At the Beginning of a Change

 

“… I think we’re at the beginning of a change in cycle … ” said Lloyd Blankfein, Chairman of Goldman Sachs, during a conversation from Davos with CNBC. Goldman continues to succeed because they are probably the smartest firm on Wall Street in understanding important turning points. And once again, they see what has been unfolding since the election victory of Donald Trump on November 8. 

What Mr. Blankfein sees now, Mr. Gundlach saw way early. He boldly predicted in 2015 that Candidate Donald Trump would win the election.

  • The shift in sentiment to positive from negative regarding the efficiency of Trump is one of the biggest I’ve seen in my career‘ – Jeffrey Gundlach, the reigning Bond King in Barron’s last week.

Any one who heard the early speeches of Candidate Trump heard the name Carl Icahn, a friend and the epitome of a “killer” in Wall Street parlance, a brilliant & hard negotiator who could fight the world to better America. What did Mr. Icahn say on inauguration day?

  • “Trump’s inauguration is a major, major watermark in U.S. history because it marks a secular change in our government”

But what is this change?

1.The Change

This change is the return to the foundational values of America. Listen to President Trump state that in his inauguration speech:

  • January 20th, 2017, will be remembered as the day the people became the rulers of this nation again. … What truly matters is not which party controls our government, but whether our government is controlled by the people. … we are not merely transferring power from one administration to another or from one party to another, but we are transferring power from Washington, D.C., and giving it back to you, the people. … At the center of this movement is a crucial conviction that a nation exists to serve its citizens.

This is a huge change from 8 years ago when a new President proudly proclaimed “… the World has expectations of my presidency“. No wonder we saw the peak of global elitism during President Obama’s tenure in Washington DC. Wherever you looked, core America was ignored & looked down upon by the global elite.

We found a simple but telling symbol of this during a visit to Washington DC over the Fourth of July weekend – not one of the four TripAdvisor recommended restaurants we visited served American beer. They served all sorts of foreign beers but not a single American brand. It was a telling indication that Joe Sixpack was not welcome in his nation’s capital. 

This change has been coming since the second term of President Bill Clinton. It got accentuated during the George W. Bush presidency. The change during those 12 years was real but under the surface. It became full throated and in-your-face during the Obama presidency. It began with Candidate Obama’s line “people clinging to their guns & religion” and continued with his actions during his last 8 years.

On the face of it, the line about an “inclusive & diverse” America sounded great but in reality it was a banishment of core Americans whose fathers & grandfathers had built America’s industrial strength. They were being told America wasn’t really their country anymore. 

Into this stepped a man named Trump. He was one of the few who saw what despair the Obama presidency had wrought on core America, the silent American majority. And he gave voice to that despair & promised to fight for them. He, with his Trump brand of success, instilled hope in them and reawakened their passion for their country And the people, the majority who felt forgotten & discarded by Obama, made Trump their champion.  

Donald Trump remained true to them through out his campaign. Look at his acceptance speech at the Republican Convention:

  • I have joined the political arena so that the powerful can no longer beat up on people that cannot defend themselves … I have visited the laid-off factory workers, and the communities crushed by our horrible and unfair trade deals. These are the forgotten men and women of our country. People who work hard but no longer have a voiceI am your voice.”

His first act as President of the United States was to reaffirm his allegiance to the people:

  • “The oath of office I take today is an oath of allegiance to all Americans. … The forgotten men and women of our country will be forgotten no longer … I will fight for you with every breath in my body, and I will never ever let you down”.

What does this mean specifically?

  • From this day forward, it’s going to be only America first, America first. Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families“.

2. Engineering

Ray Dalio, the founder of the World’s largest hedge fund, was correct this week when he told Bloomberg “this is going to require excellent engineering“. Of course, Mr. Trump has known that since he began constructing buildings in his youth. Look at the team Mr. Trump has assembled – absolute top tier people with proven skill, expertise & accomplishment – Wilbur Ross for Commerce, Steven Mnuchin for Treasury, “Warrior Monk” Mattis for Defense and the man we call “Tillerosonus Rex” (otherwise known as Rex Tillerson) for State, the man who has to fight Putin, Xi Jinping, Saudi Arabia, Iran and a whole lot of others.  

This is not a dream team, folks. This is a hard reality team that knows exactly what they need to accomplish and how. What a change this is over the past?

  • The reality is that this country was run by people who had no clue how to trade. They didn’t know how to bargain. As that Nobel Prize winner Bob Dylan said “the times they are a-changin“”Mario Gabelli in Barron’s. 

This is not a change you have to believe in. This is a change you see and you have seen it since the election of Donald Trump. If you know anything about winners on Wall Street, you know that these people succeed because they are the best in jumping on a train as it begins to leave the station. They were not for Donald Trump before the election. But they saw the election and they instantly recognized that a major change is beginning. So they have jumped on it. 

3. Sovereign vs. Suzerain

If you look at the rest of the world, you will notice that they began considering America as their suzerain – a state whose main function was to “enrich & serve” the rest of the world. This began in 1994 under President Clinton. Initially it was a major success. But soon it became dogma because of the power & influence of the elite who benefited immensely from it. It accelerated under President Bush and it went to an extreme under President Obama. 

That has changed as of yesterday, January 20, 2017. As President Trump said in his inauguration speech:

  • We will seek friendship and goodwill with the nations of the world, but we do so with the understanding that it is the right of all nations to put their own interests first“.

This is the basic definition of a Sovereign nation. And we now have a President that gets it & will re-implement it. This is not just a change but a transformation back to the foundation of America. 

What picture captures all of the above? The one below we found on Twitter:

And how do we make America Great Again? As President Trump said:

  • ” … we must think big and dream even bigger. In America, we understand that a nation is only living as long as it is striving

 

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