I don’t know about you. But I think it’s fair to say this is one of the weirdest rallies of all time.
Market Roundup
This year started off as the worst ever for the 119-year-old Dow Jones Industrial Average. But in just 24 days, the Dow has retraced its entire 10%-plus decline. That’s the fastest stocks have ever gained back a drop of that magnitude.
Then there’s the issue of where this bounce back is coming in the market cycle. Assuming you still believe this is a bull market, it’s roughly the second-longest in history. That means it would be remarkable (historically speaking) if this rally marked the start of a fresh leg up rather than just a bounce.
Then there’s the issue of which sectors are leading and which are lagging. I’ve been arguing for a while that we’re very late in the economic and credit cycle. It’s a time when economically sensitive, lower-yielding, higher-risk assets lag … and non-economically levered, higher-yielding, lower-risk, and lower-volatility names shine.
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| A strange start indeed to 2016 for the markets. |
Sure enough, Bloomberg points out that utilities and telecoms are leading by a wide margin so far this year. As a matter of fact, utilities are up a hefty 13% less than three months into the year. That’s the best performance relative to the broader market in any year going back to at least 1989.
Or in other words, safe is sexy. That’s very similar to what we saw in the last two difficult market periods in 2007-09 and 2000-02.
Finally, Treasury yields are up from their lows … but not by much. They remain far, far from their highs, with the 30-year yielding around 2.7% vs. 3.3% last summer before any of the commotion began.
The U.S. dollar is also rolling over and threatening to break down from a 14-month consolidation/topping pattern. That’s not what you would expect to see if U.S. economic growth was strong and getting stronger, especially relative to the rest of the world.
| “In in other words, safe is sexy.” |
Bottom line: Many of the individual stocks and sectors I’ve named in my Safe Money Report outperformed in the selloff, and they’re continuing to do so in the rally. My hedges are obviously taking some heat. But considering the nature, character, and timing of this rally in the market and economic cycle, I’m extremely wary of jumping on board willy-nilly.
It’s not like we didn’t see this exact same thing happen in September and October, either. The Dow surged 2,100 points back then, almost exactly how much it has rallied off the February low. That rally eventually fizzled out, and my indicators suggest this one is at risk of doing so too.
Now, let me hear your thoughts. Is this another big bear market bounce? Or is it the start of a new bull run? Can you “trust” a rally that’s led by defensive, conservative stocks rather than riskier companies? What investment strategies are you using in this environment? Share your comments below when you get a minute.
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In the meantime, several of you commented on the outlook for the economy and currencies in response to recent columns.
Reader Peter said: “I suspect the reason Sanders and Trump are doing well is because the economy is not doing well, regardless of what Washington bureaucrats tell us. I also think the age of cooperation among central banks has morphed into the age of open competition. This regime change cannot be underestimated. So, yes, we are in the late cycle.”
Reader Hank added: “This situation is an avalanche waiting to happen. No one can predict which snowflake or blizzard might trigger it. Thus, I would prefer to have as much knowledge now to better prepare for this event.”
On the question of the U.K. and the British pound, Reader Al said: “The Brits are putting up a good show in order to get more out of the EU. However, there is only a very slim chance the U.K. will actually ‘Brexit.’ The refugee situation brought the possibility of Brexit, yet the Brits are the least affected.”
And Reader John D. I. said: “The EU is a dictatorship of bureaucrats that will eventually lead to a civil war as citizens object. The U.K., in contrast, was a democracy since its civil war, and Brexit is the only way to keep it, although our politicians lie again. If you do not learn from history, you are doomed to repeat it.”
Thank you for sharing. It seems more and more “Black Swan”-style crises are buffeting the markets these days, from Brexit … to wild currency swings … to huge declines and equally vigorous rallies in stocks. It’s all a sign to me, as the Wall Street Journal noted in a story today, that “policy makers are losing the ability to wield control over financial markets.”
If you agree or disagree, or have anything else to add on these topics, make sure you hit up the discussion section and add them to the mix.
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Gold reversed to the downside yesterday, and lost a few more dollars earlier today. But it’s still having its best quarterly performance since 1986 – and it’s the top-performing asset in the entire world. Gold ETFs have attracted around $11.7 billion in inflows, which the Financial Times calls the strongest since 2009.
Apple (AAPL) is going small again, according to Bloomberg. The company is going to release a smartphone designed to attract low-end buyers who have previously bought less-robust 5S and 5C models. But overall sales growth has been slowing, and owners have been taking longer to upgrade their phones recently – two challenges that have weighed on Apple shares.
Apparently, consumers aren’t spending as much on high-end jewelry either. Tiffany & Co. (TIF) predicted a first-quarter earnings per share drop of as much as 20%, and another decline of up to 10% next quarter. It blamed slowing profit growth on the uncertain economic environment and currency fluctuations.
So what do you think? Is this bounce back legit, or poised to fail? Is Apple’s cheaper phone going to help ignite sales growth? Are you making money from this rally in gold, and do you think it has further to run? Let me hear about it in the discussion section below.
Until next time,
Mike Larson
Recommended Articles by 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.
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Mike,
Maybe, just maybe, the economy is getting better and that is why the stock market is improving… It was only seven years ago that our stock market under Cheney/bush was repeating 1929 and the economy was also in a free fall… That ended under Obama, who like FDR took stops to save the stock markets and the economy……
Problem is that ever since then the liars Club better known as the GOP was been screaming in unison that it wasn’t going to work and things would only get worse….. I know from reading old newspaper reports from 1932 forward, that they were saying much the same thing then……. How could they have been so wrong both times in the past 100 years at such important turning points?
The good point of all this wrongheaded screaming? Our Grandparents stopped listening to the lies and refused to elect Republicans in a majority for the next 50 Years and we had the greatest period of Economic Expansion in our history!…
I disagree with everything you said.
There you go again trying to confuse them with history and facts.
Obama and HIS FED has done irreparable harm ro our country, economy and asy of life. Under his regime we have crossed into the abyss and will probably never be able to crawl out.
Keep your obviously left leaning liberal views out of this forum and go post on MoveOn.org moron!
You guys amaze me…… Go simply read real economic history books of this great country….. Do you work for the GOP? Or are you simply dimwits that have bought into the falsified GOP propaganda? Do you live in America? Did any of you live through the period from 1932-1981?
Eagle, what’s your point?
The GOP is the Master of Deceit. It is also the Master of Snookering the sadly
uninformed.
I agree, they learned how to do it from the Democrats!
I was born in 1932 and lived through the great depression. I had 3 sisters and it was not easy for my family. We lived in Birmingham AL where the only election for most government positions was the Democratic Primary. The ballot had a rooster holding a ribbon saying “White Supremacy”. The Democratic party held the South back. If you truly look at history, Hoover had an advisor that discovered cycles that have controlled economies over hundreds of years and you could predict what was going to happen years in advance. According to the cycles. the depression should last for only a few years. FDR was interested in having the government do programs to employ people to do make work. While I was in grade school they were blasting rocks, building rock walls, bleachers overlooking a playground and barbecue pits. The grade school went through the eighth grade and by the time I finished a lot of the stuff built had to be removed to improve the playgrounds. World War II finally got us out of the depression years past when it should have happened as predicted by the historically proven cycles. Truman proved to be far better than his Boss Tweed controlled political background led people to believe but it was Ike who really got things rolling. The South made a huge move forward when the voters voted in the Republicans. I had graduated from API in 1954 in Industrial Design and got a job at GM Styling and moved to Detroit. I have looked at both parties and have problems with both but by far I find the Democratic party and bigger government being our worst choice.
The Too Big To Fail Banks are far more deeply into derivatives ( 500 trillion ) than they were before 2008 and our national debt is too great to ever be pay back. We have built a house of cards that will fall at any time and everyone needs to be prepared. If you believe this is BS and you are wrong you and your loved ones will be up shit creek without anything to live on. If you are right, the those who had prepared will have a stockpile of stuff they can use during the hyperinflation caused by the Fed printing all that fiat money to make the economy look like it is improving.
As an 84 year old Eagle Scout and I say be prepared.
How quickly we forget it was the Democrats that tried to stop the Civil Rights Act. Jim
I agree 100 per cent.
I agree. I was a Sea scout a nd believe in the motto – Be Prepared – Hope for the
Best and be ready for the worst!
Hi Joe,
That was well said…
Too Big To Fail was supposed to be fixed… by people moving their accounts to smaller local banks. What do we have now after 6 years or so of this? Last I heard was that about 600 or more Smaller Banks have folded and the Big Banks are Bigger.
Guess who paid for the Government insured small Bank Accounts while the Deck Chairs were rearranged ?
Insiders have been the leaders in getting in early, grabbing gains and then exiting.
I wonder if they are holding Gold Now and waiting for the next shoe to drop?
Will it be the gas prices that rise first as the election season approaches an end?
Are gas prices low to pacify the Election volunteers and Staffers who might
not like to pay $5 a gallon.
Will low gas prices be the one positive in the Legacy of the current President..
It will be hard to erase the negatives, such as the doubling of the National Debt
Ron
…and george wallace was a democrat as well.
Excellent, Joe! Neither party seems to have a clue, and The US probably needs another major party because the Democrats and Republicans are merely looking out for themselves, not the US or its citizens. Bush and Obama are two of the worst presidents we have ever had. The only other thing worthy of mention is the Fed…they should all resign! Yes…BE PREPARED!
All liberals intentionally forget that the Democratic Party took over congress in 2006 to reverse any progress our economy had.
Which Bills did they pass and Bush sign that reversed “progress”? And it was 2007 when they took office.
Hi Van,
Bingo!!! There is the Big Elephant in the room..
2 years of worry about the Democrats taking power encouraged many investors to reduce their exposure to the volatile Stock Market…
If even 10% of the Investors were worried and they cashed in their chips.. that alone
could have caused the Crash of 2008.
Lets not forget that the trend of Bashing Bush was at it’s peak from 2006 to 2008
and Bush never said anything to defend against any of the accusations…
Remember how Interest rates began to Rise each quarter as the Consumer Spending
finally started to slow down … Bush did not have control over that, but he got blamed
with the result.
This is why the rates are NOT rising now, even though Yellen has been promising it…
The Fix is in and the Rates will stay down until the Republicans can be blamed again
for the Next Crash.
Ron
While you’re correct in your observation that the economy does better during liberal administrations you are incorrect in defining Obama as a liberal. He is an economic centrist who is only liberal in the minds of those to the right of Attila the Hun. We are still squandering a trillion dollars a year on the Bush/Cheney perpetual wars/security, the ruinous Bush tax cuts were only rolled back on 0.7% of all taxpayers, Wall Street still calls the shots and job killing trade treaties are rubber stamped. Nixon and Eisenhower were more liberal than Obama.
You are wide awake! Keep going…
Wall Street and the Fed are really the heart of the problem! Do away with both and see how prosperous we will become in no time again!
Blaming the “Liberals/Dems” or the “Conservatives/GOP” is laughable. How can anyone with a tenth of a brain be so gullible?? It’s the Money Changers ( you know whjoo) that control the so called “Fed”, the so called Financial Markets, Politicians, the “Media”, the Banks, Big Pharma, Big Food, Big Cancer, and the Global Corps that are p*ssing down your boot and telling you it’s raining and laughing their *sses off at how damn DUMB you really are ( including me as I’m in their System).
The financial sector accounts now for ca. 30% of the earnings of all public corps. They are going to call the shots for eons to come and if they don’t it’s game over. The Rubiccon has been crossed and there is no way back.
“maybe the economy is getting better”. IN ONE MONTH?!?! That is a special kind of dumb right there……
Where have you been the past 7 years? Eagle is correct.
I disagree with everything you wrote Eagle495,
Obviously you need a history lesson and economics course. FDR did absolutely nothing for the economy since he implemented John Keynes economic strategies which kept us in a recession until we went to war. The war got us out of economic despair while our economy grew under Truman & Eisenhower. One of the greatest economic periods was under Reagan.
What did Obama actually do economically. Our stock market is going up because of phony buybacks and short selling. The Fed and other world banks have been propping this thing up for 8 eight years with phony printed money that has no value. I don’t believe you were paying attention but since the Japs went to negative interest rates at the beginning of Feb and the ECB started the great QE bazooka BS the markets started roaring while Jant Yellon announced no new rates. This really says that the economy is still weak. We have accumulated more gov’t and consumer debt under this president than any other at $20 trillion. Credit card debt is around a $ trillion while student debt is 1.2 $trillion. How many good paying jobs have been created none. We lost more high paying jobs only to be replaced by lower paying jobs. Why is average household income down close to $2000 while welfare has increased from 35 million to 50 million. Oh, our labor participation rate is the highest it has ever been at around 95 million.
After reading your nonsense I can see your an Obummer cheerleader. Just make sure that the little skirt your wearing does not show those big butt cheeks of yours. Yikes
Have you been fully unaware of the uber U.S. Economic Collapse which was
caused by the Republican Party (per David Stockman). You doomadons blather on and on, using the same old tired script, word for word – and ignore the fact that our
pensions were saved, and healthcare for real people is now available to the tune of
18 million citizens, and also ignore the perfect storms – coming from every direction – that the President has had to deal with. Thanksgiving and gratitude for Democratic voters.
Your delusional Origbless,
Read what I wrote and learn something. You liberal left wingers keep talking about how prosperous the country was because Democrats were in power during certain times of US history. However both parties have their faults but guess what??? Both are part of the establishment and feed off each other. My father’s family were all old democrats and did not resemble anything that these clowns represent today. The democrats represent the new socialist party while the republicans have no identity. I consider myself a Reagan conservative, who by the way was a democrat turned republican. You see its more about ideal ology than party.
Now with the economy your nonsense answer about saving pensions is total BS. Obama had nothing to do with the Federal reserve doing what it did. Again you are clueless because technically even though the Fed was created by our government in 1933 it is a private bank and not really part of our federal government. Ben Bernake and Janet Yellon called the shots. What the fed did was increase the deficit and artificially inflate stocks using phony financial engineering. Those pension values don’t really exist just like our credit crisis. Most banks around the world are highly leveraged with derivatives and debt that can collapse anytime. Buy backs and shorting the market are also contributing. In other words all this is just a mirage because we are in an election year. Instead of using a phony unemployment rate which is worthless and a stock market number that is worthless lets look at the true state of the economy as I stated above. Obama has been president for 8 years and has made tis country worse. He has divided this country by race and economic status. His foreign policy has destroyed the idle eat and immigration is a joke. Oh, all those green energy jobs really worked while having a failed energy policy. How many coal companies went out of business??? Ya, you really care about your fellow man don’t U. As a long as that phony pension of yours life is ok and so what if it screws everyone else. Just remember that phony pension was propped up by tax payer money that yours an my grand kids will be paying off after we are long gone. But WTF who cares as long as you get that phony pension. You just better hope it stays up for the next 6 months because I think there is a major change a coming. I bet you were not singing your little Obama love songs 2 months ago when that market was going down. I am assuming you are not educated in finance or economics and are a proclaimed self educated economist. Just remember there are more important stats if you want to know the health of this economy….BDI, D/A ratios, P/E ratios. company earnings. labor participation, manufacturing indexes etc.
All are at about or worse as they were in 2008. So maybe things are not so rosy. Oh I forgot as long as your inflated pension is up everything is OK.
Half of the ACA Exchanges are bankrupt and the rest are in the red. Obamacare solved nothing. All it did was hand the bill to the taxpayers. For the first time in its history Social Security didn’t have a COLA. If you think your pension is safe from these felons you are dreaming. The greedy SOBs have already set their sights on the $24 trillion in our pension funds and retirement accounts. Their is no limit to what a desparate government will do to try and save itself. If you want a preview think Cyprus, or maybe Puerto Rico. Jim
Mark, you are SPOT-ON!!
It is time to declare war on the banking cartel and close down the fed!!!
Man, are you in for a surprise!!! The DEBT level has NEVER been this high in history! Let us look at the raw data and facts! This economy simply cannot service the current debt level. Republican or Democrat, WHO will steer us through the coming crash??
Where will the money come from?
Think, it may be a new experience!
How many times do I have to tell you Eagle495? THE OBAMA ADMINISTRATION AND THEIR FED HAVE MOVED CONSUMER SPENDING FORWARD with all of their ZIRP.
Eagle495: it appears by your name that you were born in the fourth month of the year 1995; and by what you write it tells me you were born on the first day of that month.
It’s hard/impossible to respond to your political rant given how poisoned your brain/reasoning is.
Regardless, and without returning to the last century or more, I would recommend that you tell us which economic indicators that you follow are pointing up. I would like to be happy as a pea in a pod, and if it takes drinking the koolaid that you drink, I’m at the point where I might give it a try. However, I know of no indicators that are showing things as peachy as you seem to see them; even the indicators that lil barry has changed to favor his view of things are in the crapper now.
Help us all out here, we all want to have that slap happy feeling like yourself.
“Maybe, just maybe, the economy is getting better…” is a phrase we’ve been hearing for more than 7 years. Yet, this is the only president in American history to preside over an economic recovery without a single year of 3 percent or greater growth. So, how does the stock market keep making new highs? Do you suppose adding $10 trillion in new debt, expanding the Fed’s balance sheet by another $4.5 trillion, and having zero percent interest rates for 7 years had anything to do with it? Does anyone deny that we would have an economic disaster on our hands if interest rates were to normalize at say 4 or 5 percent? This economy would immediately have a $1 trillion annual interest payment to overcome each year before paying anything else.
Regarding your interesting (and fallacious) historical facts regarding the depression era, it seems you forgot a few things. Yes, it was Republican Herbert Hoover who did some truly bone-headed things (that Democrats generally love) like imposing a huge income tax increase, as well as pushing and signing the Smoot-Hawley Tariff (wage protection) act that caused global trade to tank. But if you think FDR reversed those policies, you are sadly misinformed. In fact, he continued those policies – in spades! And that is why it took a more than decade before we started to emerge from the depression, and that happened only because World War II changed worldwide economic dynamics. Be assured, economic idiocy crosses party lines with ease!
Dr. Michael Savage was right. Liberalism is a mental disorder. Jim
Hi Jim,
They are all governed by FEELINGS and Intentions… and let the Facts
be ignored because the truth is inconvenient.
The Media is their Lap Dog, and we never hear blame placed where it belongs.
Ron
You are really on to something there. As long as their intentions are good it doesn’t matter what the results are. Trillions in welfare and assistance haven’t budged the poverty rate but it’s OK because they tried. Their usual response to policy failure is to double down rather than changing course. Just look at the major urban areas that have been under their control for decades. If you dare to call them on it you will be met with a barrage of name calling and ridicule. Journalists suffer from the same affliction as economists. They all learned their trade in government schools. Jim
Mike,
This feels like the suckers rally of April 2008. There’s nothing that unusual about it as you have described how utilities are acting. It just seems to take much longer than it should while one is watching the market every day. I still believe that we are in the early stages of a cyclical bear market.
Eric
Baton Rouge, LA
Maybe it is going up because too many people are hedged against a crash.
Precisely, the Market never rewards the obvious. Everybody got short in this last 10% freefall so the Insiders and Option Writers are buying the shit out of the Equities. This drives up the price and sweeps all those short options chips off the table. Then when everybody says “oh look, it’s still a Bull Run” and cashes in and go long guess what happens????
Combine Dragi’s bazooka with Jellin’s dovish message and you have the making of a continued rally which is not hard to understand. The important thing to monitor here is the half life of each CB’s announcements on the markets. They have been getting shorter which is why it is hard to trust these rallies. Perhaps the recent G20 meeting produced some form of cooperation agreement among the Central Banks. It sure seems that way given the announcements of the past couple of weeks. When we see this morph into competition as opposed to cooperation, watch out.
Something like OPEC, I take it.
I have a feeling the economic equilibrium of the world is changing.and trying to find a new balance. Supply chain problems in China and elsewhere may see time sensitive production brought back to the consuming countries. There is an increasing lead time for production for the holiday season which results in either too much or not enough inventory, remember the Cabbage Patch Doll riots? There have been things promised out if China that are years behind schedule. A company named Broadway Limited Model Trains has been promising a N-scale model of a Pennsylvania Railroad M1a steam locomotive for over five years, they keep saying it is in the pipeline, supposed to be here next month, as they have said a dozen times before. They have not used the “Container fell off the ship” excuse so far, but that has happened. There are hundreds of containers in Davey Jones Locker, and one full size hundred plus ton Chinese steam locomotive consigned to Iowa.
Every election we hear the repub mantra about creating jobs yet their policies and practices are anathema to jobs. How many poor fools remember that we were losing 750,000 jobs a month as the door hit the Cheney administration on the way out. It was the second depression caused by repub “businessmen”. So how do they get away with it. Why do working people fall for it over and over. Because they push your hate buttons, or your fear buttons, all the while enriching a few contractors and the billionaire boys club. Name one period where any good to our country or its people occurred under repub administrations or congresses.
This is not a “repub” verses “demorats” argument! They both play the same game. It’s the rulers verses the ruled. Hopefully, the electorate is getting the message this cycle. If you vote for Hillary you’re voting for the same game to go on.
And if you vote for Trump, you are voting for another game that will be just as ruinous for the average person. Putting one of the Lords of Money in control will be just as bad as putting a Socialist Elitist in control. Neither have the welfare of the average person at the top of their list – maybe not even at the bottom. There is NO ONE in either major party who is worthy of our vote this year.
I agree Chuck.
But Chuck, If you accept the proposition that not voting is a vote, and you are given the choice of Mr. Trump or Mrs. Clinton what are you goiung to do? Jim
You are always allowed to write in someone else. Yes, it is a useless protest, but it is a protest, at least, against the entrenched powers. If enough do it, maybe someone will eventually get the message. Even not voting is a message that you don’t give a damn for the available choices.
Yeah, but Trump SAYS he wants a strong U.S. Economy and that means a strong Middle Class. A strong Middle Class only exists with a robust manufacturing base with good paying stable jobs. The “Globalization” of the economies is not “inevitable” as the Elites would have you believe. Trump espouses FAIR trade which means we export as much or more than we import with Trade Laws and tariffs that level the playing field. If Nike wants to make $200 sneakers in the Far East using child slave labor and polluting the environment it’s the Gov’s DUTY to slap a huge Tariff on them to force them back to the U.S. How about a reasonable profit after paying a U.S. Worker $20 hr. instead of a Chinese kid $2 a week??? That’s what Trump is about let alone controlling our damn Border for a change and ENFORCING EXISTING LAW!!?? Jeez, what a concept huh??? So complicated to grasp.
bingo!
Come on, Mark. Under GOP presidents the prosperity was because of them but under Obama the run up from a GOP time fiasco/crash isn’t because of him? I don’t really think so either but I wouldn’t give your boys too much credit either.
Never!… What they do have is billions from the 3%, that now thanks to their initiative called Citizen’s United through their packed Conservative Court that is allowing them to basically buy elections all over the country… That said, their time is running out as the likes of their candidate Trump is bringing uprising all over the country to counter how low the GOP can go in the process of enslaving the Average American… Last time this happened the American people did NOT elect Republican in a majority for 50 years (1932-1981)!…
Eagle495, just say no to drugs. thay have fried your brain. Almost every democraticaly run city in the u.s. is bancrupt, with the highest rates of every bad aspect of a civilized society. That’s not to say the republicans are much better. But they are marginally. The only smart vote is a non- politician, who is not in the back pocket of every lobbyist in America. What is the meaning of insanity, doing the same thing over and over again expecting a different results. The easiest way to pick the next president is to pick the one the media and the establishment is going after the most, that’s the one that THEY FEAR MOST is going to change the statis qou. That person cannot possibly do any worse than the idiot in office now. I realize I am talking to a rock, but sometimes even a rock can break.
“The easiest way to pick the next president is to pick the one the media and the establishment is going after the most, that’s the one that THEY FEAR MOST is going to change the statis qou.”
I am in 100% agreement with you on that statement, jerry. Trump is the most controversial person to run for President since I can’t remember when. He is a Business Man, and I’ve always said that we need a Successful Business Man to run the Biggest Business in the USA. The Corrupt Bureaucratic Federal Government.
Trump has made all the money he wants to have, he has certainly funded other organizations over time, many different Politicians that he thought at the time were worthy of his funds, only to realize later that each one of them was lying. Now, he decides at his age, that someone with a good working knowledge of Business has to step in and run things the way they should be run. Everyone else that he has supported has let him down.
The “Biggest Business in the USA” is controlled lock, stock, and barrel by Global Corps, Wall St., the “Fed”, Big Pharma, ( wrote Obummer Care btw), Big Ag, ( Monsanto can poison you legally ) while the FDA is their lapdog paid off with the revolving door of fat Corpo Jobs and pay offs. Anyone who seriously goes up against that better have damn good body armor and sleep with one eye open. Ask Lincoln, JFK, RFK, MLK, et all.
Well said! You are wide awake!
The problem with Trump however is a lack of CLEARLY defined solutions!
Let us hope that he will be able and wise enough to deal with the Fed and the banking cartel. He should start with a Fed audit, issued by Executive Order. The debt level is also out of control. He should liquidate the Fed and restructure the banking cartel by braking them up into mid-size banks.
Yep…..DETROIT is the legacy of 70 straight years of DEMOCRAT leadership. Spend, borrow, spend….(and tell the people that you are Santa Claus and there is no tomorrow)…..that is all they know. The Great Obama Depression is running…..and now the stock market is slowly getting on board. Look out below.
The central banks are more in collusion than cooperation. they have no clue what to do except pander to the wealthy and listen to political hacks. Yellen is probably the weakest Fed head of all time and certainly the most politically influenced. Nothing is going to stop Socialist Europe from recession as their social programs overwhelm their economies. Now with millions of refugees on the dole it will be accelerated. The Fed should not consider what is happening in Europe but allow a strong dollar and the velocity of money coming into the U.S. will actually mute any interest rate rise. This maybe against economic theory but times have changed and theories must also.
You are on the right track!
The Fed however has no further role to play. You need a 21 Century solution, not a 19 th Century model that was hijacked by the banking mafia.
Hi Frebon,
You are right-on..
but watch out for the result of an Angry Electorate who wants to remove the
Government Lefties who presided of the largest transfer of Wealth From the Taxpayer to the
Rich.. About 10 years ago, were were hearing that the Baby Boomers’s Kids
would be inheriting about $10 Trillion of the fortunes amassed by their Parents..
I guess that prize was too much to loose for the Market… but their Kids did not see much of it.. The Insiders and the movers have taken most of it and are waiting to reinvest at the Next Bottom.
Was this done to avoid the taxes that would have to be paid to transfer Wealth to the Next Generation? Transfers during a Crash would show little Gains, so taxes would be minimized…
Comments anyone?
Ron
Yes Miguel is a ” gato muerto ” bounce it is just a matter of time for the Rigged Markets to CRASH again lets keep buying good quality companies that pay us back and Not to expensive
GOD bless you all
Cheers
There are several underlying trends that make this a complex market to track; however, the bounce back has not yet breach the upper bear channel trend line (formed by previous peaks). Next week will be key when stocks either begin another pullback (bearish trend continues) OR a breakthrough moving higher. Projecting we will see a pullback to the lower bear channel trend line (formed by last four previous lows). There is also a triple bottom (8/15, 1/16, 2/16) which is a bearish sign and another pullback would likely break that support line.
This day marked the turning point, S&P if it closed at 2050 on a Friday would be very bullish.
But it came so close 2049.58, That means watch out below for next week.
Also Oil should do a about face w/ Rigs being uncapped now that Oil has hit it’s $40 level.
Remember Drillers in the US said if Oil ever hits $40 they will be back in full force.
So you are saying because the S&P was .43 point short of your target, “goal’, we will sell off into oblivion next week?? And oil is at a lofty $40 dollars, so all the rigs will come back online in force! Are you for real, or just kidding us here?
The last time we had this number of rigs in operation Abraham Lincoln was president. No matter what you hear, they just can’t take a rusty mothballed rig and put it back in service and find a crew on short notice. The shale producers who claim they can have positive cash flow and deleverage at these prices are out and out liars. North Dakota and South Texas could be declared disaster areas. The financing will not be there either. People refuse to accept the fact that shale has never been a cash flow positive business. They accumulated staggering debt levels when oil was $100 a barrel. The “King of Shale” just drove into a concrete post at 90 miles an hour.The price would have to double from here to give them even a ray of hope. Short of a major geopolitical event U.S. oil producers are screwed.
Finally, someone with insight!
The fact most commodities are in rally mode is probably a result of the weakening dollar. Nothing more. Jim
I agree with Gerald H., above, except that next week will be critical, either up or down. The S&P500, yesterday slightly broke through the 1 1/2 year arch of highs I discovered a couple of weeks ago, and wrote about before. Today it continued higher, closing above the arch for the week, which could be significant. By all logic, the markets should be collapsing, but they are not – at least not yet. Either some unforeseen forces are propelling the market higher, or they are setting us up for a catastrophic collapse. It is not yet time to go all in on either side, but we might nibble at both.
As an old retired history and economics teacher I find it interesting that the Republicans of today are screaming about Obama’s policies just as they did with FDR in the Depression. Sure errors were made but like it or not it WORKED. It is one thing to bitch and moan but entirely something else to actually do something. Obama is critized for the debt, which by the way will be paid with inflated dollars like always, when the second largest debt in recent times was by Reagan. Or how about that in the early 1980’s the average CEO made 35 times more than the typical worker but now it is over 500 times. The Forbes 400 richest in the early 1980’s contained only 2 billionaires but now every one is a billionaire and in fact the cut off was 1.75 billion meaning that there are billionaires that did not make the list. Something is very wrong and before you label me a Democrat I am a registered independent and never voted a straight ticket for that is the way of sheep. What needs to be done is cooperation and compromise and a policy that takes the majority of the people first and the hell with the Party and just maybe we will be unified once more. However the way we are going I fear it will take a World War 3 to do that.
Rick, you just contradicted your point about how FDR got the country out of a depression. When in fact your last point, and by the way well said, is the only reason for the end of the depression. WAR. Had it not been for WW2, the depression would have lasted much longer. IF you are old enough to remember things were not so good economically after the war recession/depression continued to a lessor extend until the next war. Are you seeing a pattern yet. WAR IS COMING. It seems to be the only thing that slows a depression.
We need to look beyond Republican vrs. Democrat comparisons. It diverts us from the real problem. It’s policy that matters. Both parties have embraced Keyensian economic theory that features the unlimited expansion of government at the expense of the private sector. Keynes theorized that the continuous expansion of debt was the key to prosperity. “Experts” like Paul Krugman still preach it. Keynes was clearly wrong, but this is still what’s taught in every school in America. These policies have bankrupted Europe. Whether we want to admit it or not, by any definition America is bankrupt as well. It’s wishful thinking to believe inflation will save us. Our currency has already been devalued ninety five per cent by the Fed. The logical end result is zero. These policies are ruinous and must be reversed. The sooner the better. We should be voting for whomever we think might try to accomplish that regardless of party. Jim
Of course WAR is coming. How else can you create new industries that will employ the masses? How else can you create jobs? You have to build things. A lot of things. And lots of very expensive things too. Things that control the seas and things that battle 200 million man armies and things that fly into space and capture the high ground. And you have to build them domestically, because the enemy will be doing the same thing.
Hi Andrew P.
War will fix many things as Factories must be built to make weapons…
but will the EPA prevent that because Factories might go against the Climate Change
policies? No more Coal Mines is the Goal. How then, to make Cast Iron?
Will the US have to use China to make the needed Weapons ?
Oh Great!!, more Contracting Out!!!
Your Turn!
Ron
Yeah and guess who funded Hitler???? Rothschilds and the Bank of New York and the Bushes. ( look it up) Guess who funds both sides of “wars” and gets rich???? “War” is a money/debt making enterprise and has the added benefit of culling the population of young, stiff dicked males too. What a deal!!!
Hi Tactical!!!
Lady Bird Johnson was a major Shareholder in Haliburton
so the Dems do not have Clean Hands when it comes to making money from Wars.
Ron
Have to agree with Jerry he’s spot on. Rick as a former economics teacher you fell off the path somewhere. It was WWII that pulled us out of the depression. FDR’s policies hurt this country much more than you imply. Social Security is one of the biggest debts this country has and is already predicted to go bust in approx. 15 to 20 years if nothing is done to fix it. I was raised in a Blue collar Democrat house, switched to Republican when I grew up and now am a Independent. I also agree with Jerry that war is coming, not because of economics but because of weak leadership through out the world and Obama. Why Obama? Because as the leader of the most powerful nation on earth he sets the stage. He has failed terribly. He has allowed terrorism to run rapid around the world and in this country. He can’t even bring him self to say radical islam (small ‘s’). So all these terrorists groups are now raising and will spark a world war.
War will not do the trick this time!
Financial war against the Fed and the banking cartel will work much better!
That’s ODD…I would Think Tiffany’s profit would be Effected to the Upside because of the Increase in the Gold VALUE of its Jewelry…?
Only if somebody is buying it.
Simply put…Capital Flow from foreign countries from Europe and Asia is causing this weirdest rallies.
Well said. We are the prettiest girl in a room full of uglies. Wait till everyone finds out she has a mask on. Look out Below.
I still believe this is a forceful bear market rally that has been accelerated drastically by the recent Fed meeting. There are far too many headwinds for this market to reach new ATH’s. That said, I think it will largely trade sideways within a range for a few months. Brexit, the US election, oil volatility, Asian markets, geopolitical events, economic data, etc…There is an endless list of variables that could reawaken the bear.
i I THINK WHAT WE NEED TO DO IS RIDE THIS ONE OUT THEN BUY BACK IN AFTER STOCKS TANK AGAIN
Hi Ken,
When you say “ride this one out” do you mean that you already sold-off any stocks you had and are waiting to Buy Low ?
If you are in Cash, and the US Buck devalues to that of a Peso, how easy will it be to EAT, never mind buy back into the Low Stock Market?
If you are invested IN inflation-proof stocks…. How did you choose them?
I heard that buying Hormel would be a wise move since we might all be eating Spam..
It keeps well during times of Famine, when no one wants the Money you are trying to spend. Kramer said it during the 08 crash..
Until we decide to pay down our escalating national debt I believe this is a bear market rally as the weaker dollar gave it a bit more steam. Liberals have a tendency to over inflate their markets. I have not in my lifetime seen this much debt globally. Until we act in a responsible manner and get our house in order i’m not long this market.
And how exactly do you propose they get the house in order??
I say liquidate the debt and start over. At least Trump knows how to do that! He did it several times with his bankrupt casino! He now needs to do it with the Fed. That will disarm the banking mafia over night! The next step is to close down all military bases in 50 other countries and get the military industrial complex under control.
This alone will go a long way to get the house in order!
Tom you cut spending and raise revenues.
Hi Badger,
Debt Happens when governments try to make the Poor, Rich by Making the Rich, Poor.
Ron
it is pretty obvious that this is a central bank plunge protection rally.
Go read Rick’s post (above) again. He is on to it. The disparity of incomes between average “Joe blow” and the elite CEO’s is obscene. Since when is any individual worth 500 times the worth of his employees??. We all went to school together didn’t we? Did my school mate just morph into superman and can now think 500 times better than me?. We need a system that can re-distribute the wealth on a more equitable basis. Power up middle America and we will be back on track. This is not a “socialist” / “commie” talking. This is all about “social equity”. Perhaps Trump can sort this out. He is on the GOP ticket but the party faithful hate him. His message to them is “F@#K you lot. I actually respect the man in the street. He helped me get to where I have got”.
Hi Bruce,
Business has its’ Cliques too … the Kids of the Rich get the great jobs through
Nepotism… as long as you do not hire your own Kids and hire the Kids of the OTHER
Rich, all goes well…
Look at how hard it is for an outsider like Trump to get into the Club of Elite Politicians…
They already hate him for getting rich while only Pretending to be a Democrat.
Grease Has no Loyalty as long as it gets to the RIGHT Palms.
I fear for his Family as well as for Him.. Lets hope that he does not share Lincoln’s Fate.
Ron
I think the DNC is running scared with all this political trash being spewed by them on a financial site. No other reason that I can see for this.
You know they are in panic mode when they play the race card. It’s impossible to prove a negative. It works every time. Jim
The KKK bit is priceless. Jim
They never praise the Unaffordable Care Less act (better known as Obama Care); I wonder why.
Jim, What does KKK stand for; Keynes, Krugman, Kennedy?
You are priceless as well! Jim
Will, I meant that as a compliment. Jim
We have to take this rally on like walking on thin ice. Currently the markets are extremely manipulated. Today I watched bids higher tan the ask and then onward and up. It’s hard for me to by any stock in this fake out. Negative rates are there because the economies are in trouble. Inflation will only happen when wages go higher, interest rates normalize and the economy runs without government manipulation. Fire the current economic idiots and go back to pre Greenspan.
Joeee has a good memory for an old guy. I assume he has experience, because his observation of wage inflation has been one aspect we have heard nothing about. The money “printing” by the Fed and other central banks were supposed to lead to the re-inflation of the economy. The fact that the money ended up in the bank accounts of management and financial “guru’s” should not have occurred. The choice was re-inflate workers wages to stimulate demand, or let the businesses collapse due to lack of profit. Unfortunately the overseer’s in politics and the Fed, and similar overseer’s around the world, either took bribes, or were too stupid to do their job properly. The money went to the wrong people. The elite’s bank accounts. So nothing has changed eight years after the banking “collapse”. If the ordinary people spend the money, then interest rates will naturally rise, because the money is spent, not in the elite’s bank accounts.As you said Joeee, rate’s will “normalise”, because the money is in circulation. The fact is that now, after the banks have been “saved”, the job is half done because the demand must be stimulated by people in work. Those wages still need to rise. If demand falls, we will have a completely lost decade rather than a merely lost decade. Then we look at the future of the election results in six months time, and whether it is “progressive” Hilary, or inherited wealth Donald, and realise there is no hope for anyone. We can’t all “head for the hills”. Anyone who believes the established political and banking elite (yes, Trump too) can save the day, is due a massive lesson.
This may not be an accepted economic indicator that analysts typically reference, but it is one that got my attention and is telling about the strength and vibrancy of American manufacturing and the construction industry that would have a ripple effect through the economy. The owner of a company that manufactures stainless steel chimney caps says his phone is ringing off the hook with orders for their made-in-U.S.A. products, up 84% over last year during the same period. These orders are from distributers all over the country that provide products to the segment of construction that is primarily rehabilitation, rebuilding and refurbishment of existing buildings and not necessarily new construction. This, in part, may be why Wall Street is still behaving like a raging bull. Signs are also up all over our community posting job openings and I personally sense confidence that America’s economy is not only healthier than the rest of the world, but is on the mend, as in repairing our infrastructure. America will become great again without Trump’s help, although he might want to take credit for it just like some other Presidential candidate claimed credit for making the internet happen. To me their contributions are just a step above the Bronco Cheerleaders taking credit for Denver’s Super Bowl win.
I’d say a step BELOW. Cheerleaders work to get the crowd into the game. Candidates are too busy sniping at one another.
Exactly. Those politicians will try to take the credit. If they are allowed to, it will only mean the next recession is getting booked. And we will be back to “business as usual”.
Well I assume it is the same old thing at this time of year . People are doing their taxes and putting money into their pension funds . For the most part the pension managers do not have a clue so they are just doing their normal response to an influx of money . Invest it in something , and that is why stocks are rising . I would assume that this year that money pool is not as big as in past years and will be depleted fairly quickly , then look the hell out . When the correction comes it will likely be a doozy . It’s is taking longer than expected perhaps but that is the way it always is it would seem . It’s all about the timing . I have got some reverse ETFs but mostly cash and a few lithium stocks , oh and a bunch of dogs .
Cheers
There is a theory that because central banks have played hob with interest rates for safer government bonds, investors are casting about for other fairly safe places for their money. Real estate has long term appreciation value as populations rise, so that may be number one. Gold always has value aside from it’s currency exchange rate, and there is a limited amount of it. That is number two. Stable companies in nations with fairly stable economies may be number three, and that means stock in those companies even if one has money to buy a whole company. US companies, of course are often well thought of in many fields. This may be why US markets are showing strength despite our many problems. How long can this continue? Perhaps for longer than we think, as foreign buyers are looking for more safety. The better energy companies could be especially attractive to foreign buyers used to thinking farther ahead than American investors.
Politics aside. I just don’t trust government statistics anymore period. QE is nothing more than a big new experiment that has no historical back up. I was right long ago when all these trade agreements were bad for our working people. The markets were acting like this just before the 07-08 crash. I have been holding gold etf and silver stocks for four years now right through the bottom and still holding. What a ride!
The real facts are:
1. The world economy, following our example, is in an accelerated state of collapse,. Since FDR the public and private debt have become unmanageable. What nobody wants to believe is that debt must ultimately be paid, if not in money, in sharply decreased standard of living. History goes in cycles and we are now at the end of the third cycle. We could save our civilization, but it would not be a painless process. During the two previous cycles, all governments, except for one, have declined economically, and most have completely collapsed politically and socially. The one government that did not collapse is one that you would not expect, because it has gained such a bad rep. That government was the Byzantine Empire. In 1092, Emperor Alexios I saw that all of the other governments from Rome to China had collapsed economically, so he had the 95% gold
coinage restored, and his empire was restored to relative health until it was conquered by the Ottoman Turks in 1453. This is exactly what we need and the number one bete nnoir for the Fed, because it would bring about an extended period of deflation as the economy of our world returned to saner levels, and people had to face the fact that all of the prosperity they have been enjoying during the past decades, has been a fantasy which cannot be maintained. Two possible scenarios are (1) all the world governments will collapse, followed by centuries of middle ages, or (2) the 1% who are now buying our government will take over and reduce the working class to, in the words of Franz Hayek, serfs. As long as most people view the study of economics as eek-onomics, our society doesn’t have a chance. Read Economics in One Lesson by Henry Hazlitt as an antidote to the Fed doctrine and pseudo-economists like Larry Summers and Tim Geithner. Our education has been economically impoverished, because even in most graduate schools, only one sect of economics is taught, namely that of Keynes, and most of the ones I have talked to with grad degrees in economics have never heard of Franz Hayek or Ludwig von Mises. At present none of our presidential candidates are talking about economics, because they are totally ignorant of the basic principles of a sound money economy. Also check out the Institute for Economic Research in Great Barrington, MA.
You sir, have done your homework. You get an “A”. Jim
One of the basic principles of science is that any theorem must be tested against other theorems. If only one theorem of economics is taught, and others ignored, then there is nothing scientific about it. Keynesian “economics” does not comport very well with reality, and needs to be discarded in favor of systems which do.
You are so right. As Ken so adeptly points out, the key to healthy economic activity is the use of honest money. Dishonest money promotes dishonest behavior. Fractional banking and unredeemable paper money are the creation of scoundrels. Jim
The best example of this is War. If governments had to pay for it with real money it would never happen. Jim
How true. Using inflation to fight stupid, non-productive wars was the death of Rome, and now we are experiencing the same thing. This country has been in so many wars, and has only won maybe one war, against Grenada, since the big one in 1945. I am convinced that the Middle East would not know we exist, if we weren’t over there reminding them constantly. Saddam was not a very nice guy, but he did a better job of keeping things under control than this country has done. Wars seldom if ever benefit the ones who fight them. During earlier times, the political leaders were out there fighting wars with their men, but nowadays, they hide behind a desk thousands of miles away and issue orders. I would call that cowardice. The way things are now, the men who sacrifice their lives in war, never receive any of the benefits. They are merely pawns to be arranged on a chessboard, and the idea of “fighting for your country” is a fiction intended for the most gullible.
I’m not so sure, Jim. There were plenty of wars back when bills were paid in gold. War seems to be a natural part of life. It is just competition to the extreme, after all, and we are all competitive. Will we evolve a better way before we destroy ourselves? Not in the current group of generations, anyway.
One fact that few people probably know is that economics is a religion in three sects.
First is Keynsianism, with John Maynard Keynes as its main prophet (profit). The principle idea is that inflation makes everyone feel wealthier than they actually are.
Second is monitarism with Milton Friedman as its main profit.His idea was that a little inflation was OK, but it should not be carried too far.
Third is the Austrians Ludwig von Mises and Franz Hayek, who taught that inflation ws always bad, because it transferred wealth from those who earned it into the hands of those who did not. The advocate a full gold backing for national economies.
Studying economics now is like catechism, in which you are exposed to only one dogma.
The U.S. abandoned the gold standard during the Uncivil War, and getting back to gold brought on the crash of 1873. In this country, gold was outlawed for common use in 1933, and fully demonetized in 1971, silver was demonetized in 1965 and copper followed in 1982. Now the main currency is not even paper, but plastic.
It doesn’t matter who gets elected. Our government is controlled by the unelected bureaucracy and the Deep State. They have been bad with their choices lately.
As one who had several government jobs early in his career, I can tell you that bureaucrats can never be trusted. Government is the employer of last resort, and when I finally realized that fact, I swore off of government employment forever. I discovered first hand that the quality of your work was irrelevant, and that fitting into the social scheme was the most important factor in continuing in any government job. If you did the job competently, didn’t gossip or discuss nonessential subjects like sports, you could not hold a government job for long. And there was also nepotism. And if you discovered a very serious health problem, and the honchos did not want to try to solve that problem, they would adopt a “shoot the messenger” strategy.
Ditto…..been there, done that. Big Government is nothing but an assault on freedom. Always has been…….always will be.
There is something we can do to protect ourselves. Could it be that the recent rally in gold has anything to do with their stupid negative interest rates. This is an attack on traditional banking if there ever was one. The Japanese aren’t putting up with it. There has been a surge in the sale of home safes there. There is a run on safety deposit boxes in Germany, both are classic savers and they aren’t trusting the banks to do it for them anymore. Even the German government wants its gold back from New York. The soundness of the banking system relies on the assumption that no more than one or two per cent of depositers are going to want their money at a given point in time. Any more than that would constitute a “bank run” that could easily bring them down and whack the currency as well. Many wise investors are choosing gold now and maybe we should too. Jim
This thread has left me with a new resolve to go back to my former rule: NEVER READ THE COMMENTS THREAD! Sheesh! Only one of two of you guys ever answered the original question…instead just reciting your talking points past each other and snarling snark. Never again….
You’re repeating yourself. Anyway, I thought the posts were exceptionally good tonight. Jim
I don’t know why anyone is surprised at what is going on in the stock market. The market is and has been under the control of the banks since Bernanke started QE. Where do you think the QE money went? It didn’t get loaned out. It didn’t get into the general economy. It went straight to the banks investment arms so and their HFT computers so they could make their billions in profits each quarter. The banks are not making any significant profits from their retail arm, just their investment arm. HFTs now account for close to 70% of all stock trades. It’s not the trader or retail investor causing market to do what they are doing, it’s all the HFTs. Does anyone see the coincidence that after QE ended in November 2014, the market edged a little higher for a few months, and never reached their highs again? Unless there is another round of QE, 18,300 on the Dow will not be reached again before the market crashes, which won’t happen until interest rates are normalized or some major global even occurs. With $4 trillion in the bank’s investment arms, they can pretty much go long on the market and then force it up, then go short on the market and force it down. If we could reach the HFT’s algorithms, we would all be rich. Only as bonds mature and the banks have to redeem some of that $4 trillion, each rally will stop below the high reached in May of 2015. This means the Dow won’t go past 18,300 this time, unless huge amounts of foreign money from the Euro or Japanese banks come in to our market seeking a return now that they are suffering from negative interest rates. So, until the Fed lets our economy return to the free market capitalism we used to have, I’m afraid were at the complete mercy of the Fed for quite some time. Remember, you can’t fight the Fed; they control our financial markets, not the trader or investor anymore. The good old days are gone where fundamentals and technicals used to mean something.
Thanks for drawing this excellent distinction between Weiss Sr. and Jr. The ratings are valuable, but the chicken-little warnings have really hurt investment performance and I’m far too old to start again. I doubt whether I’d do much better even if I subscribed to all the other Weiss family publications other than Safe Money Report. In fact, it could be confusing as hell. So how do you steer a steady investment course in this chaotic, volatile market?
TRADE, TRADE, TRADE, TRADE just be in cash at the end of the day or at least at the end of the week.
People always need to eat and sleep and be healthy and be clothed, but they do not need a new phone each year! The lack of imagination in manufacturing will inevitably lead to a down fall in those stocks!!!
http://stockcharts.com/h-sc/ui?s=%24SPX&p=M&st=2007-07-26&en=today&id=p13094953339&a=417583788&r=1458375015871&cmd=print
nature will win. nature is the free market design.
The day to day stock market is a farce. The only reason the market is up is oil. As soon as the oil play runs out of room to speculate the market will choose another alibi.
exactly
I think the debt question has to be discussed . What is debt . Well most people ,I believe , have this vision that when they borrow money from a bank that someone else had that money on deposit at the bank . Fractional reserve banking , which I believe is what we have had since the depression of the 1930s means that banks no longer loan out what they have sitting on deposit , they loan out money that is now created on the spot . Before someone borrowed it , it did not exist . This is how the money supply increases . Money printed out of thin air and loaned to the masses. There is very little difference between this and quantitative easing . The difference being that with quantitative easing , the banks are flush with cash waiting for someone to come along and borrow it . The problem is , that for the most part , most people who would be considered credit worthy are already in debt up to their eyeballs . So the big problem with quantitative easing is getting the cash out of the bank into the economy . There is another problem with the banking system that is little understood . The interest on the debt , the debt that was created out of thin air , has never been printed . What does this mean exactly . Well it means that all the debt in the world plus the interest on that debt cannot possibly be paid back because that is more money than what was printed in the first place .
Basically the whole banking system is a Ponzi scheme of sorts , and we all know how they end .
Yeah! Ponzi schemes end with every participant broke, or in prison!
I believe this rally is a direct result of two things that is happening now. 1)The Fed’s decision to change the dot plot from four to two increases this year (reduction). Note: The helicopter money continues to fall from the skies ! 2) The price of oil climbing and now ranging between $40-$41 per barrel (due more to a reduction of production vs an increase in worldwide demand). The problems that the world is being faced with,are not being addressed ! Hence,these tactics will at some point,in the very near future fail !…
More and more, Trump seems to be taking a leaf from der Fuhrer’s book. His Brownshirts aren’t in uniform, but they act much the same way to anyone who opposes their Leader. I was willing to give him a listen, but the more I hear and see, the more I think the Republicans have turned against American principles. Their number two man, Cruz, doesn’t seem any better. And the more I hear of Hilary, the better Bernie looks, on the Democratic side. Not that I would vote for him, either – I am not a Socialist. This nation seems about ready to take the emperor – empress – dictator route, which is where it has been trending for over a quarter century.
The Republican reaction to Garland for SCOTUS shows their belief in the idea, “my way, or the highway”.
I READ THIS WKND WHAT CHARLES MUNGER SAID @ THE 2013 BERKSHIRE HATHWAY MTG! IF YOUR NOT CONFUSED YOU DONT UNDERSTAND THINGS VERY WELL. GOD BLESS US ALL.
The potential for down is enormous and it’s not just the economy. There is a huge societal breakdown and moral decay and anyone who knows history can see where this is heading.
These comments are interesting but what we really need is a qualified economist to analyze the present situation. It is becoming more difficult to understand then the Laymen can appreciate .
The author is confusing credit card binging with well being.
If he were to look one level deeper and consider the size of the debt load dumped on us, maybe he might reconsider.
Richard Cather