Trump Fatigue. It feels like a market top.

Maybe Trump has finally gone too far.  It's getting suspiciously frantic.

It feels like "peak Trump."  The end is near.

I experienced my first "market top" in 1958.  The matter at hand was a novelty song by "Alvin and the Chipmunks."  It is my first remembered experience with over-exposure.  I loved the song.  The radio played it repeatedly. After maybe 6 weeks, I had had enough. I went from loving it to hating it.  Click: Alvin and the Chipmunks

Gradually, then suddenly. The song was was great, really great, still great, still great--and then terrible.  It was like bankruptcy, described by Hemingway.  

It is hard to identify tops in markets. You want to take advantage of a wave, then get off it before it crashes. Good luck.

Markets can be irrationally high, and then get higher, and higher yet.  In hindsight it was obvious that technology stocks were at unsustainable prices in 1997, but they kept going higher for 3 more years, becoming crazier.  Three years was a long time to have been on the sidelines, looking stupid.

Citibank stock.  The music stopped.

From 2002-2007 banks were making crazy, utterly irrational mortgages, and then leveraging them, and packaging them for sale, and making piles of money doing so. Chuck Prince, the president of Citibank, knew the leveraged loan business was crazy but said "As long as the music is playing you've got to get up and dance. We're still dancing."  In investments if your peers and competitors are making money riding a wave, even a crazy one, you look bad when on the sidelines.  You can call it prudent but the world calls it missing the boat.  People riding the wave are outperforming you.  

What are the signs of a real market top? One thing is that the public gets excited.  Neighbors talk about home prices or the stock market or gold or whatever is in the bubble.  Key players in the market make that subtle move from enthusiastic to frantic. Stupid get more stupid.  Crazy get crazier. People justify the impossible because, after all, the impossible has worked so far.  People have to ignore things that cannot be ignored.  At tops the franticness builds. Enthusiasm gradually accelerates, then accelerates more, then collapses. 

Notice how, in the NASDAQ chart, it gets frantic at the right at year 2000, moving up very sharply just before it gets ugly?  Market tops explode and collapse, they don't wither and die.

NASDAQ.  Crazy then collapse.

Trump will not slowly fade away.  He will explode.  It looks to me like an explosion is happening.  He is flailing. He has moved things up a notch.

This is peak Trump right now.  It has been going on a while and it might go on a while longer but Trump has entered a frantic zone of tweeting, making charges easily disproved--"Why does the Mueller team have 13 hardened Democrats, some big Crooked Hillary supporters, and Zero Republicans.  Another Dem recently added, does anyone think this is fair?  And yet, there is NO COLLUSION!"

He invents stories of McCabe fabricating and backdating memos, and accelerating the personnel changes in the White House. "Spent very little time with Andrew McCabe, but he never took notes when he was with me.  I don't believe he made memos except to help his own agenda, probably at a later date.  Same with lying James Comey. Can we call them Fake Memos?"

He publicly bragged about making up facts in a conversation with Justin Trudeau ("I didn't even know. I had no idea.")  

He is a boxer punching blindly.  News stories call it "chaos" and Trump has to deny it is chaos. 

At market tops almost everyone associated with the "buy side" is reluctant to buck the tide.  Trump's Republican team is either totally with him, or at least quiet.  He has loyal officeholders like Nunes supporting him and Fox News is steadfast, but the Republicans with national profiles are being careful. In stock market terms, these would be the people who caution that "the markets might be a little ahead of themselves" and they recommend caution, but, no, they aren't sellers. 

Like in the stock market, there are a few outright short sellers, i.e. people saying things are wrong, who are outcasts: Senators Corker and Flake, Governor Kaisich. Now that Trey Gowdy has announced his retirement he, too, is sounding like a short seller, saying publicly he wants Trump to leave Meuller alone. 

At market tops all the experienced market observers know two things:  1. The situation is crazy and unsustainable and looking dangerous.  2. So far the wave is moving up, not down, and it is suicidal to stand in the way of the wave (Trump). That is where Republican office holders are now.  They are experienced market (political) observers, afraid to buck the trend, recognizing they would lose clients (lose a primary) if they jump off the crazy bandwagon too soon. But they know crazy when they see it.

Click: NY Times article

I make a prediction:  we are in that frantic zone now:  We are in the equivalent of that glorious two months between New Year 2000 and the NASDAQ top in March, 2000, when the already sky high market went up another 20%. 

It was crazy time. Anything goes time. It was peak NASDAQ frenzy.  It was just before the markets all went bad, very bad. 

It is not apparent yet, but that is where I predict things are for Trump.  It just feels like a market top.