Is history repeating itself?

What a bloodbath in the last two days of trading the passing week! Thursday's relentless selloff wiped out the whole week of gain of the markets and then the next day's initial panic selling wiped out another week's gain before it eased off towards the end of the day😢 This must be very painful, especially for those who were chasing the market lately. After all, no one cares about any warning signs that are sounding increasingly louder and louder but who cares when the market will only go up! Here is the saying: Nothing really matters until it matters.....and then it matters really a lot! Indeed, I had a real life experience about it as I was adding short positions more and more lately but was frustrated to see all the warning signs meant nothing to me until Thursday...all the sudden all my shorts deeply in the water abruptly jumped out of the water...and a lot above it!! Does it mean we have seen the top of this round of bull run and more downside is coming? No one knows for sure but I believe so. But it won't be a straight line down of course. We will see a lot of ups and downs even if we start to see a downtrend for the next few weeks. For example during the deep selloff  on Friday, I saw some positive divergence start to show up, which suggested a bouncing at least for a short term. We may see a wonder rally early next week but then most likely we will see more deep selloffs after that. I shared with my DW Family during the day for a short term bounce trade based on this and expect for a quick profit if lucky enough.  



With the excessive exuberance lately, we certainly see evidence of what looks like unusual, dot-com-bubble-esque behavior... It bears the question: is history repeating itself? I will start to collect such kind of evidence moving forward as this was exactly what happened during the formation of the dot.com bubble prior to 2000 and housing bubble prior to 2008. Below are interesting examples of excessive exuberance from various sources I have got:  

1) Tesla has now become the seventh most valuable company in the U.S., overtaking Visa.  And at $452 billion, Tesla is the world's most valuable automaker. It's worth more than twice as much as the classic "Big Three" (General Motors, Ford Motor Co., and Fiat Chrysler) combined, and it's twice as valuable as the distant second, the $217 billion Toyota Motor Corp.(NYSE: TM).

Market cap:
Tesla: $464 billion
Visa: $451 billion

Net Income:
Tesla: $0.4 billion
Visa: $11.8 billion

Profit Margin:
Tesla: 1.4%
Visa 51.4%

By the way, Tesla tumbled by 20% within days after it reached its all time highs around $500. It closed Friday around $418 and I think it can easily bounce a bit higher next week. But I won't be surprised to see it plunge again toward $320ish to meet its 50 DMA in the weeks ahead. As I said, I'm trading TSLA both directions and for now I'm long for at least a few days and then likely short it thereafter. 

2) Based on the fundamentals, Zoom's share price makes even Tesla and Amazon (AMZN) look like bargains. After jumping 40% after its earnings, its PE is 2700+ now, yes, more than two thousands times over its earnings! Talking about the insanity only seen during the epic dot.com bubble🤕  

3) Then Whitney shared an enlightening, if not scary, and entertaining exchange with an 11-year-old boy whose father asked Whitney to talk some sense into him...

The boy recently asked his dad for $50,000 to trade Tesla options after doing well with smaller investments that haven't gone down since he started making them.

"I know it will go up!" the boy told his dad about Tesla stock. The child insisted even after Whitney urged caution and shared his own story of being a "bull market genius" as a young investor in the late 1990s before the dot-com bubble burst.

4) "Today, one of my spouse's employees came up to him and said: "Doesn't your wife trade the market? You know she needs to buy Apple." Investing, stock market, etc., are not part of this business by any stretch of the imagination.

5) That reminded us of another anecdote we heard recently from Michael Batnick, the author of the excellent The Irrelevant Investor blog. It's a funny one...

In a recent episode of a regular YouTube show he hosts, Batnick said that he was in his home office, writing a post titled, "Why Everyone's Trading." Then, a plumber doing work in his home walked in and became part of the story...

Literally this man walks into my office and says, "You do stocks?" So I turned to him and said, "What do you got?" He takes out his phone. He was so excited. He said, "What do I do? I've got $130,000 in the market and I have absolutely no freaking clue what I'm doing." And the names he owned are exactly what you'd expect...

The plumber owned the stocks of tech giants like Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), and Apple... and other familiar names like PayPal (PYPL), Tesla, and Visa (V).

Batnick said he couldn't believe that "I had my very own shoeshine moment." He was referencing the well-used line allegedly said by the famous patriarch Joseph Kennedy just before the 1929 crash, "If shoeshine boys are giving stock tips, then it's time to get out of the market."

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So much for today. But let me be very clear, I'm not saying we are seeing THE top of the market. After all even with the harsh Mar 35% selloff, the market is still in its decade long bull trend. Until this trend line is breaking down, it may continue to run higher, especially if Trump wins his second term (fingers crossed). But for now we may have seen the near term top with a lot of volatility coming up. Don't be surprised to see 10-15% or even more sharp selloffs in the next few weeks. The best scenario I'd like to see is a more severe correction coming up very soon, followed by a good bounce back close to the Nov election to aid Trump's election!💪💪✌✌

"Why I'm stubbornly short"

I'm not talking about myself but a paraphrase for the hedge fund manager, Mark Spiegel. 

I think it is useful to share his thoughts about the current market conditions that in many aspects mimic what had happened during the bubble formation period back in the late 90s. No, I definitely don't consider a huge market crash is coming unless Biden wins the election, which can easily trigger a 50% market run. I have more confidence now that this won't happen but it doesn't mean the market is safe right now. Remember, during the late 90s period when the tech melt-up was ongoing, I think there were 7 times the market corrected by 10-15% or more before the final euphoric run towards the ultimate peak..... 

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Mark Spiegel of hedge fund Stanphyl Capital believes that there's a bubble in growth/tech stocks. In his recent investor letter, he explains why his fund is down this year...

So our short positions have obliterated the profits from our long positions, and yet when this bubble pops we'll be glad we have them.

The dichotomy between our longs and our shorts is well illustrated in this chart showing a record divergence between the performance of "growth stocks" vs. "value stocks," yet I believe that as has always happened in the past, this will mean-revert in our favor:

Later, Spiegel explains why he's maintaining a large short position in the Invesco QQQ Trust (QQQ), an exchange-traded fund that tracks the Nasdaq 100 Index:

I have a "near-term reason" and a "long-term reason." Near-term, bullish speculation is (literally) off the charts: for the last two weeks the Put-Call ratio for Nasdaq 100 constituent stocks closed at the extremely low (i.e., "complacent") level of 0.42 and intra-day today it hit 0.21, which may be the lowest level ever. Meanwhile, @SentimenTrader points out that call option buying as a percentage of NYSE volume far exceeds that of the 2000 bubble era...

... while @hmeisler shows us that Citi's Panic/Euphoria index is well into "Euphoria" mode – by far the highest it's been since the bubble peak in 2000 (when it hit approximately 1.5):

Valuation-wise, on a forward [price-to-earnings] basis, the S&P 500 is now at the peak of the 2000 bubble...

... while as a percentage of GDP the S&P 500 now exceeds the 2000 bubble's peak...

... and the broader stock market (the Wilshire 5000) hugely exceeds the 2000 peak:

And from @ISABELNET_SA we can see that available buying credit (cash) in customer accounts as a percentage of S&P 500 market cap is down near the level it was at the peak of the 2000 bubble...

... while as @Fxhedgers points out, there are almost no shorts left:

So "excessive bullishness & complacency" is the near-term reason why I maintain our QQQ short position. Medium-to-longer-term I believe the Federal Reserve's endless money-printing combined with massively profligate deficit spending from both parties in Washington and growth-retarding levels of debt will return us to an environment similar to the stagflationary 1970s; i.e., slow growth and high inflation (which we got a hint of this month). In that environment, high-flying stocks (such as the QQQ we're short) will suffer massive PE multiple compression, and gold (which we're long) will climb steadily.

For DW investment group, we have set up a Telegram group. If you want to join, Here is the link for "DW  谈股论金": https://t.me/joinchat/SgYa_xNrjTNHk9cS51ke0A.    

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Restoration of the American Dream

Restoration of the American Dream
By Trish Regan

My grandfather only finished the 7th grade. He worked most of his life as the night watchman at the City Yard in Portsmouth, New Hampshire... a former Navy shipping town on the southern coast of the state.

One hundred hours a week... at 50 cents an hour. That equated to a weekly paycheck of $50... And, being a typical Irishman, he had eight little mouths at home to feed.

Those eight little kids knew what it was like to be really poor. They went without shoes in the summer and wore donated heavy coats in the winter... But their father worked hard and always told them they could be anything they wanted to be.

And, you know what? They believed him.

I thought about my grandfather as I watched the Republican National Convention this week. Republicans are seeking to remind Americans of the opportunities that make our country so unique.

Yet, reading the liberal media's headlines in real time... I was struck by the venom.

"GOP pushes falsehoods and fear at convention," says the New York Times. Meanwhile, the Washington Post ran breaking headlines that read: "Republicans abandon promises of an optimistic convention and try to recast accusations of racism."

Recast? Is that because the GOP dared to have an Indian American, former governor of South Carolina Nikki Haley, speak? She addressed the issue head-on... "In much of the Dem party, it's now fashionable to say that America is racist. That is a lie."

Meanwhile, Senator Tim Scott spoke of his own family's origins... "Our family went from cotton to Congress in one lifetime. And that's why I believe the next American century can be better than the last."

I think we can all agree... Every American must be afforded the opportunity to access the American Dream...

However, the Left, through unfortunate policy choices, has increased the economic challenges in poor, urban communities.

I've reported on New York City schools where high schoolers cannot read or write English... yet no one cares. They simply pass them through the system. So why not offer vouchers and charter schools?

Many parts of urban America could be infused with investment via low-tax opportunity zones... And yet, the Left resists.

There are serious structural socioeconomic problems in America... So why is the Left trying to take the same socialist-style policies they use to run America's biggest cities and employ them on a national scale?

Republicans are being criticized because they dare to refute the Left's narrative that America is racist and President Trump is evil.

I think we can all agree there are challenges in America today. However, those challenges are a result of lousy economic policies that made it nearly impossible for many minorities to break the cycle of poverty.

We can do better. We must do better...

But will Joe Biden accomplish that?

Not according to Donald Trump Jr., who had one of the most tweeted quotes of the night...

Joe Biden is basically the Loch Ness monster of the swamp... For the past half century, he's been lurking around in there. Sticks his head up every now and then to run for president and then doesn't do much in between.

He argued that Biden's economic ideas were designed to crush the middle-class worker... but that his father's policies, "have been like rocket fuel to the economy and especially to the middle class. Biden has promised to take that money back out of your pocket and keep it in the swamp."

Social media erupted after his quip about "Beijing Biden"... But bottom line, he hit on the policy issues that matter for the middle class, citing Biden's support of NAFTA, his support for TPP... and even noted that, "Beijing Biden is so weak on China that the intelligence community recently assessed that they prefer Biden. They know he'll weaken us economically and on a world stage."

It is the middle class that has been robbed of opportunity in recent decades.

I think of it like this... the Left – and the Right – delivered us an hourglass economy... complete with plenty on top, plenty on bottom, and very little in between. The middle class, the ones doing everything right... playing by the rules... working, saving, paying their mortgage, trying to save for their kids' education and their retirement... THEY are the ones that lose in a bureaucratic, top-heavy, government-run, tax-to-death economy.

If you're on the bottom, you get handouts and free government money for college... But the middle-class family scraping by is told they earn too much for financial aid. Somehow, they're supposed to sell their home to send their kids to school... just so their kids can get indoctrinated by this groupthink?

America is nothing without a strong middle class... and freedom.

Army veteran and American Consequences contributor Sean Parnell, who is running to unseat Democrat incumbent U.S. Representative Conor Lamb in Pennsylvania, highlighted that very issue saying, "My fellow Americans, I promise you this: in our tent you are free. Free to speak the truth, choose your journey, define your life."

Imagine that... a world that preaches tolerance.

As the president's son said, "In the past, both parties believed in the goodness of America. We agreed on where we wanted to go... We just disagreed on how to get there. This time the other party is attacking the very principles upon which our nation was founded. Freedom of thought, freedom of speech."

Meanwhile, my former colleague Kimberly Guilfoyle distilled it this way, "This election is a battle for the soul of America. Your choice is clear. Do you support the cancel culture, the cosmopolitan elites... who blame America first? Do you think America is to blame? Or do you believe in American greatness?"

Somewhere deep inside us, regardless of party, I think we all believe in American greatness...

I know my grandfather did – the man who only finished 7th grade, and in his retirement went on to become a state legislator... in charge of his state's education department!

Only in America, as they say.

His children – my father, my aunts, and my uncles – all eight of them are a darn impressive bunch... an economics professor, a teacher, a journalist, a nurse, three lawyers (including one that was twice the Democrat Party's gubernatorial nominee), and his eldest daughter, the Mayor of the city my grandfather once worked for...

You see, it can happen, right here in America... in the land of the free and the home of the brave.

My grandfather loved this country and all it enabled him and his family to achieve – because, fundamentally, America is good.

Where should money be now?

I have been talking about the market risks for too long and I'm not sure I can add much of anything new now. So let me just share with you another writeup forwarded by my friend. It is said this one is from a very successful veteran trader who retired at age of 42 by trading options only. Needless to say he is very keen about risk/reward and sensitive about the market risks. Per my friend, this trader has been warning about a sizable correction for quite a while already and is increasingly piling up his cash load waiting for a right moment to go long again. Now he is sharing one sector that he thinks is one of the best places to put money into now.

Though I know most people don't like to buy cheap stuff but are more interested in chasing high flys. 🤓😷

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This divergence between techs and financials is unusual. It's going to reverse at some point. Money will rotate out of the high-flying technology stocks that are trading at historically rich valuations and flow into "value" stocks that have not participated much in the market's rally.

I thought we might have reached that point last month when the Technology/Financial ratio chart hit its highest level since the dot-com bubble burst back in 2000. But, as I mentioned above, extreme conditions have gotten even more extreme.

Take a look…

This is a ratio chart that shows the share price of the Technology Sector ETF (XLK) divided by the Financial Sector ETF (XLF). When the chart moves higher, tech stocks are outperforming financials. And, when the chart moves lower, XLF is doing better than XLK.

So far this year, XLK is far outperforming XLF – to a degree we haven't seen since 2000. It's not sustainable. It's going to reverse. And, when that reversal happens, the move lower on this chart is likely to be as swift as the move higher has been.

In other words, you're not going to want to own tech stocks. You'll want to be in the unloved financial sector.

Despite my concerns over the health of the broad stock market, I've been slowly, and steadily putting money into the financial sector over the past several weeks. It's arguably one of the cheapest sectors in the market.

Most financial stocks are trading at historically low valuations. And, the technical patterns appear to be turning bullish.

If we do hit a rough patch in the stock market over the next several weeks, money is likely to come out of the tech sector and flow into financial stocks. That could spark a pretty hard decline in many of this year's best-performing stocks. And, it could spark one heck of a rally in the banks.

A crash between bulls and bears over Tesla

This is probably the fiercest bull-bear debate over electric-car maker Tesla (TSLA). And it probably won't disappear any time soon. I personally cannot understand a case to be made based on fundamentals. As such I'm more lining towards the bearish case fundamentals.  But I'm definitely not a short guy for TSLA as it is damn risky! Musk is notoriously good at suddenly pulling out rabbits from his hat and TSLA fans just love it and will chase regardless. Having said that I'm constantly trading TSLA on both sides depending on its TA at a given spot of time. For example, I did two trades this week, initially shorting it with an option spread and then going long later in the week and both worked out perfectly. After closing out a profitable bullish trade today, I'm opening a bearish trade for the next few days at least.  But I can tell you, shorting it is more challenging these days as it can flip its trend very quickly. So I have learnt to take profit quickly instead of waiting for the max potential gain.

Today, I'm just sharing with you both sides of the debate, which my friend forwarded to me lately. Make up your own mind!😇

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The bulls have been triumphant so far, as TSLA shares are now trading for more than $2,000... and the company's market cap is approaching $400 billion. Will this continue?

For the bull case, watch this long (43-minute) conversation between Tesla Daily's Rob Maurer and Mad Money's Jim Cramer (hint: listen at 2x speed): Jim Cramer & Rob Maurer Discuss TSLA Stock, Elon Musk, Tesla's Battery Day, and Tesla's Advantages

For the bear case, here's the latest from my friend Doug Kass of Seabreeze Partners, who thinks "the stock may represent the largest single bubble – as measured by market capitalization of nearly $400 billion – in history"...

Trade of the Week (and Investment Short) – Short Tesla ($2014)

* I have assiduously avoided shorting Tesla for years.

* No more...

Telsa's shares have climbed from [roughly] $350/share on March 19, 2020 to over $2,000 today.

It can now be argued that Tesla's shares represent not only a good short-term short but, at current prices, the stock may represent the largest single bubble – as measured by market capitalization of nearly $400 billion – in history.

Here are the major points to my short investment thesis:

* Tesla has a shallow moat – the manufacturer has nothing that is proprietary in terms of electric car technology. Tesla's competitors (in the U.S., Europe, and in China) have a century of experience consistently manufacturing and distributing high-quality automobiles which subsidized ongoing operating losses from their electric car endeavors.

* Polestar, Audi, Volkswagen (VLKAF), and others have highly rated electric vehicle ("EV") offerings that are now or will be shortly offered.

* Adjusted for the sale of emission credits, Tesla has never been profitable in its 17 years of existence (despite having no competition and no need for advertising). In July, Tesla reported second quarter net income of $104 million, which included $428 million of pure profit emission credit sales, a revenue stream that will be drastically reduced later this year and which Tesla openly admits will disappear completely some time in 2021 (when other manufacturers have enough EVs of their own). Excluding that, Tesla lost $324 million and that's before the accounting of a questionably low warranty reserve. The worrisome and accounting, recently pointed out by @WallStCynic, "depreciation and amortization was down (!) year over year despite a new factory coming on line. SG&A and research and development was also down year over year." While sales are shrinking, the accounts receivable line is growing (remember this is a company that demands pre-payment before delivery.

* Tesla, at best, undertakes aggressive accounting. There are multiple lawsuits regarding the purchase of Solar City (which arguably bailed out the finances of Elon Musk and his family).

* Management turmoil at Tesla has intensified over the last one to two years.

* Tesla's quarterly sales have actually dropped since the end of 2018. The only reason Tesla's sales are being maintained is because of massive price cutting – and this is BEFORE the onslaught of competition that is on Tesla's door step.

* Tesla's second quarter revenues were buoyed by price cuts and sales into China (where EV competition is just beginning to start) while the rest of world sales were -30%. (For perspective General Motors (GM) sold over 710k units in China compared to only 30k for Tesla). Current sales are so weak that Tesla is aggressively advertising a price drop for the Model Y. The company's market share in the competitive European EV market has fallen from about 30% to single digits.

* The market is not static. Analysts and market participants fail to consider how much of Tesla's share of the EV market will be taken by the new models introduced by nearly every auto manufacturer, who's announced spending plans will dwarf Tesla's anticipated outlays. From Mark Spiegel: "Noted competition will include the Audi Q4 e-tron and Q4 e-tron Sportback, BMW iX3 (in Europe & China), Mercedes EQB, Volvo XC40, Volkswagen ID.4 and Nissan Ariya, while less expensive and available now are the excellent all-electric Hyundai Kona and Kia Niro, extremely well reviewed small crossovers with an EPA range of 258 miles for the Hyundai and 238 miles for the Kia, at prices of under $30,000 inclusive of the $7500 U.S. tax credit. Meanwhile, the Model 3 now has terrific direct "sedan competition" from Volvo's beautiful new Polestar 2 and the premium version of Volkswagen's ID.3, and next year from the BMW i4."

* The mere presence of all the competition will clearly lead to margin compression. As previously mentioned, Tesla is already cutting prices of its existing models.

* Bullish analysts base their future stock price evaluations on unsupported assumptions of what share Tesla will take of the global automobile market. They further assume that the margins that existed over the last two years – a period in which Tesla has faced little or no competition, will be maintained in the future.

* Tesla faces numerous lawsuits, including a May lawsuit accusing the company of selling units that were a fire hazard and a potentially significant and well publicized sudden acceleration class lawsuit delivered in July. Range claim issues have also recently arisen.

* Tesla no longer has a stock split as a catalyst as the company already announced a 5-1 stock split for shareholders of record on August 21.

Bottom Line

I have assiduously avoided shorting Tesla over the years, in part because of the high short interest, which has subsequently contracted to more "reasonable" levels.

I have followed Tesla for over a decade and I could add materially to the bearish case that I have summarized this morning.

That position has now changed.

Faced with an onslaught of competition, Tesla's market cap is now nearly 4x that of Ford (F), General Motors and Fiat Chrysler (FCAU) combined – despite selling only about 400k cars/year, compared to the "big three's" sales of 17 million units.

I am adding Tesla to my Best Ideas List (short).

Here is another one: David Trainer of research firm New Constructs recently posted his bearish case for the stock here: Tesla: The Most Dangerous Stock for Fiduciaries. Summary:

• TSLA's performance, including the recent stock split-driven price spike, makes the stock more attractive to many momentum/technical traders. 
• More cautious investors and fiduciaries should only be more wary and should consider the unusually high level of risk in the stock given that fundamentals are not driving the price.
• Tesla is priced as if it will not only achieve the scale and production of a mass-market automaker, but do so while maintaining its well above-average vehicle prices. 
• Even if we assume Tesla can achieve a 7% NOPAT margin, equal to Toyota, and grow revenue by 26% compounded annually (in line with consensus estimates through 2025) for the next decade, the stock is worth only $813/share today – a 57% downside to the current stock price.

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By the way, you must know by now that it is nearly a certainty that Wechat will be gone in the US. So very soon we have to communicate via other media. For DW investment group, we have set up a Telegram group. If you want to join,

Here is the link for "DW  谈股论金": https://t.me/joinchat/SgYa_xNrjTNHk9cS51ke0A.    

Importantly, you cannot join directly via Wechat. Two options:

1. When open the blog in Wechat,  点击右上角的三点，然后选在Safari 中open，然后点击the link and then join 
2. Or copy the link and paste to Safari to open and then join 

A Speech Only Melania Could Give

A Speech Only Melania Could Give

By Mollie Hemingway  

Melania Trump gave a long and detailed speech to end the night. Her 2016 convention speech was well received but was found to have included lines from a speech Michelle Obama had previously given. There was no way that the speech she gave last night could be delivered by anyone else, and certainly not by Michelle Obama.

The media worshiped and adored Michelle Obama's speech, which included lines suggesting that if you disagreed with it, it was because you were racist. Both she and her husband were seething with disdain and hatred in their speeches, which the media found very compelling.

Melania Trump, by contrast, gave an incredibly positive and empathetic speech. She expressed concern for pretty much all Americans, from those affected by the coronavirus to those concerned about unequal treatment under the law. She asked the rioters to stop rioting — something Biden didn't have the courage to do — and asked Americans to try to look at things from each other's perspective.

One line really drove home the contrast between the current and former first ladies. She said, "As you have heard this evening, I don't want to use this precious time attacking the other side, because as we saw last week, that kind of talk only serves to divide the country further."

Instead she concluded by making the case that her husband is "what is best for our country." She spoke lovingly of her husband, who had been attacked relentlessly at the Democratic convention. "We all know Donald Trump makes no secret about how he feels about things. Whether you like it or not, you always know what he's thinking. And that is because he is a person who loves this country and its people and wants to continue to make it better. Donald wants to keep your family safe, he wants to help your family succeed. He wants nothing more than for the country to prosper and he doesn't waste time playing politics."

Democratic Counter-Programming Is Riots And Mobs

Democrats decided to endorse the violent "peaceful protests" that have gripped the nation's cities this summer. At no point in their convention did a single speaker speak against the riots or the violence that have hurt cities and their inhabitants. Many praised or justified the unrest.

On the second night of the Republican convention, the riots continued in Kenosha, Wisconsin, a small city north of Chicago. Democratic mayors and governors have resisted pleas from citizens to restore order. Yesterday, the Democrat governor of Wisconsin refused an offer from the Trump administration to send in help. As the Republican convention concluded, the riots had "intensified" into greater unrest. Portland also experienced another night in its three months of unrest.

In Washington, D.C., this week, mobs of activists roamed streets forcing strangers to raise their fist in a show of solidarity with their cause or be shouted at and threatened until they succumbed.

Political parties usually try to lay low or provide effective responses to the opposite party's convention. Democrats, having squandered their opportunity to speak against the leftist mobs hitting cities during their convention, may struggle with how to seem less friendly toward the riots in the months to come.

CNN's Don Lemon and Chris Cuomo worried about how the riots were "showing up in the polling" and pleaded with Democrats to stop being so silent.

It's not just that the Republican convention is going well, but that the Democratic counter-programming of riots and mobs couldn't be worse for Democrats.

Real story behind the post office 'election theft' conspiracy...

 

Don't Fall for the Post Office 'Election Theft' Conspiracy Theory
By Buck Sexton

Dear reader,

If you want to get attention in 2020, come up with a crazy conspiracy involving President Donald Trump...

Even the most so-called sophisticated political minds fall prey to the most outlandish anti-Trump tale.

First came "Russia Collusion." For three years of the Trump presidency, the news media ran wild with their theories of international scheming and traitorous undermining of American democracy.

This scheme had its foundation in the dossier from Christopher Steele, a sloppy British ex-spy, who dressed up gossip as intel reporting and managed to dupe an all-too-willing cabal at the FBI with lurid tales of golden showers in Moscow, among other outrageous charges.

A thriller writer would have passed on it as a plot for a novel. CNN and the national media had no such reservations.

It led to countless hours of media coverage and a yearslong special counsel investigation. Now we know, beyond any reasonable doubt, the Russia Collusion scheme was a fairytale. The Mueller probe confirmed it and the Durham investigation has racked up its first prosecution of a former FBI lawyer who was part of the fabrication.

And the final bipartisan investigative report released yesterday by the Senate Intelligence Committee, which interviewed more than 200 witnesses and reviewed more than 1 million pages of documents, also found no evidence of collusion. Acting Chairman Marco Rubio noted in a statement:

We can say, without any hesitation, that the Committee found absolutely no evidence that then-candidate Donald Trump or his campaign colluded with the Russian government to meddle in the 2016 election.

What the Committee did find however is very troubling. We found irrefutable evidence of Russian meddling. And we discovered deeply troubling actions taken by the Federal Bureau of Investigation, particularly their acceptance and willingness to rely on the 'Steele Dossier' without verifying its methodology or sourcing.

Nonetheless, the political maneuvering of the Russia collusion catastrophe served its purpose for a time. The process was the punishment.

Trump's administration spent enormous energy and resources defending itself from this fabrication of Hillary Clinton's Democratic Party and a handful of Deep State plotters inside the federal bureaucracy. The idea of collusion also gave the Democrat base a comforting story to tell that absolved Hillary of losing and redirected its constituents' anger.

To the Democrat faithful, Russia collusion meant that Trump cheated, so he isn't really the president.

Now, the Democrats are running the same playbook for the 2020 election...

The Post Office conspiracy is becoming the Democrat Party's "secret weapon" narrative to fire up its base and undermine any Trump victory before a single vote is cast.

In short, the new theory is that Donald Trump is trying to defund or even eliminate the U.S. Postal Service (USPS) in order to stop vote-by-mail operations across the country.

But the evidence ranges from the dishonest to the absurd...

Photos appeared across social media last week showing post office employees removing mailboxes from the street. Other photos showed locked mailboxes.

Turns out none of the pictures showed anything nefarious or even unusual – post offices often adjust drop box locations – but it didn't matter. The story was too good for Trump haters to pass up.

Then, Democratic leadership like Nancy Pelosi and Chuck Schumer went full throttle with allegations that Trump was undermining the Post Office as a voter-suppression scheme because he won't agree to a $25 billion bailout check for the USPS.

I hope we can agree there is a difference between allegations that Trump is "dismantling the USPS," as pop music star Taylor Swift weighed in on Twitter, and declining to be politically blackmailed into handing that same agency billions of dollars more after it has lost billions year after year.

Simply put, the allegations are nuts. The Postal Service doesn't answer to Trump. It's already funded until 2021. And there is no danger that Trump can pull all money from it, nor is he threatening to do so.

In reality, the Democrats have decided that they want universal mail-in ballots for this election, without anywhere near the logistical planning or funding surge necessary to prepare for that in a reasonable fashion. It is also a massive invitation for voter fraud in what is likely to be a very tight election.

Beyond that, the USPS is a poorly run entity that has been losing billions of dollars in recent years (around $78 billion since 2007). It has 600,000 employees, but its mail carriage was down 33% in 2019. And about half of what is does deliver is junk mail and unwanted marketing material. In a world with FedEx, UPS, and Amazon, the USPS needs to be pared down and streamlined. Trump advocates for this because it is what common sense demands.

Instead of acknowledging the real problems from the USPS, Democrats have seized this moment for maximum political advantage. They are claiming Trump's refusal to cave to their every demand for the USPS is tantamount to another Russia collusion election theft.

With the 2020 election looming, it's clear what's at play. This post office conspiracy not only fires up the Democrat base, it also gives them a ready excuse in case Trump wins. "He stole it!" will be the rallying cry of the resistance.

And we will all be worse off as a country for the lie.

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