoria is “colored by politics.”
He specifically refers to partisan politics, which is curiously reversed in economic outlook. Republicans are now positive and Democrats negative.
Suddenly reversing the color of the narrative (within the counter-identity gaming environment I describe) tends to predict bad policymaking.
Policy is not “objective,” Bernanke says, if the agenda reflects partisan sentiments.
Sentiment of the equity interest also reflects the color of politics in the form of a “Trump rally.”
Once again, pushing to record levels, President Trump is not responsible for better than expected earnings. Buy-backs and M & A form the actual, attributive value. Objectively, the value can be attributed to the Obama administration with Bernanke, for the most part, heading-up the Federal Reserve.
The Trump administration must reformulate the perception of the probable risk. His treasury secretary, Steve Mnuchin, former Goldman Sachs employee and forecolsure king, says his tax reform plan will increase productivity and economic growth; but we all know, objectively, it won’t. At this point, we tend to support the counter identity, which just happens to be responsible for the “Trump rally” described as being supported by the possibility of a lower tax liability and higher net earnings.
Here we are, once again, embracing policies that confirm not to work according to populist expectations. It is a continuation of the Reagan revolution, steering us into the shoals of failed expectations, with President Trump at the helm, supplying the demand for the counter-identity party, pathologically making the same mistakes over and over again.