4.17.18 - Cuba After the Castros
Gold last traded at $1,349 an ounce. Silver at $16.78 an ounce.
NEWS SUMMARY: Precious metal prices steadied Tuesday on upbeat stock earnings and a firmer dollar. U.S. stocks rose as Goldman, Netflix & UnitedHealth earnings lifted investors’ spirits.
$1,400 Gold Coming Up -Seeking Alpha
"If you look at the economy, especially the retail sector, with record numbers of stores closing, and higher interest rates threatening corporations, along with a widening trade deficit due to Trump administration policies, including tax reform, and a ballooning debt to GDP ratio, which mathematically is unsustainable, it all leads me to be cautious that the gold market might be anticipating something greater than what we just witnessed this past weekend in Syria....Take advantage of the volatility of the gold market, which appears to be increasing, and what I believe is going to be an explosive move in the price of metals that could surpass recent moves and challenge four-and five-year highs....Some of the early indications suggest that we could potentially accomplish a price range that is record-breaking, reaching new highs in the last 10% of the 9-year cycle. Such a move puts into place in 2018 the possibility that within the next few months a record-breaking acceleration could develop."
The Key to Financial Freedom -Craig R. Smith Special Report
"As a father of two daughters and a new granddaughter, I have been reflecting upon what - in addition to my heart-felt love, faith and values - I can pass on to my children that will be most precious 20 years from now. Almost all parents feel the same. We are giving our children the large legacy of our reckless spending, a stone of debt heavy enough to crush their hopes, dreams, and future. Our legacy to future generations will be a national debt that the Congressional Budget Office calculates will grow by an average of $1.6 Trillion each year for the next 10 years, raising America's immediate national debt to as much as $36 Trillion. This is like handing your child a credit card already maxed out at $160,000 - the amount of debt per person our government has already agreed to borrow and spend beyond its income - and expecting your child to make the payments!....The good news is that our children and grandchildren, and perhaps our nation, can be saved from over 100 years of debased money and a politically- manipulated economy ... if wise action is taken to put away the life-saving antidote to this deadly debt disease immediately!" Watch 5-min. video
When Failing to Prepare is Preparing to Fail -TCW
"A financial asset is nothing more nor less than a claim on future cash flows. So, when asset prices motor ahead of incomes or profits, it means fundamental valuations have deteriorated. Let the fundamentals erode long enough and far enough, and financial instability is ensured. How could it be otherwise? Asset prices are the sum total of stocks, bonds, and real-estate. When asset prices are high relative to GDP, chances are good that you’ll encounter some combination of stretched P/Es, outsized ratios of real estate prices to household incomes or rents, and bond yields that are too low or credit spreads too narrow. Since asset prices and incomes must, over sufficiently long periods of time, follow an interlocked trajectory, an episode of asset price inflation will invariably sow the seeds of its own destruction. In this cycle, the de-coupling of asset prices and GDP has been extraordinary and is largely attributable to the central banks' collective flood of cheap credit....But trees don't grow to the sky. The Fed is, at long last, tip-toeing its way to a rate normalization....the Fed is out of reasons/excuses to further delay raising rates....When the investment cycle is young or mid-stage, 'risk-on' strategies swim with the tide. Portfolios with higher 'ex-ante' yields generate higher 'ex-post' returns. Late in the cycle, this relationship reverses and rather than yield being the condition precedent to gains, it becomes a leading indicator of principal impairments. The time to prepare for adverse outcomes is always before the bear market. Those who do not heed the signs of danger will learn, first hand, why in investing, 'Failing to prepare is preparing to fail.'"
Cuba After the Castros -Pontification Blog
"Cuba was once the third most prosperous nation in the Western Hemisphere, before Fidel Castro replaced capitalism with a communist dictatorship that turned it into one of the poorest, with an average monthly salary of $31. Fidel died in 2016 at age 90. The Castro dynasty ends this week when Fidel's younger brother, former head of the secret police Raul Castro, retires after 10 years as Cuban President. (He will remain head of the Communist Party.) His hand-picked successor is said to be Miguel Diaz-Canel, who turns 58 this week, a committed Communist whose past is almost unknown to the press....The new Cuban dictator faces difficult challenges. His island survives mostly by free oil from the Communist dictatorship of Venezuela, also a sinking economy kept in power by more than 14,000 Cuban secret police....Cubans understand the evils of Communism and tend to vote Republican...We need to learn why so many Cubans were willing to risk their lives by fleeing from the Castros to find economic and personal freedom."
4.16.18 - Syria attack: Will Russia launch a CYBER War?
Gold last traded at $1,350 an ounce. Silver at $16.67 an ounce.
NEWS SUMMARY: Precious metal prices inched higher Monday on political uncertainty and dollar weakness. U.S. stocks rose as Syria fears eased and investors turned their attention to earnings.
Syria attack: Will Russia launch CYBER warfare? Expert says it is Imminent -Express
"The attack on Syria by Western powers has fueled fears that Russia will retaliate with a cyber attack against UK hospitals and other services including air traffic control. But will Russia launch cyber warfare against Britain? One expert believes havoc could be on the way. Counter-terrorism expert Michael Clarke, who specializes in defense studies, has urged the public to be ready for 'cyber warfare' within the next two or three weeks. He said: 'I suspect Russia will choose not to respond in military terms. But cyber warfare is highly likely. It will be an attack on national infrastructure, not just upsetting city firms, but getting inside the transport system, or the health system, or air traffic control. It could affect everyone.' The UK, US and France launched 105 missiles at suspected chemical weapons sites in three strikes in Damascus and near Homs on Saturday....Presidents Assad and Putin have both dismissed reports of a chemical attack in Syria, which led to Saturday's air assault. A senior Russian military official said 71 of the missiles were intercepted but the Pentagon called the mission a success."
The War the Deep State Doesn't Want to Win -Bonner/Bonner And Partners
"Earlier in the week, it sounded as though The Donald was ready to send in missiles to Syria, to avenge a gas attack. We were worried. 'Does the president realize that this is meant to be a fake war?' we wondered. Americans have no business in Syria - on either side - and have no idea what is going on there… or why. But that's fine for a fake war, right? If there's not really anything at stake, you don't have to worry about winning. In fact, it's best not to win… so you can keep the power and money flowing - from the many in the public to the few insiders in the military/security industry. On the campaign bus, Donald J. Trump suggested that he would put a stop to these unwinnable wars… and as recently as last Thursday, he said: 'Let the other people take care of it now. Very soon, very soon, we're coming out… We're going to get back to our country, where we belong, where we want to be.' Yes, home is where we Americans want to be. But the Pentagon and its crony suppliers can't make much money if the U.S. minds its own business. And it is now a Deep State requirement that the president gets behind the foreign wars. That means a bigger budget for the military… and more misadventures overseas. Someone from the Deep State (he is surrounded by them) must have reminded him. By Wednesday of this week, Mr. Trump was back on message: 'Get ready Russia, because they will be coming, nice and new and 'smart!' You shouldn't be partners with a Gas Killing Animal who kills his people and enjoys it!....And the world sighs...and turns its attention to another fake war... the war between The Donald and the Deep State."
Jim Rogers: Enjoy This Market Hoorah Before the Worst Correction of Your Lifetime -Kitco
"Legendary investor Jim Rogers says market participants should enjoy the rally in stocks while it lasts, issuing a dire warning that 'the worst correction of his lifetime' is coming. U.S. stocks opened higher on Monday as the corporate earnings season continued, with Bank of America reporting better-than-expected quarterly results. 'Soon something's going to happen that will make everyone happy again and the market will go up one more time, and that will probably be the last hoorah. Next year will be not a lot of fun,' Rogers said in an interview with Kitco News on Monday. He added, 'It's been 10 years since we have had a bear market. That is very, very unusual, so the next bear market is going to be the worst in my lifetime.' When promoted to quantify the correction, Rogers said it would easily be over 50%....Before this is over, gold is going to go through the roof - when people lose confidence in governments and paper money, they always buy gold and silver, whether they should, is irrelevant, they always have,' Rogers, the 75-year-old chairman of Rogers Holdings Inc., said."
Both Parties Have a Plan for the Debt: Do Nothing -Samuelson/Real Clear Markets
"The Congressional Budget Office last week released its annual budget and economic outlook report, and although the news was gruesome, the report was greeted in Washington with a giant yawn. The assumption among Republicans and Democrats is that the political rewards for curbing runaway budget deficits are too meager to justify the risks. There's a consensus to do nothing - and to hope that nothing goes disastrously wrong. Just how large are impending deficits? Here are the CBO projections. From 2019 to 2028, the federal government will run cumulative annual deficits of $12.4 trillion....No one knows the consequences of these unprecedented peacetime deficits, but the CBO has listed some possibilities: They may further raise interest rates, which would increase deficits, squeeze other federal programs and crowd out borrowing by businesses....Government might find it difficult to respond to national emergencies, whether war, natural disaster or a financial crisis....We could face a full-blown debt crisis....Social Security and other 'safety net' programs would have to be reduced, possibly through higher eligibility ages and more means-testing....The longer this continues, the riskier it becomes. On this, the conservatives and liberals probably agree."
4.13.18 - Looming 'Debt Hangover' to Crush Economy
Gold last traded at $1,345 an ounce. Silver at $16.65 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying and a flat dollar. U.S. stocks fell despite upbeat bank earnings on rising geopolitical and economic worries.
Why gold remains the safe haven asset of choice in times of geopolitical uncertainty -Proactive Investors
“Is there going to be a significant escalation of the war in Syria, now that President Trump is threatening missile strikes?....Gold is famously correlated inversely to the dollar and since the dollar has been weak of late the price is relatively strong, at just over US $1,340 per ounce. But there is an exception. In times of significant geopolitical uncertainty, the so-called 'safe haven' attractions of gold tend to override the influence of the dollar in pricing, as investors seek shelter in the world's oldest store of wealth....If the jungle drums of war start beating loudly, then uncertainty rises and the gold price does too. That's not just because the value of other assets becomes more questionable, or because earnings and profits are likely to fall. It's also because the dangers of that huge derivatives book unwinding suddenly leap back into the forefronts of investors' minds....Historically, cattle, land and gold have been the three great stores of wealth. Real estate has held its relative value more than cattle, but it is less easily exchanged. For the risk-averse, gold remains the only significant option."
The Day That Changed America's Future -Craig R. Smith/Swiss America
"On March 23, 2018, unbeknownst to most Americans, the course of U.S. history was forever changed by irresponsible government leaders from both parties. On that fateful day, the massive $1.3 trillion, 2,232-page omnibus spending bill (which no one even took the time to read) tossed financial sanity out the window. The consequences will soon impact the lives of every man, woman and child for many decades to come. Such profligate government spending impacts the younger generations especially hard, as they are buried alive under this massive future debt; which already amounts to $160,000 for every household in the nation. Imagine handing your child a credit card maxed out at $160,000 in debt and expecting them to make the payments! Career politicians seem to believe debt and deficits don't really matter; but I say they matter a lot, on both governmental and household levels. Spendthrift leadership breeds spendthrift consumers....No wonder so many big time investors, like Microsoft founder Bill Gates, Hedge fund manager Ray Dalio, and JP Morgan co-president Daniel Pinto are calling for a big drop in the stock market sometime soon. Sadly, we never seem to learn the lessons of market crashes in the past, so we must repeat them. The way I see it, our leaders will soon face two options to bring the U.S. and world economy back into balance, a huge increase in consumer inflation - as the Fed struggles to reflate the economy – or, investors will face a major drop in asset values. Neither one will be neat or pretty. And we can’t rule out both!" Full story
Looming 'debt hangover' will crush the economy -CNBC
"At some point in the near future, the U.S. will have a debt hangover. We will wake up and feel the effects of continued government spending, the persistent lowering of tax revenue, ballooning mandatory social welfare payments, and ever-increasing interest payments. It is not going to feel good. How did we get here? Currently, the publicly held U.S. national debt is 75 percent of GDP...Before the 2008 recession, the publicly held U.S. national debt was roughly 35 percent of GDP. Why did the debt grow by 40 percentage points over the last 10 years? Government spending. The government spent their way out of the recession. A group of economists at the White House and in the Federal Reserve encouraged fiscal and monetary authorities to continue issuing debt and deficit spending, or borrowing to spend....The Congressional Budget Office said on Monday that by 2047, if we maintain our current trajectory of fiscal policy, our debt-to-GDP ratio will hover around 150 percent. That would put the U.S. in between what Greece and Italy are experiencing now. This number is bad news for the U.S. economy....Right now, the U.S. is not equipped for dealing with this looming debt hangover."
Financial crisis awaits if anti-Trumpers keep rumbling -Crudele/New York Post
"The financial markets this week gave us a taste of what the reaction to true chaos in the Trump administration could look like. Stocks were up sharply in the final hour of trading on Monday when all of a sudden the big gain turned into an itty-bitty one. Someone obviously knew ahead of time that the office and home of Donald Trump’s personal lawyer, Michael Cohen, had been raided by the FBI at the behest of special counsel Robert Mueller. Before the close of trading, the Dow Jones industrial average was up by as much as 440 points, but it ended Monday's session with just a 46-point gain....If the Democrats somehow succeed in toppling the Trump administration or at the very least limiting the president's ability to negotiate deals, make decisions on national security and do other things that presidents do, we are heading for a constitutional crisis that’s worse than we saw in the 1970s during Watergate. Wall Street isn't going to like that. The quickest way to a constitutional crisis would be if Trump fires Sessions, and his new attorney general gets rid of Mueller. Or Trump could go after Mueller directly."
4.12.18 - Stocks: 'Take Your Money and Run'
Gold last traded at $1,341 an ounce. Silver at $16.47 an ounce.
NEWS SUMMARY: Precious metal prices retreated Thursday on political backpedaling and a firmer dollar. U.S. stocks rebounded after president Trump said Syria attack may not be imminent.
'Nervous' Investors Pile Into Gold ETFs -Bloomberg
"Anxious investors from Germany to China are seeking shelter in gold ETFs. Holdings in all bullion-backed exchange-traded funds tracked by Bloomberg extended their ascent to the highest since 2013, rising for a fourth straight session in the longest run since January. Xetra-Gold, the third-largest commodity-linked ETF, had almost 177 million shares outstanding as of Monday, the most since the Frankfurt-listed fund started trading in 2007. While equities rebounded Tuesday after Chinese President Xi Jinping struck a conciliatory tone in remarks on trade disputes with the U.S., geopolitical angst is driving demand for gold as a haven. 'We've seen volatility risk in the stock market, and geopolitical risk concerning the situation in Russia and the Middle East,' said Michael Blumenroth, an analyst at Deutsche Bank AG who writes a weekly market report published on Xetra Gold's website. German investors aren't alone. China's Bosera Gold ETF has attracted $610.8 million this year, putting it on course for the biggest annual inflow since it was listed in Shenzhen in 2014. New York-listed iShares Gold Trust has attracted $1.49 billion in 2018, the biggest inflow of all commodity ETFs."
'Take your money and run.' Investor David Tice warns on 'pretty dangerous' stock market -CNBC
"The investor known for running a bear fund suggests a stock market crash may be virtually unavoidable - citing Federal Reserve Policy and geopolitical risks. In a note to CNBC, David Tice wrote that investors should 'take your money and run.' 'You guys have enjoyed the party,' he said Wednesday on CNBC's 'Trading Nation.' 'There are a lot of people dancing. But I think that could be pretty dangerous. I'd say the last couple of 10 percent declines were a sign that the band is about ready to go home.' Tice has viewed the February correction as a foreshock - predicting stocks could lose 20 to 25 percent of their value by year's end...'All this volatility with the VIX having doubled is very, very disturbing,' said Tice. 'We're testing 200-day moving averages on some of the hot stocks like Google and Facebook.' Tice, who sold his Prudent Bear Fund to Federated Investors in 2008 just as the financial crisis was unfolding, wasn't in the bear camp much of last year. On 'Trading Nation' last July, he urged investors not to bet against stocks. According to Tice, Fed rate hike cycles historically lead to recessions and deep market declines. He says this time is no different because the market is very overvalued. He reiterates that investors should consider buying gold. 'In this kind of environment with geopolitical uncertainty and trade uncertainty, you've got to be in gold,' Tice said."
The Zuckerberg Collusion -Wall Street Journal
"What is the main reason Mark Zuckerberg was hauled in front of three committees of Congress? It is because the media connected a long series of dots to suggest the possibility that Russian bots exploited the personal Facebook data obtained by a firm named Cambridge Analytica to . . . put Donald Trump in the White House. Without the link to collusion - an infinitely elastic phrase with no legal meaning - Mr. Zuckerberg never would have had to leave Menlo Park....Despite the legislators' thunderings about regulation, the likelihood of the House and Senate enacting rules for the web is more remote than Halley's Comet, due back in 43 years....Mr. Zuckerberg divided his prepared testimony between two subjects. The first, headlined 'Cambridge Analytica,' was a proxy for the personal-privacy issue; the other was 'Russian Election Interference,' a proxy for the collusion obsession....Zuckerberg said Facebook was aware of 'traditional' Russian cyberthreats 'for years,' including a group called APT28....Buried beneath the subsequent stampede toward 'collusion' was the report's extensive description of U.S. intelligence's longstanding, pre-Trump concerns about a Russian 'network of quasi-government trolls.'....But somehow all this suspected Russian interference wasn't worth putting in front of American voters until after they elected Donald Trump. Some 15 months later, the Russian-collusion grand opera has degraded into an FBI smash-and-grab operation against Trump lawyer Michael Cohen to find payoffs to porn stars....Of more pressing concern are Mr. Zuckerberg's thoughts on what he keeps calling the values of the Facebook 'community.' Meaning what? A primary criticism of social-media platforms like Facebook is that they expose users to content that encourages 'hate' or is 'hurtful.' Facebook’s answer to this perceived problem has been to hire some 15,000 people dedicated to 'community operations and review,' with more monitors on the way."
Gold is taking back its crown from bitcoin as best defensive play, strategist says- CNBC
"Gold soared to two-year highs this week as uncertainty rattled the market. The bull run isn't over yet, says one strategist. 'I am a buyer. I really do like it,' Boris Schlossberg, managing director of FX strategy at BK Asset Management, told CNBC's "Trading Nation" on Wednesday. It's 'retaking its mantle as the key defensive asset against bitcoin, which has certainly suffered a lot over the last couple of months.'...Gold's rise is not a new development, says Chris Verrone, head of technical analysis at Strategas Research Partners. In fact, its rally has been years in the making. 'This improvement in gold is now about 4 or 5 years old,' Verrone told CNBC on Wednesday. 'We have this big base that's been taking shape really since late 2012.' Gold prices found a bottom in early December 2015 after hitting a multiyear high in late 2012. Since that low, gold has surged 28 percent to trade at around $1,347 an ounce."
4.11.18 - Gold Spikes Up on Geopolitical Fears
Gold last traded at $1,360 an ounce. Silver at $16.76 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Wednesday amid geopolitical fears and a weaker dollar. U.S. stocks traded lower after Trump warned Russia to 'get ready' for missiles coming to Syria.
Gold is nearing its best level in 4 years after Trump warns Russia to 'Get ready' -Market Insider
"Gold spiked Wednesday morning after President Donald Trump warned Russia about its cooperation with the Syrian government, and extended its gains over the course of the morning. The precious metal is currently trading up 1.34% near $1,359 an ounce. 'Russia vows to shoot down any and all missiles fired at Syria,' Trump tweeted. 'Get ready Russia, because they will be coming, nice and new and smart! You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!' Wednesday's advance has the precious metal on track for its best close since March 2014. It would have to take out $1,366 for its highest print of 2018."
Jerome Is The New Janet: Tie, Trousers And Same Old Keynesian Jabberwocky -David Stockman's Contra Corner
"Trump's new Fed chairman, Jerome Powell, amounts to Janet Yellen in trousers and tie. In fact, you can make it a three-part composite by adding Bernanke with a full head of hair and Greenspan sans the mumble. The overarching point here is that the great problems plaguing American society - scarcity of good jobs, punk GDP growth, faltering productivity, raging wealth mal-distribution, massive indebtedness, egregious speculative bubbles, fiscally incontinent government - are overwhelmingly caused by our rogue central bank....The Donald came to Washington threatening to drain the swamp and ended up appointing to the one job that could have made a difference a crony capitalist Keynesian who was literally born and bred in the Washington DC Swamp and never left it during his entire adult life....We turn today in rebuke of Jerome Powell's positively deceitful speech on 'The Outlook for the US Economy' recently delivered to the Economic Club of Chicago....Call the Powell speech what you will, but we think it's just more jabberwocky designed to rationalize an illicit central banking regime which is rotten to the core. Needless to say, when an unelected, all-powerful arm of the state lies to the people systematically there has got to be a con job in there somewhere. And this time even Wall Street has lost track of the scam." Full story
All this volatility is following one bear’s script for a 60% tumble in the stock market -Marketwatch
"Stocks were pulling back early Wednesday after the prior session's big rally, and longtime bear John Hussman warns it's this kind of volatility on the Dow DJIA, and the S&P 500 SPX, that only serves to reinforce his pessimistic view that the market is careening toward a painful drop of at least 60% and a decade or more of zero to negative returns. 'We're observing the very early effects of risk-aversion in a hypervalued market,' the Hussman Trust president wrote in his latest missive. 'To some extent, the actual news events are irrelevant. I certainly wouldn't gauge market risk by monitoring the day-to-day news on potential tariffs or even prospects for rate changes by the Fed.' For those of you feeling a bit queasy because of what Hussman describes as the 'rather minimal level of volatility' we’ve seen lately, it's time to make some changes and rebalance your portfolio with some hedges, or at least lighten up by adding cash....The driving factor he frequently cites for the top-heavy market is that the Fed's quantitative easing has inflated valuations to unsustainable levels, and as the free money goes away, the bottom will fall out, leaving a trail of blown-up investors. 'Investment is about valuation. Speculation is about psychology,' Hussman said. 'Both factors are unfavorable here.'"
Inflation shows strongest annual gain since early 2017 -CBS News
"U.S. consumer prices rose 2.4 percent in March from a year earlier, the fastest annual pace in 12 months. The Labor Department said Wednesday morning that on a monthly basis, the consumer price index declined 0.1 percent in March. However, the index's yearly gain suggests that inflation pressures may be picking up. Excluding the volatile food and energy categories, core prices ticked up 0.2 percent in March and 2.1 percent from a year ago. That was the biggest annual increase since February 2017....Capital Economics U.S. economist Andrew Hunter noted in a statement that 'the recent strengthening of monthly price pressures suggests that core inflation will continue to trend higher this year.' He added that when looking at the results overall, 'the recent inflation data keep the Fed firmly on track for another 25 [basis point] rate hike in June. With underlying producer price inflation already at a seven-year high and the tightening labor market set to put upward pressure on wage growth, we expect a continued rise in inflation to prompt Fed officials to raise rates four times in total this year.'"
4.10.18 - Gold Prices Primed for the Next Bull Run
Gold last traded at $1,345 an ounce. Silver at $16.59 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on safe haven buying and a weaker dollar. U.S. stocks rallied as trade war fears eased after Chinese President Xi Jinping discussed plans to open up the country's economy.
Gold Prices Are Primed for a Bull Run -Money Morning
"Gold prices may have seemed volatile last week, but they've actually been trending steadily higher and are on the verge of a bullish breakout. And despite another run by the U.S. Dollar Index to challenge the 90.50 level - for the fourth time since mid-January - it proved too difficult once again. In fact, the dollar should have gotten even more help on Friday, as U.S. Federal Reserve Chief Jerome Powell gave his first speech on economic outlook since taking on his new position two months earlier. Powell said labor markets remained tight and that inflation was expected to rebound within the next few months, supporting further rate hikes. Instead, the dollar backed off, and gold maintained its strength as markets sold off hard once again....Gold has maintained its upward trendline, which has acted as support for new higher lows since late 2015. We also can see an upward trend channel, with the top line acting as overhead resistance. The top of that channel is near $1,400, which is certainly a threshold that's likely to get a lot of observers excited about gold."
Volatility Is Back. Scarred ETF Investors Aren't -Wall Street Journal
"The case for buying into volatility is the best it has been in years. Rising interest rates, fears of a trade war and a rout in technology stocks have triggered big swings in U.S. stocks, a contrast after an extended period of market calm. The S&P 500 stock index has moved more than 1% on 10 of the past 15 trading days, while the Cboe Volatility Index, known as the VIX, is up 97% this year. The VIX ticked higher on Monday after the Dow Jones Industrial Average erased most of a 440-point gain following reports that federal investigators had searched the office and home of Michael Cohen, President Donald Trump's longtime lawyer. The market swings have made investments that track Wall Street's fear gauge among the year's top performers....Despite those gains, exchange-traded products that profit from rising volatility have suffered more than $1 billion in outflows so far this year, according to FactSet. The funds have fallen out of favor in recent years as stocks climbed steadily higher and the VIX fell to record lows. 'The fact that volatility can come into favor and fall out of favor very quickly has rightfully given investors pause when chasing these returns,' said Todd Rosenbluth, head of ETF research for CFRA."
"We Understand The Chinese Government Has Halted Purchases Of US Treasuries": SGH -Zero Hedge
"According to the consultancy, SGH Macro Advisors, a long-time favorite of macro hedge funds, Beijing has twice threatened deliberately targeted tit-for-tat punitive measures against the US to date: 'first, in response to the Trump Administration's threat of steel and aluminum tariffs, and second, in response to broader measures aimed at $50 billion of products that lie directly at the heart of Chinese technology transfers, intellectual property violations, and strategic, 'Made in China 2025' plan.' But even as US cabinet officials lined up yesterday to calm jittery equity markets, SGH says in a note released over the weekend that 'China had already signaled an aggressive and potentially more ominous escalation in the developing trade wars to the White House: From what we understand, the Chinese government has halted its purchases of US Treasuries. Despite the direct encouragement, according to Chinese sources, by US Treasury Secretary Steve Mnuchin for China to stay put, Beijing has apparently discontinued purchases of US Treasuries for the past few weeks.'....While the report has not made it into the public arena, it is worth noting that 10Y nominal yields have barely moved on the news, rising from a session low of 2.78% to 2.80%, and are currently trading back with a 2.79% handle. Of course, should China proceed to announce that it is now a matter of official policy not to buy US paper, the adverse reaction will be far more aggressive."
'The Most Bullish Set Up for Silver that I Have Ever Seen' -Mound/Street Wise Reports
"We now have the most bullish setup for silver that we have ever seen. After trading sideways/down for over 20 months now, investors have completely lost interest in it, which is, of course, the perfect breeding ground for a huge rally that seems to come out of nowhere....If you know what you are looking at the 8-year chart presents a much more encouraging picture. While this chart superficially looks boring and bearish too at first sight, on closer inspection we realize that a downsloping Head-and-Shoulders bottom is completing....Silver always tends to underperform gold at the tail end of sector bear markets, which is the reason why the silver-gold ratio that we will soon look at is so important....Silver gets cheaper and cheaper relative to gold, until an extreme is reached and the pendulum starts to swing back the other way with a new sector bull market....Conclusion: A major new silver bull market looks imminent that is expected to kick off with a dramatic spike, due to a wave of panic short covering."
4.9.18 - New Bill To Relink The U.S. Dollar To Gold
Gold last traded at $1,340 an ounce. Silver at $16.52 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on bargain hunting and a weaker dollar. U.S. stocks rose on softening China trade war rhetoric and strong gains in tech stocks.
After 34 Years, We Again Have A Bill To Relink The Dollar To Gold -Forbes
"The value of the dollar was linked to gold - that is, the U.S. used a 'gold standard' - for most of the time between 1789 and 1971, a stretch of 182 years...From 1934 to 1971, the parity value was $35/oz. In other words, the dollar's value was to remain stable at 1/35th of an ounce of gold....For much of the past five centuries throughout the Western world, this was 'normal.' The floating currency environment we have today, which academic economists like to suggest is some kind of natural economic phenomenon, is actually an aberration. The dollar's value has declined to about one-thirtieth of what it was in 1970, compared to gold, with predictable consequences....In 1984, the remarkable Congressman Jack Kemp introduced the Gold Standard Act of 1984, which was cosponsored by seven others including Newt Gingrich and Connie Mack. It didn't pass. In March of this year, 34 years later, Congressman Alexander Mooney (R-WV) introduced H.R. 5404, 'a Bill to define the dollar as a fixed weight of gold.'....Eventually, someone like Alexander Mooney will introduce a bill like HR 5404, and it will pass. It will pass because it is the right thing at the right time; and also, because we have the confidence that we actually know how to do it."
Sell The Bounce? -McCullough/Hedgeye
"Key Takeaways: Global Equities (including the SP 500) are signaling lower-highs and cross asset class volatility is breaking out to the upside, Headline US GDP Growth is setting up to surprise to the downside. The Big Picture: The reasoning as to why my answer to the question in the title of this note (Sell The Bounce?) is YES has multiple-factors across multiple-durations. For many Global Equity markets we've been selling the bounce for 3-6 months....Do network tools distract you? How about stock markets that whip back and forth with 14-40 volatility? Did it matter that volatility used to be TRENDING in a range of 9-12? Even if you didn't know that wasn't normal - now you know. Not knowing is actually the point about volatility. What do you really know about what is going to be the macro market 'news' for the next 3 months? For me, on growth and inflation, I can tell you, unapologetically, that those answers change every day....What are the Top 5 (non-tariff) Hedgeye Reasons why Global Equities (including the SP 500) are signaling lower-highs? 1) Headline US GDP Growth is setting up to surprise to the downside for the 1st quarter in the last 6, 2) #GlobalDivergences continue to manifest vs. a consensus of a 'Globally Synchronized Recovery', 3) #ChinaSlowing vs. its mid-2017 acceleration, 4) #EuropeSlowing vs. its late-2017 cycle peak, 5) Mr. Market is a leading indicator - cross asset class volatility is breaking out to the upside."
A "Cashless" America Could Soon Be "Gunless" -Pontification Blog
"The United States is quickly turning 'cashless,' buying most things from automobiles to hamburgers via bank loans and credit cards. Americans carry more than a trillion dollars on what should be called 'debt cards.' Banks love cashlessness, in which more and more of what we need is not earned or saved, but borrowed for high interest. Government is even happier with the fast-arriving cashless society. Cash can be hidden, despite your bank being required to spy on you and report any odd financial activity. Government wants every transaction you make to be taxable, trackable, hackable, blockable, and used to empower Big Brother. Cashlessness in surprising ways gives vast power to government. Days ago, for example, liberal Democrat New York State Comptroller Thomas J. DiNapoli, who controls where the state invests its $209.1 Billion pension fund, sent out a letter. It went to institutions behind our credit cards - Visa, MasterCard, JPMorgan Chase, Bank of America, Wells Fargo, American Express, Discover Financial Services, and others. DiNapoli’s message was about as subtle as a guy wearing a pinstripe suit, black shirt and white tie saying: 'You gotta nice place here. Too bad if anything happened to it. But maybe I can provide you some protection.'....DiNapoli suggested that these companies look into implementing ways to block credit card purchases of firearms, ammunition, and gun accessories. The implied threat was clear: stop extending credit to gun and ammo buyers, or risk having New York State investment money taken away from your bank or credit company because the left wants to ban guns....The Federal Government has already tried such intimidation, as Craig R. Smith and I explained in our 2014 book Don't Bank On It! The Unsafe World of 21st Century Banking....If a 'cashless' government becomes authoritarian, it can not only monitor and tax everything you buy, but also ban purchases - ranging from foods it deems unhealthful to guns it deems dangerous." Full story
Americans Face Highest Pump Prices in Years -Wall Street Journal
"Americans are spending more at the pump than they have in years. Prices could rise even higher just as drivers hit the road for family vacations. 'This summer, in terms of average gas prices, will likely be the highest since 2014,' said Patrick DeHaan, petroleum analyst at GasBuddy, a fuel-tracking app. Crude prices have jumped thanks to continuing production cuts by major exporters. As a result, gasoline is also becoming more expensive. According to the U.S. Energy Information Administration, average regular retail gas prices reached $2.70 a gallon last week - the highest level since 2015. While higher fuel prices could herald an end to the glut that has plagued the energy market since 2014, they also threaten to dampen demand and hit consumers in their pocketbooks....'What we're seeing now at the pump is reflective of OPEC's decision in 2016 to cut back on oil production,' said Mr. DeHaan....Higher gas prices also have the potential to dent U.S. demand, if consumers opt to drive less. 'The rise of the use of the word 'staycation' is probably going to happen this summer. You may start to see some people that are turned off to higher prices,' said Mr. DeHaan."
4.6.18 - The Next Crisis Will Be The Last
Gold last traded at $1,336 an ounce. Silver at $16.34 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday as trade war fears weakened the dollar. U.S. stocks fell sharply as worries of a trade war between the U.S. and China grew.
Gold swings higher as U.S. payrolls data miss forecasts -Reuters
"Gold rose on Friday after weaker than forecast U.S. payrolls data knocked the dollar lower and as concerns over the prospect of a U.S.-China trade war kept the metal on track for a narrow weekly gain. The U.S. currency fell versus the euro and Wall Street stock futures added to losses after the report showed that the U.S. economy created the fewest jobs in six months in March, easing concerns over aggressive interest rates hikes....U.S. President Donald Trump said late on Thursday that he had instructed U.S. trade officials to consider $100 billion in additional tariffs on China, fueling an already heated dispute between the world's two biggest economies."
The Next Crisis Will Be The Last -Roberts/Real Investment Advice
"Throughout the last four decades there is a direct link between the actions of the Federal Reserve and the eventual economic and market outcomes due to changes in monetary policy. In every case, that outcome has been negative....For the Federal Reserve, the next 'financial crisis' is already in the works. All it takes now is a significant decline in asset prices to spark a cascade of events that even monetary interventions may be unable to stem. As stock prices decline: Consumer confidence falls further eroding economic growth. The $4 Trillion pension problem is rapidly exposed which will require significant government bailouts. When prices decline enough, the record levels of margin debt are triggered which creates a liquidation cascade. As prices fall, investors and consumers both contract further pushing the economy further into recession. Aging baby-boomers, which are vastly under-saved will become primarily dependent on social welfare which erodes long-term economic growth rates. With the Fed tightening monetary policy, and an errant Administration fighting a battle it can't win, the timing of the next recession has likely been advanced by several months....At some point, there will be a realization of the real crisis....The issue for future politicians won't be the 'breadlines' of the 30's, but rather the number of individuals collecting benefit checks and the dilemma of how to pay for it all. The good news, if you want to call it that, is that the next 'crisis,' will be the 'great reset' which will also make it the 'last crisis.'"
Gold Price Seen 'Moving North' as World Fails to Replace Output -Bloomberg
"Bullion prices are set to climb because there's been a lack of exploration and the global industry isn't replacing the reserves it's been mining, according to Stephen Letwin, chief executive officer at Iamgold Corp. 'Gold has a much higher probability of moving north as opposed to south,' Letwin said in an interview at a mining conference in Hong Kong on Thursday. 'I've been around a long time; when you're in an industry that's not replacing what it produces, eventually, the price has to move up.' The producer-funded World Gold Council has estimated that world supply may have peaked, while Frank Holmes, chief executive officer of U.S. Global Investors Inc., said this week that mine supply topped out in 2017 or will do so this year. Combined with understated inflation and strong demand from China and India, this could help boost prices to $1,500 an ounce by the end of the year from about $1,327 now, according to Holmes."
How China can win a trade war in 1 move -The Week
"China will not be easily cowed in a trade dispute. Chinese President Xi Jinping is now exchanging threats of tit-for-tat tariffs with President Trump, who announced Thursday he's considering raising the stakes another $100 billion. China vowed to defend itself 'at any cost.'....If things do spiral into all-out trade war, it's worth noting China has a nuclear option. I'm referring to rare earth metals. These are elements like dysprosium, neodymium, gadolinium, and ytterbium. They aren't actually rare, but they do play crucial roles in everything from smart phones to electric car motors, hard drives, wind turbines, military radar, smart bombs, laser guidance, and more. They're also quite difficult to mine and process. It turns out the United States is almost entirely dependent on foreign suppliers for rare earth metals. More importantly, it's almost entirely dependent on China specifically for rare earth metals that have been processed into a final and usable form. Basically, if China really wanted to mess with America, it could just clamp down on these exports....America's problem has never been a lack of rare earth deposits - it has plenty. The problem has been maintaining a domestic industry to mine the minerals and transform them into final components....it certainly wasn't prudent to allow China to corner the rare earth metal market. But ultimately China is just a hard-nosed global player, pursuing what it sees as its national interest."
4.5.18 - High Debt Threatens Boomer Retirement
Gold last traded at $1,328 an ounce. Silver at $16.35 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Thursday on a firmer dollar and easing trade war fears. U.S. stocks traded higher led by tech following China trade-war concerns the previous trading day.
China, holding Treasuries, keeps 'nuclear option' in U.S. trade war -Reuters
"It took China just 11 hours to retaliate against the United States for proposing tariffs on some 1,300 Chinese products, but Chinese officials are holding back on taking aim at their largest American import: government debt. In a tit-for-tat response to the Trump administration's plan for 25 percent duties on $50 billion of Chinese imports, China hit back with its own list of similar duties on key American imports including soybeans, planes, cars, beef and chemicals. But officials signaled no interest for now in bringing their vast holdings of U.S. Treasuries to the fight. China held around $1.17 trillion of Treasuries as of the end of January, making it the largest of America's foreign creditors and the No. 2 overall owner of U.S. government bonds after the Federal Reserve. Any move by China to chop its Treasury portfolio could inflict significant harm on U.S. finances and global investors, driving bond yields higher and making it more costly to finance the federal government....'If they wanted to pull the nuclear switch, if they committed to dumping Treasuries, it would have an immediate and temporary impact on money markets in the United States,' said Jeff Klingelhofer, a portfolio manager who oversees more than $6 billion at Thornburg Investment Management Inc."
Will Trump Launch a Currency War, Too? -Project-Syndicate
"Last month, Donald Trump personally announced a series of import tariffs and other measures to restrict the flow of Chinese goods and capital into the United States. Clearly, Trump views China as a significant economic threat, so it may be only a matter of time before he sets his sights on the renminbi as well. So far, the US has imposed sweeping import tariffs of 25% on steel and 10% on aluminum, which Trump personally announced early last month....It is also tightening restrictions on corporate acquisitions and investments by foreign firms; and it has signaled its intention to challenge China's forced technology transfers at the World Trade Organization....Trump has already blocked a $117 billion bid by Broadcom - a Singapore-based firm with close ties to China - to acquire the US tech giant Qualcomm....To date, the Trump administration has not taken any direct action against the renminbi. But if it views Chinese exports and investments as a threat, it may be only a matter of time before it targets the Chinese currency, too....Most recently, China launched a new exchange for renminbi-denominated crude oil futures, which some observers see as a direct challenge to the dollar."
Bond Market Has A $745 Billion Bet Against the Dollar -Bloomberg
"Foreign holdings of local-currency debt of developing nations have swelled to near a record $745 billion, according to data collected by Deutsche Bank AG. With much of their buying at the expense of the greenback, according to this metric investors have never been so exposed to a sudden turnaround in the U.S. currency. The trade has been lucrative, handing investors returns of more than 13 percent in the past year and a 4.7 percent gain in the first quarter as most risk assets succumbed to losses....'The short dollar trade is the biggest pain trade in financial markets right now and EM local currency is a natural extension of this,' said Damian Sassower, a fixed-income strategist at Bloomberg Intelligence in New York. 'It's never been this cheap to hedge against a sharp rise in the dollar.'"
From rout to rally: The markets write off Trump’s trade-war talk -New York Post
"Some more undeniable facts: If Trump really does believe what he says and starts a trade war with China because it's 'good' for the economy, or continues to hammer Amazon's stock price over a belief the company is ripping off the Post Office and doesn't stop his inane tweets about anything that pops into his head, he risks squandering all those economic gains - and his reelection. That was the message from the wildly gyrating stock market on Wednesday, when investors were initially so spooked by Trump's clear economic naivete that it looked like we were headed for another 500-point-plus drop. Then came the new White House economic adviser, longtime free-market evangelist Larry Kudlow, to remind investors of Trump's tax cuts and deregulation and to assure them that the president isn't actually starting a trade war with China, just negotiating for better terms....And presto, the market rout turned into a rally - by one estimate, only the third time in history the Dow reversed a 500-point loss to end the day in the green. The big question is how long investors will ignore Trump's absurd economic statements, whether it's the outcome of a trade war (never good) or whether Amazon is actually screwing the US taxpayer (it isn't)....At least for now, investors believe the BS coming from the current president is much more palatable than what they've had shoveled at them the past eight years. For them, the unpredictable Trump is pretty predictable."
Growing debt among older Americans threatens their retirement -CNBC
"Debt among older Americans is rising fast. In 2016, the average debt in families in which the head of the household is age 75 or older was $36,757. That is up from $30,288 in 2010, according to a recent report by the nonprofit Employee Benefit Research Institute in Washington. High balances and calls from collection agencies can leave many older Americans feeling helpless. The average monthly Social Security check is $1,404, and more than 40 percent of single adults receive more than 90 percent of their income from that check, according to the government. Older Americans' debt can threaten this....'There's just fewer options you have at that stage of the game,' said Justin Halverson, a financial advisor and co-founder of Great Waters Financial in Minneapolis. But the situation is far from hopeless. Here's what you can do. 1) Get your budget in order....2) Do what you can....3) Consider lifestyle changes....4) Ditch the regret....'We all make mistakes,' said Halverson. 'The first step toward moving forward is looking backwards and forgiving yourself.'"
4.4.18 - The Source of America's Economic Illness
Gold last traded at $1,340 an ounce. Silver at $16.25 an ounce.
NEWS SUMMARY: Precious metal prices traded higher Wednesday on a weaker dollar amid trade war fears. U.S. stocks traded mixed as investors reacted to the latest China trade war tariffs targeted at American goods.
Gold Is Heading to $1,400 If Trade War Breaks Out, According to Sprott -Bloomberg
"Gold will surge to the highest level in five years if a global trade war breaks out, according to Rick Rule, chief executive officer of Sprott U.S. Holdings Inc., who's been involved in the market for four decades. Bullion could top $1,400 an ounce in 2018 as escalating trade tensions drive investors to havens and the three-decade bull market in bonds nears an end, said Rule...Asia's top economy retaliated by imposing its own levies on Monday, while the U.S. is expected to release this week a new list of Chinese products to be slapped with duties. A trade war could crimp demand for U.S. assets just as the budget deficit swells, with the dollar vulnerable should international buyers shun American debt....'The fact that the U.S. seems to be bound to engage in a zero-sum trade war has begun to strike people as something that's bad for everybody in the world, not just the U.S. The potential for a winnerless trade war certainly gives cause to some concern,' Rule said in an interview March 29."
Does The Stock Market's Slide Signal Regime Shift? -Capital Speculator
"This much is clear: the sharp decline in the S&P 500 yesterday (April 2) confirms that the downside bias in the first three months of the year has spilled over into the second quarter. It's also obvious that the latest market stumble has inspired a new round of warnings from analysts. CNBC, for example, reports that 'Monday’s broad-based sell-off pushed stocks below important technical levels, signaling more pain ahead for the market.' Some analysts say that the S&P 500's close below its 200-day moving average yesterday for the first time in nearly two years marks a grim sign for a momentum-based outlook of equity prices generally....Tactical traders with a short-term horizons may find reason to be anxious these days, but investors with a relatively longer outlook might wonder if a genuine regime shift has arrived for equities....Stocks can certainly suffer when the economy's expanding, but such a slide usually requires some event that's unrelated to the economy proper. The leading suspect on that front at the moment: the rising threat of a trade war. If you're looking for a reason to worry, this is at the top of the list."
The Source of America's Economic Illness -Bonner/Bonner And Partners
"Up, down. Up, down. What to make of it? The stock market is in denial, struggling with the idea, not quite willing to give in… not quite willing to admit that the bull market of 2009 - 2018 is over. Of course, we could be wrong. We frequently are. But the big risk you face… is that we're right....Many people, including the president, seem to think we are in some kind of boom. But there is no evidence of it. GDP growth rates continue to slow and are in danger of going negative at any time – watch out for the readings from the first quarter; they could be shockingly low....Economist Richard Duncan summarizes: 'The combination of trillion-dollar-a-year budget deficits and Quantitative Tightening will drive the Liquidity Gauge into record negative territory this year. Next year and the year after, the Liquidity Drain will become even worse. This is creating a toxic environment for investors. Only a trade war could make matters worse.'"
Dems take GOP - and future generations - to the cleaners -Edwards/The Hill
"The 2,232-page omnibus spending deal signed into law last week threw fiscal sanity out the window. While entitlement spending has continued to grow, the relative restraint in discretionary spending had provided hope that federal budget control was possible. But that hope is now dashed under this president and Congress. The omnibus hiked discretionary spending 13 percent in a single year, while scraping the budget caps that were the singular achievement of reformers after the landmark 2010 election. President Trump included substantial cuts in his recent budget, but signing the omnibus made a joke of his own proposals for fiscal restraint. The GOP’s discretionary budget actions and the relentless rise of health care and retirement spending have put the budget on a catastrophic course....No one knows the timing of the coming crisis, but we do know that younger generations will get hammered under the massive debt, which already amounts to $160,000 for every household in the nation. Young people will be forced to pay a rising share of their earnings to foreign and domestic creditors....In the omnibus deal, the Democrats took the Republicans to the cleaners. But a more unnerving upshot is that majorities in both parties seem entranced by federal spending."
4.3.18 - America's Two-Party System Has Collapsed
Gold last traded at $1,337 an ounce. Silver at $16.39 an ounce.
NEWS SUMMARY: Precious metal prices eased back Tuesday on profit-taking and a firmer dollar. U.S. stocks attempted a rebound from Monday's sharp technology-led sell off.
Stocks post worst start to April since the Great Depression -CNBC
"The stock market's start to the second quarter was its worst since the Great Depression. The Dow Jones Industrial Average fell 1.9 percent - or 458 points - as China's retaliatory tariffs against U.S. agricultural goods stoked fears of a global trade war. With the S&P 500 closing down more than 2.2 percent Monday, the broad market index posted its worst start to April since 1929, according to S&P Global. The index also closed below its 200-day moving average - a key technical level - for the first time since June 2016, 442 straight days. 'Based on recent market action, the bears clearly have control right now,' Bespoke Investments Co-Founder Justin Walters wrote. 'The path of least resistance is lower until something comes along to reverse that trend.' The S&P 500 fell back into correction territory Monday as technology led the market lower, with names like Amazon and Netflix both down more than 5 percent."
America’s Two-Party System Is Done -Bonner/Bonner And Partners
"The most remarkable thing about the latest federal budget is that no one seems to find it remarkable. As far as we know, no member of Congress read it. And the president - who is supposed to be the nation's chief executive officer - has only the dimmest idea of what is in it. And yet, it establishes three astonishing new things. First, governments typically promise peace and prosperity. But this budget practically guarantees war and poverty. Second, the checks and balances of the two-party system have been almost eliminated. There is only one party now: the Deep State Elite....That brings up the third big thing no one seems to care about: the finances of the richest country on earth have become a dangerous sh*thole fantasy. With the end of the two-party system, no fear of deficits, and no way to curb spending, we are now looking ahead to national bankruptcy....What will give? The stock market will crash. Then, the Fed will panic. So will the White House and Congress. Almost immediately, new spending programs - shovel ready - will appear. Deficits will soar to $2 trillion. The Fed will cover them with more fake money. Consumer prices will rise. Asset prices, in real terms, will fall....The Deep State will gain power and money; the public will suffer. Has anyone been to Venezuela lately?"
The yuan-oil future and gold -GoldMoney
"Trading in the new Shanghai oil future commenced last Monday, and on the first three days trading there were 151,804 contracts traded with a turnover value of 65bn yuan. It is the first futures contract listed on China's mainland available to overseas users, putting them on the same footing as domestic investors. There are 15 benchmark contracts for different delivery dates between September next and March 2019. There is little doubt that the Chinese government views this contract as an important development, with international commodity trading houses, such as Glencore and Trafigura, encouraged to participate. Furthermore, state-owned banks would have been on hand to ensure the necessary currency and financial liquidity is available....This contract goes head-to-head against the petrodollar and is the first serious challenge to it since its inception in the mid-1970s. The petrodollar was born out of the monetary chaos that led to the end of the Bretton Woods Agreement, when excess dollars in foreign hands were redeemed for gold. In that sense, being the first significant threat to the petrodollar, this contract could mark the end of a monetary era....The undermining of the petrodollar's status, even though it is initially only at the margin, provides a weak background for the dollar. China's trade surplus, coupled with the US trade deficit can also be expected to continue to put downward pressure on the dollar relative to the yuan....A new era for the dollar is in prospect and the price of the dollar measured in real money, gold, seems set to decline....Therefore, physical gold prices appear at the least to be firmly underwritten, because major bullion banks can be expected to accumulate bullion."
A list of the biggest data leaks over the last six months -Fox Business
"News of data breaches exposing the personal information of customers of big companies such as Facebook, Under Armour and Equifax seems like a monthly occurrence nowadays - because is it. Over the last year, there has been a massive data breach involving big outlets every month. And this month alone, there have already been two massive breaches involving Saks, Lord & Taylor and Panera Bread....Panera Bread's website leaked customer records for at least eight months...data leak included names, email and physical addresses and the last four digits of credit card numbers of millions of customers who order food online....Hudson's Bay Company, which owns Saks and Lord & Taylor stores, confirmed that hackers stole credit and debit card information of more than 5 million of it shoppers....Under Armour announced its health and fitness app, MyFitness Pal, suffered a data security breach that exposed the personal data of roughly 150 million users....Both The New York Times and Observer broke the news that 50 million profiles of Facebook users were “harvested” without their consent to a consulting firm, Cambridge Analytica."
4.2.18 - Gold Climbs After China Tariffs
Gold last traded at $1,346 an ounce. Silver at $16.64 an ounce.
NEWS SUMMARY: Precious metal prices shot up Monday on safe haven buying as China trade war fears weakened the dollar. U.S. stocks fell over 2% as a rising number of investors cashed out stock holdings amid rising FAANG stock risks and trade war escalation.
Gold Climbs After China Imposes Tariffs -Wall Street Journal
"Gold prices rose Monday after China imposed tariffs on a range of U.S. goods, following through on a promise to retaliate against the Trump administration’s penalties on imports of Chinese steel and aluminum. Gold added 0.8% to $1,337.40 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices have stayed between about $1,305 and $1,360 this year, moving within that range based on safe-haven demand from investors, swings in the dollar and worries about higher interest rates. Some money managers favor gold when they think markets might turn rocky. Protectionist trade policies from the U.S. and China have stoked fears of a global trade war that leads to higher manufacturing costs and eventually slower economic growth, pushing some traders to scoop up gold....'Last night's tariff news from China spooked the market, took the dollar lower and gave us a lot of safe-haven buying in gold,' said Bob Haberkorn, senior market strategist at RJO Futures."
"Hedge What You're Afraid Of" - Goldman Urges Clients To Start Preparing For The Worst -Zero Hedge
"It's time to start hedging. That is the warning to clients from the latest report by Goldman's derivative strategists John Marshall and Katherine Fogerty, who caution that in the aftermath of the February VIX spike, as volatility increases 'so do returns from time invested in hedging strategies increase.'....The main catalyst for the bank's shift in outlook is the expectation that increases in realized volatility will force vol-targeting funds to adjust gross and net exposure, and lever appropriately, as well as have direct effects on the calculation of risk in a variety of equity portfolios....Goldman provides a handy checklist of the hedging process which, naturally, begins with 'Hedging what you Fear', which is also the focus of this particular report which looks at seven discrete factors 'weighing on investors minds' including: Credit Risk, Rate/Inflation Risk, Oil Risk, US Market Risk, US Cyclical Risk, China Risk and Europe."
Rising Rates Sounding Alarm Bells for Debt-Laden U.S. Consumers -Bloomberg
"Americans have a history of loading up on debt in good times, then paying dearly when the bills come due. Adding to the pain: A booming economy is often accompanied by rising interest rates, which make mortgages, credit cards and other debt much more expensive. As the U.S. Federal Reserve raises rates, there are signs that consumers could be putting themselves in peril....Spending on U.S. general purpose credit cards surged 9.4 percent last year, to $3.5 trillion, according to industry newsletter Nilson Report. Card delinquencies are also rising. U.S. household debt climbed in the fourth quarter at the fastest pace since 2007, according to the Federal Reserve. 'There are warning signs out there,' said Kevin Morrison, senior analyst at the Aite Group. Especially concerning is a surge in student and auto loans over the past decade, he said....Use of credit cards is rising faster than debit cards, as banks offer users lucrative rewards."
California’s Illegal Alien Voting Law IS Secession -Pontification Blog
"Mark the date April 1, 2018, April Fool’s Day, as the day Civil War 2.0 began. On that day the State of California began to automatically register illegal aliens to vote who have driver licenses. This new law immunizes illegals against any state criminal penalty for registering and voting. Leftist scholars say that our states control their voting criteria and can legally register non-citizens to vote in state, county, and local elections. States, including California, however, may not register illegals to vote in federal elections - for Members of Congress, U.S. Senators, or President. Allowing citizens of other countries vote in California would illegally 'dilute' the votes not only of Californians but those of all American citizens by giving foreigners political power in selecting American lawmakers and Presidents....California has one-quarter or more of America's illegal aliens - as well as one-third of the entire nation's welfare recipients. With a population more than 40 percent Latino, it has become Mexifornia. The new California motor-voter registration law that took effect April 1st transparently is intended to enfranchise illegals, who vote 2-1 for the ruling Democratic Party, in order to dissolve the American nation into a borderless, bankrupt, bilingual backwater ruled as a colony by a global Progressive government....Imagine a better alternative. Suppose that President Trump announces today that the new California law has made all future elections unconstitutional and illegal, because foreigners are now allowed to tilt the outcome."
3.29.18 - Three Reasons To Expect $1,500 Gold
Gold last traded at $1,327 an ounce. Silver at $16.26 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Thursday, ending the first quarter of 2018 with a modest gain. U.S. stocks traded higher as tech stocks rebounded, but the DJIA remains on track for a 4% decline YTD.
Three reasons gold will climb to $1,500 this year -Marketwatch
"Gold prices could jump to $1,500 an ounce this year, a level they haven't seen since 2013, according to Frank Holmes, chief executive officer of U.S. Global Investors. That would mark a roughly 11% rise from the current price....He cites three key reasons for his forecast climb for the precious metal, the first of which is tied to inflation expectations. 'Inflation could be growing a lot faster than what the government is telling us,' he told MarketWatch in an interview this week....'No matter which gauge you look at ... inflation is trending up,' said Holmes. Gold is traditionally seen as a hedge against inflation. Holmes also pointed out that a weaker dollar policy will 'always benefit commodities and emerging markets.'....Meanwhile, rising gross domestic product figures in China and India, continue to help with what Holmes characterizes as the 'Love Trade.'....Gold prices may even eventually climb to new highs at $1,900 an ounce, Holmes said. 'If we see inflation ramp up, then ... we could see gold move to new heights.' Gold futures reached a record settlement at $1,891.90 on Aug. 22, 2011."
Stagflation Alert As Wages And Salaries Roll Over -Zero Hedge
"Back in January, with jobs aplenty and Americans spending like drunken sailors (sending their savings rate to the lowest on record), average hourly earnings suddenly spiked...Well, fast forward to today, when all those 'green shoots' are either dead or on the verge, and after today's Personal Income and Spending report, it appears that it is stagflation that is once again looming. Meanwhile, the PCE deflator rose by 1.8%, coming hotter than expected...In other words, inflation is here....Then there is the US consumer's reaction, and while until just a few months back the US savings rate was at all time lows, it has since jumped to 3.4%, the highest since August 2017, as households are no longer spending more than they can afford, a theme we observed at the end of 2017....The BEA's personal income actually carries wages and salaries data for both private and government workers. What it found is that after peaking in December, wage growth for these two worker groups has declined for 2 consecutive months, confirming what many have warned, now the slowdown begins....Between higher prices, declining wages, rising savings (not to mention maxed out credit cards), and plunging spending plans, Americans have once tapped out."
Poll: Majority of Americans say they are not seeing change in paychecks due to tax cuts -The Hill
"A majority of Americans say they are not yet seeing President Trump's tax cuts reflected in their paychecks, according to a new poll. A CNBC All-America Economic Survey finds 52 percent of working adults say they haven't seen a change. Just 32 percent of the working adults report taking home more money due to the tax cuts, which Trump signed into law late last year. Of those saying they are taking home more money, 38 percent say the extra pay they receive helps them a 'great deal' or a 'fair amount.' Forty percent say the extra pay helps 'some' or 'just a little,' and 22 percent report that the extra pay 'does not help much at all.' The poll was conducted from March 17 to 20 among 800 Americans, of which 60 percent were working adults. Its margin of error is 3.5 percentage points."
There is one dangerous assumption made by 70% of Baby Boomers -USA Today
"There's a reason so many older workers are in danger of running out of money in retirement. Only 54% of Baby Boomers have money set aside for the future, according to new data from the Insured Retirement Institute (IRI). That's the lowest percentage on file over the past seven years. But what's perhaps equally frightening, if not more so, is the fact that roughly 70% of Boomers are confident they can live solely off Social Security if they deplete their own savings. The problem, of course, is that Social Security was never designed to sustain retirees in the absence of outside income. And if more workers don't come to terms with that, they'll continue to put their retirement at risk. Countless seniors enter retirement with inadequate savings and wind up living in poverty. The reason: They expect their Social Security benefits to pick up the slack, which they're just not equipped to do. Those payments, in a best-case scenario, will replace about 40% of the typical worker's pre-retirement income....Almost one-third of Baby Boomers expect to need an annual income of $45,000 to $75,000 during retirement, according to the IRI. But the average Social Security recipient today collects just over $1,400 a month in benefits, which translates into just under $17,000 per year."
Don't wait! You have until April 17th to stash some hard-earned cash into your IRA or other qualified retirement plan. Swiss America can help you create a personalized precious metals savings and retirement plan that will help preserve your family's wealth.
**Swiss America will be closed March 30 in observance of Good Friday. We wish all of our readers a Happy Easter!**
3.28.18 - Stocks: Already in a Bear Market?
Gold last traded at $1,324 an ounce. Silver at $16.25 an ounce.
NEWS SUMMARY: Precious metals prices eased back from recent highs Wednesday on short-term profit taking and a firmer dollar. U.S. stocks traded mixed as tech stock giant Amazon fell on potential tax worries.
Gold investment forecast to keep rising -Business Live
"Bullion investors, miners and coin makers will help drive the fifth successive annual increase in total global gold investment in 2018, CPM Group said in its Gold Yearbook 2018 on Tuesday, citing geopolitical tensions and fears that the bubbling US economic expansion would end in a 2019 recession. 'The changing global monetary policy landscape coupled with [a] long-in-the-tooth growth cycle in the US and little fresh ammunition to bolster the US markets further, means that the US economy looks most at risk of recession,' CPM said. CPM forecast net gold investment at 20.3-million ounces during 2018, a 6.6% rise from its 19.1-million ounces in 2017. This would be the highest hike since 2016, when gold investment increased 23.9% to 26.1-million ounces....'Market volatility has been unusual, [has] worried more investors and brought more attention to gold as a haven,' said George Gero, the MD of RBC Wealth Management. 'Asset allocators have been looking for assets that could be a hedge with forthcoming inflation.'"
Stocks may already be in a bear market - and here's how long it could last -Marketwatch
"The Dow Jones Industrial Average surged 670 points on Monday, but fell 345 points on Tuesday. It will hit bottom on March 4, 2019, at 18,328.27. That's on the assumption that a major bear market began at the Jan. 26 highs, and that the ensuing bear market will be average both in terms of length and loss. That would mean we face 11 more months of a declining market, in which the Dow DJIA, -1.43% will drop another 5,529 points (or 23.2%) from Tuesday's close. The Dow has already slumped 2,759 points, or 10.4%, from its record close of 26,616.71 on Jan. 26. Of course, we don't know yet whether we're in a major bear market....The Dow Theory, the oldest stock-market timing system in widespread use today, came within a hair's breadth of issuing a major bear market signal on both Friday and Tuesday."
Investment chief of $250 billion firm says financial markets are on a 'collision course for disaster' -CNBC
"Investors should brace themselves for a vicious recession made worse by large corporate debt levels, according to Guggenheim's Scott Minerd. He warned clients that inflation and rate hikes from the Federal Reserve will lead to the next market downturn. 'I have come to realize that the markets are potentially on a collision course for disaster. The collision course is being brought about by strong fiscal stimulus in the late stage of the business cycle, when conventional economic wisdom mandates that it should be heading the other direction to create fiscal drag,' the firm's global chief investment officer wrote in a note to clients Monday. 'With the huge fiscal stimulus coming online, the Federal Open Market Committee (FOMC) will feel obliged to play the role of creating economic headwinds.' Guggenheim has more than $250 billion in assets under management across its fixed income, equity and alternative investment strategies, according to its website....The analyst said when the economy enters the next recession companies will have the 'highest debt load' in history."
Trump hates Amazon, not Facebook -Axios
"Capitol Hill wants Facebook's blood, but President Trump isn't interested. Instead, the tech behemoth Trump wants to go after is Amazon, according to five sources who've discussed it with him. 'He's obsessed with Amazon,' a source said. What we're hearing: Trump has talked about changing Amazon's tax treatment because he's worried about mom-and-pop retailers being put out of business. A source who's spoken to POTUS: 'He's wondered aloud if there may be any way to go after Amazon with antitrust or competition law.' Trump's deep-seated antipathy toward Amazon surfaces when discussing tax policy and antitrust cases. The president would love to clip CEO Jeff Bezos' wings. But he doesn't have a plan to make that happen. Behind the president's thinking: Trump's wealthy friends tell him Amazon is destroying their businesses. His real estate buddies tell him - and he agrees - that Amazon is killing shopping malls and brick-and-mortar retailers. Trump tells people Amazon has gotten a free ride from taxpayers and cushy treatment from the U.S. Postal Service."
3.27.18 - Are Gold Prices About To Break Out?
Gold last traded at $1,342 an ounce. Silver at $16.49 an ounce.
NEWS SUMMARY: Precious metal prices eased back from 5-week highs Tuesday on short-term profit-taking and a firmer dollar. U.S. stocks fell into correction territory as tech giant Facebook's data security issues dragged the major indexes down on the heels of last week's sharp sell-off.
Gold is breaking out, and a perfect storm may be brewing for a bigger rally -CNBC
"Gold is on a tear, and some market watchers see further upside ahead for the precious metal. Gold rallied to its highest level in five weeks on Monday, tracking for its best quarter since the January-March quarter of last year. Larry McDonald, publisher of the Bear Traps Report, told CNBC's 'Trading Nation' that gold is breaking out and could rally further. Here are his reasons why. Gold has broken out on a technical basis, due in part to a more dovish-than-anticipated Federal Reserve, trade war concerns brewing in Washington and a relatively weaker U.S. dollar....Gold is trading at an attractive juncture, just below its 2017 peak, and may be expected to move higher in the coming weeks. Gold has gained 3.5 percent this year....Bottom line: Gold, along with gold miners, may see a bigger rally in the coming weeks."
Wall Street firm says a bear market will rock stocks in the next year -Business Insider
"One Wall Street analyst says the weakness is just getting started, forecasting a bear market within the next year. Last Thursday's bloodbath in US stocks may just be the beginning of troubling times ahead, at least according to one Wall Street firm. Barry Bannister, an equity strategist at Stifel, has seen enough and is calling for a bear market in US equities sometime in the next year. (Note that a bear market is defined as a 20% decline from recent highs.) His rationale for the bearish outlook - that the removal of Federal Reserve accommodation will hurt corporate profits and whip up volatility - is not particularly novel, given that it's a commonly cited fear for investors. What's notable about it is the severity of his forecast. By Bannister's measure, even a gradual removal of easy monetary conditions may cause stocks to 'adjust rapidly with a 16% price-to-earnings (P/E) decline.' That would be a disastrous shift for a market already viewed as overvalued - and one for which corporate earnings are such an important pillar."
Suddenly, it seems as though many experts are warning us about a potential stock market collapse. Discover how to find the hidden positives and negatives of today's rising economic optimism in a brand new Swiss America Special Report: THE CRASHLESS SOCIETY.
It's the beginning of the end for this economic expansion -Marketwatch
"Spring snowstorms in the Northeast of the U.S., a trade tussle with China that could escalate into a trade war, hawkish personnel changes in the White House, a Jerome-Powell Federal Reserve that expects to overshoot the neutral policy rate, and the worst week for U.S. equities since January 2016 - stormy weather all around! Could this be the beginning of the end? This is the question Pimco ask in our latest Cyclical Outlook, which summarizes the conclusions from our quarterly Cyclical Forum held earlier this month. The beginning of the end of … extreme monetary accommodation? The end of easy money implies the end of suppressed stock-market volatility....The beginning of the end of … the economic expansion? Probably yes....Global growth momentum has started to ebb as evidenced by the recent rollover of business surveys in China, Europe and Japan, which confirms the Peak Growth thesis in our 2018 outlook. The cyclical umph added by fiscal expansion this and next year will likely sow the seeds for a downturn later, potentially leading to a recession in 2020."
A Domestic Budget to Make Barack Obama Proud -The Atlantic
"President Obama finally got a Republican-controlled Congress to fund his domestic budget...In the $1.3 trillion spending bill that President Trump reluctantly signed on Friday, lawmakers did more than reject the steep cuts in dollars and programs that Trump proposed for domestic agencies a year ago. Across much of the government, Republican leaders agreed to spending levels that matched or even exceeded what Obama asked Congress to appropriate in his final budget request in 2016 - and many of which lawmakers ignored while he was in office....Congress eliminated none of the 18 independent agencies Trump wanted to scrap, including the Corporation for Public Broadcasting, the National Endowment for the Arts, and the National Endowment for the Humanities. And several of the programs he wanted to zero out won huge increases instead....'This could have been written by President Obama and liberal Democrats,' Senator Rand Paul of Kentucky said Thursday night on Fox News, hours before he consented to a vote on a 2,200-page bill most of his colleagues hadn't had time to read. Senator Ben Sasse of Nebraska accused his party of hypocrisy. 'Every Republican would vote against this disgusting pork bill if a Democrat were president,' he said in a statement."
Mr. Smith couldn't agree more. The signing of the $1.3 Trillion U.S. budget marks "the point of no return" for the United States, Swiss America Chairman Craig R. Smith explains in his latest video: America Jumps Off the Fiscal Cliff.
3.26.18 - America Jumps Off The Fiscal Cliff
Gold last traded at $1,355 an ounce. Silver at $16.68 an ounce.
NEWS SUMMARY: Precious metal prices rose on safe haven buying and a sharply weaker dollar. U.S. stocks rebounded as investors looked beyond recent trade war worries and the growing U.S. debt debacle.
PetroYuan Futures Open - Over 10 Billion Notional Trades In First Hour -Zero Hedge
"After all the preparation, all the expectation, cheerleading and doomsaying, China's Yuan-denominated crude oil futures contract began trading tonight and appears to be off a good start with well over 10 billion yuan notional traded within the first hour. Additionally, well over 23,000 contracts have traded within the first hour for a notional trading volume of over 10 billion yuan - more than $1.5 billion notional... signaling significant demand. Offshore Yuan is moving in sync with 'Petroyuan' futures - as WTI tends to track the USD....After numerous 'false starts' over the last decade, the 'petroyuan' is now real and China will set out to challenge the 'petrodollar' for dominance. Adam Levinson, managing partner and chief investment officer at hedge fund manager Graticule Asset Management Asia (GAMA), already warned last year that China launching a yuan-denominated oil futures contract will shock those investors who have not been paying attention. This could be a death blow for an already weakening U.S. dollar, and the rise of the yuan as the dominant world currency....The petrodollar is backed by Treasuries, so it can help fuel U.S. deficit spending. Take that away, and the U.S. is in trouble. It looks like that time has come…"
Urgent Alert! America Jumps Off the Fiscal Cliff -Craig R. Smith video
The signing of the $1.3 Trillion U.S. budget marks "the point of no return" for the United States, Swiss America Chairman Craig R. Smith shares in an impassioned new video. Conservatives feel betrayed by Congress and the President. "We have jumped off the fiscal cliff," says Mr. Smith, and are now virtually guaranteed that our financial future will come crashing down upon future generations. Mr. Smith is calling viewers to take immediate action and outlines his strategy to protect your wealth before the next crisis strikes. Watch video now
Unless You Want to Go to Prison, Read This Before Taking Money Out of Your Bank -The Common Sense Show
"The courts have ruled that once you deposit your money in the bank, the bank owns your money. You virtually are paid no interest for the hard earned money that you place in the bank....The biggest reason to take your money out of the bank is because it has absolutely no protection. The FDIC has only about $25 billion in its deposit insurance fund, which is mandated by law to keep a balance equivalent to only 1.15% of insured deposits....Taking what was your money out of the bank is no longer a matter of walking up to your friendly teller with a withdrawal slip and the teller cheerfully honors your request and you calmly exit the bank with your money in tow. In fact, your teller is trained to look for certain indicators in any cash withdrawal of any significance....Federal law requires that the bank file a report based upon any withdrawal or deposit of $10,000 or more on any single given day....Structuring transactions to prevent a CTR from being reported can result in imprisonment for not more than five years and/or a fine of up to $250,000....The best way to avoid getting your money caught in the bank in the midst of a bank run would be to not let the lion's share of your money ever cross the bank...Don't put cash in a safety box because the courts have also ruled that the banks own your safety boxes."
Gunning for Religion -Pontification Blog
"Much of what he saw was expected at Saturday's March for Our Lives protests, writes Jarrett Stepman of the Heritage Foundation. The politics and organizers were predictably 'left-wing,' and their aim was not so much to safeguard children as to outlaw all non-government guns. But what most surprised Mr. Stepman was how many of the protestors attacked 'the act of offering prayers in the wake of shootings….it was strange to see so many signs specifically aimed at condemning prayer.' One such voice was former Attorney General Eric Holder, who called scornfully for radical political action instead of 'the usual…prayers.'....Last Saturday continued mind control on children....Progressives believe government is god, and that with enough wealth and power they can create utopia, a new anti-individualist egalitarian Eden, a Politically-Correct heaven on Earth in which all power – including all guns – will be held by government."
3.23.18 - Gold Jumps As China Tariffs Shake Markets
Gold last traded at $1,349 an ounce. Silver at $16.58 an ounce.
NEWS SUMMARY: Precious metal prices rose to one-month highs Friday on safe haven buying and a weaker dollar. U.S. stocks struggled as China trade war fears loomed over the global financial markets.
Gold jumps as Trump tariffs shake global markets -Reuters
"Gold prices surged to a one-month high on Friday as the threat of a global trade war sent investors scrambling for safe assets. U.S. President Donald Trump signed a memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, prompting Beijing to urge the United States to 'pull back from the brink'. The tariffs have a 30-day consultation period, leaving room for compromise, but investors fear a trade war could develop with potentially dire consequences for global growth....Adding to the turmoil, Trump also threatened to veto the $1.3 trillion spending bill passed by Congress, raising the specter of a government shutdown. World stock markets, the U.S. dollar and U.S. bond yields were all lower. 'Risk aversion is currently the name of the game in financial markets,' said Peter Fertig, analyst at Quantitative Commodity Research. 'Markets are looking for safe havens.'"
The Worst Part Of The GOP's Massive $1.3 Trillion Spending Bill Is What's Not In It -Investors
"Some Republicans were complaining that they didn't know what was in the massive $1.3 trillion 'omnibus' spending bill they voted on this week. But it's what's not in the bill that's the most troubling. The real problem with this bill is what it doesn't contain. First on this list is any semblance of spending discipline. It is, rather, an orgy of new spending, which hikes outlays in the next six months by almost $77 billion. Over the next two years, it will increase defense spending by $160 billion and domestic spending by $128 billion....As Heritage Foundation budget expert Justin Bogie put it, the bill 'is unshackling the Washington swamp to spend without constraints.'....Border security is the second glaring omission in this bill. The bill includes $1.6 billion in funds to build a border 'wall.' But - incredibly - it specifies that only a portion of it can be used to extend existing barriers, and specifically bars the money from being used to build anything other than what 'is currently deployed.' In other words, none of the money can be used to build any of the prototypes Trump just visited."
China Started the Trade War, Not Trump -Wall Street Journal
"If there's a trade war between the U.S. and China, don't blame Donald Trump: China started it long before he became president. Even free traders and internationalists agree China's predatory trade practices - which include forcing U.S. business to transfer valuable technology to Chinese firms and restricting access to Chinese markets - are undermining both its partners and the trading system. Mr. Trump's China crackdown is risky, but it's on firmer legal, political and economic ground than many of his other trade complaints, for several reasons. 1. These products are different: The classic case for free trade predicts that each country specializes where it has a comparative advantage, lowering costs and raising incomes for everyone....2. The WTO isn't enough: When China joined the World Trade Organization in 2001, many advocates thought it would play by the global rules against advantaging its own firms and hurting others. Instead, China does so anyway in ways not easily remedied by the WTO....3. The U.S. isn't alone:...'Everyone who trades with China faces this problem,' Peter Navarro, Mr. Trump's trade adviser, told reporters Thursday....4. China isn't like Japan:...It is a military ally and is thus sensitive to U.S. pressure on trade. China is a geostrategic rival pursuing and sometimes stealing U.S. secrets for both civilian and military purposes."
You are not friends with Facebook and Mark Zuckerberg. You are their product. -USA Today
"Attention Facebook users, all 2 billion of you. If after reading the latest news about a private company harvesting your personal data for political gain, you think Facebook has screwed you, you have no one to blame but yourself. Facebook has been playing fast and loose with your data and privacy for years....For years, we loved Facebook without thinking of how it worked or what the consequences were. We happily, giddily traded all of our privacy and shared data - without much thought - for access to free information about friends, relatives and news....Fair or not, the onus to protect our data is on us to get smarter. We really have no right to be mad. There is no such thing as a free lunch. We always knew that, but it was convenient to look away and hit the 'like' button instead. So here's how to adjust your Facebook privacy settings. Do it."
3.22.18 - Fed A 'Wet Blanket' For Stocks
Gold last traded at $1,327 an ounce. Silver at $16.38 an ounce.
NEWS SUMMARY: Precious metal prices stabilized Thursday after rising sharply following the Fed statement and rate hike. U.S. stocks traded sharply lower as China trade war fears and tech troubles worried investors.
Gold Gains After Fed Decision -Wall Street Journal
"Gold prices extended gains in aftermarket trading Wednesday, boosted by a less hawkish than expected Federal Reserve and worries over a brewing trade war with China. Gold for April delivery was recently up 1.6% at $1,333.20 a troy ounce in electronic trading. Fed officials said they would increase their benchmark federal-funds rate to a range between 1.5% and 1.75%, as widely expected. They also said they have penciled in a total of three rate increases for this year, a less aggressive outlook than some investors were anticipating. A slower-than-expected pace of rate increases tends to buoy gold, which struggles to compete with yield-bearing assets when borrowing costs rise....Investors view a growing trade conflict 'as a huge negative,' said Ira Epstein, a broker at the Linn Group. Those concerns are buoying gold, a popular destination for nervous market participants, Mr. Epstein said. A further boost for gold came from a falling dollar."
China Braces For Trade War With US, Accuses Washington Of "Repeatedly Abusing" WTO Rules -Zero Hedge
"The White House unveiled $50 billion worth of tariffs on more than 100 different types of Chinese goods Thursday at 12:30 pm ET - what President Trump has characterized as a response to China's larcenous Intellectual Property practices (and, quite possibly, a preemptive strike as China prepares to launch its petroyuan contracts next week). This is how UBS' Chief US Economic Paul Donovan summarized what is coming: 'President Trump is expected to announce a tax increase for US consumers who have dared to purchase goods that have been partially made in China. There is likely to be a large US flag, suitably photogenic and smiling American workers and a dramatic signature. And selective tariffs, investment restrictions and visa limits. US Trade Representative Lighthizer said that an 'algorithm' was used to maximize the pain to China and minimize the pain to US consumers (this acknowledges that there is pain for US consumers). Trade data (presumably the algorithm input) is complex and often out of date. Saying the word 'algorithm' in an authoritative voice does not magically reduce the risks.' The tariffs will be imposed under Section 301 of the 1974 US Trade Act and focus on Chinese high-tech goods. There will also be restrictions on Chinese investments in the US, said US Trade Representative Robert Lighthizer....China's shift to a consumption-based economy has made it less dependent on exports - so the $50 billion tariffs imposed by the US likely won't have much of an impact. But Moody’s Investors Service said the impact would be far greater if the US significantly expands tariffs and throws in broad-ranging protectionist measures."
The End of the Petrodollar? -National Interest
"In a move that could portend massive shifts in the global oil game, the Shanghai International Energy Exchange will soon unveil an oil-futures contract denominated in Chinese yuan rather than U.S. dollars. Experts warn that the growing clout of Chinese currency in international financial markets could erode the primacy of the U.S. dollar, a long-term economic trend that should greatly trouble Washington. The International Energy Exchange conducted a final set of drills to test trading, settlement, and quote transmission back in December. China's Securities and Regulatory Commission has announced that the crude-futures contract will launch on March 26. The new benchmark is so significant because it directly challenges the dollar-dominated pricing scheme of crude oil markets - commonly known as the petrodollar system - which helps to undergird the dollar's status as the international reserve currency. That arrangement dates back to 1974, when Saudi Arabia and other regional oil suppliers, in exchange for sustained U.S. military aid and equipment, agreed to exclusively accept the Greenback for oil sales and - perhaps most importantly - to invest their oil revenues into U.S. treasuries."
The Fed Is Now A 'Wet Blanket' For Stocks -Forbes
"The Federal Reserve raised the overnight funds rate 25 bips as expected. No one was surprised. But when Fed chairman Jerome Powell said that they will hike more in 2019 if inflation rises on economic growth - which it, of course, will - the Fed will just hike less rather than stop. In other words, even if the economy slows, the Fed funds rate is going higher. This is hawkish, and a head-scratcher. The Fed 'adopted a slightly more hawkish tilt to policy at this meeting,' HSBC Global Research analysts led by Kevin Logan in New York wrote in a note to clients last night. 'The shift was apparently motivated by a re-assessment of the outlook for economic growth and inflation. Our own forecasts for the federal funds rate are unchanged. We still anticipate two more rate hikes this year and one additional rate hike in 2019,' he says....The contrarians over at The Daily Reckoning sent a cautious reminder to subscribers last night that 10 of 13 post-World War II tightening cycles have ended in recession. And at 105 months of economic expansion, the current bull market is running on fumes. By May it will become the second-longest bull market in history."
3.21.18 - Gold Rises Over 1% after Fed Rate Hike
Gold last traded at $1,325 an ounce. Silver at $16.41 an ounce.
NEWS SUMMARY: Precious metal prices rose over 1% after the Fed hiked interest rates a 1/4 point. U.S. stocks traded mixed despite an upbeat Fed outlook.
Gold rises more than 1% after Fed raises interest rates -CNBC
"Gold prices rose higher on Wednesday after the U.S. Federal Reserve approved a widely expected raise in interest rates. While baseline forecasts of three more rate hikes this year were unchanged, the Fed hinted that the path of rate hikes could be more aggressive in the following two years. Spot gold soared 1.28 percent at $1,327.64 an ounce at 2:14 p.m. EST, having dropped as low as $1,306.91 in the previous session....The dollar index, which measures the greenback against a basket of six major currencies, slipped 0.55 percent to 89.87 after climbing to its highest since March 1 in the previous session. A weaker greenback makes dollar-denominated assets such as gold cheaper for holders of other currencies....Among other precious metals, silver added 1.74 percent at $16.467 an ounce while platinum rose 1.06 percent at $950.50 an ounce."
At $21 Trillion, The National Debt Is Growing 36% Faster Than The US -Black/The Sovereign Man
"Well, it happened again. On Friday afternoon, the national debt of the United States hit another major milestone, soaring past $21 trillion for the first time ever. Clearly that is an enormous number… it's actually larger than the size of the entire US economy, which is pretty incredible....Most disturbingly, the national debt has grown by more than $1 TRILLION… just in the last SIX MONTHS. I'm scratching my head right now wondering - where did they spend all that money? Was there a major economic crisis, wave of bank failures, or severe depression that required massive fiscal stimulus? Nope. It was just business as usual....The size of the US economy increased by 4.4%. Yet the national debt grew by 6%...On a proportional basis, the national debt expanded 36% faster than the US economy....Over the course of several years, that effect compounds into something that's quite nasty. At the end of 2008, for example, the size of the US economy was $14.5 trillion. A decade later, the size of the economy is $19.7 trillion, 36% greater. Yet over the past ten years, the national debt has grown from $9.4 trillion to over $21 trillion - a growth rate of 123%! It's really, really hard to pretend that this is good news."
Politics & Investing -Merk Investment Insights
"When it comes to your investment portfolio, do you ignore the noise coming out of the White House? Do tariffs matter? Or would it be more prudent to chill and focus on other potential drivers of the markets?....We all recall how many predicted a stock market meltdown when Trump was elected; the selloff lasted a few hours, then the markets rallied. Go figure. Similarly, I allege that if I were to look at your investment portfolio, odds are high I can tell you whether you are a Democrat or Republican at heart. If this were actually correct (I have no proof, although I have anecdotal evidence my claim has some merit), should your political preferences dictate how you deploy your capital?....Socially conscious investments may have moved from the fringe to the mainstream. My own take had been, well, in a market that goes up, and up, and up, it doesn't really matter what you invest in, so you might as well invest in a good cause with a subordinate interest whether the return on capital is as high as it could be if social factors were not considered. There's a saying that bull markets make smart investors. Meaning, as Warren Buffett has put it so eloquently, when the tide moves out, we will find out who swims naked. Differently said: investing according to your political convictions may make you feel good, but may not necessarily be financially prudent....So how does one take a deep breadth, and take a step back, to assess what the implications are and not be euphoric or horrified, depending on your political leanings? Well, it’s not easy. An article in the New York Times earlier this month had a novel suggestion: read a printed newspaper. More specifically, shut down all your electronic gadgets....We don’t have a crystal ball, but what we do know is that with all the noise there is, the most important thing may be to have a plan. Then, the political drama may be less stressful to investors. Depending on one's investment process, it doesn't mean one should ignore Washington, but it may mean turning off the talking heads once in a while to get away from it all. So get off your desk and off your iPhone, it may well be good for both your health and your portfolio!"
Orbitz says hacker stole two years' worth of customer data -ZDNet
"Travel booking website Orbitz has been hacked, the company said. The site, now owned by Expedia, confirmed in a statement that it 'identified and remediated a data security incident affecting a legacy travel booking platform.' According to the statement, the company found evidence in March that an attacker had access to the company's legacy systems between October and December last year. It was during that time the hacker accessed customer data from the previous two years - between January 2016 and December 2017 - which included names, dates of birth, postal and email addresses, gender, and payment card information. On the company's consumer platform, the attacker may have accessed personal customer data between January and mid-June 2016. Orbitz said that about 880,000 payment cards are affected by the hack....'We are working quickly to notify impacted customers and partners,' said the statement. 'We are offering affected individuals one year of complimentary credit monitoring and identity protection service in countries where available.'"
3.20.18 - Gold: A Good Insurance Policy as Rates Rise
Gold last traded at $1,311 an ounce. Silver at $16.18 an ounce.
NEWS SUMMARY: Precious metal prices slipped Tuesday on a firmer dollar ahead of anticipated Fed rate hike. U.S. stocks rebounded from Monday's sharp sell-off on bargain hunting as Fed meeting begins.
Gold Still A Good Insurance Policy As Rates Rise – Degussa -Kitco
"Gold has fallen to a three-week low as the Federal Reserve starts a two-day monetary policy meeting; however, one bullion firm said that it sees some buoyancy in the precious metals, despite the threat of higher interest rates. Although gold prices are testing support just above $1,300 an ounce, analysts at Degussa said that the current price could represent an attractive entry point for investors looking for some market insurance. 'At the current price, there is a good reason to expect that gold can serve as insurance against the vagaries of the fiat money system, providing its owner with optionality,' the analysts said in a recent report....'The Fed's tightening policy is like taking away the 'punch bowl,' and if it raises interest rates too much, the party would definitely come to an end. It is against this backdrop that gold, even in times of slightly higher real interest rates, is increasingly attracting investors, which has ultimately led to a price increase,' the analysts said....Degussa's comments come ahead of the Federal Reserve's widely expected interest-rate hike Wednesday."
Has the Stock Market Already Peaked In 2018? -Kass/Real Clear Markets
"The Return of Volatility: 'Maybe it's because of the experience of the last month and because we tend to read the latest trend into our forecast, but there was a consensus at SIC that market volatility is going to resume its normal place in our lives...The volatility of February was not the odd thing; it was the preceding 15 months that was extraordinary. Have we seen a market peak, as my friend Doug Kass thinks? Maybe.' - John Mauldin, SIC Perspectives - Here are my Top 10 Reasons why the markets may have already peaked in 2018: 1) A Presidency of One: Trump's behavior may finally matter to the capital markets...2) The Outcome of the Mueller Investigation Could Be Market Unfriendly...3) A Blue Wave in the Mid-Term Elections Could Also Be Disruptive to the Markets...4) The Expectations of a Synchronized Global Economic Recovery May Be Wrong...5) Global Central Bankers are Pivoting Towards Tighter Money...6) The US Lacks Fiscal Discipline...7) Inflation Pressures Are Building and Interest Rates are Heading Higher...8) Trade Wars Seem More Likely - Threatening World Trade...9) Facebook, Google and Amazon Face the Existential Threat of Regulations and More Legislation...10) Expanding Individual Investor Optimism...Bottom Line: Based on the above, and other factors, I am currently net short and expect heightened volatility and a widening trading range in 2018."
Trump's Turning Point In History (And Ours) -Pontification Blog
"Progressives continue to suffer shock and awe that Trump, like a mythical Greek hero, did the almost-impossible by defeating Clinton. This man of destiny prevented our doom, although it remains to be seen for how long. He is tough but honest about his agenda....As part of the media's frenzied coup attempt to destroy Trump, CBS '60 Minutes' plans next weekend to interview a fame-and-wealth-seeking pornographic movie star who claims she and Trump had an affair. She says she was paid $170,000 not to discuss this matter in public, but now she will - which means that nothing she says can be trusted. CBS is changing from the Tiffany to the titillation network, airing smut for ratings. Did it do this when Progressive Bill Clinton was sexually accused? Bill and Hillary Clinton were given prime time on '60 Minutes' in a pre-taped, pre-election interview - basically a free ad - where Executive Producer Don Hewitt gave them the questions in advance, along with guaranteed do-overs if they slipped and said anything embarrassing. Republicans are never allowed to edit their CBS interviews like this...CBS is sinking from being fake news into Pornews, airing pornography as news. Anything to destroy Trump....Trump has struck fear into our smug unelected rulers who thought they were above the law and would pay no price for attempting a coup d'etat. Leftists now know this war with Trump could cost them their accumulated power. Trump has less than seven years left to serve, but supporters act as if he has made America permanently prosperous. Seven good years might be coming, or, God forbid, tomorrow morning's news could report that Trump's presidency has suddenly ended and the economy and dollar are in free fall. We should be prepared with honest money, prudent diversification, and individual responsibility."
How the Deep State Robbed the Working Stiff -Bonner/Bonner And Partners
"Is the economy remarkably resilient? Yes. Resourceful? Yes. Strong? No. The growth rate - probably the best measure of 'strength,' has been generally softening for the last 30-plus years. And what 'growth' there is… is spotty. Some areas are doing much better than others. As we saw last week, the big urban agglomerates, with many immigrants, tend to be dynamic and prosperous. Many other areas have been left behind, especially in former manufacturing regions of 'flyover country.' Some people, too, have done very well. The richest 10% has gotten almost all the wealth gains of the 21st century. That means 90% of the population has gotten nothing. The median man, for example, has lost real income (when adjusted for inflation), not just for the last 18 years, but for the last 40. The typical working stiff feels he has been cheated....But not by the Mexicans… or the Chinese… or by bad trade deals. He's been cheated by his own elite....From ancient Rome, to the court of Louis XVI, to the Soviet Union, there is always a group of insiders who manage power for their own benefit. Why does this matter? In 1971, President Nixon ended the convertibility of the U.S. dollar to gold. Almost without realizing it, the Deep State got control of America's dollar. By 1987, they had learned how to use their control to boost their wealth far beyond anything they had seen before. But now, they face a new test: Their fake-money system may soon explode."
3.19.18 - The Best Financial Advice Nobody Gives
Gold last traded at $1,317 an ounce. Silver at $16.32 an ounce.
NEW SUMMARY: Precious metal prices rose Monday on market volatility and a weaker dollar. U.S. stocks fell sharply on political and economic worries as tech giant Facebook's shares skidded over 7%.
How to Maximize Your Gains in a Gold Rally -The National
"The price of gold is likely to move higher again this week if the Federal Reserve raises interest rates as forecast. Gold prices have jumped after each of the previous five rises of the current cycle and is more than 30 per cent up from its recent bear market low of $1,050, touched in December 2015....If any single factor can be isolated to explain the latest price surge for the yellow metal, it has to be the relative weakness of the US dollar over this period....The five Fed interest rate rises have so far failed to stop the fall in the greenback's value as the market is more worried about a surge in the national debt courtesy of tax cuts and increased military spending. One possible future scenario is that January's US stock market decline resumes and that the Fed then cuts interest rates to counter an even more serious correction. That's what happened in 2008 when rates rose up and up until the stock market crashed and then went down all the way to zero. The effect of that was a dollar crash and soaring precious metal prices, with gold hitting an all-time high of $1,923 an ounce by October 2011....Open your eyes to a wealth of opportunities right now in the gold and silver sector, where you can still get in ahead of the crowd."
When Did the Stock Market Crash? -Motley Fool
"A stock market crash is loosely defined as a sudden and sharp decline in stock prices across a broad portion of the stock market. Crashes can be triggered by panic, economic factors, bursting of speculative bubbles, and these days, by automated trading technologies. Since 1772, the U.S. has experienced a total of 22 stock market crashes, but not all have been equally harsh or long-lasting. With that in mind, here are some of the most notable U.S. stock market crashes, and a brief rundown of the causes and results of each one....One of the worst stock market crashes in U.S. history was the Panic of 1907. The stock market fell by about 50% during a three-week period...which led to the collapse of the Knickerbocker Trust....The Crash of 1929 was the worst, and longest-lived crash we've had. From September 1929 through July 1932, the Dow Jones Industrial Average lost a staggering 89% of its value....October 19, 1987 was the largest one-day percentage drop in the Dow Jones Industrial Average in history. The Dow fell by 508 points on the day, which was a 22% drop at the time. For context, this would be like a one-day drop of 5,500 points in 2018."
Suddenly, it seems as though many experts are warning us about a potential stock market collapse. Truth is, America appears to be getting stronger by the day, not weaker. And so what if the stock market takes a big correction? It always comes back, right? Discover how to find the hidden positives and negatives of today's rising economic optimism in a brand new Swiss America Special Report: THE CRASHLESS SOCIETY.
The Best Investment Advice Nobody Will Give You -567 Capital
"Even if you're an investing novice, it's likely you've heard of Warren Buffett. And for good reason: Warren Buffett is currently the third-richest person in the world with a reported net worth of $84 billion. Unlike the two richest men, Buffett created his wealth mostly by investing - as in the actual act of buying and selling companies - rather than creating a product or service....If you were able to invest $1,000 in Berkshire Hathaway when Buffett was named as CEO, your initial investment would be worth approximately $21 million versus $161,000 from a $1000 investment in the S&P 500. Here's the rub: It's virtually a certainty that you're no Warren Buffett. Don't take this personally....Here's the best advice nobody in the financial industry will tell you: Your savings rate is more important to your investing success than your rate of return.To drive home this point, meet Saver Sally. Sally is a consistent investor and accepts the market's return instead of attempting to time or beat the market. After 20 years of stashing away $1000 per month, Sally has an admirable nest egg of approximately $760,000....Too often investors are looking to be the next Warren Buffett (without the prerequisite investing intelligence) rather than the next Saver Sally. It may not be as exciting, but investing more money has the benefit of being a less-risky approach to increase your net worth."
74% Of Americans Believe The "Deep State" Is Running The Country -Zero Hedge
"According to a new poll, that's precisely the case because a supermajority of Americans believes the faction of unelected officials, known as the deep state, is orchestrating policy in Washington, D.C. and effectively running the nation. The Monmouth University Polling Institute found that no less than 74% of Americans believe in a 'deep state' when it is described as a collection of unelected officials running policy. Only 21% do not believe this kind of group exists. As a result of countless 'conspiracy theories' being proven as facts in recent years, chief among which the Edwards Snowden revelations which exposed the NSA as nothing short of 'big brother'... fully 8-in-10 believe that the U.S. government currently monitors or spies on the activities of American citizens, including a majority (53%) who say this activity is widespread and another 29% who say such monitoring happens but is not widespread. Just 14% say this monitoring does not happen at all. Shockingly, there were no substantial partisan differences in these results....Monmouth University Polling Institute Director Patrick Murray said in a statement. 'There's an ominous feeling by Democrats and Republicans alike that a 'Deep State' of unelected operatives are pulling the levers of power.'....'This is a worrisome finding. The strength of our government relies on public faith in protecting our freedoms, which is not particularly robust. And it’s not a Democratic or Republican issue. These concerns span the political spectrum,' said Murray."
3.16.18 - Why Wall St. Pros Are Jumping Ship
Gold last traded at $1,312 an ounce. Silver at $16.27 an ounce.
NEWS SUMMARY: Precious metal prices zig-zagged Friday amid political uncertainty and dollar volatility. U.S. stocks traded higher, but were on track for weekly losses amid growing trade tensions.
Gold firms on political concerns, softer dollar -Reuters
"Gold prices edged higher early on Friday, supported by a weaker dollar and safe-haven demand amid U.S. political concerns and tensions between the United Kingdom and Russia. However, further gains were capped by expectations that the U.S. Federal Reserve would raise interest rates at its policy meeting next week. 'As choppier markets seem likely, gold will remain a good hedge against unexpected spikes in equity market volatility and geopolitical tensions, in our view,' UBS analysts said in a note. Growing U.S. political uncertainties following the recent departure of two key officials, former Secretary of State Rex Tillerson and top economic advisor Gary Cohn, from the Trump administration have left investors worried."
Why Wall Street's Seasoned Pros Are Jumping Ship -Bonner/Bonner And Partners
"The Fed has announced a program of QT - quantitative tightening - in which it sells (or simply allows to expire) the bonds in its portfolio at a rate of $600 billion a year. Meanwhile, the federal government itself has cut taxes, forcing it to cover its shortfall by borrowing nearly $1 trillion in 2018. The combination will add nearly $2 trillion a year to the supply of bonds available for purchase. Who will buy them? At what price? Most likely, no one will buy... unless rates rise to make it worth their while. Most likely, rates will rise. Most likely, asset prices will fall. And some of Wall Street's most seasoned pros are bailing out. Bloomberg says famous analyst Dennis Gartman is selling: In Wednesday’s edition of his eponymous newsletter, the economist said he is 'calling for a major, multiyear top on the equity markets following the recent volatility and following the reversals to the downside that took place yesterday in the Dow Industrials; the Nasdaq; the S&P and the Russell 2000.' He said the forecast represented a 'watershed' moment. And founder of the DoubleLine Capital investment firm, Jeffrey Gundlach says so, too: 'We are late in the economic cycle... and it is unusual that the deficit is expanding... [adding stimulus this late in the cycle] has never happened before.' Gundlach sees the deficit getting worse, with 'a lot of bonds supplied to the market.' He predicts a negative rate of return for the S&P 500 this year. My conviction is high, higher than that the 10-year yield will break to the upside. And most likely, the feds will respond with even more EZ money policies. The Fed will cut rates to zero... and beyond. And the federal government will both cut taxes... and expand spending."
How Debt Could Blow Up the Trump Economy -Fortune
"In Trump's first three full quarters in the White House, GDP clocked growth just shy of his vaunted goal of 3%, a performance that by recent standards looks stellar. The stock market has added a quarter to its value since the election, a $5 trillion vote of confidence. The jaunty outlook is recharging animal spirits in corner offices: In its January survey of small companies, the National Federation of Independent Business found that 32% of the enterprises rated the present climate 'a good time to expand'; that was a record high and a threefold increase from late 2016. Fueling the giddiness is the President's signature legislative achievement: the Tax Cuts and Jobs Act, which slashed rates for corporations from 35% to 21%. The new law is a runaway hit with business leaders....Trump's heady economic potion, however, is masking misguided policies that could leave those same businesses with a severe hangover from today's celebration. The U.S. government's huge and growing budget deficits have become gargantuan enough to threaten the great American growth machine. And Trump's policies to date - a combination of deep tax cuts and sharp spending increases - are shortening the fuse on that fiscal time bomb, by dramatically widening the already unsustainable gap between revenues and outlays. By 2028, America's government debt burden could explode from this year's $15.5 trillion to a staggering $33 trillion - more than 20% bigger than it would have been had Trump's agenda not passed....A cyclical downturn, a sharp decline in stock prices, or an unexpectedly steep increase in real interest rates dictated by skeptical overseas investors might be the catalyst that prompts legislators to get serious about reducing entitlements and debt."
Do You Own Bitcoin? The IRS Is Coming for You -Wall Street Journal
"Late last year, the Internal Revenue Service persuaded a federal judge to require Coinbase, a San Francisco-based digital-currency wallet and platform with about 20 million customers, to turn over customer information. Driving the IRS's decision was its belief that few bitcoin investors appear to be paying taxes due on sales. The court order is one of the agency's first moves as it clamps down on cryptocurrency scofflaws....Criminal tax lawyers expect the IRS will act on the information and high-profile cases will follow. Some cryptocurrency holders are now disclosing past tax lapses to avoid potential criminal prosecution....'Digital currency holders shouldn't think they can hide from the IRS,' he says. Smaller investors are also feeling heat. Many traded during last year's price spike, and tax preparers are now asking clients routinely about cryptocurrency sales. They aren't supposed to sign returns with unreported income....Tax triggers. Selling a cryptocurrency for cash typically triggers capital gains or losses. Using it to buy something like a meal or a car also counts as a sale by the buyer, even if the recipient accepts the cryptocurrency."
3.15.18 - Will the Stock Market Crash? YES!
Gold last traded at $1,317 an ounce. Silver at $16.42 an ounce.
NEWS SUMMARY: Precious metal prices drifted lower Thursday after predictable dollar jawboning by incoming economic advisor Larry Kudlow boosted the buck. U.S. stocks rose, despite increasing concern over a possible China trade war, on news that CNBC's senior stock market cheerleader will head Trump's National Economic Council.
Will the stock market crash? Yes. Here’s what to do now -USA Today
"One minute, all economic indicators are sitting pretty and the Dow Jones industrial average is hitting record highs. The next - blammo - we're in the throes of a stock market 'sell-off,' or 'right-sizing,' or whatever you want to call it...Just as it did recently, the stock market is going to decline again. But no one has the luxury of getting a calendar notice announcing the time and magnitude of a seismic stock market event. Still, just knowing that these things happen means you can create in advance a game plan for what to do while you’re in the thick of it. To prevent a knee-jerk reaction during periods of stock market volatility, follow these five tips. 1. Trust in diversification - When a market decline hits, your results may vary - and perhaps for the better - if you've invested money across different baskets of asset classes. 2. Remember your appetite for risk - Even though the stock market has its roller-coaster moments, the downturns are ultimately overshadowed by longer periods of sustained growth. That's the reality on paper. 3. Know what you own - and why - Part of doing stock research is crafting a written record of the strengths, weaknesses and purpose of every investment in your portfolio. 4. Be ready to buy the dip - Market dips are when fortunes can be made. The trick is to be ready for the fall and willing to commit some cash to snap up investments whose prices are dropping. 5. Get a second opinion - It's rewarding to be a DIY investor, especially during the good times when the stock market’s on a tear and your portfolio is going up in value."
China Trade Tariffs: Good or Bad Idea? -Fox Business WATCH
Swiss America Chairman Craig R. Smith joined Fox Business host Charles Payne to discuss a potential China trade war. The Trump administration is assembling a package of $30-60 billion in China trade tariffs. Does Mr. Smith think this recent show of strength by President Trump toward America's biggest competitor will lead to a full-blown U.S. China trade war? Watch now to find out.
The Dollar's Doldrums -Project Syndicate
"Donald Trump's first year as US president has been, if nothing else, a bounteous source of surprises. One of the big ones in the circles I frequent is dollar weakness. Between January 2017 and January 2018, the broad effective exchange rate of the dollar fell by 8%, wrong-footing many of the pundits....Economic commentators are better at rationalizing past exchange-rate movements than at forecasting future trends. So, when it comes to explanations for the dollar’s decline over the past year, we are confronted by an embarrassment of riches. The most popular explanation for dollar weakness is that Trump, through incompetence or misdirection, failed to deliver what he promised. There was no across-the-board import tariff. There was no abrogation of the North American Free Trade Agreement. There was no $1 trillion infrastructure package. But there were, in fact, deep tax cuts. There were, in fact, interest-rate hikes by the Federal Reserve. And there were, in fact, tax changes creating incentives for the repatriation of profits. Other things equal, these developments should have propped up the dollar. So there must be more to its weakening than just Trump’s failure to deliver. Another popular explanation is that investors expected the real exchange rate to rise through inflation rather than currency appreciation....Investors have no way to forecast the impact of policies, because policies thought to be headed one way suddenly veer in the opposite direction....More chaos in the White House would only depress the dollar further."
Larry Kudlow: I've Supported The Gold Standard Since The 1970s -Blodget/Business Insider
"Nov. 2, 2010 - Former Wall Street economist and star CNBC host Larry Kudlow takes issue with Joe Weisenthal's description of him as a 'fair-weather gold bug.' Specifically, Larry responds to Joe's assertion that the Wall Street bailout that Larry supported could not have been possible if every dollar had to have been backed by gold: Hi Henry [Blodget]. Would you be kind enough to tell your man Wiesenthal that I have supported a gold -backed dollar since the mid 1970s. Also, I favored letting Lehman go bankrupt. And I did not support Tarp 2, the capital injections. I did support Tarp 1, where Treasury was going to buy toxic assets in order to resell them, RTC style. And, Tarp 1 would have been possible under a gold-backed dollar."
3.14.18 - What Will Gold Do in the Coming Crisis?
Gold last traded at $1,325 an ounce. Silver at $16.53 an ounce.
NEWS SUMMARY: Precious metal prices traded sideways Wednesday on a flat dollar. U.S. stocks traded lower amid growing fears of a U.S.- China trade war.
How Will Gold Prices Behave During The Next Economic Crisis? -Alt-Market
"It is generally well known in economic circles and in the general public that precious metals, including gold, tend to be the go-to investment during times of fiscal uncertainty. There is a good reason for this. Precious metals have foundation qualities that provide trade stability; these include inherent rarity (rather than artificially engineered rarity such as that associated with cryptocurrencies), tangibility (you can hold gold in your hand, and it is relatively difficult to destroy accidentally), and precious metals are easy to trade....When gold and currency are tied together, gold prices tend to remain rather stable, as they are often set by the national treasury. In 1914, the price of gold was $20 per ounce and had maintained that approximate value for decades. To give some perspective on value, in 1914 the average house cost $3,500, or 175 ounces of gold....As far as the crash of 2008 is concerned, we all know what happened with gold markets. In the lead up to the crash, from 2004 to 2008, gold doubled in value. Then, after the initial crash from 2008 to 2012, it doubled again....The question is, what happens next?....Once higher interest rates kill the stock market bubble as well as the renewed housing and credit bubble, gold will skyrocket as one of the only asset classes with tangible real world value."
It is very interesting to note that in 2017 the U.S. national average home price was $227,300. The same 175 ounces of gold that bought an average U.S. home in 1914 would, at today's price of $1,300/ounce, equal $227,500! By any standard gold is a VERY reliable store of value! Learn more in our Timeless Truth About Gold & Silver report and DVD.
Here Comes The Main Event: Trade War With China -Zero Hedge
"The recently announced global steel and aluminum tariffs by the Trump administration were just a (Section 232) preview of the main event: Trump's imminent trade war with China, which as Credit Suisse previews, will be unveiled any moment in the form of tariffs and restrictions on trade with China, reportedly in retaliation for Chinese IP violations. First, a reminder on the all-important Section 301: What is Section 301? Section 301 of the 1974 Trade Act allows the President to, among other things, 'impose duties or other import restrictions on the products of [a] foreign country,' if the President determines that that country is violating a trade agreement or 'engages in discriminatory or other acts or policies which are unjustifiable or unreasonable and which burden or restrict United States commerce.'....What to expect? here are some high-level thoughts from Credit Suisse: 'The Chinese will likely respond in kind, beginning a succession of tit-for-tat trade policies between the two countries....If the U.S. acts unilaterally (as it appears it will), China will likely bring a challenge before the World Trade Organization (WTO)'....In terms of specifics, the US trade deficit last year hit an all time high of $375BN. The Trump administration is planning imposing tariffs on up to $60bn of Chinese goods, or roughly 13% of goods import from China ($505BN), and 2.75% of total US goods import according to Danske Bank; the tariffs will target tech products, telecoms & clothing....As trade war looms, it would be prudent for investors to start thinking about potential risks to the companies they own if they have sufficient business in China."
Asset forfeiture: Rap albums and hard-earned cash are the government's 'little goodies' -USA Today
"The legendary Wu Tang Clan rap album 'Once Upon a Time in Shaolin' may soon be part of the federal government’s forfeiture fund. Earlier this month, a federal judge ordered infamous 'Pharma Bro' Martin Shkreli to hand over the one-of-a-kind album, along with a Picasso painting, $5 million in bail he posted, and another rare rap album, Lil Wayne’s 'Tha Carter V.' Those assets will only add to the already bulging federal forfeiture coffers. Over the past 30 years, this fund has ballooned 1,600%, from $93.7 million in deposits in 1986 to $1.6 billion last year. But many of the owners who've had their property confiscated by the feds aren’t convicted criminals like Shkreli, they’re innocent people never even charged with a crime, much less convicted of one. A whopping 87% of DOJ forfeiture cases involve civil, not criminal, forfeiture - meaning no conviction is required. Under U.S. Attorney General Jeff Sessions, the Trump administration has doubled-down on this controversial practice....No one wants fraudsters like Shkreli and other convicted criminals to profit from their wrongdoing. But civil forfeiture allows the government to take property from innocent individuals. Although the Obama administration scaled back the controversial practice, Attorney General Sessions has embraced civil forfeiture, restoring the federal 'adoption' program that provides a hefty bounty for state law enforcement agencies to seize property in collaboration with the federal government. Police and prosecutors like civil forfeiture because their departments often get to keep most, if not all, of the forfeiture proceeds....Civil forfeiture can be - quite literally - highway robbery. Musician and entrepreneur Phil Parhamovich found that first-hand, when he was pulled over by the Wyoming Highway Patrol last year and ticketed $25 for improperly wearing his seatbelt. During the traffic stop, troopers found $91,800 in cash. Suspicious, they seized the money but never charged Parhamovich with a serious crime. Parhamovich wanted to use his cash to purchase a legendary Madison, Wisc., music studio where Nirvana and the Smashing Pumpkins had once recorded. In the months after his highway robbery, Wyoming refused to return the money to Parhamovich. In fact, they even held a hearing about his funds before they notified him of the hearing date. The Institute for Justice (IJ) sued the state of Wyoming on Parhamovich's behalf."
Time to Be Alert! -Knowledge Leaders Capital
"This is the time to be alert for any signs of a failure in the S&P 500. Why? There are two really good historical precedents to the current market configuration. The set-up is as follows: stocks suffer a rather quick correction, bounce back, take out the previous lows and experience a waterfall decline. The period of time from the bounce-back high to a new low was seven days. Let's look at the 1929 crash to start. The S&P 500 peaked at 31.86 on September 16, 1929. Over the next 14 days, the index experienced a 10.08% correction. Then, over the next four days, stocks bounced back by 7.54%. What followed was a seven-day period of time where stocks drifted lower, and then on October 18, 1929 the low was broken and a waterfall decline ensued. The decline from October 8, 1929 to November 13, 1929 was a 22-day waterfall decline, with stocks dropping 42.68% into November 13, 1929. The 1987 crash was a remarkably similar experience. Stocks peaked on August 25, 1987 and then began a 7.79% decline over 18 days. Stocks then rebounded by 5.65% over the following 10 days, peaking on October 5, 1987. Over the next seven days, the low failed and a waterfall decline followed. The decline was 28.51% over four days, culminating in a low on October 19, 1987. In the last 40 days, we’ve seen the S&P 500 peak at 2872.87 on January 26. Stocks experienced a 10.16% correction over nine days, and then they bounced back by 7.96% over the next 20 days ending last Friday, March 9. We are now in that seven-day window where stocks need to hold up. If, over the next seven days, we drift lower and take out the 2581 low of February 8, history suggests this is a set-up for a waterfall decline."
3.13.18 - How The Fed Could Surprise Wall Street
Gold last traded at $1,327 an ounce. Silver at $16.62 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday as tame inflation data weakened the dollar. U.S. stocks fell on political uncertainty as blue chip and tech stocks declined.
Record Buybacks at Worst Possible Time -Shedlock/The Maven
"Donald Trump's tax cuts are already paying dividends... well, actually the companies that are benefiting from the Tax Cuts and Jobs Act passed by the Trump Administration in December are not only returning cash to shareholders in the form of dividends, but are presiding over what could be the largest share buyback program in history....Suddenly US companies have found themselves flush with cash, and they need to find a way to spend it. The options are typically to plough funds back into the company via capital expenditures like new buildings, products or equipment. Or, distribute the money back to shareholders in the form of dividends, or through share buybacks which don't obviously go directly to shareholders, but reduce the number of outstanding shares, thereby making the share float less diluted....Goldman Sachs estimates share buybacks will jump to $650 billion while JP Morgan predicts they could run as high as $800 billion. Either estimate would far exceed the $530 billion in share buybacks recorded in 2017....There are plenty of negatives to share buybacks, with the most obvious being that buying back shares means that executives are foregoing the opportunity to put that extra cash back into the business instead, which could potentially grow the company long term. Recent studies have linked increased spending on buybacks to decreased corporate investment - such as expansion plans, more hiring or raises....The bottom line is that share buybacks usually do nothing to create long term shareholder value and are never a match for a steady, and sustainable, dividend."
The Fed could have a surprise in store for Wall Street -Crudele/New York Post
"Wall Street is wondering whether there will be three or four interest rate hikes this year. After Friday's strong employment report for February, four seems to now be the odds-on favorite. I'm going to be a troublemaker and suggest something else: If the Federal Reserve is truly worried about an overheating economy and future inflation, then there are some shocking steps it could take that won't make the stock market or the Trump administration happy. The Fed has been raising rates gradually since December 2015. In all, there have been five tiny hikes of one-quarter percentage point each. Hikes six, seven, eight and nine could come in 2018, starting with the Fed's March 21-22 meeting. The Fed is concerned not only with inflation as you and I know it - meaning, a rise in prices - but it is also clearly worried about asset inflation....There's an old saying in the financial community that it's the Fed’s job to pull the punch bowl away when the party gets out of hand. So how could Powell's Fed keep Wall Street from getting more inebriated?....The most shocking thing would be to raise interest rates between its official meetings. After the meeting next week, the Fed doesn't have another policy-making Open Market Committee meeting until early May. A surprise rate hike in April would slap some sense back into investors. Or, if the Fed could hike rates by more than the customary quarter percentage point. A half-point hike once or twice this year would also get investors' attention."
What Will Blow the Stock Market to Pieces -Bonner/Bonner And Partners
"So let us continue with our description of the Great Mountebank Market of 1987–2018. It wasn't… and isn't… what investors thought. Investors thought they were making money by funding America's win-win industries. But they weren't investors at all; they were speculators....In 1971, the feds replaced the old dollar with the new dollar. Alike in every other respect to the old one, the new dollar had one critical difference: It had wings. The old dollar was weighed down by gold. It could never get off the ground....The old dollar helped make America the biggest exporter in the world, with an unbroken chain of export surpluses reaching back more than a hundred years. But the new dollar could be gotten without satisfying a single customer. It was not earned on Main Street. Instead, it was created, by the credit industry, on Wall Street....The total accumulated deficits from 1971 to the present toted to nearly $20 trillion in today's money. Debt soared to the rafters… and then went through the roof....Today's GDP is around $20 trillion. At the historic ratio, the economy could support $30 trillion of debt. Instead, it has $68 trillion. This gives us a measure of how out-of-whack the whole system has become. And it also gives us a hint of what kind of adjustment would be necessary to bring it back into whack. About $38 trillion of debt… debt-fueled asset prices… and debt-driven GDP… would have to disappear....And the entire stock market rose up, as if on a cloud of deadly gas. Fake money, phony profits, counterfeit interest rates - all swirl together in a noxious ball of highly volatile fumes. And now, the Fed - reversing 30 years of policy - strikes a match. After its artificially low rates, and its quantitative easing… it intends to engineer a 'soft landing' using its quantitative tightening policy. Instead, it is likely to blow the whole system sky high."
Lawrence Kudlow Being Considered for Top White House Economic Post -Wall Street Journal
"Top White House officials have reached out to gauge Lawrence Kudlow's interest in becoming President Donald Trump's top economic adviser, and the CNBC commentator was expected to interview for the position as soon as this week, people familiar with the discussion said. Mr. Kudlow, a longtime cable TV economic analyst and veteran of the Reagan administration, is under consideration to replace Gary Cohn as director of the National Economic Council. The post doesn't require Senate confirmation. Mr. Cohn announced his resignation last week after Mr. Trump's decision to enact new steel and aluminum tariffs. Other candidates for the job include Chris Liddell, the director of strategic initiatives at the White House, and Peter Navarro, the architect of the president’s tariff program, White House officials said. Mr. Kudlow and Mr. Cohn both have publicly opposed Mr. Trump's decision to implement tariffs, which they warn could tempt a trade war."
Cold, hard cash isn’t being dethroned by the Bitcoins, Venmos and PayPals of the world -Marketwatch
"Cash isn't dead yet. Far from it. These days you can pay for stuff or send money with newfangled 'electronic' services such as PayPal and Venmo, fall back or traditional credit cards, cut an old-fashioned check or take your chances with Bitcoin. Even with all these new options, however, the demand for cash 'remains robust around the world' and it's even increasing, according to a new study. Although the use of electronic payments has grown more rapidly since 2000, the amount of cash in circulation among the world's wealthier countries has increase about 7% to 9%, the Bank for International Settlements found....People who like to keep lots of currency on hand may do so because they are uncertain about the health of the economy or the stability of their government."
3.12.18 - The End of the Goldilocks Stock Market?
Gold last traded at $1,320 an ounce. Silver at $16.53 an ounce.
NEWS SUMMARY: Precious metal prices eased back Monday on profit-taking and a flat dollar. U.S. stocks traded mostly lower amid blue chip weakness and ongoing trade war concerns.
Investors, Worried About End of Goldilocks Market, Pare Back Riskier Bets -Wall Street Journal
"Nine years into a roaring stock bull market, fund managers are paying their last respects to Goldilocks. Repeated bouts of market volatility in 2018 and signs of a pickup in inflation have forced them for the first time in several years to reassess their tolerance for risk. For many, that means boosting cash positions, slashing equity or diversifying portfolios....While modest but improving economic growth and very gradual rises in interest rates may indeed continue to characterize the financial markets in 2018, signs of higher inflation, rising U.S. interest rates and threats of a global trade war have shaken investor confidence. 'Something fundamental was creeping into markets and market psychology,' said Larry Hatheway, GAM's chief economist who sat on the committee meeting last month. 'Until now, the expansion was seen as one that could go on and on without any signs of price inflation, and that's being questioned now.'....'Now, we're at an inflection point. Buy and hold won’t work anymore,' said Yves Bonzon, Swiss private bank Julius Baer Group's chief investment officer. Mr. Bonzon is also reducing allocations to stocks and holding more cash."
A Bull Market For The History Books - Bear Market To Follow Shortly -Zero Hedge
"If you're getting the sense that stocks always go up, that's because they've been doing so for a really, really long time....The longer the good times go on, the more cocky investors and entrepreneurs become and the more dumb investments they make. These don't generate sufficient cash flow to cover the interest on the related debt or otherwise satisfy backers, and eventually fail. Investors who lose money on failed projects stiff their creditors and so on, down the food chain until everyone is shell-shocked and risk-averse. Stock prices plunge, the economy contracts and the cycle begins again. The key sentence here is 'the longer the good times go on,' because the malinvestment is both cumulative and progressive. That is, the number of bad decisions rises as people become convinced that 'this time it’s different' and they can't lose. Why the current expansion/bull market has gone so long is open to debate. What's undeniable, though, is the vast amount of malinvestment that has accumulated. The biggest example might be corporations borrowing hundreds of billions of dollars to buy back their stock at record high prices...If those equities subsequently fall by half in a future bear market, today's buybacks will end up as an object lesson in corporate hubris. Another undeniable fact is that based purely on historical precedent, this bull market is ancient, which puts it near, if not at, its end."
SP Angel: Gold 'Still Holds Its Haven Status' -Kitco
"Gold might be range-bound lately but the metal is still holding up due to its safe-haven status, says commodities brokerage SP Angel. Stock-index futures are pointing to a higher open on Wall Street in the wake of Friday's news that the U.S. economy added 313,000 jobs last month. But while lower, gold has not sold off sharply. 'The precious metal still holds its haven status, remaining persistently over $1,300/oz, as uncertainties remain over President Donald Trump’s meeting with North Korean leader Kim Jong Un and the impact of the trade tariffs,' SP Angel says."
Donald Ducks Into California: Will He Be the Last President to Visit this U.S. State? -Pontification Blog
"Donald Trump scheduled this week for his maiden visit to the most hostile leftist land to him on Earth, the once-golden state of California. The Spanish named this place after the fabled warrior Queen Calafia (from the Arab word Khalifa, the Muslim religious and state ruler) who ruled a magic island of talking animals. This was the land where 49ers swarmed nearly two centuries ago, with pipe dreams of gaining wealth without work, and actors later followed with stars in their eyes. Today California has more poor people than any other state - one-third of America's welfare recipients, and one-quarter of its illegal aliens. This dependency on government has produced a super-majority of ruling Democrats and a minority-majority state where whites are a minority....President Trump reportedly plans to arrive in San Diego on Tuesday, be targeted by protestors (some of whom may be taking the San Diego State University course on impeaching Trump), inspect the eight prototypes for his border wall, and fly for 20 minutes up the coastline that night to Los Angeles and a Republican fundraiser where tickets cost from $35,000 to $250,000. In 2016 Trump got more than 4.5 million votes in California. He then will fly home Wednesday, perhaps with one other stop, perhaps in Fresno. He may be the last President to visit American California....Californians used to worry about their state seceding and turning into an alien nation, but, high on Hollywood hallucinations they smoke something to forget that now. This month Steven Spielberg releases 'Ready Player One,' which as Craig R. Smith and I discuss in Money, Morality & The Machine is about a dystopia where people live mostly in computer games."
3.9.18 - U.S. Credit Card Debt Tops $1 Trillion
Gold last traded at $1,322 an ounce. Silver at $16.63 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks rose on unexpectedly strong February jobs data.
Job growth surged in February as wage growth slackened -Politico
"The Labor Department reported 313,000 new jobs in February, the largest single-month gain of Donald Trump's presidency. The numbers represent a leap from from January's 239,000 new jobs, lending credence to Republican claims that last year's tax reform bill would jump-start the economy. It was the largest single-month gain since July 2016, when the economy added 325,000 new jobs. 'The non-stop job creation since the election has yielded 2.9 million jobs,' Labor Secretary Alexander Acosta said in a statement. 'President Trump's tax reform continues to boost economic confidence with more than 400 companies handing out bonuses, raises or other benefits to more than 4 million Americans.' But while U.S. employment continued to grow at a steady clip, the wage recovery many experts anticipated when January's jobs report showed 2.9 percent growth in average hourly earnings over the previous year seemed less secure. That figure grew 2.6 percent in February, and the January wage growth number was adjusted slightly downward to 2.8 percent....But low unemployment continues to be accompanied by weak labor force participation. In February it was 63 percent, up 0.3 percentage points from January and still close to its lowest level since the 1970s."
US Credit Card Debt Tops $1 Trillion for First Time -24/7 Wall Street
"The total amount of U.S. consumer credit card debt totaled $1.009 trillion at the end of 2017. At the end of the previous year, U.S. credit card debt stood at $980 billion, just missing a prediction that the $1 trillion mark would be reached in 2016. The average American household increased its credit card debt by 6% to $8,600, compared with the end of 2016. In the fourth quarter of 2007, household credit card debt averaged $8,461, the previous high. Americans added a record $927.2 billion to credit card debt last year, most of it in the fourth quarter, when the debt jumped by more than $50 billion. To say the WalletHub researchers are concerned is, perhaps, an understatement: 'Only four times in the past 30 years have we spent so much in a year. And in each of those prior cases, the charge-off rate - currently hovering near historical lows - rose the following year. There wasn’t nearly as much kindling on the fire, either.' So it's not a question of whether consumers are weakening financially, but rather how long this trend toward pre-recession habits will last and just how bad it will get."
Gold's Near-Term Prospects Are Looking Up Again -Seeking Alpha
"Encouragingly, gold showed strength on Tuesday even despite a lifting of the 'fear factor.' As we'll discuss here, the fact that gold is rallying without a sustained fear component is even better for its intermediate-term prospects. Gold prices rose more than 1 percent on Tuesday as the U.S. dollar index weakened after North Korea expressed a willingness to 'denuclearize' and investors worried about aggressive U.S. trade policy. Gold and silver prices were both decisively higher for the day, thanks in part to a weakening dollar....As discussed in the previous report, the single best thing that could happen to boost gold's prospects right now would be a weakening of the dollar's value, which would benefit gold's currency component....Aside from the prospects of lower geopolitical risks involving North Korea, worries over that the proposed tariffs by the Trump administration could spark a trade war have eased since last week....Longer-term investment positions in gold can be maintained as the fundamentals underscoring gold's two-year recovery effort are still favorable."
The Case for Trump's Tariffs and 'America First' Economics -New York Times
"In his campaign, Donald Trump stressed 'America First' economic nationalism. But in his first year in office, the theme languished. So when he recently announced that he intended to impose steep tariffs on steel and aluminum, Republicans were as surprised as anyone. The conservative press and right-leaning think tanks were outraged. The director of the National Economic Council, Gary Cohn, resigned in protest. Conservatives and free-market theorists could forgive Mr. Trump many sins, but to actually flirt with economic nationalism was inexcusable....With his signing on Thursday of a tariff order, Mr. Trump appears once again to be setting himself against the mandarins of both parties. That has been a politically successful strategy for him in the past. But while his approval ratings may benefit from a brawl over trade, the more important question is whether economic nationalism is any good for the country. In principle, it is....Tariffs are not magic. Sometimes the unintended consequences at home and retaliation from overseas can be devastating. But trade wars, like shooting wars, shouldn't be avoided with pre-emptive surrender, which is what the free-trade regime amounts to for America's long-term security and middle-class prosperity....Mr. Trump's steel and aluminum tariffs may not work. But they are a first attempt at finding an alternative to a free-trade system that has built up the People's Republic of China while hollowing out the factory towns that once made America great."
3.8.18 - "Deep Correction" Warns JP Morgan
Gold last traded at $1,322 an ounce. Silver at $16.50 an ounce.
NEWS SUMMARY: Precious metal prices steadied Thursday ahead of tariff announcement. U.S. stocks traded mixed on hopes Trump's tariffs will be softer than feared.
Trump Prepares to Formalize Tariffs but Floats Exemptions -New York Times
"More than 100 Republican lawmakers implored President Trump to drop plans for stiff and sweeping steel and aluminum tariffs as the White House prepared to formalize the measures on Thursday afternoon. Officials said late Wednesday that the plan would initially exempt Canada and Mexico and could ultimately exclude other allies. Peter Navarro, a top White House trade adviser, said on Wednesday night that the president would hold a signing ceremony on Thursday afternoon in the Oval Office. He said the tariffs would go into effect in 15 to 30 days. 'The proclamation will have a clause that does not impose these tariffs immediately on Canada and Mexico,' Mr. Navarro said in an interview on Fox Business Network. A permanent exclusion will hinge on those countries agreeing to a 'great' trade deal in the ongoing renegotiation of the North American Free Trade Agreement, he said. 'We're going to open this up for our allies to just see if we can work through this problem,' Mr. Navarro added....In an interview on Wednesday afternoon with Fox Business, Wilbur Ross, the secretary of commerce, said countries would be exempted if it served American national security interests....The prospect of approaching tariffs has set off furious lobbying from governments around the world, who have tried to sway the administration with offers of friendship and threats of retaliation. China cautioned that it was prepared to 'make an appropriate and necessary response' should the United States impose the tariffs."
GOLD - The Next Big Surprise -The Macro Tourist
"I am a long-term fan of our little yellow friend, but there are definitely periods when I am more bullish than others. Over the past half year, my enthusiasm for precious metals has been tempered by one important chart. During this period, the yield on the US 5-year TIPS (Treasury Inflation Protected Security) has been steadily rising. It's not a perfect comparison, but you can think about this as the risk free real yield - the yield you will earn after inflation. Many market pundits mistakenly believe inflation is the most important determinant of gold's price level. That's simply not the case. Although the great bull market of the late 1970's was accompanied by high inflation, the 2005-2011 rise was in the midst of tame inflation, with CPI even ticking below zero for a period. No, inflation is just one part of the puzzle for gold. The other important piece is the nominal interest rate....After all, gold is also a currency, with no yield. Yet the real benefit is that it is no one's liability....The way I see it, one of two things will happen in the coming months. If the economy continues to gain steam...the Fed will lag in raising rates. This will cause real yields to decline as inflation picks up. This will be good for gold....But there is another possibility. What if all the economic bulls are wrong?...What if the next surprise is the economy slowing down, not the other way round? In that case, the Fed will pause and the massive short position at the front end of the curve will be seriously offside...Gold will rally harder than Heather Locklear parties on a Saturday night."
JP Morgan co-president warns of 'deep correction' for stocks totaling as much as 40% over next few years -CNBC
"J.P. Morgan co-president Daniel Pinto believes equity markets could see as much as a 40 percent correction within the next few years. 'The equity market has some way to go for the next year to two,' Pinto said in an interview with Bloomberg TV. 'But then, if there is a correction, it could be a deep correction. It could be between 20 and 40 percent depending on the valuations at the time. The most important thing for someone like us is just to be prepared.' Pinto's comments come a month after fears of burgeoning inflation and rallying interest rates caused a spike in market volatility and sent the Dow Jones industrial average tumbling into correction territory....Pinto noted that market corrections tend to be the result of many factors, but he highlighted central bank activity as a potential pitfall for global markets....Markets consider a March rate hike from the Federal Reserve nearly certain, judging by trading in the Fed funds futures market. Subsequent hikes are anticipated in June and a third likely coming in September, according to the CME's FedWatch tracker."
The Meaning of Bitcoin's Volatility -Wall Street Journal
"Bitcoin, despite its name, isn't money. Its price volatility significantly diminishes its usefulness as a reliable unit of account or an effective means of payment...Even if you're not buying cryptoassets, bitcoin's boom-and-bust cycle is worth watching. It may foretell of heightened market volatility to come and significant imbalances across a broad swath of financial assets. The underlying technology, blockchain, is a significant breakthrough....Bitcoin's earliest disciples included technologists and libertarians, along with a few doomsayers who feared catastrophe and currency debasement in the aftermath of the financial crisis....Most cryptocurrencies on the market today will turn out to be worthless. But a new generation of cryptocurrencies is on the horizon, some of which might possess more of the attributes of money, better satisfying bitcoin's founding purpose. Bitcoin is particularly sensitive to new uncertainties in the conduct of economic policy. Bitcoin's surge in volatility in December and January thus presaged the past month's volatility in more traditional and consequential financial assets, including stocks, bonds and credit."
3.7.18 - Trade Wars to Boost Gold
Gold last traded at $1,324 an ounce. Silver at $16.48 an ounce.
NEWS SUMMARY: Precious metal prices eased back Tuesday on profit-taking and a firmer dollar. U.S. stocks fell as trade issues roiled investors following the resignation of the White House's top economic adviser Gary Cohn.
Fuel For The Protectionist Fire: US Trade Deficit Surges, Ex-Petroleum At All Time High -Zero Hedge
"Coming at a time of heightened trade tensions and fears of an imminent trade war, for once every trader was looking at this morning's international trade report to see if it will pour more fuel on the trade war fire. It did, because according to the BEA, in January the US trade deficit surged 5% to $56.6 BN from $53.9BN in December, worse than the $55.0BN expected, and the biggest deficit going back to 2008....The report came just hours after Trump once again slammed the US trade deficit, tweeting that "From Bush 1 to present, our Country has lost more than 55,000 factories, 6,000,000 manufacturing jobs and accumulated Trade Deficits of more than 12 Trillion Dollars. Last year we had a Trade Deficit of almost 800 Billion Dollars. Bad Policies & Leadership. Must WIN again!"....Of note, the deficit with China increased $1.5 billion to $35.5 billion in January. Exports decreased $1.3 billion to $10.5 billion and imports increased $0.2 billion to $46.0 billion. And while the trade number not only indicates that Q1 GDP estimates are about to be cut below 2.0%, it confirms that a trade war is now more or less assured."
Trade Tariffs Will Not Make America Great Again -Bonner/Bonner And Partners
"Until the 1970s, America was the world's leading exporter. Then, in a few years, it became the world's leading importer. From having the biggest trade surplus, it soon had the biggest deficit. Why? Did Americans suddenly forget how to make things? Did our businessmen and entrepreneurs lose interest in making money? Were they incapable of making a good deal? What really happened was that the money system changed. In 1971, the Nixon administration created a new dollar by removing the last vestiges of gold backing. Instead of making stuff at home, the U.S. began taking it from abroad, and paying for it with its new credit money. Instead of being a manufacturing powerhouse, it became a consumer's EZ credit paradise. And instead of favoring real jobs with good wages on Main Street, the economy was distorted by over-empowered PhDs at the Fed, overpaid scalawags on Wall Street, and hoggish scoundrels in both parties wallowing in an overblown, overreaching, and over-indebted swamp in Washington....The real purpose of government is, always and everywhere, to enable the few to exploit the many....There are the obvious first-effect losers. U.S. automakers, for example, use an average of 3,000 pounds of steel in every car. The extra cost will force Detroit to raise prices. And here we encounter the second-effect losers: the residual, high-paid autoworker jobs....And there are the third-effect losers, too: practically the entire population of the U.S., who will pay more for everything from aluminum beer cans to steel garden tools."
After Currency Wars, Trade Wars Boost Interest in Gold as Safe Haven -Commodity Trade Mantra
"One of the potential outcomes of a trade war is that other nations start dumping U.S. Treasury securities, which could boost gold demand. Trade partners may retaliate by dumping U.S. securities at time when the U.S. Treasury needs to access global capital markets. If materialized, a reduction in U.S. Treasury holdings may boost the demand for gold, supporting our bullish view on gold prices. We have seen a relatively consistent protectionist agenda from the Trump administration since the President took office. Yet, until recently the 'America First' commitment has avoided seriously unsettling the market. Over the past few weeks, the effort has shifted away from withdrawing from trade groups which the US was not yet committed to (the TPP) or renegotiating advantageous arrangements with partners that have little leverage (NAFTA). Now, we are seeing more targeted and aggressive moves....In 2008, the global financial system was coming apart at the seams and the largest central banks responded by massively increasing monetary policy by cutting benchmark rates towards zero and introducing large stimulus programs. Given there was no major liquidity outlet for capital to move while seeking safety and stability, investors reverted to their ancient solution: go to gold. In 2008 to 2011, the precious metal soared to the record high that still stands to this day - nearly $600 higher than the current spot rate. Is this one of the few markets of genuine last resort or is this time different?"
Here's A Real Trade Abuse Trump Should Address -Steve Forbes/Forbes
"Here's a hugely winning issue for President Donald Trump that would deal with a gross trading abuse and simultaneously advance his goal of reducing the prices of prescription drugs: Insist that foreign buyers of American pharmaceuticals pay their fair share of the research and development costs of these medicines. Currently, Americans are subsidizing overseas users of our drugs. Here's how that works. The average price of successfully bringing a new medicine to market in the U.S. is about $2.4 billion. The entire approval process takes some 12 years before a drug receives its final green light....Pharmaceutical companies get 20-year patents for their drugs, which means they really have about 8 years of monopoly power (20 years for the patent minus the 12 years for clearing all the hurdles before a particular prescription can actually be sold). No wonder the initial price for a new drug is sky-high, even though the actual manufacturing cost per pill is minuscule....When a pharmaceutical company sells a new drug overseas, buyers demand a price that's a fraction of what American customers pay....The U.S. should now make fair pricing of American drugs overseas a top trade priority: If you don't want to pay for our R&D, you won't get our pills. Period....A side benefit would be reducing FDA resistance to the president's desire to let terminally ill patients have the right to take medications that haven't yet cleared bureaucratic hurdles for approval."
3.6.18 - 42% of Americans at Risk of Retiring Broke
Gold last traded at $1,335 an ounce. Silver at $16.86 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Tuesday on safe-haven buying and dollar weakness. U.S. stocks fell on trade war fears despite upbeat news from North Korea.
Breakthrough: North Korea Ready To Denuclearize "If Regime Safety Is Guaranteed" -Zero Hedge
"Score another diplomatic victory for Trump, whose hard line negotiating tactic appears to have generated a dramatic - and favorable for market - outcome. Moments ago futures spiked, 10Y yields jumped and the USDJPY bounced about 106 on what the FT dubbed a 'diplomatic breakthrough' that North and South Korea have agreed to hold direct talks between their leaders with North Korea signalling it is willing to abandon its nuclear program 'if regime security can be guaranteed.' The headlines come from South Korean National Security Office special envoy Chung Eui-yong, who is speaking to reporters in Seoul after returning from Pyongyang. Remember he and another envoy, National Intelligence Service chief Suh Hoon met North Korean leader Kim Jong Un in Pyongyang on Monday. Chung confirms that North Korea is indeed ready to stop the jawboning and negotiate....The easing of tensions between the two Koreas and this clearly positive geopolitical development has triggered a broad based risk-on move....The question now is whether this unexpected diplomatic victory for Trump will further empower him to demand similar concessions on the trade side, and launch the 'trade wars', even as the market is now fully convinced that the US president will backtrack."
The Arithmetic of Risk -Hussman/Hussman Funds
"The collapse of major bubbles is often preceded by the collapse of smaller bubbles representing 'fringe' speculations. Those early wipeouts are canaries in the coalmine. Once investor preferences shift from speculation toward risk-aversion, extreme valuations should not be ignored, and can suddenly matter to their full extent....Extreme valuations are born not of careful calculation, thoughtful estimation of long-term discounted cash flows, or evidence-based reasoning. They are born of investor psychology, self-reinforcing speculation, and verbal arguments that need not, and often do not, hold up under the weight of historical data. Once investor preferences shift from speculation toward risk-aversion, extreme valuations should not be ignored, and can suddenly matter to their full extent. It appears that the financial markets may have reached that point. A second feature of the initial break from a speculative bubble is that the first leg down tends to be extremely steep, and a subsequent bounce encourages investors to believe that the worst is over. That feature is clearly evident when we examine prior financial bubbles across history. Dr. Jean-Paul Rodrigue describes an idealized bubble as a series of phases, including that sort of recovery from the initial break, which he describes as a 'bull trap.'"
"I continue to expect the S&P 500 to lose about two-thirds of its value over the completion of the current market cycle. With market internals now unfavorable, following the most offensive 'overvalued, overbought, overbullish' combination of market conditions on record, our market outlook has shifted to hard-negative. Rather than forecasting how long present conditions may persist, I believe it's enough to align ourselves with prevailing market conditions, and shift our outlook as those conditions shift...For now, buckle up."
42% of Americans Are at Risk of Retiring Broke -CNBC
"Nearly half of Americans have less than $10,000 stashed away for retirement, according to a report by GoBankingRates. For them, a serious lack of planning coupled with a longer life expectancy has destroyed any retirement dreams. At this rate, retirement is more of a fantasy than a reality for many people in this country. About 42 percent of Americans have less than $10,000 saved for when they retire, according to a study by GoBankingRates released Tuesday. The No. 1 reason most people cited for not stashing more away was because they didn't earn enough to save, followed by the fact that they were already struggling to pay bills, GoBankRates said. The personal finance site polled more than 1,000 adults online in February....Americans are also becoming steadily more pessimistic about their future economic prospects, according to a separate study by United Income, a start-up that aims to apply big-data analysis to financial planning."
Investors' preference for safe-haven assets lifts gold -Business Live
"Gold touched a near one-week high on Monday as investors opted for safe-haven assets, on political uncertainty in Italy and fears of a potential escalation of a simmering global trade war. Gold is often seen as an alternative investment during times of geopolitical and financial uncertainty, benefiting along with other haven assets such as the yen and US treasuries while stocks tend to trend lower....'There are fears that a global trade war or protectionist measures will undermine global growth,' said Societe Generale’s head of metals research Robin Bhar. 'People have wanted gold as a hedge against those looming uncertainties'. The dollar index was steady, having touched its lowest in almost a week earlier in the session...A weaker dollar supports gold, making it cheaper for holders of other currencies."
3.5.18 - 4 Mistakes Will Sink the US Economy
Gold last traded at $1,319 an ounce. Silver at $16.41 an ounce.
NEWS SUMMARY: Precious metal prices wavered Monday on mild profit-taking and a flat dollar. U.S. stocks zig-zagged on trade war fears as investors mulled over potential U.S. steel and aluminum tariffs.
Trump signals he may drop tariffs if a 'fair' NAFTA agreement is signed -CNBC
"President Donald Trump signaled on Monday that his announced tariffs on steel and aluminum may not be implemented, at least for Canada and Mexico, if a 'fair' NAFTA agreement is negotiated. 'Tariffs on steel and aluminum will only come off if new & fair NAFTA agreement is signed,' the president tweeted. U.S., Canadian and Mexican representatives meet Monday for the final round of NAFTA talks, which have been complicated by Trump's tariff announcement on Thursday. The president announced a 25 percent tariff on steel and 10 percent tariff on aluminum, roiling financial markets and causing sharp rebukes from Canada, the European Union and others, including many U.S. companies. Despite the blowback, Trump in the subsequent days maintained his tough stance, even going so far as to say that 'trade wars are good and easy to win.'"
Reporters are doing a disservice by mixing politics with business -New York Post
"Welcome to March madness. Stocks - after suffering their first monthly loss for February after 13 straight monthly gains - began March acting more like a lion with sell-offs. Analysts and economists with full heads of hair and shiny cuff links that complement their overly starched shirts are quickly becoming a bunch of cranky curmudgeons as their trust funds sag a little bit....On Thursday, President Trump imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum imports from all countries - although it is primarily targeted at China. Not my favorite move, but not a surprise if you were paying attention. And this brash action sent stocks plummeting more than 600 points from their highs of the day. I'd like to point out that 16 months after Trump’s election win, stocks were up 40 percent, then might have corrected - and are still 35 percent higher. Only a fool would knock that. Wouldn't you know it, all the fools came marching in on Thursday. TV business 'reporters' can barely hide their dislike for Trump, and simply can't just call it a sell-off....But investing isn't a political endeavor. What a disservice they are doing to those watching with the sound on! On Wall Street, stocks can have a fantastic run and need to take a breather."
Gold wavers, buoyed by trade-war rumblings, but pressured by firmer dollar -Marketwatch
"Gold prices wavered between losses and gains Monday, buoyed by heightened jitters about a potential trade war and uncertainty for the European Union following Italy's divisive election, but pressured by a firmer U.S. dollar....President Trump continued to tweet on the subject over the weekend, at one point threatening to slap a tariff on European autos, should the European Union try to retaliate to the new tariffs. The trade-related market churning has underpinned a flight to the perceived safety for assets such as precious metals. Gold and silver also scored a fillip from buying from investors looking to hedge against rising prices that are typically associated with global trade tensions....'Trump/tariffs uncertainty is supporting a renewed upside attempt as a trade war could hurt growth and with it, the [Federal Reserve's] ability/need for higher rates,' said Ole Hansen, commodities analyst at Saxo Group, in a note....Meanwhile, 'the Italian elections on Sunday that produced no clear winner threw fresh uncertainty into the marketplace,' said Jim Wyckoff, senior analyst at Kitco.com."
The Four Mistakes That Will Sink the Economy -Bonner/Bonner And Partners
"Investors in the U.S. stock market thought they were profiting from the Great American Enterprise Machine. Instead, they were unwitting accomplices to a huge fraud... in which most citizens were robbed to transfer money to the elite. But today, we're focusing - again - on the heist itself, and trying to understand if, when, and how the money goes back to its rightful owners....Fed policy always consists of three mistakes. (1) It keeps rates too low for too long. (2) It raises them, causing a serious allergic reaction on Wall Street… which it then medicates (3) with more low rates. The Fed - benighted as always, bewitched by power, and vainly besotted by its own image - is now making Mistake 2. That is, it is trying to recover from Mistake 1 in time to be able to gather up some interest rates so as to make Mistake 3 again. Having put the whole world head over heels in debt (the world total is around $230 trillion), it now believes it can increase the cost of carrying that debt without crashing the whole system. A 'soft landing' is what it is aiming for....Higher rates and more savings will mean, at a minimum, a very serious recession and a long, deep sell-off in the stock market. Most likely, stock prices will be cut in half... and not bounce back, in real terms, during our lifetimes....And come the next stock market correction - which could well be accompanied by a recession - the Fed will immediately swing around again. But this time, it won't be able to implement Mistake 3 as it did in 1987, 2000, and 2008; it will lack the firepower. It has already shot its monetary wad. With no choice, it will team up with the White House and Congress to resort to Mistake 4. The pols will propose wasteful, unproductive, and unneeded spending programs, to be financed with money they haven't got. The Fed will 'print' the fake money with which to pay for them."
3.2.18 - How Little Does the Fed Know?
Gold last traded at $1,322 an ounce. Silver at $16.53 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying amid dollar weakness. U.S. stocks fell on fears of a trade war if tariffs are placed on steel and aluminum imports.
The next financial crisis -Washington Times
"With the economy humming along, it's easy to become cavalier about big federal deficits but when the next recession hits - those could make it a lollapalooza. As often stated, federal deficits greater than $1 trillion dollars - about 5 percent of GDP - are huge for an economy in the advanced stages of an economic recovery and leave policymakers little latitude to further boost spending when the economy hits a speed bump. As importantly, though, Uncle Sam's incessant borrowing - just like irresponsible home mortgages in the 2000s - could again send financial institutions barreling over a cliff. Americans don't save enough to satisfy Uncle Sam's voracious appetite for credit. To finance the difference, Americans sell foreigners private assets - choice real estate, equities and corporate bonds - and government bonds. Already IOUs held by the rest of the world exceed 45 percent of GDP and within the next decade, that figure will surpass 60 percent. No major nation has crossed that threshold without enduring wrenching financial adjustments....Congressional leaders from both parties indicate little interest in changing the rules to force better policy and as we learned during the recent financial crisis, the bond market has a way of imposing tough reforms on recalcitrant politicians. Americans are not going to like going through Greek austerity but the best glimpse of America's future may be found by visiting Athens."
Dow drops more than 250 points on trade-war worries -CNBC
"U.S. stocks traded lower on Friday on fears that a trade war could take place after President Donald Trump announced tariffs on steel and aluminum imports. The Dow Jones industrial average fell 254 points after falling as much as 376 points, with McDonald's and Boeing as the worst-performing stocks. The S&P 500 declined 0.5 percent, with financials and energy as the worst-performing sectors. The Nasdaq composite declined 1 percent. Trump made the announcement on Thursday, noting the U.S. will implement a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports next week. The news sent stocks reeling, with the Dow closing 420 points lower, while the S&P 500 and Nasdaq dropped more than 1 percent. It also raised concern that other countries may implement retaliatory tariffs on U.S. exports. 'The problem is that they are bad for anyone else that uses that steel or aluminum, such as car manufacturers, builders, the energy industry, or really most of the economy,' Brad McMillan, chief investment officer at Commonwealth Financial Network, said in a note. He also said that companies impacted by the tariffs have two choices: raise prices or absorb the higher costs and make less money....But Trump stuck to his guns on Friday, tweeting: 'When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win.'"
Trade war talk pushes gold prices higher -Reuters
"Gold prices rose on Friday as the threat of a global trade war pushed shares and the dollar lower and spurred demand for assets such as bullion that are seen as safer investments. U.S. President Donald Trump's decision on Thursday to place tariffs on imports of aluminum and steel raised fears of retaliation by other nations and knocked the dollar from a six-week high, making dollar-denominated gold cheaper for users of other currencies. 'The risk of trade wars which could impact economic growth and raise uncertainty plays into the hands of gold,' Saxo Bank analyst Ole Hansen said....'If a trade war becomes a reality it could push inflation up and growth down and that should ease the aggressiveness of the Fed. That's why it has become the focus (of the gold market),' he said. Also positive for gold was its ability to hold above its technically important 100-day moving average price at $1,300, also a key psychological level for investors."
How Little Does the Fed Know? -Wall Street Journal
"Part of the grip central bankers have on markets comes from their mystique. The Federal Reserve holds sway over the price of money, which gives it hard power. But the Fed's soft power is almost as valuable: its pronouncements on the future of the economy provide the baseline for investor forecasts, and not only because they are trying to work out what the Fed will do with interest rates. The Fed's aura of invincibility has been dented over the past decade. Yet those listening to new Fed Chairman Jerome Powell testify to Congress this week showed little willingness to question his foreknowledge about the economy....There are a few reasons to cast doubt on Mr. Powell's belief that the economy has strengthened this year. More broadly, investors should shrug off the idea that the Fed has any special insight into what will happen a year from now....The big question in the U.S. jobs market is whether there are lots of discouraged and part-time employees ready to rejoin the workforce as the economy strengthens, limiting wage pressures. The Fed's view? 'The only way to know is to, find out,' Mr. Powell said. Investors can't wait. If next week's nonfarm-payrolls report brings a repeat of January's surprisingly strong wage figures, it would push up inflation expectations, lead to another bond selloff and probably hurt stocks again. On this, as so much else, they need to form their own opinions, not rely on central bankers."
3.1.18 - Why Personal Debt Really Matters
Gold last traded at $1,319 an ounce. Silver at $16.49 an ounce.
NEWS SUMMARY: Precious metal prices settled lower, but recovered losses after markets closed. U.S. stocks tumble as investors react to tariff talk.
Whatever Jerome Powell said, Wall Street heard 'rate hike' -Crudele/New York Post
"Jerry Powell apparently doesn't get it. The new head of the Federal Reserve isn't supposed to imply that he doesn't work for Wall Street. And he's not supposed to say, as he did the other day in front of Congress, that 'we don’t manage the stock market - we manage stable prices and maximum employment.' That's not what Wall Street and the stock market want to hear. And that was proven by the fact that the stock market dropped sharply on Tuesday when Powell was speaking. Investors are undoubtedly worried that Powell will be more like Paul Volcker, who left as head of the Fed in 1987 after conquering out-of-control inflation. Wall Street would like him to be more like more-recent ex-Fed bosses Alan Greenspan, Ben Bernanke and Janet Yellen - who wanted to be tight with politicians and loved by the investment community....But don't worry. Powell will probably come around. The pressure to be loved by the rich and powerful is just too hard to ignore....Uh-oh, inflation 'is moving up to target' means that the Fed will be more vigilant and will be raising rates quicker."
Debt Matters... -Zero Hedge
"My take: Consumer debt is a massive problem...I don't think it's an accident that markets have been reacting negatively to yields spiking. And it's also not an accident that home sales are dropping in the face of higher rates. How sensitive to higher rates is the entire construct? Currently every spike in the 10 year invites selling during the day. Jerome Powell's words led to yesterday's 10 year spike above 2.9% and it flushed stocks. Yesterday we also learned that 72% of earnings growth since 2012 was due to buybacks, or financial engineering in short...That's a big number and it reveals the extent of the mirage that has been propagated for the past few years. Consumers and the government are drowning in debt and the construct continues to be held up by low rates, hence the sensitivity. And I think principally people understand this. After all it's not often that a macro chart goes viral....Rates have been rising and we see stress emerging any way you cut or slice the data. So I submit the Fed and markets find themselves in a narrative trap inside the bubble they have created. Hence the Fed's tinkering with 'gradual, patient, rate hikes'. Oh just shut up, you know exactly why you are trying to send that calm message because we saw yesterday what happens when the message gets interpreted differently: Stocks drop. Here's the reality: Earnings growth is heavily reliant on buybacks which have been financed with debt and now with tax cuts, courtesy unwitting tax payers, but the structural growth component remains MIA....Now add 6-8 rate hikes over the next 24 months and what do you get?....And if unemployment picks up at some point you'll have millions of consumers in high debt with limited savings and rising debt obligations. And then suddenly debt matters."
The Fed Is About to Pop the Bubble in Stocks -Bonner/Bonner And Partners
"Yes, Dear Reader, the Fed giveth. And the Fed taketh away...Mr. Powell says the Fed plans to take back some $2 trillion over the next three years. What are investors thinking? That the Fed doesn’t mean it? That it won't follow through? Or that higher rates won't affect their stock portfolios? We don't think the Fed will follow through, either. But it won't get back on the job - inflating the markets and the economy - until the wolves have dragged away a few of the flock and the rest are running for cover. That's the way it works. The Fed is not just fallible; it is also foolish. First, it makes mistakes. Second, it tries to correct its mistakes with more mistakes. And third, when it sees what a mess it has created, it reverts to the first mistake: It cuts rates… and holds them down too low for too long. Then it raises them… and the economy goes into recession. It cuts again. Raises again. And then, it must cut again. Or try to. The 10-year Treasury note yielded nearly 10% on Black Monday in 1987. It yielded over 6% when the dot-com bubble blew up in 2000. And it yielded just under 5% when the subprime mortgage crisis hit in 2007. But today, the 10-year note yields 2.9%, which doesn't leave the Fed much to work with. So Chief Powell is making the second mistake now. He is eager to get yields higher before the next crisis hits. Then, he'll have something to make the first mistake with. But raising borrowing costs is bound to set off the next recession/crash...Disaster could strike any day… as soon as investors realize that Mr. Powell is sneaking up on the bubble with a pin in his hands."
Cryptocurrency Firms Targeted in SEC Probe -Wall Street Journal
"The Securities and Exchange Commission has issued dozens of subpoenas and information requests to technology companies and advisers involved in the red-hot market for cryptocurrencies, according to people familiar with the matter. The sweeping probe significantly ratchets up the regulatory pressure on the multibillion-dollar U.S. market for raising funds in cryptocurrencies. It follows a series of warning shots from the top U.S. securities regulator suggesting that many token sales, or initial coin offerings, may be violating securities laws....'Many promoters of ICOs and cryptocurrencies are not complying with our securities laws,' SEC chairman Jay Clayton said earlier this year. In another speech he said he has instructed his staff to be 'on high alert for approaches to ICOs that may be contrary to the spirit' of those laws....'We're seeing the tip of the iceberg … there is going to be a ton of enforcement activity,' said Dan Gallagher, an SEC commissioner from 2011 to 2015 who now sits on the board of blockchain company Symbiont. Mr. Gallagher told an SEC conference in Washington last week that the largely unregulated token offerings are 'the freaking Wild West - it is 'Wolf of Wall Street' on steroids.'"