|
||||||||||||||
Stocks took another header today, with the Dow Industrials plunging 469 points, and the Nasdaq Composite shedding 2.8%. The VIX index of volatility jumped to almost 34, while “risk off” moves were the name of the game in currencies.
What’s causing the renewed turmoil? A simple fact: Numbers don’t lie. And today, they showed that manufacturing and exports are tanking worldwide.
In China, a key “official” index of manufacturing activity sank to 49.7 in August from 50 in July. That was the weakest in three years. A separate private report on production also remained stuck near its lowest in more than six years.
In South Korea, exports plunged at a massive 14.7% rate in August. That was far worse than the mid-single-digit decline that was expected, and the biggest plunge since the 2009 Great Recession.
Manufacturing activity in Chinese trading partners like Malaysia, Vietnam, and Japan is also falling. Indonesia showed its 11th straight contraction last month.
|
|
| Manufacturing in China and elsewhere in Asia is struggling. |
 Many on Wall Street had been counting on the U.S. to hang in there, even as many foreign markets and economies deteriorate. But today’s Institute for Supply Management report dashed those hopes. The U.S. index sank to 51.1 in August from 52.7 in July. Not only did that miss economist forecasts, but it was also the worst reading since May 2013. That’s 27 long months ago.
Seeing a trend here? The numbers show the global economy is losing momentum, led by sharp slowdowns in emerging markets. Heck, even our neighbor to the north, Canada, just slipped into recession after its economy shrank for the second quarter in a row.
Now here’s where things get interesting to U.S. investors. I noted several days ago that the junk bond market was trading at levels that suggested the Dow Jones Industrial Average could trade down to around 13,000. A separate carry trade index I wrote about on Aug. 28 is trading at a level last seen when the Dow went for about 10,000.
The last time the Chinese manufacturing index was at these levels, the Dow went for the mid-12,000s. And the last time our ISM index was at these levels, the Dow was around 14,800.
Again, I’ll ask: Are you seeing a trend here? We’ve seen the U.S. stock market start to crack, with wild declines and equally powerful short-term bounces. But we’re still trading at far higher levels than several indicators suggest we “should” trade at.
| “Raise cash, grab profits, sell losers and buy hedges.” |
None of that guarantees stocks will plunge. Other influences can drive equities on any given day, week, or month. But the sum total of the indicators I watch suggest this is the time to “raise shields,” so to speak, and gird for a battle with an increasingly volatile market. That means raise cash, grab profits, sell losers, and buy hedges like inverse ETFs and put options on big rallies when they’re cheap.
Are you doing that yet? If not, why? What do you think about the Dow’s fair value – is it 14,800? 13,000? 10,000? Or have stocks already declined enough to reflect the threats I just highlighted? These are hugely important questions, so please go visit the Money and Markets website and let me know what you think.
|
What will the Federal Reserve do next? What about the latest turmoil in China? And just how do I feel about stocks? That’s what everyone was talking about over at the website since yesterday.
Reader Frebon said the Fed needs to take action, rather than keep sitting on its hands. The comments: “The Fed raising rates is a good thing not a bad one. The Fed’s mandate has nothing to do with the market, only employment and inflation. They have failed on both with their current policies, as the published unemployment rate is a farce.
“They need to re-load their bullets if they will ever be able to help in the event of another recession. A Fed rate of 0.75% by year’s end should be their target, and 1.5% by June. Then they should re-assess the situation.”
Reader J.P.F. also said cheap money is causing more problems, rather than helping: “Haven’t we had enough of easy money, zero-interest rate policy? What’s the point of having a so-called ‘free market’ if marginal bets are not free to fail, as well as succeed in the market? As a saver, and longer-term investor, this past 10 years has certainly been a nightmare!”
But Reader Billy said raising rates is only going to make a bad situation even worse: “You almost get the feeling they are trying to help this deflationary storm grow stronger by the day (hidden agenda?). Look, the bottom line is we now have a perfect storm forming of growing deflation, massive toxic debt, crashing commodities, particularly oil/gas, a crashing Chinese economy and stock market, major technical and cyclical warning signs, and major geo-political problems ALL occurring simultaneously!”
As far as the impact of a hike or no hike, Reader Chuck B. offered this take: “Mike, you seem about as uncertain about the market direction as I am. The Fed seems to be inclined to push rates up a touch, anyway, while hoping that won’t cause a panic.
“I’m watching Larry’s charts, though, and if they seem to be turning out right, I’m holding back a few bucks to feed in when his big correction seems to be ending. And it is a correction – and overdue, at that, which may make it pretty scary. Perhaps we need a scare.”
Thanks for sharing, everyone. My view on the Fed is that policymakers clearly want to hike. They clearly should have already started hiking months ago, an opinion I laid out back then, and many others share.
But they have also shown that they’re slaves to the market. They’re scared of their own shadow, and basing policies that take several months to impact the economy off of a couple days’ trading in stocks and bonds. It’s no way to run an economy, but it’s how the Fed is doing things these days.
As for being uncertain about markets, I (respectfully) disagree. I have been ramping up my market warnings all summer here in Money and Markets. Literally DAYS before the Dow plunged almost 1,100 points at the open, I warned that “The bond market is screaming that stocks are toast.” A few weeks ago, I said central planners had lost control and that the “autopilot” market was over. And on Aug. 7, I said in no uncertain terms that I was “getting more cautions now than at any time in years.” That was more than 1,300 points ago on the Dow.
I went even further in my Safe Money Report, bagging multiple profits, cut a few losers, raised cash and hedged against declines. And I made the lion’s share of those moves before the big break in stocks.
And by all means, don’t miss the signals the various markets are sending out. Conditions are getting more volatile, and more treacherous to your wealth here. That’s why I believe protective action is warranted, and why I’m increasingly concerned the entire six-and-a-half-year bull market may be over.
|
Who doesn’t like a parade? Apparently, the Chinese do, because they’re about to celebrate the 70th anniversary of the conclusion of World War II with a massive display of military might.
The interesting thing now is that China is launching this celebration of its own magnificence at the same time its stock market, currency, and economy are slumping badly. So it’s doing all it can to artificially prop things up until the last tank rolls down the street – including new steps that make it more expensive for banks to bet against the Chinese yuan. But the country can’t fight the fundamentals forever.
Are central bankers out of bullets? That’s an argument I’ve been making for several quarters now, and the mainstream media is jumping on the bandwagon. Here’s just one example from the Financial Times, where the writer concludes:
“Several signs suggest loose monetary policy is increasingly proving ineffective, and central banks are failing to generate enough cyclical upswing to win against the structural forces constraining growth and inflation. Monetary stimulus alone cannot fix debt overhangs, low productivity, persistent unemployment, stagnant demographics and a lack of reforms and fiscal stimulus.”
Sounds about right to me – and that’s why I’ve been arguing that you need to take your financial future into your own hands, rather than count on Washington (or Frankfurt, or Tokyo, or …) to bail markets out anymore.
So what do you think? How concerned should we be about the major slowdown in China and elsewhere in Asia? Or about the fact central bankers are running out of bullets? Let me hear about it at the website.
Until next time,
Mike Larson
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
{ 63 comments }
The small retail investor has no chance in this market. Hedge funds, computer trading and insider front running has made it impossible to buy and sell stocks based on value. The end of Glass Steagall has exposed the large financial institutions to too much risk and the Fed had no choice but to bail them out. It will probably happen again.
Glass-Steagall was brought to law in 1933 by the Democratic Majority… It worked really well for over 66 years.. It was the Veto Proof Republican Majority that removed G.S. in 1999… (I’ll never forgive Clinton for signing it along with another Republican brought bill called NAFTA) The enabling legislation to remove G.S. was brought by Gramm/Leach/Blyley, all powerful Republicans… Elizabeth Warren and the Democrats have been trying to return it to law since Obama came to Power in 2009, but the Republicans have opposed it… No doubt about who the GOP is beholding to, aye?… :(
Here you go Mike S.. Notice the vote totals, who signed it, and what the Dim Treasury Sec. said. Just a loose reading about Glass-Steagall tells you it had already been watered down by Dim majorities 30 years before the vote in 1999. It’s purty “stupid” of you to keep blaming it all on the Repugs. They were all in on it together.
CONGRESS PASSES WIDE-RANGING BILL EASING BANK LAWS
By STEPHEN LABATON
Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another’s businesses.
The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.
”Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,” Treasury Secretary Lawrence H. Summers said. ”This historic legislation will better enable American companies to compete in the new economy.”
mule,
You need to get your “facts” from legitimate news sites rather than those supported by the Right Wing Greedy Billionaires. The vote to remove Glass-Steagall in 1999 was 205 Republicans and 16 Democrats…. Now, does that sound “Bipartisan”? Geezz! :(
Geezz Mike S. you need to go read the congressional record and quit boring people with your selective history, facts, and memory. (<:
What a democratic spin! If anyone has done more damage to business it is the policies of the democratic party. Who do you think is responsible for the mess we are in now with an overload of debt? Obama has brought more debt to our country than almost all of our former Presidents combined and have caused great damage to our small businesses which has had a devastating effect economically upon our country.
Where will they get the money ???
Mike Larson, when you say “cut a few losers” would that include the energy-stocks you urged us all to buy, when oil was $100 barrel, then $80 then $60..It’s been your biggest & constant buy-recommendation for a year..until now, as you now say nothing about it..
There are those who are pointing out that the Inverse ETFs you recommend as a hedge are also susceptible to volatile markets as much as the regular ETFs. Have you any opinion concerning these particular investment instruments related to risk?
edt
Chicago
With respect to leveraged etfs, please remember that they always go down faster than they go up; this is a straight-forward consequence of the math involved in the daily rebalancing. So if the underlying index goes up-down-up-down, you will always lose money with a leveraged etf (but be even on an unleveraged etf). So the leveraged ones are only good for large, unidirectional moves. So the extreme down and up moves of last week produced losses at the end of the week.
Phil,
You might want to take a look at my gains below in TNA since August 2009
How much of the markets past highs for the last years were floating on the Fed’s funny money AKA QE? How much overseas was likewise floating on hot air? The Chinese were spending huge amounts on construction of unneeded cities. FDR during the 1930’s spend massive (at the time) amounts on construction but it was dams, airports, and roads plus public buildings. Now much of that construction is falling apart and the governments concerned are too far in debt to fund reconstruction of that. How much of the QE funny money should have been spent there in stead of bailing out the banks and corporate America? Of course some of the politicians are badly out of touch with reality, in California our governor and his buddies don’t want to build needed water projects or fix broken roads. NO, NO, No they want to build a badly overpriced unneeded electric toy train set. They just expect to go out to the orchard and pick some more money, after all money grows on trees, doesn’t it?
Was it not a lovely day,just loved UVXY,VIXY
I hear all the yelling and screaming plus all the second guessing. Please tell me one fact
where is all this money to go ? Safe haven Safe haven where art tho.
The Dollar is starting to slide the yuan is not ready yet and will not be for quite some time, every one says gold is dead. Market around the world are tanking , Banks are going broke.
Maybe Mattresses will be a great investment.Slow down on the gloom and doom we will all be here when the storm passes . What do we do .????
Robert Drinkwater
I go way back with Weiss
Go for the gold it won’t take much to make it shoot up silver is better. 2 small market s
Mike,
My Long Term BUY/SELL indicator went to a SELL (yesterday) on the last trading day of August…. My Long Term BUY/SELL Indicator went to BUY on the last trading day of July 2009… The gain in SPX was about 89% and 316% in TNA.. I am now 100% Long Term in Cash and a few leveraged inverse funds (TZA and SDS)… Interesting how the futures were down big time going into the open today…….
Hi Mike,
The Government Insiders I suspect are cashing in and Shorting the market
because they know that it is a Quantitative-Easing-House-of-Cards, funded by
Borrowing by the Fed..
There could be an Election Component involved … by scaring the voters into the
belief that Conservative Times will Be Hard Times. If this works, there could be a voter backlash.
Trump is also scaring the Markets into preparing for the US to take Employment
back from the Asian workers. China responds by Devaluing their currency.
US Investors sell more of their investments in China… (Yes, American Profits also
Come from China)
That is the opposite of what the Prez said he wanted to do…which was to make the top 1%
share their wealth with the Poor.. through increased taxation If you look you will find that there are MORE Millionaires in the 1% so maybe they are Sharing less than we thought they were.
I would sure be nice to know what Investments are being Sold by the Federal Senate
who are allowed to profit from Insider Information Legally.
The Defeated Senators also are likely selling what they bought back in 2009 and
taking their profits since they no longer have their finger on the QE Budget and can no longer pick their winners.
http://thehill.com/policy/finance/166599-pelosis-net-worth-rises-62-percent-
http://www.opensecrets.org/pfds/summary.php?year=2010&cid=N00007360
http://www.insideedition.com/headlines/6753-who-paid-for-anthony-weiners-lavish-wedding
It sure must be tough making ends meet.
Greedy money changer on these sites keep complaining that the interest rate and bond purchasing must continue until their wallets and nice and full. Ten more years of this welfare for the money changes will not improve the living standards of working class Americans. What is proof of that statement? For the last 9 yrs salaries have declined and upward mobility is now only downward retrenchment. The FED recovery only benefits those on welfare and the top 1 percent. Why is the market not moving skyward? Some smart people are beginning to take profits and the market is running out of suckers to keep prices rising. Oh do not worry. If the FED has to secretly purchase securities in addition to bonds they will to keep this Ponzi scheme going for another 10yrs. After all, Yellen will want to be hired by Goldman Sachs when she retires. It would be palatable if this stupid reckless interference in the free market turned the economy around, but instead it only enriched the money changes and expedited the decline of living standards in America. As I said, do not lose sleep over this minor dip, the FED cannot afford to lose face or interfere with the wealth generating machine of the top 1%. Wal-Mart stated that they are raising their wages to 9.00 dollars an hour….boy that should stimulate the consumer sector.
All the world markets are down and looks like going lower and lower. How could anyone expect the U S markets to avoid the nose dive. Plus the FED is meeting in September, and the IMF meets in October. Protect your money.
FRB is giving banks near zero interest money, while it allows banks to charge high interest rates against the ordinary consumers, and while it allows banks to pay near zero interest rates to ordinary depositors. These allow the banks to first stay afloat right after 2008, and these enable banks to be fairly prosperous by now, with bank stocks fairly high.
With banks now making good profits, the FRB is trying to end giving free money to the banks by trying to raise interest rates off of near zero to the banks. This make sense.
Onl the other hand, the consumers and the middle class are still taking it on the chin due to FRB policy of allowing banks to charge usury rates against the consumers. Mortgage rates historically is about twice the rate savers’ bank deposits. In the past, when savings earn about 3 to 5 percent, mortgage rates were about 6 to 10 percent giving mortgage rates being about 2 times depositor rates. Now mortgage rates are 3 to 4 percent, while saving depositor rates are about a quarter percent, so that mortgage rates are 12 to 16 times saving depositor rates, instead of being 2 times. Thus instead of a 100 percent mark up, banks are getting 1,200 to 1,600 percent mark up against the consumer. For student loans of 6 percent, the markup is 2,400 percent mark up. For credit card rates of 8 to 20 percent, the markup is 3,200 to 8,000 percent. These thousands of percent markup is obscene by any measure. The FRB is allowing the banks obscene markups against the consumers. The FRB should no longer allow, and end obscene markup by its member banks.
Thus, the FRB should raise interest rates against the banks because the banks have mostly recovered from 2008, while at the same time the FRB should dictate the automatic lowering of interest rates charged against the consumers and student loans.
With the aging of the population in the developed world of the US and Europe with US baby boomers starting to retire in mass, the FRB should dictate the banks to automatically lower mortgage rates, credit card rates, consumer loan rates, and student loan rates. This lowing of rates for the ordinary people should be automatic with having to refinance to prevent banks from using catch-22’s to deny ordinary from refinancing to lower rates, and to prevent banks from charging high fees in another one of these catch-22 gotch-you schemes to increase obscene profits for the banks on the backs of the ordinary consumers.
While profits are necessary and good for the economy, as shown by the collapse of former Communist countries which tried to eliminate profits, obscene profits are harmful to the economy, as shown in 1929 when stock market operators made obscene profits selling stocks of shell and phony companies with false pumped up earnings reports, when oil baron make obscene profits with high oil prices, and when banksters made obscene profits with loose mortgage deals before 2008.
Here’s my Investment Advice For Today:
If you had purchased $1,000 worth of shares in Delta Airlines 5 years ago, you would have $49.00 today .
If you had purchased $1,000 worth of shares in AIG 5 years ago, you would have $33.00 today.
If you had purchased $1,000 worth of shares in Lehman Brothers 5 years ago, you would have $0.00 today.
But, if you had purchased $1,000 worth of beer one year ago, drank all the beer, then turned in the aluminum cans for the recycling refund, you would have received $214.00.
My conclusion, based on the above, the best current investment plan is to drink heavily and recycle.
It is called The 401- KEG.
Here’s to Beer. Best advice on here in a long time. Actually breweries are probably going to be one of the best investments these days the way things are going. Beer will replace all commodities including oil, gold and agriculture; except for barley, malt, hops, recycled aluminum and recycled water. Who says commodities are dead; just bring them back to life the old fashioned way. So drink up and watch your portfolio grow at the same time..
Cheers! Jim
Aw shoot Dr. Ron, here’s to BEER, enjoy(in moderation) in good health. Besides all the talk lately is we’re heading into a beer market anyway cause the bs market has run outta steam. Chug a lug Chug a lug
In 2008-09, the Dow retrenched about 50%. If that happened again, it would put the Dow in the 9000s. Play that for what it’s worth. Maybe – maybe not. But it does argue a good bit more of a drop is possible.
OK, enough already. We love “plunge” and “collapse” when we are talking about ONE month numbers. We don’t see “soar” the other side when the gains are the equivalent. We love to be miserable, it a condition that helps to sell advice. I love Money and Markets but let’s (collectively) drop the drama and headline stuff. If, instead of one month PMI numbers, and one week employment numbers, everything was measured as a six month moving average we wouldn’t have any headlines. Oh, silly me, then we wouldn’t be able to sell advice.
Dow at 8500 in the next 12 months.
Dow at 8500 in next 12 months.
Not in infrequently the U.S. has been the one to lead the world out of recession. It seems likely that the zero interest rate policy won’t do much more to help as others contract. But we still have plenty of ammunition to help. For some time it has made more sense to use a more stimulative fiscal policy–I’d favor an ambitious infrastructure program as a major part of it–that will stay in place over a period of time long enough for businesses to make investments consistent with it.
Of course, such a program is the opposite of what the Republican candidates are asking for–a reduction in spending and paying back part of the debt. It never did make much sense and it makes less sense now. And ironically, most of them seem to have forgotten that Ronald Reagan’s administration never got out of stimulative mode–thank goodness! Milton Friedman and Robert Eisner, well-known economists from opposite ends of the political spectrum, agreed that the Reagan deficits weren’t a problem. (So did I, in local newspaper columns.) Liberal Democrats professed to be outraged by the “huge deficits,” which didn’t cause a problem even in an era of much higher interest rates.
An exception of sorts to those who seemingly have never actually looked at the Reagan record is David Stockman, who hasn’t liked the actions of any president since Eisenhower left office, but I consider his case a poor one. And I don’t suppose many candidates will quote his statement on p. 59 of his book The Great Deformation: “The first spell of false prosperity was the unacknowledged yet massive exercise in Keynesian deficit finance carried out during the terms of Ronald Reagan and George H.W. Bush. The cumulative federal deficit was an astonishing $2.4 trillion, meaning that the public debt tripled and Federal red ink amounted to nearly 70 percent of GDP growth during those twelve years of Republican rule.”
When will you financiers and fellow wizards finally admit that monetary policy alone cannot fix the underlying fiscal problems resulting from the maldistribution of income and wealth and its consequent socially unsustainable inequality? The problem lies with a corrupt Congress that is doing everything possible to ignore “biting the hand that feeds it” with the legalized bribery known as “campaign contributions”! Forget about “morality” :greed just plain doesn’t work when the producers of tangible goods and needed survival services are driven into poverty while the speculators creating counterfeit pseudo air castle wealth are hugely rewarded for their perfidy. Read the book by Thom Hartmann “The Crash of 2016” and tell me how the 1.2 Quadrillion dollars of collaterless derivatives contracts created by US banks are beneficial for the economy!
Collateral-less derivatives will eventually have a positive effect as they will enhance the velocity at which the economy collapses…
Which means we will get the blood bath over with faster…
Pain felt for short periods is much easier to tolerate… Believe me…!
A lot like the scrubbing bubbles, collateral-less derivatives will wipe out the banks and investors overnight who should not be in business anyway!
Kinda like a cleansing of the system if you will…
Hopefully some dimwit in the pathetic federal government will not try a bailout for them, and they will die a natural death…
Dr. D,
Those “collateral-less derivatives” were not allowed before the GOP (R-205, D-16) voted to remove Glass-Steagall from the law in 1999 at the behest to the Big Banks…
There is a great story out there called “Mr. Weill goes to Washington” about this whole mess… Many might find it interesting reading…. Roughly $400 million was brought by the Cabal of Banking, Brokerage and Insurance to “lobby” for the G.S. Removal… I believe that was a record…..
Dr. D,
Those “collateral-less derivatives” were not allowed before the GOP (R-205, D-16) voted to remove Glass-Steagall from the law in 1999 at the behest to the Big Banks…
There is a great story out there called “Mr. Weill goes to Washington” about this whole mess… Many might find it interesting reading…. Roughly $400 million was brought by the Cabal of Banking, Brokerage and Insurance to “lobby” for the G.S. Removal… I believe that was a record…..
Mike, there is no question we are economically and financially in uncharted waters, so to speak. No one should be fooled into thinking this market can’t go down to 10k or 12k…we are THAT over extended in EVERY which way and form.
Billy, millions of people suffer Normalcy Bias, which leads people believe that since something has never happened before in their lifetime, that it never will happen.
You see, the Normalcy Bias inhibits our ability to cope with an adversity once it is underway.
People with Normalcy Bias have difficulty reacting to something they may have heard about, but never personally experienced like a 9370 DOW overnight.
Normalcy Bias also leads people to interpret warnings and inaccurately reframe information in order to form and project an optimistic outcome which leads the person to infer a less serious situation.
In short, Normalcy Bias is a kind of pain-killing drug which numbs a person to an impending danger.
I’m guessing you’ve taken your scrip today like a good little investor…!
As a Civil Engineer I am always in favor of creating jobs (including for myself) through infrastructure improvements; the contribution of food stamps to solid waste management and wastewater treatment being extremely minor. The problem with infrastructure improvement programs is the long lag time required for planning and environmental impact studies due to existing regulations. In the past infrastructure programs were used to support job creation during downturns; but under the current regulatory environment it is less restrictive to hand out food stamps than to create jobs.
Which is why the federal government needs to back away from helping people, and let the market and businesses develop the plans, methods, and projects and Americans are of necessity going to chuck all of the roadblock to progress and prosperity on the ash-heap of failed government policies.
The only jobs government has ever created were simply more burdensome government jobs.
There will be a reset when the DOW hits 3000 and the federal government as we know it today will be much smaller and leaner…
AND A RESET DOESN’T HAPPEN, AMERICA WILL CEASE TO EXIST.
Yea, like Child Labor Laws, the WPA, CCC’s Civil rights, Women;s rights, the EPA, Forest Service, Parks, TVA, Hoover Dam, Veterans Hospitals, GI Bills, ADC, FBI, ,,,, Ya, all those burdensome regulations…. Ya, Glass-Steagall got removed and, gee, that really helped didn’t it… What kind of a “Dr” makes those kinds of blanket statements, aye?
As a Louisiana resident I know they eye of the hurricane when I am in one. The backside is always worse than the front. All the Fed has done is keep us in the eye for six years. The debt, the malinvestment, the incompetent must be cleansed before our systems function properly again. It will be painful but the end result will be a return to sanity and prosperity. Jim
A good analogy. And when the wind suddenly goes from nearly calm to 120 mph, it can rip things up pretty badly. So how can we dissipate this storm before the eye-wall hits? Or can we?
Mike, this is a Black Swan in slow motion.
Raising rates is going to transform a bad situation into a nightmare.
2008 will look like a picnic when this perfect storm burst..
ITS BUSHES FAULT
Make that two Bush’s and throw in the evil genius of Cheney, aye?… Yep, the mess we have now in the Middle East goes right back to those three oilmen who thought they new better than our Generals…. I’m reminded of Powell’s prophetic words: “If you break it, you own it”…. Well, they sure broke it…. Looking back another generation, Preston Bush also had an “interesting” history with the Nazi’s but was never charged with Treason… :(
Unfortunately, there are no markets. Instead, the central banks are manipulating the debt and equity markets. Until one knows what the central banks are doing, it is difficult to determine what is a fair price for an asset. If one does not know a fair price for an asset, he should not purchase it.
A fair price is and will always be what someone is willing to pay for anything…
I read an excellent article today pointing out that the single best investment in inflationary environments is not good old fashioned gold but rare coins. They typically remain in very strong hands, thus making them very resistant to price declines. It recommended ancient and European coins in particular as they are still reasonably priced. It takes research and brains to be successful, but what doesn’t? Making money and having fun at the same time sounds like a pretty good idea to me. Jim
OK, I’ll play devil’s advocate. Here’s the game. Individuals and their 401k’s buy/own the stocks at $100/share. The market goes down to $90 per share and they sell (losing $10). The “Big Boys” (BB) and the “Plunge Protection Team” (PPT) buy at $90 then sell to other individuals and 401ks at $95. A ciuple of days later, the stocks decrease to $80 and individuals sell and BB and PPT buy. Later they sell at $85. Wash, rinse, repeat. The BB and PPT can do this 24/7. Why would they permit that to end??
1,
I noticed that also. Buma can do that in two years, no contest!
I believe much the same thing was said by the GOP about FDR, yet our Grandparents re-elected FDR more than any President in American history… Perhaps we could learn something from our Grandparents, aye?
Anyone who takes things from Bad to Less Bad Is going to be a hero. That’s what FDR did, of course. Or rather, he took office when things were at their worst, and starting to become better. He got the credit.
will she or will she not. stop running around and increase those dam rates even if it is only .10%. or shut up about when you will increase them. it only creates confusion and uncertainty. people do not feel secure. if you are decision taker take the decision. it is better a bad decision than no decision at all. after all you are decision takers you can correct a bad one if need be. again take it or shut up until you take it.
“structural forces”: This is what happens when the post WW2 Baby Boom moves into retirement. Demand falls. Really, growth is a demographic phenomena. If you want growth and demand, grow your family.
Could be all those immigrants Mr. Trump hates could be a good thing after all – as long as they can get jobs and buy things. That’s what they did in the 19th and 20th centuries. They saved America despite being mostly hated at the time. Bring the jobs back from Asia, and they’ll do it again.
In my book I am not giving any credence to what China is doing . Lou
In my book I am not giving any credence to what China is doing . Lou
I’m always surprised how distraught the analysts become at changes in production and economic changes in general. The human race has been evolving since the beginning of its life on earth. Are we supposed to now cease accepting change for the sake a few billionaires?
evolution is the lie of the devil just like alll the F – – – -ing globalist who want to promote agenda 21 and all the lies of the devil saying that there is never enough to go around so lets just kill everyone off. Take you Georgia guide stones and shove them up your posterieor only idiots who believe in evolution are stupid enough to accept the lies of the devil. There is plenty there is enough God told mankind to go out and conquer the earth and that there will always be “enough” it is only the devil worhshippers and their minions who promote phillsophies of “scarcity”, Proof is as simple as asking any person “how much is enough?” Rockefeller a multi billionnaire said always just a little bit more,,, Jesus told us to learn to be content with what you have, how can God give you more if you do not learn to be content with what you have? It is amazing to me that people with too much are the ones never satisfied and always want more , this is what causes poverty, they outwardly rich but inwardly they are bankrupt and cause the rest of the world to become bankrupt!
Globalizatioon and the idiots that brought you the “new world order” will be the economic death of this country. If Americans had a brain in their collective consciousness they would had said “hell no we do not want and do not need a “new world order” ” I would rather keep my job and live in a depression with no global trade than live in a NWO with no job no future and no hope of ever having a normal life again in this country. We should take the idiots who have been promoting this NWO out and hang them in effigy like they did with murderers and thieves because what they have done to this country is a crime worse than any criminal could commit. They have destoyed the wealthest nation in the world and caused us to become the greated debtor nation in the world and now we can not even provide and feed our own people, They should be damne to hell for all eternity and recieve the punishment from God that they deserve and I hope and pray eveyday that the good Lord will cause it to come to pass and make and example of them!
we have such trash in Washington because America is under the judgment of GOD already because of abortion and queer marriage; it will only get worse!
Globalization was sought by the GOP inspired “New World Group” that send Nixon to open China… That did not work out so well did it?.. :( Luckily more and more average Americans are connecting the dots and refusing to buy products made in China…
“The mainstream media is jumping on the band-wagon.”
Do our school no longer teach english majors the difference between “media” and “medium”?
“The mainstream media is jumping on the band-wagon.”
Do our schools no longer teach english majors the difference between “media” and “medium”?
Edelson said Euro and yen will go down as Europe and Japan take money out and buy USA asests. Why are USA stocks going down? I am trying to buy inverse ETFs but hard to find right price as they have been fluxuating up and down daily. Wait too long then inverse ETF are too expensive.