This is a guest post by Mike Wagner, analyst for D. Scott Neal, Inc., written as part of his end-of-day analysis of markets and securities on January 20, 2017, reflecting on the inauguration of Donald J. Trump as the 45th President of the United States. Following his astute analysis of the day’s volatility, he wrote to me:
I have ruminated on today’s events for much of the afternoon. I seem to be caught between those who think the world stopped spinning at noon today and those who believe it began spinning again after an eight-year hiatus. Maybe it is an appropriate irony, then, I have so little to say on such a momentous day. It struck me while looking at the day’s volatility how incredible it is that in such a divided country a peaceful transition of power could occur even still. Our financial markets function still; our communications function still; save for a small few who will take absolutely any opportunity to loot and burn, our streets remain free of other-than-usual violence still; in short, the Republic survives.
I think back to my freshman year at the University of Kentucky when, for a history class, I spent the afternoon in Special Collections breathlessly reading and re-reading the 1942 speech H.L. Donovan, then-president of the University, gave in response to America’s entry into the Second World War and the University’s role in the same. He spoke with great eloquence of the sacrifices that victory in that conflict would require, noting that the country had discovered it could not have the flying fortresses, ships, tanks, guns, and other supplies necessary to successfully wage war without giving up many of the comforts and conveniences of everyday life. I wonder what sacrifices might be required for this freedom of ours to continue through what feel to be very troubled times. I wonder also what sacrifices I have ever had to offer for the enjoyment of this democracy, if, indeed, I have offered any. Reading the letter quoted by Senator Schumer during this morning’s inauguration proceedings of one Major Sullivan Ballou to his soon-to-be widow leads me to wonder who indeed loves democracy in its ideal as opposed to loving it only insofar as its abstract supports the particular philosophies to which one may subscribe?
These questions make exceedingly poor market analysis, I grant, but their answers, at present, lend me the same conclusion I have of the market itself on a day like today: I don’t know. No one, of course, knows what the market is going to do. That said, much of the work we do here ultimately rests on the premise that there is a psychology to the market crowd which might be irrational itself but which may be rationed through nonetheless, ultimately giving some sense of clarity. I find myself to be remarkably unclear at the moment, despite the felicity of the Elder signals. So, for tonight, I’ll close with a simple but sincere prayer: God help us.