Not Even Smoke and Mirrors

BestCashCow first projected that Trump’s extreme and malignant narcissism would cause him to fail properly to divorce from his assets in a way that would call into question his independence, his freedom from the emoluments clause, and his and his family’s liability.

Many well-versed in the law and in trusts maintained that Morgan, Lewis and Bockius, Donald Trump’s law firm, would put together an air-tight, yet complicated, ownership structure.  A smart ownership structure would use his ascendency to the presidency as an opportunity to pass his assets to his children and grandchildren with limited tax liability, while assuring that he would have all of his needs met for the rest of his life should he be removed from the presidency.

Following this weekend’s release of the trust documents under the Freedom of Information Act, it is very clear that everything, including the lease on the Old Post Office Building in Washington, has passed into the Donald J. Trump REVOCABLE Trust.  President Trump is the only beneficial owner of the trust, but the trust is run by his son and chief financial officer.  There is no legal impediment to Donald Trump’s receipt of information on the trust assets and their performance (as Sheri A. Dillon proclaimed in her January 11, 2017 news conference) and the trust is revocable at any time.

In short, Donald Trump’s law firm has done nothing, absolutely nothing, to separate Trump from his assets and the ethical liabilities that those assets create, save to introduce a single legal entity, wholly owned by Donald Trump himself.

The new administration – and the Republican Congress – are bent on exploiting the government for their own self-interests.  Inherent in that goal is an assumption that the majority of the population at large is totally indifferent to, or unable to understand, the color of the wool being pulled over their eyes.  In this case, there is no smoke, no mirrors, and the wool can be seen right through.

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Retirees Face Uncertain Future

It is exceedingly hard to look even months out with a modicum of confidence as to coming trends and events.  We are in the most uncertain of times.

This is especially true for those in retirement.  Over the last decade, really beginning in 2008, retirees have had to break with conventional wisdom and invest a much larger proportion of their assets in the market than in the past and than wisdom would suggest; bonds and cash simply offered too little yield to meet their needs. 

Now, with a new and unsteady president, the market seems even more risky for all Americans, and especially for those depending solely on unearned income.  The country has certainly enjoyed a significant upswing following the election, but that seems more fueled by irrational exuberance than by a thoughtful weighing of the major risks ahead resulting from irrational and off-the-wall government leadership.

Logic suggests that the market, however strong in recent days, is due for a major fall as the impact of a seriously unstable president with a seriously flawed agenda clashes with reality.   Those in retirement are caught in the middle.  Stay in the market and enjoy a temporary surge or get out now before an almost certain and lasting drop takes place. 

Market timing has never worked.  While all looks good for the moment (interest rates are beginning to creep up and the market is doing well), logic and clear thinking dictate that retirees need to act now in their best interests, reduce significantly their market holdings, and move to the safety of government-insured bonds and bank or credit union savings accounts and CDs.  To do anything else will leave a significantly large proportion of the population today in great jeopardy of falling short of the resources required to cover basic needs.  

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A Moment of Crisis

After only a few days of the Trump administration, led by an unstable president and his frightening trio (Bannon, Flynn, and Conway), the country is spiraling out of control.  Strikes and protests abound throughout the country and abroad, and NATO countries, equally in shock, are already voices in the wind.  The US has never faced anything like this before, and its systems of checks and balances have already proved to be impotent. 

Congress continues to be the domain of fools and self interests.  The Supreme Court is unaccustomed to independent action.  The people are divided.  Our political systems were not built for what has effectively happened – a coup d’etat supported by a foreign foe, disguised as a presidential election.

We are in uncharted territory.  The first thing we must do is recognize fully that this is an unprecedented moment.  And, more important, a very dangerous moment.

The second is to look for some, as yet unidentified entity or group, that can lead the way out and protect the nation from disaster.  One that has yet to surface but could so do would the formation of The Council of Presidents, composed of the three last legitimate presidents of the United States – George W. Bush, Bill Clinton and Barak Obama.  These leaders, standing as a single voice and an informed group, need (1) to join together in a single voice and (2) to stand as a new and strong body taking control and leading the way out of this crisis.  As a group, they could lead the country, Congress and the Courts to take quick and effective action to put this coup down.

And, as a third step, while we support and assist necessary and an unprecedented action such as The Presidents' Council, we must look inward and move to protect our individual best interests.  The stock market has been surprisingly slow to realize what is happening, succumbing to unrealistic promises, and is just beginning to turn down.  This is the moment to reduce, if not sell entirely all positions in the market and to seek cover in cash, metals and federally insured bank products.  In days, it will be too late.

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Irrational Exuberance

In 1996, when the then Federal Reserve Chair, Alan Greenspan coined the phrase “Irrational Exuberance”, it troubled folks but also incorrectly forecast a precipitous drop in the markets.  It took another three years. 

It doesn’t take a Federal Reserve Chair to see it again, and it will not take three more years for the markets to drop like a lead balloon.  In fact, it’s hard to believe that any serious investor watching Donald Trump’s early moves, especially those decimating key international trade pacts, would not immediately bail out and take refuge in insured cash accounts, and perhaps some gold and diamonds too.

We surely are fooling ourselves, believing that lower corporate taxes and fewer restrictions will boost the economy and lead us all down the road to riches.  Cooler heads can look beyond the hype and realize that constraints on manufacturing lower cost goods abroad and on selling worldwide thanks to multinational trade agreements represent the bulwarks of our 21 Century economy.  Withdrawing inside our borders will kill our economy.

We are decidedly blinded by irrational exuberance.

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Heads in the Sand

We all, everyone of us, have our heads in the sands.  Most of those who voted for Trump have yet to realize what they have wrought.  But they will.  The rest know now, but are unable to face the reality of it all. 

In fact, we are all trying with every fiber in our hearts to ignore the catastrophe that is about to happen.  It’s like an entire people in a sleep walk.  And that’s in the United States.  Beyond our borders, the populations of our allies are stunned too, contemplating the end of the world order as we know it.

And then John Lewis says the obvious, Trump put him down, and there is silence again.  We are a people in line, awaiting our turn in the crematoria.  We are too stunned and too afraid.  Too afraid even to think of parents, grandparents, children, grandchildren. 

We have brought this about ourselves.  We are not bold, daring and willing to put ourselves on the line – to confront the monster.  We have convinced ourselves, because it is the easiest thing to do, that there is nothing that we can do. We the people – the population at large and our leaders – are hiding behind a veil of silence. And, that very silence has drowned John Lewis. 

And, there is no other voice, and the silence is deafening.

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If Ever There Was A Time ...

Donald Trump will be president in a matter of days, regardless of what Russia may have on him.  He may be impeached in a matter of days too, but that is less certain. 

But, whatever the days ahead may have in store for us, under any of many scenarios, the news ain’t good.  Not good for the country, not good for its people, not good for the confidence we all share that the sun will come up in the morning and set in the evening, and certainly not good for the markets. Even the most optimistic among us must accept that the political, social and economic pillars we have rested on for centuries have become dangerously unmoored.   Any and all things, positions, and people we have taken for granted are up for grabs.

It doesn’t take a genius to see that we are on our own.  Listening to familiar gurus is of little help – they know no more than we.

So what are our absolutely next steps:

  1. Stay optimistic.  It is hard to believe that the country won’t have wherewithal, the fodder, and the good sense to impeach Trumputin in the early weeks and months.
  2. Retain relationships with all.  This will be over and, as a nation, we will move forward again.
  3. And don’t be a fool and assume that we will get out of this unscathed.

Thus, act in your own interests and take commonsensical steps to protect yourself in this tumultuous period:

  1. put aside an emergency fund
  2. reduce you exposure to markets that will reverse themselves
  3. regardless of how much or little money you have, be prudent and strategic by putting most of it in FDIC and NCUA-insured savings and CDs

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