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Stocks soon on sale. Dealing with North Korea…

President Trump rattled his saber with his “fire and fury” words and the Dow yesterday dropped 204 points — 0.93%. The S&P 500 dropped 1.45%. Nasdaq did even worse — dropping 2.13%. My portfolio was down 2%. Lots of gains flew away.

It’s hard to see a war starting. The consequences in millions of lives lost are so devastating.

Both decision makers — Trump and Kim Jong-un — have their motivations:

Kim Jong-un’s is to stay in absolute power. He believes that developing ICBMs tipped with atomic bombs is his best insurance policy. He eyes America’s propensity to topple regimes it doesn’t like, viz:

+ Nicaragua (1982-1989)
+ Grenada (1983)
+ Panama (1989)
+ Haiti (1991)
+ Iraq (2003)
+ Libya (2011)

He is fearful of the U.S., with justification.

The Atlantic ran a big cover story in July:

Can NorthKoreaBeStopped

The article focused on:


Every recent American president has tried sundry strategies to stop the Kims building a nuke. Every American president has failed.

The Atlantic concluded:

True, time works in favor of Kim getting what he wants. Every test, successful or not, brings him closer to building his prized weapons. When he has nuclear ICBMs, North Korea will have a more potent and lethal strike capability against the United States and its allies, but no chance of destroying America, or winning a war, and therefore no better chance of avoiding the inevitable consequence of launching a nuke: national suicide. Kim may end up trapped in the circular logic of his strategy. He seeks to avoid destruction by building a weapon that, if used, assures his destruction.

His regime thrives on crisis. Perhaps when he feels safe enough with his arsenal, he might turn to more-sensible goals, like building the North Korean economy, opening trade, and ending its decades of extreme isolation. All of these are the very things that create the framework needed for disarmament….

Although in late April Trump called Kim “a madman with nuclear weapons,” perhaps the most reassuring thing about pursuing the acceptance option (accepting that Kim has the weaponry and can keep it — added by HN) is that Kim appears to be neither suicidal nor crazy. In the five and a half years since assuming power at age 27, he has acted with brutal efficiency to consolidate that power; the assassination of his half brother is only the most recent example. As tyrants go, he’s shown appalling natural ability. For a man who occupies a position both powerful and perilous, his moves have been nothing if not deliberate and even cruelly rational.

And as the latest head of a family that has ruled for three generations, one whose primary purpose has been to survive, as a young man with a lifetime of wealth and power before him, how likely is he to wake up one morning and set fire to his world?

Not likely.

You can read the entire long Atlantic article here. 

Wikipedia on the Kim family contains this delightful paragraph:

The North Korean government denies that there is a personality cult surrounding the Kims. Rather, it claims that the people’s devotion to the Kims is a manifestation of genuine hero worship.

Read Wikipedia here. 

Trump’s motivations are eerily similar — an 8-year dynasty and genuine hero worship.

Which brings me to the U.S.  stockmarket. Here’s this year’s “action.” It puts yesterday’s fall into perspective. It wasn’t the worst one-day fall this year. I take heart.


In fact, the market has done wonderfully well this year, but is clearly stretched. “Breathers” — like yesterday — are not uncommon.

My intelligent friends (I have several) are eyeing markets carefully, hoping to buy their favorite stocks at much cheaper prices. Yesterday didn’t produce “cheap enough” for most of them.

In short, take your ten favorite stocks. Deduct 8% (or so) from last night’s price and put in some limit buy orders. Personally, I could see buying some more Amazon, Square, Alibaba, Facebook, Google and Netflix.

Please don’t panic. We’re not going to war, despite the saber rattling.

How to read the politics

This chart tells all. It tells what many, many Americans are feeling. Many been bypassed by the last 35 years of economic prosperity.  And they’re furious. It tells why Trump was elected — anything but the old status quo, which lead to this:


The chart comes from a New York Times article by David Leonhardt called Our Broken Economy, in One Simple Chart.

Here’s the short article in full:

Many Americans can’t remember anything other than an economy with skyrocketing inequality, in which living standards for most Americans are stagnating and the rich are pulling away. It feels inevitable.

But it’s not.

A well-known team of inequality researchers — Thomas Piketty, Emmanuel Saez and Gabriel Zucman — has been getting some attention recently for a chart it produced. It shows the change in income between 1980 and 2014 for every point on the distribution, and it neatly summarizes the recent soaring of inequality.

The line on the chart (which we have recreated as the red line above) resembles a classic hockey-stick graph. It’s mostly flat and close to zero, before spiking upward at the end. That spike shows that the very affluent, and only the very affluent, have received significant raises in recent decades.

This line captures the rise in inequality better than any other chart or simple summary that I’ve seen. So I went to the economists with a request: Could they produce versions of their chart for years before 1980, to capture the income trends following World War II. You are looking at the result here.

The message is straightforward. Only a few decades ago, the middle class and the poor weren’t just receiving healthy raises. Their take-home pay was rising even more rapidly, in percentage terms, than the pay of the rich.

The post-inflation, after-tax raises that were typical for the middle class during the pre-1980 period – about 2 percent a year – translate into rapid gains in living standards. At that rate, a household’s income almost doubles every 34 years. (The economists used 34-year windows to stay consistent with their original chart, which covered 1980 through 2014.)

In recent decades, by contrast, only very affluent families — those in roughly the top 1/40th of the income distribution — have received such large raises. Yes, the upper-middle class has done better than the middle class or the poor, but the huge gaps are between the super-rich and everyone else.

The basic problem is that most families used to receive something approaching their fair share of economic growth, and they don’t anymore.

It’s true that the country can’t magically return to the 1950s and 1960s (nor would we want to, all things considered). Economic growth was faster in those decades than we can reasonably expect today. Yet there is nothing natural about the distribution of today’s growth — the fact that our economic bounty flows overwhelmingly to a small share of the population.

Different policies could produce a different outcome. My list would start with a tax code that does less to favor the affluent, a better-functioning education system, more bargaining power for workers and less tolerance for corporate consolidation.

Remarkably, President Trump and the Republican leaders in Congress are trying to go in the other direction. They spent months trying to take away health insurance from millions of middle-class and poor families. Their initial tax-reform plans would reduce taxes for the rich much more than for everyone else. And they want to cut spending on schools, even though education is the single best way to improve middle-class living standards over the long term.

Most Americans would look at these charts and conclude that inequality is out of control. The president, on the other hand, seems to think that inequality isn’t big enough.

For full article with three extra charts, Click here. 

Please show this chart to your kids and grandkids


What not to say on national TV

“My wife is completely fulfilled.” — Jim Cramer, 9;05 AM August 9, 2017

If you get this email, delete it immediately.


The doctor wouldn’t write the opioid prescription. So the patient shot him.

The doctor died. The patient went home and shot himself.

There are 50,000 overdose deaths each year in the U.S. It’s affecting tiny, rural towns. It’s pretty horrible.

Goldman Sachs research has said the opioid addiction problem is seriously hurting economic growth in the U.S.

Trump has declared the opioid crisis a national emergency.

STAT (a news web site) just published one of the saddest stories I’ve ever read on the opioid epidemic. It tells the story of the doctor who was shot. It all happened in a tiny town called Mishawaka, Indiana, home to 46,000 people.

For STAT’s sad story, click here.

Our family’s favorite ring


I finally found the price. It’s $616,500 retail. But I’ve been offered it for $525,000, no sales tax.

The business of spec jewelry is fascinating. It’s a size 53 and can’t be adjusted because the stones go all the way around.

Reasons to launder money

+ To evade taxes.

+ To hide how much you have — from wives, families, governments, investors, etc.

+ To make government sanctions against you ineffective.

+ To have enough money to begin a new life somewhere else, should you need to leave instantly, if not sooner.

Understanding laundering is key to understanding Russia.

Great marketing


Conversations or the weekend

+ She said… “What do you mean by coming home half drunk?”
He said… “It’s not my fault…I ran out of money.”

+ He said… “Since I first laid eyes on you, I’ve wanted to make love to you in the worst way.”
She said… “Well, you succeeded.”

+ Priest said… “I don’t think you will ever find another man like your late husband.”
She said…”Who’s gonna look?”

+ He said… “Let’s go out and have some fun tonight.”
She said… “Okay, but if you get home before I do, leave the hallway light on.”

Harry Newton, who’s eyeing another possible market downturn today. But the weather is fine. The tennis courts are dry. The family is healthy. The only sadness is that soon the grandkids will be smarter than me. The kids already are. Have a great weekend.