All But Over

Don’t think. It’s the best
advice I can give you.

—from Isaac,
by Ray McManus

This will be my last essay on stocks for the remainder of the Grand Supercycle bull market. The preferred scenario is for the correction underway since the August 7 high to hold above 20,800 in the Dow Jones Industrial Average, and then stage the final advance to plus or minus 23,000. However, ratio analysis of the wave pattern, together with numerous time/price relationships, point to August 7, 2017 as an ideal date for the top.

A decline significantly below 20,800 increases the odds that the intraday high of 21, 179 was the ultimate peak, but either way, I don’t see any value in more discussion about the vulnerability of stocks. My next post on markets will be when the major averages have made five waves down of intermediate degree, indicating that a multiyear bear market is underway.

I do want to make some observations on the general mood of country and, based on the work of Gustave Le Bon (The Crowd, A Study of the Popular Mind, pub. 1895), suggest what this implies for the future.

The stagnation of middle class income, together with increasing control of the U. S. Congress by the nation’s oligarchy has been underway long enough–over forty years, by some measures–to get the attention of the country at large. Anger built up slowly at first,  but exploded in the last five years. Le Bon held that anger of this type eventually pushes individuals into irrational thinking. Discouraged and exasperated about a system that works against them, they subconsciously associate themselves with others who have similar issues, eventually becoming a crowd.

A crowd of deeply pissed off people does two things: casts blame for their difficulties on other groups, and seeks out would-be leaders who promise to tear the system down and fix it for them. A demagogue then comes to the fore and plays the crowd with populist rhetoric that is powerfully convincing and irresistible, given the dysfunction of the times.

Trump’s followers will deny this, but it is my opinion that they’ve been sold a bill of goods. I believe we have a demagogue in the White House now, and the outlook is either for the man to succeed as a fascist authoritarian, or for the nation to undergo a constitutional crisis.

The very existence of the person of Donald J. Trump is an affront to human decency. He is a narcissistic bully with the remorselessness of a sociopath. As a business CEO, his success is based on lying, cheating, stealing, and seriously hurting other people. He is illiterate and incurious. He is a canny ignoramus. He is a lowlife, cowardly misogynist. His multiple character defects are a matter of public record and easily accessible. Yet, he was elected President of the United States of America. What have we become?

Eight months into his presidency, Trump’s incompetence becomes more apparent by the day. But, desperate for change, thirty to forty million citizens cling to the hope that this morally reprehensible person can make their lives better. They flock to his campaign stops to have their resentments stoked by his outrageous populist  pronouncements. The man who would be the architect of the vision for a great nation makes policy out of those statements that draw the loudest cheers from the worst elements of his base, usually the ones with the most mean spirited intent. What, indeed, have we become?

We have become a kakistocracy, the Greek term for a country that deliberately chooses to be governed by its worst person.

America has devolved socially to dystopia. The endgame is total collapse. May God save us from ourselves. See you on the other side, sisters and brothers. After the fall, we can rebuild the Temple together.

Cheers,

Rod

 

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