When I first started working in the trading pits many moons ago, I was struck by how much every decision mattered.
Traders live and die by their decisions. The good ones make sure they risk only enough at any point in time to trade another day. But running from the consequences of their actions is not an option. That is unless you trade for a Too Big to Fail bank, get bailed out by taxpayers, and still pocket a bonus – but I digress.
Trading means getting up close and comfortable with cause and effect. It’s an accountability crucible. And, to me, an environment of ultimate accountability meant love at first sight.
This accountability is what Nassim Taleb means by having skin in the game. He asserts that you should never trust anyone making big decisions, especially decisions that affect others, who doesn’t have skin in the game. And my contempt for politicians and bureaucrats stems almost entirely from the fact that they don’t have skin in the game.
They don’t eat their own cooking. In fact, they do everything in their power to avoid it.
And one career politician in particular has been cooking up decisions and force feeding it to the world for 50 years. Never has he had to stomach the bitter consequence of his policies.
But stick around long enough, and I guess everything comes back around.
And Joe Biden is finally getting the Golden Corral Hungry Man’s Sampler of the foul meals he’s served up in the past…
50 Years of Meddler’s Meals
Old Joe – and I do mean old – got started in the 70s as one of the strongest opponents to race-integration busing. Like all politicians he managed to dance around that decision, but that amuse-bouche doesn’t pair too well with the Woke façade he holds up today.
Nor does the moralizing-by-legislating spree of the 90s where he went full-tilt attempting to ban gays from the military while also doing his darndest to prevent the government from recognizing same-sex marriages.
But, again, these are just appetizers. It took a full 30 years to find the perfect opportunities to serve up full plates of steaming stink.
He summed up his position regarding the war in Afghanistan with the words “whatever it takes, we should do it.”
Well, we did “whatever.” And 20 years on he botched “whatever” in a truly magnificent and humiliating manner, leaving us exactly where we started – except another $2-plus trillion in the hole and the loss of precious lives.
Then came The Great Financial Crises. And after swinging and missing at the presidency, he took on oversight of infrastructure spending and the Obama stimulus package.
Thirteen-years on and infrastructure is an even bigger thorn in his side. His attempts yielded no meaningful fruit. No one seems to trust him to get it right this time. And, thankfully, his “I know what you need better than you” agenda seems to be undergoing a full, complete, and total collapse.
Now, the stimulus bought us time by kicking the can down the road. He blasted through debt ceilings. He spent printed money. But the maximum debt/minimum rate position we find ourselves in as a consequence of his enthusiastic cooking leaves us with no dry powder and no good options.
Throughout all this, like a gravy simmered in spoiled meat, Joe never met an entitlement he didn’t like. And it should be clear to everyone that doesn’t wear manufactured victimhood like a badge of honor that we are all now struggling with the consequences of entitlement taken to the extreme.
The key problem as I see it is that Joe Biden never actually worked in the real world. His only real skill lies in his ability to curry favor and play to his audience. Not that this is unique to him by any stretch, but 50 years in office is. And, while he managed to stick around long enough to reap what he sowed, unfortunately, so do the rest of us.
But he’s not done.
Comrades in Arms
I guess you can call it a dessert course though it’s more along the lines of a 1,000-calorie triple scoop ice-cream sundae rather than a crème puff.
Whatever you call it, it’s big, coated in sugar, and I wouldn’t feed it to my dog.
Behind the scenes, Joe Biden is doing everything he can to serve up more free money.
His first attempt was to nominate Saule Omarova, a full-throttle communist, as Comptroller of the Currency. This is the nation’s ultimate banking regulator. And her vision for the office was to eliminate for-profit banking and force all of us comrades into government checking accounts.
To her, crypto currency technology offered a means of control and monitoring the populace, not free-market money.
That failed, but Biden just re-confirmed Powell – meaning Powell will play Biden’s game – and he also nominated three more members to the Federal Open Market Committee.
These guys decide whether to change the Federal Funds rate. They choose the degree to which the Fed buys bonds or tapers. And with four committee members in his pocket, all fully aware that rate hikes will spell disaster for the Democrats in this year’s mid-term elections, the potential for even more easy money just got turned up to 11, despite all the hawkish talk of rate hikes.
We’ll have to wait and see how that meal ultimately gets served up. My guess is that all we need is one more big risk-off scare – or war – and we’ll go from cheap money to getting paid to take it.
That’ll lead to an across-the-board rally in risk – stocks, commodities, crypto, gold – like we’ve never experienced in the United States.
But we’re not there yet.
It’s a trader’s market. And while Joe cooks up another meal, I’m not ashamed to say I’ll enjoy watching Joe eat the consequences of his past delights.