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Don’t fight the fed. Old adage. Stick with tech. And … You must read the review of Howard Schultz book

Two happy fed decisions:

+ No more rate increases for a while.

+ No more selling treasurys off the Fed’s balance sheet.

I won’t bore you what all this means — except it’s restrains the dollar (hence good for exports) and it stops sucking liquidity out of markets.

Amazon reports earnings after the bell tonight. It’s up today. But who knows how the market will respond to (I’m guessing) buoyant earnings.

Cloud is hot. Friends are pushing SPLK and HUBS.

Craziness has returned to tech, along with today’s huge bounce in Facebook.

When the market crashed in October and then took a real dive in December, there were three strategies:

+ Sell everything.

+ Sit tight.Also called buy and hold.

+ Sell some “iffy” and hold the rest.

There was no right strategy at the time. Many panicked and sold — at what appeared to be the bottom. I sold some at the very bottom. Couldn’t have timed it better. Brilliant me.

Since early January there’s been a huge bounce back. Who knew. My “buy and hold” friends are ecstatic.

Some “buy and hold” friends aggressively don’t read gloom and doom articles — of which there were plenty in the fall.

Some spend their days looking for special situations. Famous investor Bill Miller  was on CNBC today. His low-cost recovery “ten-bagger” picks were Avon (AVP) and Coty. He had — what seemed to me — to have logical reasons.

Cramer had the CEO of American Electric Power (AEP) on last night. It’s an electric utility with an apparently safe 3.47% yield and a rising stock price. After some research in the middle of the night… I concluded it’s not as exciting as Cramer made out. But its yield is higher than bank CDs. It’s fine for the short-term.

Here’s the last two years of NASDAQ compared to IGT (Vanguard tech index ETF) and the S&P500 (the lowest). Looks like we still like tech. Both VGT and IXIC (Nasdaq) are doing better than the S&P500.

Every billionaire should become president

The latest to throw his hat in is Howard Schultz, former Starbucks CEO. As part of his White House journey, he “wrote” a book on his life and his thoughts:

My favorite writer Matt Taibbi of Rolling Stone reviewed it: (Hint: the review is funny.)

Howard Schultz: America’s New Banality Supervillain
Will the former Starbucks CEO and author of a stunningly boring corporate memoir help re-elect Donald Trump?

Scientists may someday find the edge of the universe, but there is no end to the delusional self-regard of America’s one-percenters, as former Starbucks CEO Howard Schultz proved this week.

Sunday night on 60 Minutes, Schultz announced he was considering a run for president as an independent. The Twitter reaction was like something out of 28 Days Later: mobs of Trump-exhausted Americans sprinting to bite his face off. At a bookstore appearance for his new memoir, a heckler shouted “Go back to Davos!”

Why the severe reaction? Schultz openly declared his decision to run as an Independent was based on the idea that he’d have to “lean left” to win the Democratic nomination. This is rich-speak for “I obviously couldn’t win the nomination if I had to compete honestly.”

His plan therefore is to skip the grueling Democratic primary and buy his way past one tier of certain electoral failure, jumping straight to the general. Once there, he’ll spend just enough of his personal fortune to split the anti-Trump vote and re-elect the dumber version of himself currently in the White House.

Schultz timed his announcement to coincide with his ghostwriter Joanne Gordon’s new work, the aforementioned memoir entitled, From the Ground Up: A Journey to Reimagine the Promise of America, released Tuesday.

From the Ground Up belongs to the Fuck You: How I Became a Billionaire and You Didn’t genre that has an oddly persistent market in America.

Because it’s also designed to double as an extended stump speech, it’s a particularly difficult read — the boring and insincere autobiography of a pretentious oligarch who probably hasn’t been told to his face he’s full of shit since the first Bush administration.

The Starbucks origin story is a Freudian horror flick, though Schultz doesn’t tell it that way. He describes growing up in subsidized housing in the Canarsie section of Brooklyn in constant loathing of father Fred, who spends so much time on the couch that Schultz’s mother nicknames him “Mr. Horizontal.”

The future deficit hawk Howard acidly describes Dad as a dead-ender who had a “lack of a work ethic” and spent beyond his means — he’d “buy used tires… then treat himself to a manicure and a pricey haircut.”

Dad worked jobs that were humiliating to young Howard, including driving a diaper delivery truck. He would come home complaining of the odor, and Schultz “would get a whiff of what he was talking about.”

To get away from “the smell of his malaise,” young Schultz would sneak to the top of the building stairwell and imagine a less loser-y future. This becomes the operating metaphor of the book, about what “informed the life I led once I got out of the stairwell.”

At one point, teen Howard curses his mother out (hurling “a certain four-letter curse word followed by ‘off’”). Then just before dinner, he blithely goes to take a shower, not hearing his father come home. Dad bursts into the shower and punches Howard.

Howard leaves Canarsie, meets a girl in the Hamptons, gets married, then moves to Seattle to work for a coffee company called Starbucks. He goes on a trip to Italy, visits a café in Milan, and has the Eureka moment about opening espresso bars in America.

He leaves Starbucks to branch out on his own, and his first espresso bar, called “Il Giornale,” goes under construction in 1986. He flies his father Fred out to take a look.

“I took him to see the original Il Giornale store that was under construction,” he writes. “I proudly described my plans to create hundreds of places where people could come sit, visit, and be served Italian-style beverages.”

The reader guesses well in advance that this vision might not excite his cash-strapped Jewish laborer father from Canarsie. But to Schultz, his father’s puzzlement over the little Italian coffees is a bitter insult.

“I don’t think my Dad got it,” he said. “All he saw was a store. And for him, coffee came in a can and should be brewed in a tin percolator. Why all the fuss with the fancy Italian names?”

Howard’s father dies shortly after, and “any chance of mending our relationship died as well.” This seems to have been a defining moment for Schultz. With this campaign for president, too, he seems determined to make us all admit how grateful we are to have so many places in which to consume pretentiously-named beverages.

After his father passes, Schultz ends up buying out his old firm, Starbucks, with the aid of some felicitous connections like Bill Gates, Sr. Under that brand name, his vision of ubiquitous espresso bars becomes reality.

Coffee from there took on a mystical importance. Starbucks, he realized, was “not just something that exists between four walls,” but a “mindset.” It was “not home, not work,” but a “third place” that is “a way to exist in the world.” He went on to banish small, medium and large from America’s coffee vocabulary, replacing them with tall, short, and grande.

Schultz at one point becomes the last principal owner of the Seattle Supersonics, and when taxpayers won’t help him finance an arena, he sells out to an investment group from Oklahoma. His thinking:

Someone from outside Seattle, I thought, might have a better chance of negotiating a new arena deal because the threat of losing the team could push city officials to come to the table with more favorable terms.

Schultz claims he only sold the team on a promise that the new group would “spend a year working in good faith with the city” (read: attempt to emotionally blackmail taxpayers) to get a new arena deal.

To believe this, you’d have to believe sports-crazed Oklahoma City investors would buy an NBA team with no lease obligations in order to keep it in Seattle.

Of course the Sonics left town, and instead of getting to watch a generation of players like Kevin Durant, Russell Westbrook and James Harden dominating basketball from the Pacific Northwest, Seattle fans — whom the ever-cloying Schultz calls his “most precious” stakeholders — got to suck eggs every winter.

Meanwhile Schultz became a mega-billionaire on his way to offering “more than 170,000 variations of Starbucks beverages.”

Once you get past the somewhat interesting “avenging my loser Dad” portions, the rest of the book is just collections of clichés lifted variously from the campaign-lit and CEO-bio genres. Schultz’s mind is a giant T-shirt.

He goes to Gettysburg and learns “Experience… is the clay of wisdom.” Entrepreneurship is like “raising a child.”(Forbes alone has done that headline at least twice.)

“Magic,” he writes, “is not reserved for selling pie and coffee. It can extend to any endeavor — like trying to create jobs.”

368 pages of this!

Politically, Schultz belongs to the “Opportunity Democrat” species that began popping up in the mid-Eighties. That was when Third Way/New Democrat types replaced lunch pail labor slogans with the tall, grande and venti of political themes: “Accountability, responsibility, opportunity.”

Here’s his obligatory paean to “opportunity”:

One way to describe the American Dream is as a promise—a promise of life, liberty, and the pursuit of happiness. Inherent to that pursuit, I believe, is having access to opportunities like education and good jobs… Opportunity shows up as luck, but is also embedded into our social, governmental, and corporate constructs…

What else? Schultz has “disdain” for the political class, but he “viewed Senator McCain as an exception.” He was sort of against the Vietnam War as a youth, but didn’t protest because he was “more focused on trying to get out of Canarsie than trying to get the country out of a conflict half a world away.”

He spends a lot of time talking about the various social campaigns started by Starbucks, including plans to offer jobs to immigrants or to raise capital for small entrepreneurs by selling $5 bracelets that read INDIVISIBLE.

Which is fine, and frankly, unless you’re the kind of person for whom triteness is a felony, Schultz is more of a bore than a monster. On that last point, though, From the Ground Up is exceptionally dull, so completely devoid of ideas that it’s almost interesting. Schultz makes the Romney family cookbook read like Dante’s Inferno.

Which wouldn’t be a problem — America is used to douchey CEOs — except Schultz just injected himself into the 2020 election season in the most negative conceivable way, virtually guaranteeing four more Trump years if he spends enough money tilting at the national popularity windmill.

He’s running for the same dumb reason that’s inspired various Wall Street leaders to whisper concerns about 2020 to reporters of late: they fear and despise wealth-tax-proposing liberals like Bernie Sanders or even Elizabeth Warren more than they disapprove of the Trump presidency, and are too stupid to keep that evil thought to themselves.

If Schultz runs and Trump wins, people around the globe will pelt him with batteries and cat turds for all eternity. He’ll wish he long ago died and went to share a hell-cauldron full of Sonics fans. Is anything in the world more dangerous than a bored billionaire?

Magic at its best. Show this video to your kids.

HarryNewton
Harry Newton, who won’t ride his bike to tennis today. Too much ice on the road. It’s 6 degrees in Manhattan. They have buses and subways in New York City. What a discovery!