Not 'Quite' What It Seems

by: Mark J. Grant

In the New York Times, in almost every business publication on the planet, you find the words that Mr. Trump was "bloodied" by the Obamacare loss. Such short-sighted people, such a lack of vision. These same people then race to the conclusion that the markets, which had been driven by Mr. Trump's election, will get trounced now that Obamacare was not "repealed and replaced."

These media Mozarts, apparently, have never seen a Sly Fox. Well I have seen one, and I know what has been driving the markets since November 9, and it has not been Obamacare. Those that tell us this are staring at a banana and claiming loudly and boldly, in print, that it is a kumquat. I can suggest a new optician for these people because, obviously, either their vision or their mind is impaired. Perhaps I should suggest a psychiatrist?

By bringing out the Obamacare care legislation first, it would either pass or fail, and with advantageous results for Mr. Trump, on either side of this ledger. Passage meant triumph and defeat means that later, when Obamacare implodes under its own weight, which it will, because mathematics is still operating, that he can rightfully claim that he tried to pass a better plan but that all of the Democrats and some of the Republicans defeated what the people, by electing him, had requested.

The Democrats may well look like idiots, and some Republicans may join them in this stable, when Obamacare fails and the citizens are screaming in Dubuque, Iowa and Palm City, Florida and Spokane, Washington. It is not Mr. Trump that has been bloodied, in my opinion, but some of the people in Congress that, soon enough, will look like the partisan, self-serving nincompoops that we always thought that they were and now they have affirmed our worst fears.

Suppose you were a Congressman. Suppose you were an idiot. But I repeat myself.

- Mark Twain

What has rallied the equity markets since Mr. Trump's election has been the piece of his agenda to lower taxes and cut regulations. Just that; nothing more or less. The media spin doctors are using Obamacare for their own political agenda, no doubt, and they are trying mightily to stir the political pot but I am afraid that the stirring is not going to work and that the smoking of it has been found as a replacement.

Your village called. Your idiot is missing. Please check Washington D.C.

- The Wizard

So you don't feel so badly, or view Doctor Spin as just an American problem, I invite you to examine the idiocy on the Continent. Things are no better there and may actually be worse. Parliament or Congress, call it what you will, the "fearless leaders" are still globalized. They are all dorks.

Greece and the institutions managing its bailout review will break off negotiations in Brussels without having cleared a path to conclude the deliberations that would release needed rescue funds.

- Bloomberg, March 24

This is, of course, after every politician in Europe has told every Press outlet on the Continent that the 17th and final, absolutely final, Greek bailout was just moments, a few minutes, mere seconds, away from being resolved. Lies, damn lies and absolute untruths spoken again and again and over again with great conviction by every politician in Berlin and Brussels. The appendage is that the IMF will join the bailout and, once again, save the day so that war doesn't break out between Lithuania and the Czech Republic.

God forbid!

The odds of the IMF doing squat, when the American contingency now reports to Mr. Trump, are not high. The odds on Europe granting debt relief are no better. Consequently, in my view, there is a probability, higher than 50/50, that Greece is going to default and then, my friends, the real fun will begin as the fireworks light up the Athenian sky.

Greece leaves, Greece gets blown out by the German cannons, the ECB hands the Greek banks more money, the retching begins in Berlin; we'll see. I have the sense that we are getting close to the Zero Fault Line for Greece.

Brexit, Grexit and ring around the rosie and they all fall down.

Frexit may be unlikely but "Italgo" may be coming soon. The Italian banks, for all intents and purposes, are bust. Yes, they raised some money and yes, the ECB supports the banks, as Mr. Draghi feeds them pasta and Brunello, but here is another road quickly winding out of asphalt.

Two more Italian banks requested lifelines on Friday. The Wall Street Journal reports that

Banca Popolare di Vicenza and Veneto Banca plan to access the government rescue scheme. Banca Popolare di Vicenza SpA and Veneto Banca SpA said in two separate statements they have told Italy's Economy Ministry, the Bank of Italy and the European Central Bank they plan to access the so-called precautionary recapitalization-a rescue scheme which under European rules implies losses for shareholders and junior bondholders before public money is injected in the ailing banks.

Oh, this is going to go over well in Italy; not! The Five Star Movement, now the most popular political party in Italy, is going to get far more popular, in my view. The people that will get hurt here are the normal Italian citizens, as these two banks try to stay afloat, while costing Mama and Papa Italiano a portion of their savings.

The Italian banks, according to the WSJ, have $387 billion in problem loans and the Italian State Bank Fund has a total of $21.6 billion in it with most of it having been spent already on other banks. This isn't even a band aid. This is a quarter inch piece of a paper towel being applied to a severed carotenoid artery. Frankly, little more than a useless gesture. Nero may begin fiddling in Rome again soon.

Alea iacta est. (The die has been cast.)

- Julius Caesar.