The Market Ticker
Commentary on The Capital Markets
2016-12-26 09:18 by Karl Denninger
in Editorial , 669 references
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Historically speaking The Market Ticker used to publish an "annual review" including a set of predictions.  Some years worked out pretty good, others not so much.  But even the "bad" years weren't too bad in retrospect; if you make a dozen predictions and get half right over a year's time that really is quite a bit better than you might first think -- although nowhere near good enough to dub yourself Nostradamus.

As I intended in my ticker entitled In Closing from February of 2014 I've wound things back around here quite a bit.  Not completely, but materially.  The software here was at version 41.4 when I penned that piece; it is currently 45.5.  That's more than four revisions greater, since there have been a bunch of "point" changes since -- mostly bug fixes but a few enhancements too.

The post (thread) count was 228,802 when I penned that piece.  It currently stands at 231,735.  The Bar (for user-generated threads and comments, open to anyone who used to be a donor at any time in the system's history) has been reopened this fall, and for the time being I intend to leave it accessible into 2017.  You can find it from the "top" menu here if you're signed in and once had donor-level access -- or just go directly to our companion domain at tickerforum.org.

There were 7,950 Tickers posted from the inception of the site to February 2014.  Since there have been 2,777 more.  There were 650 posted this year.  However, the volume has dropped quite materially, especially in the back half; the count has been about one a day, on average since July, including a "burst" of them for the election season.

The donation system went away quite some time ago and this year the advertising system was almost-completely shut down as well, leaving it just active enough to remain "alive" from the adsense syndication system's point of view.

Here's the issue I have when it comes to continuing what I've been doing, when you get down to it: Nothing has really changed at all in terms of either outcomes or even interest among readers here.  Not one of the pinned threads more-recent than my In Closing missive has managed to reach materially over 50,000 views.  The only pieces to get any sort of "real attention" were those related to the election and of those none had a thing to do with policy.

But..... we're two more years down the road and, as I pointed out in October about four years from the detonation of our nation's finances.

A detonation, I remind you, that I've been raising hell about since the 1990s; it has been visible for that long on the horizon, and has been a focus here since The Market Ticker began publication.

Ever watch "Gran Torino"?  When you go into the bathroom with a hacking cough and blood comes up you got a big ****ing problem.  This nation has been hacking up blood for decades and we're still, as a population and nearly to an individual, looking for the "investment" that will make more money as our "response" to that.  What are you going to do with it all when overcome by events?  You can't eat your stawks, you know.

So here's the deal as I see it: Trump is not going to save the world -- or America.  He's not even going to save you.  Hell, you just watched Obama, according to the media, Trump, the Republicans and a bunch of others "stab Israel in the back" by refusing to veto a UN resolution stating theft of land is illegal.

Really folks?

Look, I get it -- the UN sucks (I agree with that, by the way) and to the victors go the spoils when it comes to war.  Go ask those displaced in Aleppo and elsewhere through the world how private property rights have worked out for them when it comes to owning a home or business.  Expropriation is part and parcel of what governments do, but why pussy-foot around with it and exactly how does doing so make you anything more than a sniveling pack of fraudsters?

If Israel is going to consider a 50 year past war justification for seizing land then seize the land, all at once, re-draw the border to encompass same and be done with it.  The idea that they can keep dicking around with this and by stealing a little bit here and there, one house or "settlement" at a time it is ok but if they did it all at once it wouldn't be is outrageous, it has been outrageous for 50 ****ing years and it doesn't change in character based on who's doing it or why.  War sucks although it is sometimes necessary but this load of crap is nothing more than finding a way to turn a short war into one that has now spanned generations and shows no sign of ever ending -- why don't we just admit that too many people like this war for any serious effort to sue for peace to be accepted?

More to the point given who's involved, since when is intentionally extending a war for five decades by jacking around instead of being decisive in your actions "noble", "honorable" or appropriate, say much less justified if you're "God's chosen people"?  I seem to remember a bunch of folks got a 40 year sentence of wandering in the desert for jacking around when it came to doing the right thing at a time in the distant past -- or so says a tale some consider to be divinely written. Have you ever bothered reading your professed Holy Book, Bibi?

I'm tired of that crap being a "cornerstone" of US foreign policy and by the way, it appears from his tweets Trump has every intention of making it worse.

Or maybe - just maybe - he'll tell Bibi to either **** or get off the pot.  Take it all, invade and kill all who resist.  At least that would be consistent.  Pile up the bodies and pay the price, politically and otherwise.

Speaking of Trump, many continue to harp on Trump having business interests all over the world and the "horrifying possibility" that some nut job with a suicide vest (or a big truck) might penetrate one of those places somewhere in the world and "damage his brand", leading to unspecified bad things.   How about a bit of critical thought on that point eh?  Let's consider the fact that (1) you can't (at any rational cost) buy insurance against terrorism or acts of war and thus (2) Trump is the first President in a very long time, perhaps the first President ever since people went to war on horseback with the King on the field of battle who has personal pecuniary interest in avoiding armed conflict of all types -- and when it cannot be avoided he has an interest in making any such conflict short with a decisive victory for our side. You see any armed conflict, terrorist or otherwise, might cost him something (like a smoking crater where there once was a hotel!)

Gee, that never crossed your mind, did it?  Why not?  Maybe you can explain exactly how that sort of view toward hostility in all its forms in the Executive, as a first in our nation's history, is a bad thing?

But put all the international stuff aside because it really is a sideshow.  The 900lb Gorilla in the China Shop is the medical scamjob and if we don't start locking people up and dismantle it wholesale, beginning right ****ing now, the rest literally doesn't matter.  Maybe the people of this country will get angry enough to start dropping medical and pharmaceutical executives in the streets with whatever they have, whether it's an SUV, a brick off the top of a building or something more thuggish -- or maybe they'll just wither and die as their feet, hands, legs and arms are chopped off while their vision fades to black from diabetes consuming them. Let's not forget that you can only die (or be put to death) once, so exactly what sort of disincentive does a medically-condemned person have against playing not-nice in the social order of things?  In short we either cut the crap when it comes to both medical "care" and stop pushing "foods" that are literal poisons or it's going to end in massive amounts of pain and death and the day when it comes is visible in the near future.  The only question is whether it comes slowly and painfully through disease, violently through the people being dispossessed of everything via "medical businesses" and taxes extracted to "give" to those people and firms leading the people to ultimately revolt -- or both at once.

The timeline on this was decades, we ignored it, it was then fifteen years (roughly, when the Ticker began publication) and we ignored it again, choosing to focus on the "joy" of electing a "black President" who the people believed would "pay my gas and mortgage" while bailing out all the scam artists in the banking sector.  For good measure we gave Obama free license to top it all off with frauds like Solyndra and "forced" medical insurance via Obamacare.  In response the pundits and markets cheered, the latter tripling since 2009.

Having squandered the time we had instead of addressing the issue we now have four to five years remaining before it all goes to Hell and we, in America, have front-row seats that are well within the blast radius.

So no, I'm not going to give you a bullet-point rundown this year.  Instead I'm going to point out that since the bond market has decisively broken on both a monthly and annual basis its 30 year bull market trendlines, meaning that turning the leverage crank to "goose" earnings in the markets is no longer possible, nor is doing the same possible for governments whether here or elsewhere and thus that game is in fact over.

Let me remind you how this crank-turning has worked for the last 30 years, since people have short memories and I've only written a dozen or more Tickers on this, say much less the chapter in Leverage on same.

30 years ago you borrowed $1 million.  The interest rate was 10%.  You needed $100,000 a year in income to pay the interest coupon.  Governments and businesses never, ever, pay off those bonds -- they roll them over endlessly when they mature.  If you doubt this then go look at both corporate and government debt on the Fed Z1; neither has ever decreased by one dime, even during the 2007-2009 crash.

Ok, so then rates drop over time to 5%.  You could take that windfall of $50,000 in interest payments saved every year when your bonds are rolled and spend it somewhere.  But $50,000 is small ball because it will take 20 years for that savings to amount to a million bucks.  The alternative is that you can choose to keep paying $100,000 a year in interest but borrow another million and spend it right now.  Guess what business and government did?  Now you have another million to "spread around", whether it makes your P/E better, is handed out in social spending or whatever.

Rates continued to fall.  Over time they fell until just recently good credits in the corporate and government space could borrow for several years at rates of 1%!  So they did.  Now it's not $1 or $2 million that's out and has been spent it's $10 million, with the same $100,000 interest payment due.

But what happens if the rate goes up just 1% from there -- to 2%?

Now you have a big problem.  You either need to come up with $5 million in cash to retire half the bonds when they roll, since you only have $100,000 for interest payments or you're ****ed.  In the corporate sphere you can no longer "turn the crank" of leverage to goose "earnings", fund buybacks of shares and similar -- you now not only have rapidly increasing interest expense you can't borrow any more money because you can't pay the coupon on it given your current level of indebtedness.

Look at the stock market, size of government and government debt at all levels.  The cost of borrowing fell by more than 90% during this 30 year time period and that means ten times as much leverage became available.  Only about half of the market and government's gains over that time can be attributed to technological progress -- that is, productivity improvement.  The rest is a mathematical function that came from the increase in leverage.  But leverage is a two-edged sword and the laws of mathematics are not suggestions; it multiplies "earnings", "profits" and similar but it also multiplies losses by an equal amount.  It is why banks blew up in 2008.  It is why companies blew up in 2000.

And that is why it will all blow up if we don't cut the crap right here, right now.  Housing. Stocks. Bonds. Government at all levels; local, state and federal.

And you, especially if you have debt.

Not one person under the age of 50 has any business or political memory of the world before the declining bond market rate paradigm established itself in the 1980s.  Not one person folks -- because they were all either children or not yet born at that time.  None have ever run a business, invested a nickel or made public policy during that time.  Since executives tend not to actually become executives before they're in their 40s and 50s, and the same is generally true for politicians, this means that essentially nobody with either political or business power has ever lived through or made policy in an environment where rates were not generally declining over time.

All the people who have done it and thus know how said environment constrains your actions are dead.

We can't hide the impact of our idiocy in the medical system and "free trade" through machinations from money and fiscal policy, whether in government or private business, any more.  We're going to take it long and hard, or we're going to stop it before it consumes us.  Those are the only two choices because we can't finance our way out of it, we can't cost-shift it to other nations and we can't do a damned thing about the laws of mathematics either.

And with that I will leave you with the fact that this coming year I intend to spend more time outside, more time writing a novel I've been working on for quite a while (the first of a trilogy) which I may choose to publish if we get our act together and thus I have some possibility of keeping some of the profits thereof and more time seeing and doing the things I enjoy, along with taking the steps to further reduce my economic footprint.

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Enjoy... @12:20 into it begins the segment.

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2016-12-23 08:22 by Karl Denninger
in Musings , 552 references
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Everyone says Merry Christmas and a Happy New Year.

Nice wish, eh?  Some make sure to emphasize the religious aspect of the holiday.  A few acknowledge that early Christians stole the existing festival of the Sun (before we understood celestial mechanics people prayed that the Sun would come back -- they certainly understood that without it they'd die, but not that irrespective of their burnt offering the days would get warmer -- and longer -- anyway!)  And, of course, the mercantile world has turned it onto a debt-fed orgy of buying crap we don't need for people who don't appreciate it.

But let me put the question a different way for the coming year.

What are you willing to put up with?

That's the real question you ought to ask this "holiday season."

For myself, I concluded back in the 2011 timeframe that the people of this country would not force the government to stop allowing the medical system to rob everyone blind, that we would not collectively rise and demand that those who refuse to stop go to prison, and that this meant that either I stop, to the extent possible, my expanding waistline and decreasing physical ability that was coming as I got older or I would have some miserable number of years at a point in the not-so-distant future before I finally met my demise.  This conclusion (and by the way, Congress is perfectly happy to not only screw you but personally profit from it - and you let them do that too) drove me to make a decision.  I decided that I would put up with feeling like I got hit by a bus every day for months and would stop eating a bunch of very pleasurable "foods" that are in fact poisons -- anything laced with sugar, grains, starches and human-generated frankenoils - which are most of them.  I decided to put up with that in order to attempt (with no guarantee of success) turning back that which was inexorably creeping upon me.

The result was that I lost 60lbs and am in better shape now than I've ever been in my life.  But that didn't happen because I "wished" to be able to run a 5k at a sub-7 minute pace.  It happened because I was willing to put up with the demands of getting to the point where I could run said sub-7-minute pace -- and that involved permanent changes in my lifestyle.

There are many who say "well, but there's so much damage I've already taken to my person that it doesn't matter."  Of course it matters; even if your body is severely ****ed as a result of your past abuses a positive change is still positive!  In fact for the person who is seriously compromised today the loss of that 60 or 100lbs is far more important than it was in my case where the really ugly (and permanent) stuff hadn't happened yet because the quality of life improvement is far greater; going from being unable to walk a half-mile to being able to easily do so is a hell of a lot bigger change than going from being unable to run a half-mile to being able to run three.

At the same time I came to grips with the reality that I was (at the time) pushing 50 and if things went sideways I was ok with the outcome.  I've not had a bad run -- and I'm sure as hell not going to ruin anyone else's future gasping for a few more breaths.

I snort in derision at those who say it's "easy" for me to put forward a "cut back to the point of tax neutrality" or "starve the monkeys in DC" perspective, which I have often written about in this column, given that I "made it" in the 1990s.  Why?  Because that didn't just happen on its own and luck had little -- or nothing -- to do with it.

put up with 15 years of insane demands on my personal time, emotional state, effort and stamina, starting from having one foot in the gutter (literally) and impending personal ruin, moved several hundred miles with no guarantee of anywhere to go or any sort of family support, began working my ass off for a paltry, sub-$20,000 salary that often demanded 80 or even more hours a week from me (no, there was no overtime either), found a (rather crappy) apartment that I could (barely) afford and over time clawed my way up, literally, to where I wound up.  I put up with those hours, the effort, the lack of any sort of "vacation" or time off for more than five years straight, a metric ****-ton of emotional pain, whatever permanent damage all of this might have done to my body (which I'll get to pay for down the road I'm sure) and more.  There was nothing easy about it: MCSNet was not my first effort, it was the third, with the previous two being failures -- at which I put in similar amounts of work and in the end got little or nothing other than managing to pay the rent for a while.  Don't even get me started on the long nights in a basement with a kerosene supplemental heater going so I didn't freeze my ass off while writing code that ultimately went into a couple of businesses -- instead of thousands.  Never mind the jobs in that time where I was working for someone else, often for someone who I believed was completely full of crap.

There are many who say we "can't" fix the serious, even critical issues in this country -- such as the medical monopolies that threaten to destroy the nation fiscally within the next four to five years.  Yes, we can, but no, we won't, because the vast majority of people, probably including you, refuse to put up with the costs of doing so.  I remind you that during the "bailout season" in 2008 I of The Market Ticker along with Steph and Randy of FedUP USA called for two protests -- one in NYC, and one in Washington DC.  I attended the latter.  How many of you showed up at either?  I can count the number of people who were there and have the photographic proof.  If you think I'm going to organize another one of similar sort when nobody will show up you can bite me.   In short, I won't put up with the cost of doing so any more as nobody else is willing to do so.

Everyone wants it easy.  I know people in my circle of associates and family who want it easy.  They "wish" or "pray" for things but they won't put up with the costs.  They won't take the risks, knowing damn well there is no guarantee of success. They are 40, 50, 60 even 100lbs overweight, watching their health go down the toilet yet they stuff their faces with sugared soft drinks and Cheetos despite knowing me, watching me lose 60lbs and go from being someone who couldn't run a half-mile without having to stop to being able to run half-marathons in eight months time.

When an election is lost they want safe spaces and cry zones, complete with puppies to soothe them, for chrissake.

All have excuses but few will take the costs.

Likewise there are many younger people who simply don't want to put forward the risk of jumping out on their own to do whatever it is they want to do.  All choices have costs and when you're young it is the prime time to take those costs -- and risks.  I understand some people don't want the drudgery of the effort and that it's easy to lean on divinity or prayer for a "miracle" but in my opinion there is no such thing as a miracle and the continued prostration before "God" simply serves as a means to avoid the decision to put up with the costs of attempting achievement, no matter what it is -- money, a great body, the freedom to travel or whatever.  You want to talk to me about coming to Church where I will be praying and singing? My riposte is that you are asking me to kneel in a building full of sheep who have sat on their asses for the last 30 years, watching our nation go down the toilet to the point that we now have a large percentage of the nation demanding that you can***** in the women's room if you have a dick. At the same time you've been ignoring your flesh, blood and bank accounts being picked dry by a medical monopolist system that has swallowed the entire damned country -- and that's just one of a dozen similar issues.  When you end your invocation with "God bless America" my riposte is "If this is the outcome that defines blessed perhaps we should try damned for a while thank you very little."

Cut the crap folks.

There is nothing that focuses the mind more than hopping out on the beam and realizing that there's no net!

If you never commit you greatly diminish the odds of success, no matter the endeavor.

If you refuse to put up with the costs of whatever you desire up front then you are unlikely to get whatever it is you desire because the only way to achieve said goal without paying those costs is to force someone else to pay them for you.

Fact: The universe owes you nothing because it is incapable of providing anything.  It is a fact that the universe tends toward disorder and you can see it all around you -- a piece of wood left out rots, a nail (or your car for that matter) rusts, everything, without continual effort put in to stop it, ultimately reverts to dust.

So this holiday season spend less time fawning over someone's birthday (which, incidentally, almost-certainly didn't really occur in December, but rather in the spring) and instead decide what you will put up with -- and, at least as importantly, what you won't put up with in this upcoming year.

Make that what you focus on when the calendar clicks over.

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Facts:

The S&P 500, and most of the DOW, garner a lot of their revenue (and earnings) overseas.

The Dollar has been on a tear for the last several months (since August, roughly) and is now trading at levels it has not since 2002 (!)

Said currency translation means that those foreign earnings are depreciated since foreign currency buys fewer dollars.

The S&P 500 is trading at historic highs on a cyclically-adjusted P/E basis, and well into "overvalued" territory even on simple trailing earnings. In fact on a CAPE basis the S&P is trading at a higher multiple than either 2000 or 2007!

In other words the entire market is priced for perfection -- higher earnings in the future, a softer currency and no increase in operating -- that means borrowing, given the last few years of history -- costs.

None of those things are likely to be true.

It is an effective impossibility that all of them will be true.

How overvalued is the market?  That depends on where you look in the market but 25% overvalued is in fact quite conservative.

This, of course, assumes no shocks.  No problems with debt load.  No runaway inflation, or worse, a runaway budget deficit (caused by tax cuts and Trump's refusal to address medical monopolies, which I remind you, he has struck from his transition web site and made not one mention of since the election.)  It is thus extremely likely, in fact bordering on certainty that runaway medical costs in the federal government will destroy the federal funding model within the next four to five years.

It assumes no serious terrorist incidents that disrupt transportation occur; for example, a "rogue" MANPAD attack on a cargo airliner (or worse, a passenger jet!)

It assumes the dust-up in Turkey doesn't spread (which could lead to a global conflagration.)  I remind you that Europe, including Germany, has invited millions of jihadi-sympathizing "refugees" into their nations over the last few years.

It assumes that the inexorable home price destruction that comes from higher interest rates (which is a simple mathematical formula) doesn't result in either a collapse in home sales or possibly worse, a re-emergence of zero-down liar-loan style "financing" that (again) blows up in everyone's face, threatening the destruction of the financial system -- when neither The Fed or the Government has the ability to once again double federal debt to bail them out.

The TNX (10 year Treasury) has already broken the declining trendline from 2009.  But far more-importantly it has also decidedly broken, on a monthly closing basis (and will almost-certainly do so on a yearly closing basis) the bond bull-market trendline dating to 1983.

Almost exactly none of the so-called "market mavens" that are out there today have any memory of market conditions prior to that bond bull market as none of them were in the market 30+ years ago.  Many younger professionals weren't even alive back then.  Nobody under the age of 50 was an adult when that last secular change took place and almost nobody under the age of 60 has any sort of experience managing wealth in such an environment because few people under the age of 30 have any wealth to manage.

In other words everything you, your broker, the media and everyone else thinks they know about markets is wrong because the predicate on which all of it has been founded for the last 30 years has, in the last two months, been ripped out from under you -- and them.

In 1999 despite it being obvious that the tech wreck was going to occur the market continued upward and in fact the Nasdaq doubled during that year before it all blew up and crashed -- entirely on "animal spirits", or more-accurately the greater fool was out in force.

Said fool then lost nearly all of his money.

Cramer's Winners of the New World portfolio lost very close to all of its value -- something that even today he refuses to talk about.

But this time there is no place to go for a "reflation" of those assets.  The government cannot "print debt" into a rising rate environment as doing so causes instant insolvency through unpayable interest expense as the current debt load makes materially adding to said federal debt, certainly in the amounts required to stop such a collapse, impossible.

In short the game of "turning the leverage crank" to bail people out and continue the rise in asset prices has ended.  I have been warning for the last several years that this was inevitable but the question is always a matter of timing.  It went further than I thought it would (by quite a bit) but that's not unusual at all, since the break-point is almost always a matter of psychology rather than hitting a hard limit somewhere.

We now have the timing, however, with a solid and violent monthly break of the 30+ year bond trendline and a nearly-certain annual (and equally-violent) break of that same trend.  It's over, and this means that whatever you think you know about the investing world that has been predicated on ever-cheaper credit is wrong and in fact exactly backward.  It is now merely a function of when psychology catches up with reality -- and it will, because on the math it inevitably must.

Time's up.

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Unfortunately, not as the Demoncrats had hoped for.

Yes, there were faithless electors.  One was ruled out of order and changed his vote.  A second was replaced.  Six more did in fact vote for other than the majority winner in their states.

Only two of them, however, voted for someone other than Donald Trump -- both in Texas.  The rest -- six others -- voted for someone other than Hillary Clinton.

That's right, a few heard -- and heeded -- the call to be "faithless."

But most of those who did decided that their statement of political protest was not to be lodged against Donald Trump and his victory but rather against Hillary Clinton and the Democrat party who attempted to subvert and in fact overturn said legitimate political victory.

The Democrats, and especially the whining millennials that I'm sure have now been once again triggered and are crying in the streets and on our college campuses, will almost-certainly again issue recriminations not against their party nor will they apologize for their actions.

No, they'll blame the Russians, the Chinese, or..... maybe it'll be Martians this time.

You can bet there will not be one scintilla of honest reflection from this event, just as there was not from the election itself.  There was no reflection on the fact that Hillary lost three states that Democrats were not only expected to win but had won handily -- all organized labor and minority strongholds -- in recent contests.

Nor was there any reflection on the fact that Hillary appeared to put forward the view that she deserved the Presidency; that it was hers by nobility, rather than by hard work.  There was no reflection of the rank and outrageous corruption she had displayed in her time as Secretary of State and beyond, nor the hubris of her senior staff.  There was not one whit of concern over the millions of jobs that policies her husband put into place had cost the nation -- polices she herself supported as well.

Three states flipped over this set of issues and yet Hillary could afford to lose none of them.

Worse, when the screaming started on "recounts" and "fraud" Wisconsin completed their count and it resulted in a tiny, statistically-insignificant change -- for Trump.  Pennsylvania never got anywhere but in Michigan, which had their recount halted by a judge the only irregularities found were in heavily Democrat precincts in central parts of the city of Detroit where more ballots were cast than persons signed the books for.  In other words there was a small amount of fraud uncovered all right -- but the fraud wasn't in favor of Trump, it was for Hillary!

The Democrat party has two choices here.  It can either accept this outcome as a spanking delivered by an electorate that wasn't swayed by Russian hackers, but rather by the displayed public corruption of a party that not only didn't give a damn about party member votes (in that they rigged their own primary) but also didn't give a good damn about their party member's economic prospects and believed they were entitled to those votes anyway and choose to reform itself.  It can eject those party hacks who led it into and through this disaster, including people like Pelosi, the Clinton family, John Podesta and the dozens of so-called "tech mavens" and "socialites", including anything connected to George Soros.  Should it do so the party may in fact find a means to reconnect with the people in the coming years and rebuild itself.

Or it can continue on the path it has been on thus far and double down once again on the claim that "Russians" were responsible, that Trump is a racist, that I'm both deplorable and irredeemable (along with millions of others) and more.  It can refuse to accept that kowtowing to multinational companies that move jobs overseas, draining both intellectual and physical capital is a losing strategy long-term when it comes to votes and that places like WalMart may provide short-term lower prices in exchange but in the end when you lose your job you have nothing to buy with anyway beyond food stamps and disability checks, and that's a crappy way to live.

If the party takes the latter direction, and it appears so far that's exactly their intention, then it will fade from prominence and leave open in the political landscape a replacement slot, just as happened with the Whigs -- and much for the same reason.  I have no idea who will step in to fill that vacuum, since there is no political party in the wings that fits the model; certainly neither the Greens or Libertarians have put forward the sort of organizational prowess or serious candidates over the last two decades necessary to do so.

But that the vacuum will be filled, probably by a nascent political party we have not yet seen organized, is a given.

Collections of political power are always at risk of excessive hubris.  Sometimes, as occurred with the Republicans, the body recognizes, however begrudgingly, that the shift of sentiment away from them is occurring and lets it happen.  His name in this case was Donald Trump.

In the Democrat case they refused to recognize that same problem within the ranks of their elite.  The challenger's name in their case, by the way, was Bernie Sanders and instead of coming to terms with the repudiation of Democrat voters who had enough of the Clinton corruption and entitled attitude they doubled down, called names and then rigged their primary to disenfranchise their own voters -- and got caught doing it. In response a sufficient number of those voters either stayed him or voted for a Republican to hand the party a loss in three critical states.

Finally, in an act of puerile rage, they tried to tamper with the Electoral College -- and got slapped down again, in that the net defections they managed to score were against them, not Trump.

This is what peaceful political revolution looks like folks.  It may not be perfect, and I have no belief whatsoever at this point that Donald J Trump will address the issue he must, within the first year of his Presidency, if we are to avoid fiscal disaster -- but it sure beats the shooting-style alternative.

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