Wag the Dog

     Two days from this post, the current President of the United States is going to visit my home town of Evansville,In. This political rally will take place before a packed house at our new arena in the downtown and there will also be a huge crowd of protesters outside carrying signs rallying against Donald Trump. Here is a president who has had two of his campaign organizers convicted of crimes, who has routinely lied to the American public, who has been caught having an affair with a porn actress and a playboy model, then caught buying their silence for the purpose of winning the presidential election and currently is embroiled in an investigation that he colluded with the Russians to influence our election. In spite of all this, he still has the support of millions of voters and can attract thousands of supporters at every event. How can this be? Here's my take; it's the stock market that is the tail that wags the dog. The juice that the Donald has harnessed is the unrivaled ascent of our US stock market since his election. His support is based on bloated retirement accounts, jobs that a healthy economy can support, businessmen who are making fortunes running factories, wall street pros who manage our markets, and wealthy individuals who are getting wealthier by being invested in stocks. The recent tax cut enacted by Congress has given new life to our stock market by increasing the earnings of most American companies. Another powerful force unleashed by Trump is the deregulation of many industries. The combination of deregulation and tax cuts for businesses will prop-up earnings for the duration of his presidency assuming that it goes full term. Forget morality, forget human decency,and the dignity of the presidential office, it all comes down to money and the stock market at this time. On Thursday of this week, the Haves will be inside cheering on their hero and all others will be outside carrying signs of protest. What will change things besides a new chief executive? In my opinion, interest rates. When interest rates get to a level that causes investors to lose interest in stocks and choose safe but attractive alternatives, then some of the steam will escape from Trump's boilers. Right now the Stock Market has little competition for those seeking yield, price appreciation, and the safety of numbers. Our president has recently chastised his Federal Reserve Chairman for his intention to raise rates-a threat to Trumps powers. Further evidence is that Trump routinely uses the Dow Industrial Index as a metric for his performance as president. Someone recently told me that the stock market isn't everything. It is to the Donald.