Investment Grin Of The Day
Investment Grin Of The Day
Investment Grin Of The Day
OH MY, The Stock Market Is Going To The Moon
Ladies and gentlemen, we have reached the promise land. Apparently, at least according to the Central Office Of Propaganda And Truth, we have never had it better.
Trump’s forecast of 4% GDP growth close to coming true as Americans spend tax-bill proceeds
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Surging consumer spending is driving GDP well above prior estimates, and it is now tracking near 4 percent for the second quarter.
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That’s almost double the pace of the first quarter.
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Economists say the consumer is seeing the impact of the tax cuts and is spending, as a result of more disposable income
Damn, that sounds good. But it gets even better….
Fed is Rethinking Its Balance Sheet Unwind: Expect Lower LT Rates, Higher Gold
Four Consequences to Fed Delays in Balance Sheet Reduction
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Downward pressure on interest rates : If Fed officials do opt for a bigger balance sheet and decide to continue telling banks to prioritize cash over Treasuries, it may mean lower long-term interest rates, according to Seth Carpenter, the New York-based chief U.S. economist at UBS Securities. “If reserves are scarce right now, and if the Fed does stop unwinding its balance sheet, the market is going to react to that, a lot,” said Carpenter, a former Fed economist. “Everyone anticipates a certain amount of extra Treasury supply coming to the market, and this would tell people, ‘Nope, it’s going to be less than you thought.”’
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Upward pressure on gold
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Downward pressure on the US dollar
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More free money to banks at taxpayer expense
Still, some things are just not making any sense.
The U.S. economy is roaring, but the yield curve is flattening. What gives?
If recent data is any indication, the U.S. is on track to reap a sterling quarter of growth, but that hasn’t stopped the yield curve from flattening toward an inversion, a precursor to a recession.
What gives?
Let me attempt to dismiss this bullish narrative in one paragraph or less.
Today’s market is a speculative time bomb caused by the FED’s monetary policies. Trump’s tax cuts should be viewed as a Morphine shot to a dying and highly leveraged economy. Total S&P earnings jumped from $88 in 2016 to $110 today. Just about where they were in 2014. What growth? When you factor in the fact that most of this earnings growth came from the weak dollar, tax cuts and short-term stimulus, well, things are not looking very good.
In other words, this apparent prosperity is nothing but a giant Ponzi Scheme waiting for its day in the sun. If you would like to find out exactly when the stock market will crater, based on our mathematical and timing work, please Click Here
The FED, Yield Curve Inversion & A Sense Of Impending Doom
The stock indices were mostly lower on the FED’s decision to hike interest rates. Let’s take a look at the latest…..
Fed Hikes Again, Modifies Accommodation Language, Plans on 2 More Hikes in 2018
The Fed’s “Dot Plot” part of the Fed’s Projection Materials, show a majority of FOMC participants now expect the Fed to get in two more hikes this year.
I side with the two brave souls who suggest none. Regardless, the key point is we are very close to the end of tightening. The participants expecting 4.0% or even 3.5% rates are in Fantasyland.
Yield Curve Collapse Signals ‘Policy Error’ Looms After Hawkish Fed Statement
“The current shape of the U.S. yield curve is consistent with a recession in early 2020”. One more rate hike and this is inverted!
It is also important to note the extent of the tightening cycle here.
To give all of the above context, this FED tightening cycle has been unprecedented in many respects. The FED funds rate is up close to 200% since tightening started in late 2015. The 10-Year Note Yield is up 100%. The yield curve is near inversion and some inflation readings are picking up.
That is to say, if history is any guide all sings point to a major bloodbath in the stock market. Well, unless it is truly different this time.
Our work tends to agree. If you would like to find out exactly when the stock market craters, based on our timing and mathematical work, please Click Here.
Tariffs, The FED & Other Market Mumbo Jumbo
Investment Grin Of The Day
Why Trump’s North Korean Stunt Is A Pointless Sideshow Not Worth Anyone’s Attention
When the Emperor has no clothes, he wants your attention elsewhere.
This is certainly the case with Trump’s latest escapade with North Korea.
Don’t get me wrong, I am all for ‘World Peace’, but this particular issue is really a non-issue that has been created by Mr. Trump himself. Plus, none of this reconciles well with arms sales to murderous nations (aka…..Saudi Scumrabia, etc…) hitting their respective all time highs.
One thing is certain, whatever the outcome of these talks will be, agreement or kicking the can down the road, Mr. Trump will claim his “Historic Victory”
Before we get to where the real action is, let’s get a quick history lesson…..
From Little Rocket man to Dear Kim: Drama all set for historic talks in Singapore
When Trump took office, there was nothing in his rhetoric that could predict any effort to make peace with North Korea. The tycoon-turned-president’s first year in White House was tainted by heated exchanges with Kim. Trump had famously called the North Korean ruler ‘a Little Rocket Man’, and was furiously labeled “mentally deranged dotard” by Pyongyang.
Reacting to North Korea’s ballistic missile launches and a 2017 nuclear test that caused widespread international condemnation, Trump fired off a series of insulting tweets, including the one in which he claimed his nuclear button was bigger than that of Kim.
Aside from the boyish escapade, the situation in the Korean peninsula quickly got serious. The US and its ally South Korea began massive military exercises, probably seen in the North as war preparations.
In other words, bread and circuses as the Rome burns.
Forget North Korea. We told you here a few months ago, at the time when the bozos above where threatening each other with nuclear annihilation, that nothing would happen. That there would be no war between the US and North Korea. The TIME for the next big war has not yet arrived.
Having said that, your attention is currently being diverted away from the most important issue of our time. Make no mistake, a Nuclear WW-3 is just around the corner and the chess board is being set up at the present moment on the Russian border.
So, while the world might breathe a sign of relief when President Trump declares victory tomorrow, it would be nothing but false hope. The real superpowers will fight this upcoming war soon enough. If you would like to find out exactly when this war will start, please Click Here
This 100% Accurate Market Indicator Suggests Something Horrific Is Just Ahead – Weekly Update
A positive week with the Dow Jones up 503 points (+2.02%) and the Nasdaq up 39 points (+0.51%)
This seemingly positive week for the Dow was rather simple. The index was playing catch up to its more speculative cousins.
So, what indicator are we talking about? This….
Since 1913, the Federal Reserve has engaged in 18 distinct interest rate hiking campaigns, and in every single one of those instances the end result was a large stock market decline, a recession, or both. Now we are in the 19th rate tightening cycle since 1913, but many of the experts are insisting that things will somehow be different this time. They assure us that the U.S. economy will continue to grow and that stock prices will continue to soar. Of course the truth is that if something happens 18 times in a row, there is a really, really good chance that it will happen on the 19th time too. For years I have been trying to get people to understand that our country has been on an endless roller coaster ride ever since the Fed was created back in 1913. Things can seem quite pleasant when the economy is on one of the upswings, but the downswings can be extremely painful.
A sustained interest rate hiking campaign, as undertaken by the Fed, has always resulted in negative stock market returns.
Always. Not usually, not might-be-correlated-to. Always. As in, 18 out of 18 times. Until now. When we’ve had the single highest percentage increase in history (93.33% peak to trough, so far).
Our timing and mathematical work is very much clear in this regard as well.
It shows a rather powerful bear market arriving in not so distant future. If you would like to find out exactly when it starts, ends and how much the market will decline, please Click Here