WASHINGTON – Sure, it’s an old cliché. But truly, wonders never cease. From Wall Street’s opening bell, resurgent Wall Street bulls reversed Tuesday’s nasty decline Wednesday morning. The convincingly substantial upside move is persisting Wednesday afternoon. The reason why? Sleepy Joe Biden’s delegate victory over Bernie “The Commie” Sanders on the Democrats’ vaunted Super Tuesday Cage Match. According to political pundits and CNBC’s blow-dried commentators, Slo-mo Joe’s “Comeback Kid” act is purportedly the reason behind today’s irrationally exuberant "relief rally" on Wall Street. ##### What's it all about, Sleepy Joe?
Allegedly, what Biden’s Super Tuesday enhanced delegate lead count signifies to bullish traders and machines alike is that the Democrat Party and the Deep State (one and the same) have begun to successfully derail Bernie “The Commie’s” Socialista juggernaut. Which could mean that this fall’s presidential contest will likely pit Sleepy Joe against President “The Donald.” Rich Wall Streeters, for whatever reason, vote reliably Democrat, seemingly against their own best interests. Yet they’re also realists who figure at this point that it’s better to run a clearly senile Democrat against President Trump. That’s true even if Hair Sniffer Joe goes down in flames. The fact that odds favoring Biden’s nomination increased substantially Tuesday night makes America’s One-Percenters sublimely happy one way or another. Now they know (more or less) that at least for Election 2020, they won’t have a genuine, 100% Commie nominee heading up the Democrat ticket. Including all the likely electoral and political destruction that would likely entail. ##### Bigwigs, rich guys and Wall Street bulls love socialism, too. Sort of...
Portrait of Antonio Gramsci around 30 in the early 20s. Image via Wikipedia entry on Gramsci. Italian photograph. Out of copyright, in the public domain.
True, wealthy bigwigs and the Powers-That-Be – aka, The Deep State – are fairly sure that Bumbling Biden will go down to defeat. But that could give them another precious four years to move the currently ascendant pro-Bernie, pro-AOC Commies off to the party’s periphery. The party pros figure that putting socialism over on America’s Great Unwashed should be accomplished slowly, à la Antonio Gramsci. Not overnight, à la Bernie’s idol and hero, Cuba’s late Communist dictator Fidel Castro. What does politics have to do with today’s wacky stock and bond markets and seemingly irrational Wall Street bulls? Quite a lot, actually, as it’s all about power and political favoritism, something the Democrats and their mega-wealthy funding sources have held onto with a death grip since the election of 1932 put them in power, effectively forever. It’s been a good deal for them all. **
Also read: The 2020 Wall Street Crash: A detailed narrative emerges
Does Wednesday's snapback rally have legs?
The problem with this Wednesday’s big snapback rally in stocks – the second such rally we’ve experienced since the depths of the market’s recent crash / correction – is that Mr Market has suffered extensive damage in all the recent sell-buy-sell-buy frenzy. And it takes a substantial amount of time to repair damage like this and effectively re-set all those technical charts, allowing them to assume a new trajectory. Wall Street bulls have a lot of work to do to restore upside market momentum. Meaning that the current market turbulence will likely continue until it doesn’t. Even today, whenever the averages seemed their most bullish – right now at 2 p.m. ET, the Dow is up fully 3% on the day thus far – the sellers crank it up to 11 and take market averages down at least 100-200 Dow points. Ditto the other major averages, percentage-wise at least. In other words, there are still plenty of sellers and selling out there despite Biden's Super Tuesday victories. The reasons why are many, including the headline grabbing reason: the unknown trajectory of the coronavirus epidemic / pandemic. Like other flu-like pandemics, this one will wear itself out at some point. And likely this will include any number of headline-grabbing deaths. But what will be left in its wake? ##### Coronavirus Crisis hides deeper problems in US and world stock markets
We’ll leave these outcomes to bioscience for the moment. That’s because the whole coronavirus thing is to some extent a cover for the fact that the world’s central banks have clearly lost control of the financial situation. And worse, their government representatives-for-life don’t give a damn as long as the whole system doesn’t collapse while they’re still in office stealing all the taxpayers’ money. That’s why no legislature will actually grab the worldwide Ponzi scheme that’s been going on for decade, wrestle it to the ground and reform it. They just kick the can down the road. Until something like the Great Recession or the Coronavirus Crisis forces them to pretend like they’re fixing things. How many times they can patch this mess is anyone’s guess. But I digress. Meanwhile, the Coronavirus Crisis, while serving as the current catalyst for a stock market correction, will have at least some effect, most of it not good in the short term. ##### How much ripple effect will the China-generated Coronavirus Crisis tsunami have?
With Chinese businesses and investments effectively shut down solid for X weeks or months, businesses worldwide will eventually endure an inexorable financial tsunami as optimistic quarterly projections and supply chains alike go down the tubes for at least a quarter or two by my estimates. Even if businesses, supply chains and cash flows get back to normal by summer, it will likely take two or more quarters to simply get things back on track. Meaning that FY 2020 may end up being a wash. At best. Whether or not this also means a recession – a perverse, anti-Trump wet dream among the Democrats – remains to be seen. But in the US, at least, after adding the fiscal and supply-chain damage into the equation – particularly for big Dow companies like Apple, which has been too China-dependent for too long – and mixing in the slow-moving disaster of Boeing’s 737-MAX fiasco and associated damage to its suppliers’ businesses – optimism is in short supply right now for anyone who’s remotely realistic about how things work. ##### It's still a mystery out there
No one knows the answers at this point. But how the economy muddles through the alleged Coronavirus Crisis will slowly unfold over the next month or three. But Sleepy Joe Biden's Super Tuesday win may have little to do with it in the end. I’ll have more than this in a separate article. As soon as I can figure it out. More or less. Meanwhile, let the Wall Street bulls enjoy today's run. Stay tuned. 4 p.m. ET UPDATE: At Wednesday's closing bell, the Dow Jones Industrials closed up an astonishing 4.53%, a gain of 1173+ points on the day. (Final total may vary, as heavy trading near the close has markets still in "runoff" mode.) The broader-based S&P 500 average closed up 4.22% (gaining 126+ points on the day). And the tech-heavy NASDAQ closed up 3.85%, gaining a whopping 334 points by the close. Maybe the Wall Street bulls are back again? On the other hand, God Himself (literally) only knows where this headline-crazed market will go next. See you tomorrow
*– Headline image: How about Sleepy Joe Biden's Super Tuesday win? Is the DNC setting up another 2016-style game of Bernie Ball? Markets seem to think so. Cartoon by Branco. Reproduced with permission and by arrangement with Legal Insurrection.*
