When every retail store has back-to-school specials, that’s the cue for financial writers like me to start predicting what could cause the stock market to collapse.
The reopening of schools and concern about the stock market — while I don’t think they are actually related — share the same season. In fact, I think autumn is referred to as “fall” because that’s what the stock market usually does that time of year — although that could turn out to be different this year.
The biggest crashes in Wall Street history happened in October — 1907, 1929 and 1987. And there were some near misses in addition to those, particularly the one in October 1989 that caused President Reagan to put together a “working group” to study the market’s problems.
But the biggest one-day plunges in history happened in September 2001 and 2008. So the market’s troubles often begin in September and end a month later with big blow-offs.
But first, let me give you the good news — a couple of old Wall Street sayings that might make you feel better.
The first is that investors have long been told: “Don’t fight the Fed.” And the Federal Reserve has, if nothing else, been a friend to stock market investors over the last decade by keeping interest rates abnormally low and forcing a lot of people into stocks.
These added folks in the markets have to be there to get any kind of return.
Will the Fed’s magic continue to work? Dunno. But if you find the guy who can answer that question, send him my way, I’d like to shake his hand.
The other adage says that the stock market likes to climb a “wall of worry.” And, boy, is that wall tall these days!
With that in mind, let’s start with one of the biggest worries today — North Korea, which is ruled by a crazy guy who seems to think that no publicity is bad publicity even if it can literally blow up in his face.
The stock market has — incredibly — yawned at the threat of a nuclear attack. And that shows you that these are not normal times on Wall Street.
Will a North Korean missile ever be launched against another country or will Supreme Leader Kim Jong-un be content with continuing to flex his chubby biceps and send his missiles into the ocean?
And what will the US relationship be with real nuclear powers China and Russian after Kim is ultimately removed — one way or another.
These are some things the stock market will have to deal with in the months ahead. Will Wall Street remain catatonic to this threat? We will see.
Meanwhile, the weak US economy and the confusion at the Fed over interest rate hikes — threatening to raise interest rates one day and then changing its opinion the next — could spell trouble for stocks.
Then, of course, there is the high price of stocks themselves. Is there a stock market bubble or do corporate earnings and mergers — which remove plenty of publicly traded companies, further concentrating the available pool of investments — really justify the run-up in stock prices?
Political chaos and fighting between the two parties and possible terrorism attacks also pose hurdles that can affect marts.
Oh, if that were the only problem, this discussion could end right here. But it has to go on to my next column.
Most of the big media companies get orgasmic whenever it looks like something might hurt President Trump. And they do their best to ignore anything that might hurt the Democrats, the party that broke their hearts during the last election.
Take the case of Imran Awan, his wife and a couple of other Pakistani-Americans. Awan did work for Debbie Wasserman Schultz, a Florida congresswoman and former head of the Democratic National Committee.
Awan, an information technology consultant, was arrested recently while trying to flee the country with enough money to feed a small nation. His wife did manage to escape with loot.
The New York Times, from what I can tell, has carried only two stories on Imran. One wasn’t even written by its own reporters.
The one that was internally written did its best to downplay the incident to make it look like Trump was the instigator behind the coverage that was being received in mostly out-of-the-way publications and on the Internet.
The headline on the July 28 Times story said “Trump Fuels Intrigue Surrounding a Former I.T. Workers Arrest” — making it look like this was all in the President’s imagination.
The story said “to hear commentators tell it” Awan “had managed to steal computer hardware, congressional data and even — just maybe — a trove of internal DNC committee emails that eventually surfaced last summer on WikiLeaks.”
This is what you called “slanting the news.” It’s as subtle as it is wrong.
And here is why this incident is so important.
What if Russia didn’t hack the DNC computers and release the information to WikiLeaks? What if the emails belonging to John Podesta, chairman of Hillary Clinton’s campaign, also came from somewhere other than the Russians?
And what if they came from Imran or maybe even Seth Rich, a young worker on the Democratic campaign who supported Bernie Sanders and was killed on a Washington D.C. street in a crime that hasn’t been solved?
Anyone who brings up Rich’s name gets attacked mercilessly, which makes me even more curious to find out what was behind his death.
The Times and other media can pooh-pooh the Imran situation all it wants. But his case and Rich’s murder need to be thoroughly probed, especially since Julian Assange, who runs WikiLeaks, has hinted that Rich was the source of the emails he received.
All these are easily answered questions. Ask Assange, who has been holed up in the Ecuadorian Embassy in London for years and would probably trade that information for his freedom.
Here’s what I think happened. The Russians, through surrogates, hacked the Hillary Clinton’s emails that were never released. But someone else got hold of the DNC and Podesta emails.
Who? That’s what could upset the whole narrative about Russia that we’ve been listening to. It could also upset a whole lot of other things, including the stock market.