Donald Trump

Since 1928, there have been 22 Presidential Elections. In 14 of them, the S&P 500 climbed during the three months preceding election day. The incumbent President or party won in 12 of those 14 instances. However, in 7 of the 8 elections where the S&P 500 fell over that three month period, the incumbent party lost. Statistically, the market has an 86.4% success rate in forecasting the election!

Just when Hillary Clinton thought her political fiascoes would be the worst of her ongoing troubles as she glides through the Democrat primaries, and then takes on Trump sure to find a Warren Buffett-funded victory, suddenly everything appears to have gone wrong in what is most important to the scandal-ridden former Secretary of State and presidential contender: her second - and final - campaign for president.

Three weeks out from the Iowa caucuses, and clarity emerges. Hillary Clinton, the likely Democratic nominee, is in trouble. But if a cloud is forming over the Clinton campaign, the sun continues to shine on The Donald. What does the surge for socialist Sanders and the Republican base’s backing of the outsiders Trump and Cruz and collective recoil from the Republican establishment candidates tell us? As Dylan sang, "The times they are a changing."

While the President will do his best to put a positive spin on the current economic environment, and the success of his policies, when he gives his “State of the Union” address, it would be worth remembering whom he is actually addressing. It is also worth considering that much of this is likely the reason that Donald Trump is surging in Conservative polling. As with all things – it is the lens from which you view the world that defines what you see. For Wall Street, things could not be better. For Main Street, most everything could be better. The President has a lot of “convincing” to do if he expects to change voter’s attitudes between now and the 2016 Presidential election.

"The challenge to Hillary, if Trump is the nominee and pivots to the center in the general election as a problem-solving, independent-minded, successful 'get it done' businessman is that Democrats will no longer be able to count on his personality and outrageous sound bites to disqualify him in the voters' minds."

• China turmoil sends oil, stocks sliding (Reuters)
• China's Stock Traders Go Home After 29 Minutes (BBG)
• Yuan hits weakest since Feb 2011 on fresh low midpoint (Reuters)
• Stocks Extend Rout, Oil Slides on China as Soros Warns of Crisis (BBG)
• China's 29 Minutes of Chaos: Stunned Brokers and a Race to Sell (BBG)
• North Korea Uses Bomb Test to Boost Dictatorship (WSJ)

What explains America's revulsion with the existing system? The answer comes from the latest Gallup article: "Explaining Trump: Widespread Government Corruption" in which it finds that once the silent majority of the population can identify the object of their distrust and anger - in this case Congress and the political status quo - and once they can subsequently identify an object that represents its opposite, the latter object's distance to the Oval Office becomes considerably shorter.

We don’t have a dog in this fight.  San Bernardino doesn’t change the calculation.  ISIS will eventually collapse under its own homicidal and parasitical weight, probably with the help of one or more of its neighbors, whose inactivity and divisiveness we currently underwrite. Then ISIS will be replaced by something better... or worse... it is impossible to know in this region.  In the interim, we and our European friends should focus our efforts on isolating ourselves from the madness.  And we certainly should not go out of our way to draw further fire.

"We the people are pissed. The body politic is burning up. And the anger that courses through our headlines and news feeds - about injustice and inequality, about marginalization and disenfranchisement, about what they are doing to us - shows no sign of abating,"

There’s really one supreme element of this story that you must keep in view at all times: a society (i.e. an economy + a polity = a political economy) based on debt that will never be paid back is certain to crack up. Its institutions will stop functioning. Its business activities will seize up. Its leaders will be demoralized. Its denizens will act up and act out. Its wealth will evaporate. Given where we are in human history - the moment of techno-industrial over-reach - this crackup will not be easy to recover from. Things have gone too far in too many ways. The coming crackup will re-set the terms of civilized life to levels largely pre-techno-industrial. How far backward remains to be seen.

“Play it again. I love the feel of it"...

Status Quo means Hillary. Financial Mayhem means Bernie. Fear means Trump.

Important pillars of the bull case evaporated throughout 2015. Global price pressures weakened, the global Credit backdrop deteriorated and the global economy decelerated. The huge bets on central bank policies left markets at high risk for abrupt reversals and trade unwinds – 2015 The Year of the Erratic Crowded Trade. Indeed, a global bear market commenced yet most remain bullish. Serious and objective analysts would view this ominously.

A new propaganda video from al-Qaeda's Somali affiliate al-Shabaab features clips of Donald Trump alongside the following warning from the late Anwar al-Awlaki: "There are ominous clouds gathering in your horizon. Yesterday, America was a land of slavery, segregation, lynching, and Ku Klux Klan. And tomorrow it will be a land of religious discrimination and concentration camps."

If Donald Trump is a megalomaniac salivating over taking control of American Weimar, then both Hillary Clinton and Marco Rubio are führers in the making. The same goes for the rest of the field, where each and every candidate aspires to be the Celebrity-in-Chief. Trump only looks worse because he doesn’t have the benefit of a sympathetic media on his side.