Investment Grin Of The Day Google
Star Wars: The Next Frontier In Human Stupidity
I am talking about the real thing, not the movie. China, Russia and the U.S. are developing and testing controversial new capabilities to wage war in space.
War in Space May Be Closer Than Ever
“Offensive space control” is a clear reference to weapons. “Active defense” is much more nebulous, and refers to undefined offensive countermeasures that could be taken against an attacker, further widening the routes by which space might soon become weaponized. If an imminent threat is perceived, a satellite or its operators might preemptively attack via dazzling lasers, jamming microwaves, kinetic bombardment or any other number of possible methods.
Given human species track record, I would imagine the above becomes just a matter of time.
“We are in the process of messing up space, and most people don’t realize it because we can’t see it the way we can see fish kills, algal blooms, or acid rain,” he says. “To avoid trashing Earth orbit, we need a sense of urgency that currently no one has. Maybe we’ll get it when we can’t get our satellite television and our telecommunications, our global weather reports and hurricane predictions. Maybe when we get knocked back to the 1950s, we’ll get it. But by then it will be too late.”
Another worthless data point to worry about? Yes and no. Should a serious conflict between Russia/China and the US/NATO develop over the next 15-20 years, something I anticipated, expect most satellites to become targets. As 60 Minutes episode last year showed, China already has the capability to shoot down our satellites (I am sure Russia does as well). Even the deep space ones.
As for me, I continue to be amazed with the fact that the human race is working overtime on trying to destroy itself. The problem is, we now have the technology and the capability to do just that.
Are Global Woes Finally Catching Up To The US Markets?
8/12/2015 – A positive day with the Dow Jones up 0 points (0.00%) and the Nasdaq up 8 points (0.15%)
If you haven’t noticed, China’s dual Yuan devaluation has sent the Dow down 500 points over the last two days. Although half of this down move has been retraced thus far. It is important to understand that China is doing this our to necessity. And it’s not only China. We are facing a similar setup worldwide. Consider the following.
- iShares MSCI Emerging Markets (EEM) which is down 19 percent from last summer’s highs.
- DB Commodities Tracking Index Fund (DBC), which is down 43 percent from last summer’s highs
- Factory orders here have expanded on a monthly basis only twice in the last 11 months. Excluding transportation, factory orders collapsed at a 7.5 percent annual rate in July, the worst since the maw of recession in 2009.
- In Japan, despite a near 40 percent drop in the yen, industrial production is growing at just a 2 percent annual rate.
- In China, the PMI manufacturing activity index dropped to 47.8 in July, down from 49.4 in June and below the neutral 50.0 mark for the fifth month in a row. Chinese factories are suffering their deepest contraction in activity since July 2013.
- In China, the PMI manufacturing activity index dropped to 47.8 in July, down from 49.4 in June and below the neutral 50.0 mark for the fifth month in a row. Chinese factories are suffering their deepest contraction in activity since July 2013.
- Etc….
Can the US markets recover and/or avoid worldwide/commodity collapse?
I don’t see how. What you have to understand is this. Most of the recovery off of 2009 bottom has been driven by zero interest rates, speculation, QE and stimulus. And now that it’s gone, nothing can prevent further collapse. China might be the first to pull the trigger in this currency war, but it is just a matter of time now before the FED cancels interest rate hikes. Not a good sign.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 12th, 2015 InvestWithAlex.com
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Are Global Woes Finally Catching Up To The US Markets? Google
Investment Wisdom Of The Day
China Starts A Currency War, Part 1
To fully understand what China is doing and why, we must first understand the scope of the problem or what they are trying to contain. But as is the case with any bubble, Chinese bubble is uncontainable. The problem is, we have never seen the extent of such a miss allocation before. Here is what China is dealing with…..
- Massive stock market bubble.
- Collapsing trade data.
- Chinese corporate borrowers owed $14.2 trillion at the end of 2013 Vs $13.1 trillion owed by U.S. corporations.
- This means that as much as 10 percent of global corporate debt is exposed to the risk of a contraction in China’s informal banking sector.
- Cash flows and leverage at Chinese corporations are the worst among global peers, having deteriorated from being the best in 2009.
As I have mentioned in the past, most of China’s economic growth over the last 5-6 years has been financed by massive credit expansion. The likes of which we have never seen before. The result?
- $21 Trillion Debt Mountain. Roughly the same size as the entire US Banking Sector. It took the US 220 years to get to that number, it took China just 5 years of explosive credit growth.
- $6 Trillion In Shadow Banking. Actually, no one knows how large this number is. I have read good data/reports putting this number at $10-15 Trillion range.
- Empty cities, shopping centers, massive speculative bubble in real estate, built out infrastructure, rising cost of labor and export driven economy.
How much longer can this go on? Well, that’s a Trillion dollar question…..or a $40 Trillion dollar question. Apparently, it is already unraveling. Either way, one thing is for sure, this will not end well nor will it end in an orderly fashion.
Part 2 Tomorrow…..
China, Deflation….Are We In A Bear Market Already?
8/11/2015 – A big down day with the Dow Jones down 210 points (-1.19%) and the Nasdaq down 62 points (1.22%)
Today’s sell-off and subsequent market adjustments were caused by China’s “unexpected” Yuan devaluation. In simple terms, most nations are now in a full blown currency war. Trying to devalue their way to prosperity at the expense of someone else.
A more complex view incorporates understanding that China’s move opens up a door to future fundamental adjustments throughout the world. From interest hikes in the US to the price of oil. He is a very simplistic view for the time being. Q&A: What yuan devaluation means for China, other countries I will attempt to cover this subject in greater detail over the next few weeks.
Now, Gross Sees Global Economy Dangerously Close to Deflation
Once there is a “whiff of deflation, things tend to reverse and go badly,” Gross said Friday in a Bloomberg Radio interview with Tom Keene. Gross pointed to how the CRB Commodity Index isn’t just at a cyclical low, but lower than in 2008 when Lehman Brothers Holdings Inc. went bankrupt.
I have held this premise for a number of years now. Most people believe we escaped deflation in 2008/2009 by the skin on our teeth. End of story. Well, WE DIDN’T. Deflation was simply covered up for the time being by zero interest rates, QE and massive amount of stimulus flowing through our financial system. Now that the stimulus is gone, deflation will become more prominent once again.
When the global economy has as much debt as we do now, estimated to be at around $230 Trillion, there could be no other outcome. Either deflation, outright default or hyperinflation.
Finally, MarketWatch asks Has the bear market in stocks already begun?
We have asked this exact question about 10 days ago. Let’s take a closer look at both sides of the argument.
Bearish Case:
- We might already be in a bear market
- It’s time I reminded you how expensive stocks are — a 50% plunge would not be a surprise
It’s nothing that we haven’t talked about on this blog before. Think about it in the following fashion. The NYSE (largest index by capitalization) is already down 4-6% from its trading range initiation 13.5 months ago. The Dow set an important top on March 2nd, only to set in a double top on May 19th. The Dow Transports are flashing a major bearish reversal sign.
All of the above suggests that the market has been distributing for close to a year and once this distribution period ends, a new bear market leg will kick in. In fact, considering where the indices are today, it might have already started.
Bullish Case:
The primary argument on the bullish side is as follows.
- The market has been consolidating after a big 5.5 year run up: It is resting before the next leg up — Fair enough. I will give them this one. That is technically possible.
- The market is not too expensive: I am seeing this over and over again. This time is different, this sector, that sector, accounting, statistics, etc…. People try to twist their numbers in a million different ways to justify today’s valuations. At the end of the day it is rather simple. Shiller’s S&P P/E is at 27, the third highest level in history (behind 1929 and 2000). It is never different…..case closed
- We are in a secular bull market that has another 10 years to go. Wrong. If you study history you will see that bull/bear markets alternate in clearly defined 17-18 year cycles. The 2009 bottom was a mid cycle bottom, not a terminal point of 2000-2017 bear market. Meaning, we still in a secular bear market that will only complete in 2017-18. You can learn more about it here Market Cycles
Who is right?
I will let you come to your own conclusion. From my vantage point, the market has been in distribution for over a year now.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 11th, 2015 InvestWithAlex.com
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Investment Wisdom Of The Day
Epic Bull Vs. Bear Battle
If you participate in financial markets the video below is a must watch.
Carl Icahn and Larry Fink, BlackRock Chairman and CEO discuss the state of today’s financial market. As a quick summary…..
Carl Icahn: High-yield market is about to blow up (he indicated previously that he has a large short position there or building one). Just as it did in 2007-2009. This will have a net negative impact on the stock market. Just as it did in 2008.
Larry Fink: No way in hell, we don’t have the leverage we had in 2007.
My Comments: I believe Carl Icahn is on the right side of the trade here. The massive amount of leverage Larry Fink dismisses is still there. Its just that a large chunk of it got shifted onto the FED’s balance sheet and the stock market.
Here is what I believe the trigger point will be: As soon as investors lose “net faith” in the FED you will see this whole thing fall apart. Fast. As far as I am concerned they have already lost the window of opportunity to raise interest rates. They will now be stuck in the worst case scenario…..zero interest rates, no way to stimulate as another round of QE can backfire and collapsing capital markets. As soon as investors come to this realization, the jig will be up. And that should happen much sooner than most people anticipate.
Anyway, watch this video. It is definitely worth 5 minutes of your time.
Why You Should NOT Follow Warren Buffett’s Investment Advice
8/10/2015 – A positive day with the Dow Jones up 241 points (+1.39%) and the Nasdaq up 58 points (+1.16%)
Warren Buffett believes you should be fully invested. WARREN BUFFETT: Stocks are going ‘a lot higher’
Buffett reiterated that he was a long-term investor, saying he expected prices to be “a lot higher” 10 years or 20 years from now.
No one is questioning Mr. Buffett’s investment acumen here and I would have to agree with his analysis. My own mathematical and timing work shows that the stock market will be much higher 10 years from now. That is not the question. The question is, are you able and/or are you willing to take a 30-50% haircut over the next 2-3 years?
If your answer is NO, understand the following two points.
- Mr. Buffett and Berkshire Hathaway are “The Stock Market”. Meaning, even if he was inclined to get out, he wouldn’t be able to. As a result, there is no point in being bearish or telling others to get out. Instead, consider this WSJ ‘Buffett Indicator’ Flashes Warning for Stocks
- The difference between Mr. Buffett and most investors is so vast that people should be very careful when listening to a simple “buy and hold” investment advice, even from the man himself. As far as I know, no one has been able to fully replicate his success.
That is to say, Mr. Buffett’s advice is right on the money, but only if you are willing to take a massive beating over the next 2-3 years.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 10th, 2015 InvestWithAlex.com
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Why You Should NOT Follow Warren Buffett’s Investment Advice Google
Facebook (FB) Is Cooking “Likes”
This is the last time I will bring up Facebook (FB) for a while. I promise. At this time, I continue to maintain my view that Facebook is one of the best SHORT opportunities in the market. You can learn more about it here. Why Short Sellers Should Drool All Over Facebook
Here is why I am bring up Facebook again. I have noticed something since about July 1st or the start of this recent quarter. And, I have also noticed this trend accelerate.
I have two old business pages on Facebook that I haven’t really used in about two years. When they were active, I have probably spent a grand total of around $500 advertising both pages on FB. Just testing things out. Since stopping, those pages went dead.
Until about July of this year. Just over the weekend one of the pages got 5 likes while the other got 7. Plus, around 20 people followed the pages in question over the last few weeks. Curiously, these pages got no action, literally ZERO, in both respects over the last two years. The content is old and whatever content is there is marginal at best. Point being, they shouldn’t be attracting attention.
The question is…..why or what is going on?
While the story above is anecdotal at best and even though I cannot prove this, I believe Facebook is turning to artificial “click or like farming” to squeeze more revenue growth out of their business. Not a good sign at a P/E ratio of 95.
Point being, Facebook growth is slowing down. If they are indeed doing “Click Farming”, it must be slowing down substantially. And soon as investors get a whiff of that, they will send this thing down to $20 a share, as my previous analysis suggests. You can thank me later.