Rebuke to Trump

The Trump Bannon healthcare bill was ignored by the House.  Trump blames that on the Democrats which is absurd since, with almost unique power in the House, Senate, and of course the executive branch, his slippery party had the bill in their hands.  It failed.  Republicans on the right and left of center picked at the bill.  The real story --- Trump rushed the process without gaining a consensus within his own party.  He was arrogantly overconfident that as President he could do anything he wanted.  His party was like the dog that caught the car.

Here this is welcome.  His proposed bill was hostile to the poor and disadvantaged, and perhaps even more so to much of the "middle class" that he talked about in his campaign.  It was a bad bill, trying to address an existing bill that needed some overhaul but by no means extinction.  While anything that he puts forth will likely be somewhere in the range of "bad", he outdid himself in not even being supported in his own party.

Trying to save face, and maybe with someone intelligent advising him, he will move to infrastructure development and tax reduction.  His armor with a heavy dent, he needs a win on something.  If he and his advisers have any sense, they will start with infrastructure in a bipartisan way, and slowly so he can build support in his own constituency with the mantra that bridges, road, airports, etc.   represent new good paying jobs.

To be sure, there is a concern here about how a man with such a thin skin and need for approval will react to such a public defeat.  Almost everything that Trump does is negative, and if this even goes sideways that would be a relief.  If he chooses revenge that could be unfortunate.  His mind-minder Bannon is a nihilist who will work to dismantle as much as possible, and from his perspective this is another opportunity.

Trump is not capable of being a constructive President.  That will not change.

The election was not about policy

Mick Mulvaney, the head of the OMB and a leading figure in designing Trump's budget proposal, is just about as extreme in his views as anyone ever in that role.  He is an unequivocal political appointee rather than a career budget professional in government.  He is notable as a South Carolina Republican, and that is the sort of pol atmosphere that bred Lee Atwater.  They are harsh and unapologetic.  That's an observed generalization and may be unfair to some in the state of Aiken and Myrtle Beach, but it is in fact true.  This is a place of extreme unvarnished opinions.

So here is Mulvaney in this pivotal role for the scatterbrained but intuitively disruptive Trump. Mulvaney says that the budget reflects Trump's commitments during the election, and that he and his staff are determining what Trump thinks by reviewing all of his speeches during the campaign.  Then they are distilling what policies he has committed to in speaking to the American people, and turning them into a budget.  Could anything sound more like a way for Steve Bannon to remind Trump what his policies are and for a callous person like Mulvaney to try to implement them.

Congress is the arbiter of the budget and the budget must be approved there.  The Republicans, in a perfect world, would like to coalesce around a proposal that they could all agree on and with their power in the executive and legislative branches put it in place.  Unfortunately for them, as some in Congress are realizing now, Trump was not elected based on policy proposals.  He articulated nothing clearly in the campaign other than an opposition to the ruling paradigm and an ever soaring obsession with himself.

So now, repeatedly, Trump and his handlers are mandating, when executive orders allow, and proposing, where others need to approve, policies that will disadvantage the base that elected him. Whether in healthcare, or wage policy, or environmental needs, or taxation or...on and on, they are betraying their voters and think they can get away with it through obfuscation and patriotic blather.

This is not new.  It's a different iteration of an old game.  Now it has become more extreme in a way that is troubling even to some mainstream Republicans and libertarians of the past who were, in their own way, constructive and balanced opponents of the Democratic Party approaches to governing.

A budget that pinpoints with precision relatively tiny programs that are dedicated to straightforward positive fulfillment of the social, dietary, and aspirational needs of our citizens, and cuts them as unnecessary, is beyond troubling.  It could be the vanguard of something far worse.

Louisville's sour coach

Louisville's loss to Michigan in the NCAA tournament was disappointing, as a result of a long term allegiance to Louisville the city and the team based on living there in the 1970's.  Louisville won the NCAA tournament in 1980 and 1986, and competed to near the end of the tournament during many years at that time.  Louisville's last minute loss to UCLA in the final four in 1975 put me into a depressed state for several weeks, such that I vowed to never let myself get that involved as a sports fan ever again.

At that time their coach was a personality free and almost emotion free former assistant to John Wooden.  His name was Denny Crum.  Somehow and strangely, he recruited and coached teams with more personality, team chemistry, and more charming quirks than any other seriously good team seen at that time, and that comparison may be more true today.

The Louisville coach since 2001 has been Rick Pitino.  He has been a successful coach at many levels and under him Louisville won the NCAA tournament in 2013 with a relentless defense that rattled opponents for 40 continuous minutes.  Year end year out Louisville is a contender during the season and plays a tough schedule.  Watching Louisville for the first time this year on Saturday, I watched a talented team, but they seemed stressed, even fearful.  Michigan played freely and with an ease of team play that was a picture of camaraderie.  Louisville had a solid lead midway through the second half and then seemed to tighten up.  The always intense Pitino grew even more intense in time-outs. He is totally in the moment, his moment as he seems totally self absorbed, no pats on the back for the players or anything to loosen them up or cheer them on.

After the game Pitino was interviewed and his intensity continued.  As an aside that was necessary, he said that Michigan played well and was a tough team, but that Louisville lost because they did not think.  He said that the Louisville players worked as hard as he could expect, but that their mental game was weak.  With most of the team returning for next year, he challenged his players to work on that.  He never smiled during the interview, and never said a truly appreciative word about his players, and any self deprecation or responsibility on his part was not in the conversation.

He is a winning coach and a knowledgeable basketball talent, but there is an unattractive side to him that lacks compassion and empathy, or even how his words could personally reflect on team members.  "Not smart", look at the team and it's almost a Trumplike statement.  His program at Louisville has periodically been hit by violations over the years, big, small, or embarrassing.  Do his players have fun?  It does not appear to be part of his formula.

Market stable, lacks catalysts

The U.S. equity market is trendless at the moment.  Today was a perfect example.  Across portfolios here very few stocks moved much at all.  Only Apple, up 1%, and financial stocks off broadly, showed any direction.  Among big banks, Citi, BAC, and Wells were all off over 1.5% while the handful of smaller banks followed here were off around 2%.  That's it.  Very few other stocks made any move of consequence.

The market lacks a catalyst.  It is difficult to imagine an event that would drive the market meaningfully higher now.  It's been a good run for reasons that have yet to unfold in a tangible way. Investors seem to feel positive about potential tax reduction and regulatory relief, but most actual actions are yet to take place. Meanwhile the Tweeter in Chief and his minions continue to make unpredictable and at times alarming statements.

In this environment, the more likely catalyst to arrive anytime soon is a push to the downside. Gains have been significant over the last five months, even as they have moderated in February and this month. At signs of concern, the more likely course would be for active investors to take some money off the table that would lead to a noticeable but not particularly damaging retrenchment, some would say one that is needed for a healthy market.

As retail investors apparently continue to reenter the market after years of recession driven fear, this market has a growing base.  It could be obliterated in a few days if institutional investors take a turn. Retail is not important to valuation in any medium term scenario.  Nevertheless, if retail still buys actively managed mutual funds, they will want to see their portfolio managers fully invested at the moment.

We watch with caution, but remain invested.  That's after some careful pruning over the last two months but, oh, with one new major investment.  Can't help it.

James Cotton remembered

The NYT had an obituary for James Cotton today.  He was a Chicago bluesman  who had his own band from the mid-60's into the 70's.  His trademark was the harmonica that he learned from Sonny Boy Williamson as a child in Mississippi and in Chicago from Little Walter as a back up in the Muddy Waters band.  As Little Walter aged and had his own gigs, Cotton became the main harmonica and vocal background man with Muddy Waters in the late 50's into the 60's.

Why all of this background?  The James Cotton Blues Band was the first live blues band that was seen here, here in the personal sense as that it was in the fall of 1967 in D.C.  I had become an initiate into the blues in my senior year in high school when a friend introduced me to the Paul Butterfield Blue Band.  That led to initial forays into both country blues(Robert Johnson) and urban blues(Sonny Boy, Magic Sam, Muddy Waters) on records.

Off to college I went from my modest southern town, both naive about many things of course but more knowledgeable about a few things than my freshman classmates. That's presumptuous to say maybe, maybe not, but just from the point of view of this comment, blues music, that was the totally the case except for one person. That was Jimmy from Cleveland a few rooms down.  With the Doors blasting out of Paul's room with his big speakers, the Stones and some blues from my minor turntable, and pop music from radios in the dorm, Jimmy played only Chicago blues.  He knew everything about it.

We quickly became friends and he found that James Cotton was playing at an auditorium in a fringe neighborhood(fringe is quaint term for 1960's center D.C.) and off we went.  The band was solid Chicago, what a time.  Cotton was not the best that I heard over the years but that night he was surely the best, and it was a bookmark in my music history.

As we were taking buses and had a change, Jimmy and I were accosted by young white gun carrying crew very late that night in our bus change, but between us had so little money it was inconsequential on that score, and highly positive as we talked them away, though not taken lightly or forgotten.

That's my James Cotton memory.  He was seen in D.C. other times as a guy with a reliable band, but there were so many others that were much better, Muddy Waters at the Cellar Door and  Junior Wells in particular at places in Manhattan. Cotton is remembered as the first live blues band, and how good it can be in a real blues setting, and how good is that.  RIP James Cotton at only 81.  I had no idea that you were still alive.

Trump's budget

Trump's budget proposal must be considered as a starting point as much of it is preposterous.  Is this "the art of the deal" or the art of incompetence. The focus is on the huge additional spending on the military and by extension homeland security.  The biggest cuts come at the EPA and the State Department.  They are drastic.  Tiny agencies that represent a miniscule part of the budget are also targeted.  Notably the Legal Services Corporation, the Corporation for Public Broadcasting, the National Endowment for the Humanities, and the National Endowment for the Arts each would lose all of their funding.

We know that Trump does not read anything of consequence or have any interest in the arts.  Is he such a philistine that he would deny those pleasures to others.  It should be noted that the Corporation for Public Broadcasting only provides partial funding, probably less than 20%, to PBS and NPR, but they do fund the many of the outlets that air those programs in a more substantial way.

These cuts are just a vindictive move by Steve Bannon, who relishes doing all of the work to direct the attention deficit driven Trump's mind, and the extreme right that holds sway. Ivanka will not come to the rescue.  She has become a false hope.  The American public will step up, must step up.

"Black Edge"

The subtitle of this book by New Yorker staff writer Sheelah Kolhatkar is "Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street".  For those with interest, it is a workmanlike true story about the failed attempt to charge Steven Cohen, head of SAC Capital, with a crime.In the process, there was success in prosecuting two of his high paid helpers, and forcing a number of others out of the business.

Kolhatkar begins with the basics of the hedge fund business and for those with any knowledge that is just a price of admission, reading what helps the true laymen understand what they will be reading. The core of the book then follows the effort to hold Cohen accountable for his corrupt enterprise with FBI and SEC work during the 2009-2013 time period, and it also gives a history of SAC from its founding in 1992 until its technical shutdown in 2014 as it morphed into being the virtually unscathed Cohen's family office.

The book is a good summary of what happened, and it creates a cohesive picture in one place of what many read about in the financial press over a period of years.  It is interesting but not groundbreaking.  Much of the case was built around trades in Elan and Wyeth related to a possible Alzheimer's drug, and inside information about Dell's earnings.  They were promising avenues to indict Cohen but a few flaws, and Cohen's "best that money can buy" legal team was up to the task of defending him to the point that he never was charged, never brought to trial.

"Black Edge" gives detailed accounts of the separate trials of Matthew Martoma and Michael Steinberg, Cohen's associates that were referenced earlier as helpers.  In the greater scheme of things they are not important, they were not key players, and ending on this note makes the book somewhat less than compelling.  There is no indication of any further chinks in Cohen's armor, and little new insight into this vile man.

From this reader's perspective, "Black Edge" is an interesting but ultimately unsatisfying book as what is detailed could have been mostly been gleaned by a diligent financial press reader over the years.  With first hand knowledge here of SAC from its beginning, it can be said that even the set-up could have been much stronger.  The firm was out of line from the outset, at the edge and worse.

Big storm just a mess

The storm here last night and into the morning crippled activity here for the day, but it was far smaller than forecast.  Snow was only around six to eight inches(the chairs on the back yard patio suggest just six), but the early morning ice and sleet storm had high winds and made the roads impassable.  A few cars are passing by now and if it were possible, I would have found an excuse to be out there testing the roads.  Our driveway and walkway plow guy came by and did a half ass job, so  he will come back later this afternoon as his father would require. He likes to stay in his giant Dodge Ram truck with plow and do nothing else while instructing a laborer to do some shoveling as quickly as possible.  By tomorrow late morning everything will be close to normal, even if still very cold for a day or two.

What was completely noticeable here was a day without newspapers, mail, new magazines, and new caretakers for Kathy.  We have a capable one that was stuck here, but the turnover provides new talk and different perspectives.  Newspapers can be seen online, but holding that NYT and WSJ newsprint, sorting through story to story is irreplaceable from this older perspective, especially on a day when it is most needed.

The preparation worked fine as we had food mapped out, more than needed to some extent but not by much since the icy roads meant we needed to offer food to the trapped caretaker, happily.  In a relative sense, all is well.  It gave us a chance to eat too much.

Flock of robins?

Whenever sighting robins, cardinals, or blue jays, I always think of them in a singular way.  They were everywhere in southern Virginia sixty years ago, and are still seen here on Long Island.  A cardinal or blue jay sighting is now special but they are here.  Robins are not abundant but seeing them is not so rare.

Rare today was a flock of robins in our backyard.  Never do I remember seeing robins move like that. Maybe 20 were in the backyard pecking away at the half of the yard not covered by any snow. Anticipating tomorrow's huge storm, could they have been storing up and found our yard to be good harvest.  Did the gardener over plant seed in the fall and leave a bounty for the birds.

Wildlife in general does anticipate the weather so it was not surprising to see the robins out eating. So many together was unusual, and special to see.

"Out of the Furnace", a film with more talent than attention

This film was bumped into last night on cable.  Released in late 2013 and starring Christian Bale, Woody Harrelson, Casey Affleck, Forest Whittaker, and Willem Dafoe among others, and Leonardo DiCaprio as a producer, it had never been heard of here.  No surprise really as a quick look at Wikipedia shows that it had total box office receipts of less than $16 million.  It was a bomb.  Still the star lineup almost required watching this grim tale of an Iraq war veteran returning to his small steel manufacturing town in rural Pennsylvania.  The story wanders through ongoing hardship and salvages little.

The thought here from the beginning was that was meant to be, must have been meant to be, an updated version of the 1979 film "The Deerhunter", with Iraq replacing Vietnam.  That film won best picture and other Oscars, while this one went nowhere.  Is that a sign of the times?

In fact, in "Out of the Furnace" two of the characters eventually go deer hunting.  Subtle.

The power of the FBI and James Comey

Let's just assume that FBI director James Comey did exactly what he wanted to do when he discussed publicly an ongoing investigation in July, and when he again raised the issue two weeks before the election and then two days before.  Let's just assume that this highly regarded University of Chicago Law School graduate, former Deputy Attorney General, former general counsel of Lockheed Martin, was not fumbling around mistakenly breaking longstanding precedents at the FBI.  If that obvious assumption could be made, a significant amount of newsprint and television time would have been put to better use.

His actions directly contributed to the election of Trump.  His background could suggest that he did so more out of a dislike of the policy history of Hillary Clinton than due to a positive opinion of Trump.  Comey's college thesis at William and Mary was a comparison of the German theologian Reinhold Neibuhr and the Lynchburg, VA evangelist Jerry Falwell whose racist rants could be watched on television in that part of Virginia in the 1950's and 1960's.  Only a 22 year old college student could imagine such a pairing, but the elevation of Falwell to that status suggests that Comey's background is one of flirting with the far right on many issues.

People change.  Falwell became famous, tempered his language, and his endorsement was sought by Presidents.  Comey followed his successful path and is now head of one of the most powerful law enforcement agencies in the world.

Comey apparently views himself as independent, and he is characterized by those who know him as someone with great confidence in himself, ambition, and a drive to succeed.  It is entirely possible, even likely, that Comey and Comey alone decided to act in the way he did related to Clinton's e-mails based on his beliefs.

An interesting thought is that he may not be a person who can be controlled by the Trump, Bannon, and Sessions.  With the many obvious conflicts of interest that Trump's business empire represents, the refusal to provide basic tax information, plus the knee jerk decision making by Trump, is it possible that Comey will stand up to Trump at some point and investigate the President.  There will be multiple opportunities to do so.  A big attention getting opportunity could present itself and Comey could take action.  That is not necessarily a positive comment about the personality or character of Comey but, contrary to what some may say, he seems to enjoy being in the spotlight.

Barron's "top financial advisors"

Included in the Wall Street Journal today was a supplement from Barron's that purported to detail the top financial advisors to individuals in all 50 states.  It was an interesting 10 minutes of scanning but the list seemed incomplete.  The firms that had overwhelmingly the largest amount of advisors listed were Merrill Lynch, Morgan Stanley, and Wells Fargo.  Goldman Sachs and JPMorgan Chase were firms of not one of the 1200 advisors listed.

Did they not participate?  Are their clients too upscale to be a large enough base for the survey. Certainly both firms are active in this area through their private banking groups.

Of all the advisors listed there were two that made this huge list that I had known in the past(yes I guess that took more than 10 minutes).  When they were known to me, one was an exceedingly earnest and serious guy to the point of being boring, but he certainly would come across as trustworthy.  The other was always more style than substance but that can work too.  Good for them.

The other observation was that Fidelity and Schwab were also nowhere on the list.  That can be explained partially by the fact that both have a huge base of self directed clients, but in recent years that have actively solicited clients for management responsibility for a fee.  Even Vanguard now has individual client managers for investors of more than $500,000 who want management services.  Did they participate or did their heritage put them too far behind.  But, too far behind Wells Fargo?

Red hat

For many years the U.S. Open tennis tournament has been part of our lives.  It is 20 minutes by the LIRR or less by car from us.  It was an every year event until recently.  I always went on opening days because it was less crowded and talking to anyone, even players at times, was fine.  K and I went in 2008 and we bought 08 red U.S. Open baseball style caps.  K only wears hers periodically, but I have worn mine on every rainy day since.  It is, or was, my favorite lid.

Now I can no longer wear it.  Surprise, I am not a Trump supporter.   My favorite worn out red must be retired for now.  Before the year is out, it may be pulled off the shelf.

Trump stayed on a troubling script

Trump's address to Congress began by citing "a great sense of renewal sweeping the country" and ended with the statement that in the future we will remember that "a new chapter of American greatness began today."  He clearly was saying that this was all because of him.

Those thoughts can all be debated of course, but they do frame the dimensions of Trump's view of grandeur.  It is what he thinks and what his handlers Bannon and Miller think he should say.

From this perspective, the two low points of his speech were the three extended examples of the killings of citizens by illegal immigrants, with their relatives in attendance and put on camera.  It is obvious what he was doing and it is obvious what minority group he was talking about and the effect he intended.  The second was the highlight of the wife of the serviceman killed in the questionable Seal's raid in Yemen.  As Trump led the applause, clapping on his amplified set seemingly forever, the woman cried and cried. What a rotten example of exploitation to address an issue where he has received criticism.

The Democratic response to the speech by Steve Beshear, a former Kentucky governor, was one of the best of that lackluster genre ever seen, meaning well done.  Overall, the evening could have been worse, and many were probably relieved by what they heard.  There were snippets of good news like the endorsement of NATO, as if that were an achievement.  In any event, that was a relief.  The calls for unity were frequent but, unlike in the afternoon conference with news anchors, there was no mention of "both sides needing to compromise".  There was more of a dark side to his unity, more of a demand.

We will see.