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Monday Morning Market Musings 09/14/98
Sex, Lies, and Market
Crashes
I have read the entire Starr Report and the White House rebuttals. [Definitely NOT recommended reading for the kids.] Here’s the brief bearish analysis:
The crux of the matter is NOT sex. The eleven impeachable offenses do NOT deal with the sexual behavior of the president. They deal with the very serious and very impeachable offenses of:
- lying under oath
- perjury
- obstruction of justice
- tampering with a potential witness
- and "abuse of power"
The most important point is that none of the facts of the case is being disputed by the White House. What they are disputing is the legal interpretation of the facts:
- Whether technically the president committed perjury and lied under oath, or he merely told a bunch of harmless white lies.
- Whether technically the president conspired with Monica Lewinsky to give false testimony in the Paula Jones case, or he merely offered friendly advice to his friend.
- And on and on.
As we first suggested back on August 24th , President Clinton’s days are numbered. At least a dozen major and secondary newspapers, many of which have been strong Clinton supporters, and several Democrats have now called for his resignation.
There is no doubt in my mind whatsoever that the Republican-controlled House of Representatives WILL begin Impeachment hearings. I have no doubt that there is enough evidence for them to send Articles of Impeachment to the Senate. I think it's highly probably that the Senate would vote to Impeach the president.
The president has two viable courses of action:
- He can continue to push back and attack Kenneth Starr, and defend his micro parsing of the legal definition of "sexual relations." This would simply serve to prolong and exacerbate the impeachment hearings in the House, and then the Senate, dragging on for months. One has to hope that President Clinton has enough "decency" to not put the country, and indeed the entire world, through such torture and embarrassment.
- He can resign. One would hope he would do so. Whether his motive would be "for the good of the country," or "to save his own sorry butt," is irrelevant. The sooner he takes personal responsibility for his actions, the better.
Whatever comes to pass, none of this could possibly be the start of another massive wave up in the markets. Indeed, it is perfectly consistent with our view of the markets moving down dramatically to new lows, soon. The stage is set. The prospect of an Al Gore presidency is enough to scare the shit out of any bull.
On to the markets: they remain on a precipice poised for a gigantic crash. Whether Clinton’s resignation sparks the crash, or it happens at the bottom, is irrelevant.
As with the prior Tuesday, last Tuesday’s record-breaking gain of 380 points in the DJIA was strong but short-lived, with the index giving back all of that gain and more on Wednesday and Thursday. Friday’s market was on edge in the morning, waiting to see the first reviews of Starr’s report. Was the late rally a genuine show of strength or just a concerted effort to prop up the markets going into the weekend? The overnight action gives us some clues.
As we go to press at 11:30 p.m. EDT Sunday evening, the Asian markets are narrowly mixed, with South Korea off 1.5%, Singapore up 1.5%, and the Nikkei 225 up a slight 30 points, still holding under the 14,000 mark. The December S&P 500 futures on the Globex are down 3 points, and the NASDAQ 100 is down 6 points. Not exactly a resounding follow-through to Friday’s late gains in New York.
To repeat from last week:
"Followers of astro-advisors Arch Crawford, Steve Puetz, Chris Carolan, and other are aware of the potential for an historic drop in the markets, perhaps this week. Combine their prognostications with several long-term cycles pointing down sharply into September and October, the historically worst performing two months of the year. To sum it up, US stocks remain on FULL CRASH ALERT! There may be a few days of rally to relieve the short-term oversold technical condition of the market, but be ready for the trap door to spring open at any moment and take the DJIA down a thousand points in a day."
"May you live in interesting times."
-- Ancient Chinese CURSE
Grizzly
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