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Risk On Includes U.S. Dollar – Ep. 283
12 september 2017 · 41 min
A Huge Risk-On Day Lees meer
The markets rallied all over the world. Everything was up. All the foreign markets - European markets, Asian markets, rallied. It was a huge risk-on day. Stocks went up and bonds got clobbered. Yields rose on government bonds, the 10-yr. out to the 30-yr.
Insurance Rates Going Up
There will be a lot of pressure on insurance companies to pay claims for both recent hurricanes and where's that money coming from? It's got to come from the markets. It is just not sitting there in a piggy bank. It is invested in stocks and bonds, so if they are going to pay claims, you would think that is a negative for the financial market as the insurance companies have to liquidate some of their portfolios, but not today!
Big Move Down for Gold
Risk-on, so you get rid of your safe assets, although I don't know why anyone would consider Treasuries safe, but everybody sold treasuries and bought U.S. stocks. They sold gold. Gold was down $19 today. This is the biggest one day move I've seen in a while. In fact, this $19 down move - gold has been moving up steadily to $1350 last week. I don't think I have ever seen a $19 up day.
Gold's Steady Climb
Gold's been going up slowly. $5, $7, $3; maybe there was one $10 day, I think, but it has been a very slow, steady climb on a wall of worry. And now, all of a sudden, we have a day where everybody is excited because the hurricane didn't do as much damage as it could have, and they all buy stocks. They dump gold and it goes down $19 in one day. Gold had been climbing before the hurricanes came around. and I don't think any of that gain was necessarily the result of the hurricanes. Had none of these hurricanes happened, gold could have been exactly where it was before today. Gold was rallying anyway.
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Blowing the Roof Off the Debt Ceiling
8 september 2017 · 29 min
Trump said Government was Too Stupid Lees meer
When Donald Trump was originally elected President, I was out there warning, that budget deficits under the Trump Presidency are going to be huge. Donald Trump never ran as a fiscal conservative or a Libertarian. He didn't say government was too big, he just said it was too stupid. He promised just to be smarter. He didn't say he would make government smaller, only that he would make it more efficient. He would do a better job of using big government than politicians who have held the office before him.
Trump Promised More Spending
So it was my feeling that a Trump Presidency was going to result in increasing the budget deficits that would be necessary to finance a bigger government. Also, Donald Trump never promised to cut government spending; cut entitlements. In fact, he promised the opposite. He promised not to touch entitlements, to allow them to continue to expand. He promised to spend more money on the military, more money on our vets, more money on infrastructure, more money to build a wall. So I knew all of this would result in bigger deficits.
"Gentlemen's Agreement" to Raise the Debt Ceiling
But now, my suspicions have been confirmed. Now we have news that Donald Trump has basically made a "gentlemen's agreement" with Chuck Schumer to repeal the debt ceiling completely. There has been some debate again about raising the debt ceiling, we have this charade every year or so, where everybody pretends that they might not raise the ceiling and they raise it anyway. We had a similar political theater going on until Donald Trump cut a deal with the Democrats to extend the last suspension of the debt ceiling for another 90 days. That's when we found out that they had also been working on this deal to eliminate the ceiling altogether.
Never Really Paying Off Bills
In recent years, the political spin has always been that lifting the debt ceiling is the politically, fiscally responsible thing to do. That America always pay…
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Hurricanes Rain On Market’s Parade – Ep. 282
6 september 2017 · 39 min
Threats from Hurricane Irma and North Korea Lees meer
After a long holiday weekend the DJIA fell 234 points this Tuesday. Finally we have some kind of negative reaction in the stock market to the bad news. Over the weekend we got news that North Korea had successfully tested a hydrogen bomb, and now we know that Hurricane Irma, which is now listed as a category 5 hurricane, is one of the biggest, if not the biggest hurricane ever in the Caribbean.
Anything Can Happen
It looks like it is going to go right by Puerto Rico; for those who may be concerned about me, I am Connecticut now, so my family and I are not on the island, but we certainly have property there and we are also very concerned about our neighbors and the people of Puerto Rico. It is not likely to be a direct hit, but anything can happen. It is projected to pass Puerto Rico Wednesday afternoon.
Irma Threatens Caribbean Islands on Heels of Hurricane Harvey
The people of the Virgin Islands are going to suffer a similar fate. There are other Caribbean islands that will not be as fortunate; the hurricane is going to go right over them. Who knows where it is going to go after that? There is a state of emergency in Miami, in the keys, from Key West all the way to Key Largo. It is a massive hurricane with lots of potential damage on the heels of Hurricane Harvey.
We're Broke
And you know what? We're broke. Harvey is almost a $200 billion price tag, and I don't know what Irma will be, because the government will have to bail out Puerto Rico and the U.S. Virgin Islands. There is no way the government can deny them relief - they are American citizens. There was a lot of opposition to a Puerto Rican debt bailout but no one will be against giving money to Puerto Rico as a result of the hurricane.
Hurricane Aid for Puerto Rico instead of a Bailout
In fact, this could end up being a bonanza for Puerto Rico. They could end up getting a massive amount of aid all disguised as hurricane aid. They are talking now about pow…
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Weak Jobs Report Doesn’t Rain on Market Parade – Ep. 281
2 september 2017 · 36 min
Nonfarm Payroll Report Fails to Impress Lees meer
Today is the first Day of September; and since it is the first day of a new month, and it is a Friday, we got the nonfarm payroll report. The consensus forecast was about 180,000 jobs. The number came in at 156,000, well below the consensus. To make it worse, they revised down the prior 2 months by about 20,000 jobs each. The unemployment rate notched up from its 16-year low. When Donald Trump, the candidate called 5% unemployment the greatest hoax on the American people, well, it's got to be an even greater hoax, now that it is 4.4%.
Donald Trump's Huge Reversal
I just put up a video on my YouTube channel, Donald Trump's Huge Reversal. I juxtaposed a lot of clips of Candidate Trump with President Trump. Candidate Trump talked about how terrible the economy and how the numbers are so phony and now he is embracing those same numbers, and of course it is the same with the stock market, calling it a big, fat ugly bubble. The stock market today continued to strengthen throughout the week, including in the aftermath of this weaker than expected nonfarm payroll number.
Some Silver Linings
Labor force participation held steady at 62.9, still very low. Average hourly earnings, which happened to be up .3% last month, the biggest gain we've seen in a while, in August it was up ,1% ; vert meager increases in average hourly earnings. A lot of that may have to do with the higher minimum wages - just talking about minimal amounts of money here. The average work week actually ticked down from 34.5 hours to 34.4 hours, so Americans working slightly more hours and getting barely more money.
Is This The Beginning of a New Trend?
This was a relatively weak report; there were 2 bright spots; there was that there was a decline in government workers and a better than expected increase in manufacturing. We did see an increase of 36,000 manufacturing jobs; a lot more than the expected 9,000. We do have a 2-month jump in manufacturing jobs. Th…
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Gold Breaks Through $1,300 Resistance – Ep. 280
29 augustus 2017 · 24 min
$1,300 Was a Coiled Spring Beneath the Market Lees meer
We've been flirting with that $1300 level all year; I've been talking about all the resistance that was up there and every time the price of gold got near $1300 it was met with a tremendous amounts of selling, there was a lot of supply. But as I have been saying on this podcast, the demand was building. It was a coiled spring beneath the market. The channel was narrowing. The distance between the $1300 resistance and the support kept getting narrower and narrower. I thought it was only a matter of time before we exhausted that supply and broke through that psychological $1300 level.
The Rally Held Firm All Day
Gold is up about $18-19 on the day; we closed at about $1310. Finally, I think, there were people who were worried it wouldn't hold that level, people were thinking that we would sell off so we wouldn't quite get a close above $1300, we'd just get a trade above $1300. But the rally held firm all day long. We actually closed on the highs of the day. In fact, as I am recording this, the price of gold is taking another jump. Maybe it is the missile North Korea fired that went through Japanese airspace. We're tacking on another $10-11; we're now trading above $13.20.
The Dollar Is Now a Risk Asset
The dollar continued its weakness. It is one of the reasons that gold continues to be strong. The dollar index made new lows today, down around 92.20, and looking at the action so far in the early evening. The dollar is not benefitting at all from this flight to quality. We're seeing a big rise in the Japanese Yen, a big rise in the Swiss franc. Those are the go-to currencies. The dollar is now a risk asset. People don't buy the dollar when they're worried, they sell the dollar when they're worried. Even the Chinese Yuan - new high for the year.
Gold Now Going Up in Terms of Everything
Of course gold, now, is not only rising in terms of dollars, but finally rising in terms of everything. Gold is going up in yen terms,…
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My Take on Joe Rogan Redo – Ep. 279
26 augustus 2017 · 47 min
The Joe Rogan Experience Podcast Lees meer
I appeared the Joe Rogan Experience Podcast while on my trip this week to the West Coast. I first appeared on his show about 3 years ago, and since then the popularity of his podcast has really exploded. A couple of million have already listened to my most recent appearance. I was on for 3 hours and I did almost all of the talking.
Huge Reaction to Minimum Wage Discussion
If you look at the YouTube video you'll see a tremendous amount of reactions, both positive and negative, which is a far greater reaction than the show usually gets. I could have set the record on thumbs down but I got more than 3 times the number of thumbs up. If you read the comments, many people are attacking me for being "mean" because I am against the minimum wage.
Why Am I Against the Minimum Wage?
This is the typical liberal reaction when they encounter someone who disagrees with the liberal agenda. They think I am out of touch, that I don't understand, I'm heartless, and they get so upset at me because they think I am a really bad guy. After all, only a really bad guy would want to exploit poor people by paying low wages. It would not dawn on them to think about why I am against the minimum wage.
Against Government Mandated Unemployment
I am not against people earning money; I am against mandated unemployment. I am against the government preventing people from acquiring the skills that would enable them to earn a lot more than the minimum wage in the future. Liberals don't consider any consequences - it's all about how good they feel about themselves. "Who actually cares about the consequences of this law, just as long as I can feel morally superior to anyone who doesn't support the minimum wage law?"
For Entry-Level Jobs that Provide Value to Employer
I did explain that, but apparently it went right over their heads. I am trying to explain that the minimum wage law leads to more unemployment because it causes people with low skills to lose the opp…
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Ben Shapiro Exposes Cenk Uygur’s Economic Ignorance – Ep. 278
18 augustus 2017 · 36 min
Economic Ignorance Lees meer
I happened to watch a YouTube video Politicon 2017 Live Stream Schapiro vs Uygur and I want to address only the part of the discussion which was about taxes. Ben Shapiro did a good job, but a much stronger case should be made about Uygur's statements which were economically ignorant.
False Logic
One of the points that Cenk Uygur made during the debate is that high taxes are good, that we have more prosperity with higher taxes, and lower taxes are bad for the economy. In his opinion, if the government takes money from the people who earn it and gives it to the people who don't earn it, everybody is going to be better off, including the people who are being taxed. He cited the 1950's as an example of U.S. economic prosperity, concluding that because income tax rates were 91% America was wealthy. This false logic. it is like eating a banana during a rainstorm and concluding that eating bananas causes rainfall.
The '50's and '60's Marked the End of American Prosperity
In fact the reason we were prosperous in the 1950's and 1960's is not because of high taxes during those decades, but how low they were taxed in the decades before that. Ben Shapiro's response to Uygur was that we won WWII and the rest of the world was decimated, which is true, but not an accurate response. The 1950's didn't just occur spontaneously.
Tax Rate Was Zero
We were wealthy and a mighty power before WWII. The standard of living in the '50's and '60s was a product of the 19th century, and the early 20th century when we had no taxes at all. The reason we created such a strong middle class was because we had no taxes. After the end of the civil war, from 1870 - 1913, which was the introduction of the income tax, the income tax rate was zero. That's the time of the industrial revolution. That's when all the immigrants were coming to America - the 1880's the 1890's, the 1900's. That's when all 4 of my grandparents came here. There were no taxes and massive economic growth wh…
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Freedom of Speech vs. the Thought Police – Ep. 277
16 augustus 2017 · 53 min
Press Wants Freedom of Speech as Long as It Fits Their Agenda Lees meer
One of the few rights left to us in this country is the freedom of speech. If we don't defend speech that we find offensive, someone else will find your speech offensive and move to silence you. Political correctness, is evolving into the Thought Police via the mainstream media. In particular, President Trump's reaction to the events in Charlottesville is being portrayed as a defense of White Nationalists over Black Lives Matter. Nothing is President Trump's remarks supports this story. President Trump, in the lobby of Trump Tower, was subjected to an inquisition by the Press, who intended to entrap the President and further their agenda to mischaracterize him and anyone who supports him.
Disrespecting Donald Trump and the Office of the President
I know very few members of the Press respect Donald Trump; this is clear. But they need to respect the office of the Presidency. Could you imagine members of the Press treating President Obama the way they are treating President Trump? Can you imagine the cries of racism? Of course, no member of the Press would dare show that type of disrespect to President Obama.
Condemning Violence on Both Sides
President Trump is refusing to denounce only the violence perpetrated by the White Nationalists without also mentioning that the Black Lives Matter group, who assembled without a permit, also engaged in violence. The Left is saying that President Trump has not denounced the White Nationalists enough. What the President said was that he was condemning the violence on both sides and that angered the left. They hold that the President should only condemn violence committed by the White Nationalists. That would be hypocritical.
Background on the Event
To give you a little background, the park, formerly named Robert E. Lee Park, was re-named Emancipation Park and the city was going to tear down the statue of Robert E. Lee that had presided over that park. So there wa…
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Bitcoin is a Digital Risk Asset, Not a Currency – Ep. 276
14 augustus 2017 · 48 min
Speculative Asset Lees meer
Bitcoin is a digital risk asset, not a currency. If you own bitcoin you have an asset, but it is not a safe haven. A safe haven is an asset that is not likely to go down in comparison to another speculative investment. Bitcoin has been extremely volatile; it happens to be going up, but the price is based on speculation. Does anybody believe that bitcoin has less downside risk than the stock market?
Not a Currency
Bitcoin is not used as currency. They trade in bitcoins for dollars or euros or yen to buy things, but very few legal goods and services are priced in bitcoin. Because the price is highly volatile and backed by nothing, it can not be used as a currency. It is being used as an asset. The number of top retailers who accept Bitpay is diminishing, not increasing. Merchants will try to make it easy to trade bitcoin for currency which would then buy goods and services. Most people who own bitcoin are not spending them; they are hoarding them because they think they are going to keep going up.
Just Noise
At the end of the day, the realized gains from speculation in bitcoin are going to be overshadowed by the speculative losses. All the rest of it is just noise. The realized profits will be concentrated on a small group of people, whereas the realized losses will be dispersed among a larger population.
Reversing the Consequences
Bitcoin will end up achieving the opposite of its original goal, which was to challenge the power of central government, to disrupt money, that is would rein in government and have real commodity money in the same way FedEx upended the Post Office or Uber upended taxis. This is going to give more power to government, because when digital currencies collapse, the central bankers will say, "We told you so! This is what happens when you allow the free market to do what government should do. When the free market creates money it leads to disaster. You have to stick with currencies backed by government. "
No Joke
The …
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Trump’s Saber Rattles Markets – Ep. 275
12 augustus 2017 · 38 min
Fire and Fury Not Strong Enough Lees meer
Donald Trump's saber-rattling against North Korea continues. Yesterday the President was asked to clarify his statement about the "fire and fury" and he came out and said that that wasn't strong enough; he was really sugar-coating it. What he really means is something worse - if anything his statement was not strong enough. Again, today Trump issued another threat that N. Korea had better be careful, if they say anything if they will regret it big time, so the level of rhetoric is rising.
A Legend in Trump's Mind
He was talking about the booming economy, the stock market at record highs, employment surging, all these jobs coming back. He is spinning this ridiculous phony story about a recovery that doesn't exist. Just as I pointed out he took credit for building up our nuclear armament to a level higher than it has ever been - all this is happening, unfortunately, in Donald Trump's mind.
Volatility Up
There was a big down day in the markets; it dropped over 200 points yesterday; there was a small bounce back today - the Dow was up about 14, not a major recovery, But if you look at the Vix, which is a measure of fear, a measure of volatility, it was near the lows, below 10 mid-week and it spiked all the way up to 16 yesterday, which is the highest it has been since April. It looks like it is above a key moving average on a weekly chart, so that shows a heightened risk in the market.
Dollar No Safe Haven
Interestingly enough, the dollar index closed near the lows of the day, just at around 93 even. It is down on the week. In fact, this is the lowest weekly close for the dollar index for the entire year. Now, you would expect the dollar to have some kind of a safe haven bounce with all of the saber-rattling - all of the worries about nuclear war. Typically, you would get money going into the dollar. I guarantee you, if the circumstances were the same a year ago, there would have been a big rally in the dollar this week. But not n…
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Income Not Received Should Not be Taxed – Ep. 274
10 augustus 2017 · 32 min
Elimination of Deductions for State and Local Tax - "SALT" Lees meer
Tax reform is the one remaining 2018 Republican campaign issue, and the argument over "SALT", or the elimination of deductions for state and local taxes. In general that would be state income tax or state property tax. In some states that do not have income tax, you are allowed to deduct your sales tax, although that is a more complicated deduction. In the wealthier states on both coasts, tax payers rely on those deductions.
The Mortgage Tax Deduction Restricts the Free Market
No one wants to get rid of the home mortgage deduction, but that is a much better deduction to eliminate, as it does more damage to the economy. The politically popular mortgage interest deduction is aimed at altering behavior, rather than to let the free market work independently. The real beneficiary of the mortgage tax deduction is not the home buyer but the house seller. There are many predominately Democratic states with high taxes but I don't buy argument in favor of eliminating that deduction.
Why Should the Federal Government Subsidize the State Government?
The argument is, why should the Federal government subsidize state government? If a state wants to have a high income tax, then, its citizens get to deduct that income tax from their Federal taxes and therefore, they don't feel the full burden of the tax, because some of it is absorbed by the Federal government. As a result of this, tax payers in high tax states are more receptive to those high taxes because they get a tax break on their Federal tax returns. If they could not deduct these taxes, there would be a bigger pushback on the state level.
Federal Government Taxing Unearned Income
If we are going to have an income tax, we have to tax the actual income. For example, if you earn $100,000, and let's say you live in a state with a flat 10% income tax, then they pay $10,000 in taxes. Did they earn $100,000 for $90,000? I would say they earned $90,000. Now if the F…
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Trump Hypocrisy on Jobs Raises Concerns – Ep. 273
5 augustus 2017 · 32 min
Trump Jumps to Tweet on Mediocre Jobs Numbers Lees meer
This morning the Labor Department released the July Non Farm Payroll numbers and Donald Trump tweeted,"Excellent Jobs Numbers just released - and I have only just begun." Many job stifling regulations continue to fall. Movement back to USA!" What is excellent about these numbers? If you look at the household survey reveals that we created 393,000 part time jobs during the month, and we lost 54,000 full time jobs. Candidate Trump complained about these types of numbers. He talked about the proliferation of part time jobs and the loss of full time jobs on the campaign trail, yet now, it's "excellent news!".
Small Rise in Manufacturing Jobs
Although the report was not a disaster, it was not greater than many we've seen under the Obama Administration. The expectation was for a gain of 178,000 and we beat it. We came out with 209,000, which is really not a lot of jobs. Given the size of the American economy, creating 200,000 jobs in a month is really not a lot of jobs. But exceeding this rather low bar gives rise to over-exuberant headlines over a strong jobs report. In fact they did revise last month's gain of 222,000 up to 231,000 and this month's was better than estimates. The unemployment rate did tick back down to 4.3; remember it jumped up to 4.4 and now it's back down to 4.3. We did gain 16,000 in manufacturing jobs and they did revise upward last month's gain from 1,000 to 12,000, so that is somewhat good news, although as a percentage of the overall jobs, it is small.
What's the Real Unemployment Rate?
The Labor force participation rate did ratchet up one tenth, back to 62.9; still very low. Wages rose .3% meeting expectations, and most numbers remained status quo. It's not a disaster of a report but it is not spectacular. We had plenty similar reports under Obama, which were previously labeled "fraud". The unemployment rate is low, and candidate Trump was saying, "The real unemployment rate is closer to 49%". …
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Dow Tops 22K but Market’s Foundation Has Cracks – Ep. 272
3 augustus 2017 · 34 min
Trump Takes Credit for Dow Jones 22K Lees meer
We have an all-time high in the Dow Jones today, closing above 22K for the first time ever. Donald Trump did not tweet about this today, although yesterday he did put out a tweet that the market was about to hit 22,ooo; of course he is claiming credit for it. In fact he pointed out in his tweet that when he was elected, the Dow was 18,000 and not it is 4,000 points higher and of course he is claiming credit for it. He says the media is ignoring it. They are reporting on the record highs, but believe me, when the Dow starts falling the media is going to pay a lot more attention to the declines than they do to the rises, especially when the Dow starts falling the media is going to pay a lot more attention to the declines because Trump has already branded this market with his moniker.
Bad Economic News Did not Dampen Stock Market
Donald Trump did put out a tweet in which he was bragging about wages rising. I don't know what Donald Trump is looking at - we got the personal income and spending numbers yesterday, and June income was flat. They were looking for a gain of .4 and instead they got a flat number. That was the weakest number for personal income growth since November - the month Donald Trump won the election. He's talking about the wage gains, where are they? They don't show up in personal income, and most people's income is comprised of wages.This weak economic news didn't stop the stock market from making new highs today. Of course, Apple was the main reason - it had almost a 5% gain.
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Skinny Repeal was a Fat Lie – Ep. 271
29 juli 2017 · 45 min
Obamacare Repeal Charade Over Lees meer
The whole charade surrounding the repeal of Obamacare is finally over. The most recent attempt, labeled "Skinny Repeal" was a big fat lie. They weren't really repealing anything, leaving the essence of Obamacare and accelerating Obamacare's death spiral. If Congress had repealed the employer mandates and the individual penalties but left everything else the same, then the number of healthy people making the irrational decision not to buy insurance would skyrocket and the sick people who would still be buying, would be facing higher and higher premiums and costing insurance companies bigger and bigger losses to be subsidized by the taxpayer.
Let the Democrats Own the Disaster
Many Republicans are upset with John McCain, for being one of the 3 Republicans to join all the Democrats in opposing the bill. I think McCain did the GOP a favor. This bill, if passed, would have let the Democrats off the hook. They would have not owned Obamacare, and they would be responsible for its failure. Now we all know Obamacare is still there, it is exactly the way it was passed, the bill President Obama championed and signed, the one that Nancy Pelosi said, "We have to pass it to see what is in it." We passed it, we know what is in it (although most people do not understand what is in it) and it is a disaster.
Late last year most people thought the Republicans were going to repeal it - everybody but me. I didn't think that they had the guts to do it. I had this interview on Russia Today in mid-January, it's up on my YouTube Channel; the title is, "Peter Schiff Very Skeptical of Obamacare Repeal". If you watch that video you will see that I say, "I don't think they're going to repeal it."
No Guts to Repeal
Of course, everybody thought, "of course they are going to repeal it. They've been campaigning on it for years!" The President promised it. Everybody who has run for office as a Republican says, "Elect me and I am going to get rid of Obamacare!". T…
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Dollar Falls as Balance Sheet Shrinkage Doubts Rise – Ep. 270
27 juli 2017 · 31 min
Summary: Lees meer
The Dow and the NASDAQ set new record highs today as the dollar sold off near the end of the day to close at yet another low for the year. Remember, the dollar index rallied 6% between the election and the Trump inauguration. It has now fallen more than 10% since inauguration. Many currencies are at two-year highs. The Australian dollar is at a 2-year high, certain commodities are at a 2-year high, copper broke to a 2-year high; oil prices have been strong. Oil was up about $.80 today after being up about $2 yesterday. We're now above $48.50. Getting close to $50/barrel again.
Federal Reserve: "No Hike"
One of the reasons for the strength in commodities is the weakness in the U.S. dollar. The catalyst for the weakness in the dollar today is the Federal Reserve, the FOMC, concluded their 2-day meeting today; their press release came out at 2.30pm ET and they announced that they did not decide to raise interest rates during this meeting. Nobody expected the Fed to raise interest rates, which is one of the reasons why they didn't.
Balance Sheet Normalization?
There was some anticipation that the Federal Reserve may be more specific concerning when it might start quantitative tightening or 'balance sheet normalization' as they call it. So people wanted to know when that would start, and by how much are they going to let their balance sheet to run down but the Fed did not allude to any specifics. All they said is that the process will begin relatively soon. Now the last time they put out a statement, they said it would begin this year. Now they are saying it will begin 'Relatively soon'. Why didn't they leave it at "this year"? Because "this year" would be within the next six months. "Relatively Soon" leaves the statement comfortably vague enough to fit within the Fed's slippery parameters.
Gold Hanging In There
The markets didn't know what to do for the first half hour, but eventually the dollar broke, and gold finally popped up; it was up around $11-12…
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Lessons From Vegas Don’t Stay in Vegas – Ep. 269
25 juli 2017 · 36 min
Summary: Lees meer
My recent trip to Las Vegas for The Freedom Fest provided some interesting lessons. My observations that we are paying more for less were illustrated by the theft of my luggage, as there are no more luggage security checkers in baggage claim exits. Also, for the first time, major Las Vegas hotels are charging from $15 - $18 for parking. This is causing hotel valet workers to lose money, as customers are less likely to leave a generous tip (or any tip) if they are already paying quite a bit to park. So the Las Vegas experience is changing; we're getting less for more money. Prices are going up and wages are going down.
Taking Credit for Phony Statistics
This is the real U.S. economy. Forget about all these phony U.S. statistics. The real world reflects the truth about the economy and why Donald Trump is President. I wish candidate Trump would come back; I would rather see the President questioning phony government statistics instead of embracing them. I'd like to see the President talking about the stock market being a bubble rather than a bull market and claiming credit for the increase.
Weakness in U.S. Dollar
The big story is the continued weakness in the U.S. dollar, in fact this morning the dollar index hit a new low for the year. It's now back in positive territory as I am recording this podcast, but the low this morning was 93.64 on the dollar index. Remember, the dollar index rose about 6% between the election of Donald Trump and the Inauguration, and the reason for the rally was the optimism for economic growth as a result of tax cuts, de-regulation, fiscal stimulus and a tighter Fed.
Senate Backing Away From Repeal
At the time, I argued that that was nonsense, and so far I am being vindicated. We're six months into the Trump Presidency and nothing has happened. They haven't even been able to repeal Obamacare, nor are they going to. The Senate already backed away from the version that I said would not work. Trump did a press conference yeste…
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Weak Data Sinks Dollar But Floats Stocks Ep. 268
15 juli 2017 · 31 min
Summary: Lees meer
More weak economic data today sent the U.S. stock market to record highs; at least the Dow and the S&P hit new records. NASDAQ not quite, but very close. The dollar hit a new low for the year. The dollar index, settling in at 95.10, right on the low for the day. That's down .63. Some of the other currencies are strong.
Aussie Dollar Strong
The Aussie dollar was up about 1.3% on the day; one of the strongest of the currencies today. The Aussie dollar is very close to a 2-year high. The Canadian dollar was very strong this week on the back of a rate increase by the Bank of Canada. But the dollar falling across the board.
Foreign Stock Gain
Foreign stocks did better than U.S stocks, given their tailwind from appreciating currencies. Gold prices were up just over $11. Given the weakness in the dollar and the weak economic data, gold should be moving up a lot more than it is; I still think there is still a lot of short selling going on, but I smell the mother of all short squeezes coming. Silver is up about .30; back up to $16. remember was a low as $15.10 earlier in the week.
Dollar Index Weakening
The dollar index index at 95.10, just down over 7% on the year. It ended last year just above 1.02. In fact, in January, hit almost 1.04, so we're down 8-1/2% since the January high, and the year is only half over. So I think there is a lot more momentum coming, especially in light of the economic data I'm about to get to.
Retail Sales Disappoint
The big report was the Retail Sales numbers, were supposed to bounce back from May's -.3, and they did manage to revise that to down only .1%;but instead of getting a .1% rebound we had another drop. We had -.2% in June, so that is back-to back declines. In fact that is 3 consecutive months of falling retail sales. The picture gets worse when you strip out car autos. Last month, we got -.3%. That was unrevised. They were looking for June to be +.2% - instead we were down another .2%. And if you strip out gasoline, …
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Market Ringing Lots of Bells:Ep. 267
12 juli 2017 · 29 min
Summary: Lees meer
There are market indicators of a major top as illustrated by the Blue Apron IPO, as it represents the failure of a very weak company attempting to raise money my means of an IPO when the market may have lost its steam. The stock is trading at $7.14, down from its initial $10/share offering. Wall Street has lost control of this IPO. A smaller bank actually issued a price target of $2/share. The point is that they brought the IPO to the market and they could not keep the air in the bubble. SnapChat, another Wall Street darling, went public at $17 not too long ago and although it had a big pop initially up to $29, now trades at about half that price. The point is that this process is coming unglued. The inability of Wall Street to maintain the air in these bubble stocks is an indication that we're nearing the end of this bull market.
The Yellen Put May Have Expired
The only way the Fed might be about to extend the bubble market is by changing its tune. As I said in my last podcast, I don't know if that Yellen put is still there. It may have expired with the election of Donald Trump. We know that the Fed wanted to prop the market up during the Obama Presidency; that was clearly their goal. But, especially since Trump has wrapped his presidency in the market's recent upswing, the Fed's willingness to risk credibility may be waning. The Fed may have a greater tolerance for lower stock prices. The Fed will, however step in if they see weakness in Wall Street spill over to Main Street.
Commodities and Emerging Markets
Commodities are looking good, despite the recent dip in oil, gold and silver. Base metal stocks are rising, emerging markets are continuing to pick up, especially those markets that are big exporters of commodities. So, beneath the surface we are starting to see a rotation into these commodity-sensitive, inflation-sensitive sectors.
Golden Opportunity in Silver
Meanwhile the headlines are still all about the drop gold and silver. I recorded a …
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Another Weak Jobs Report Portrayed as Strong – Ep. 266
8 juli 2017 · 29 min
Summary: Lees meer
There wasn't much of a market reaction to this Nonfarm Payroll report; the dollar index was only up .2% on the day. It closed up flat on the week. The Canadian dollar closed at a 10-month high against the dollar. Also bond prices continue to fall; this is a bad week if you own bonds, worldwide. Yields are rising across the board. The trend looks like we are about to break down in the bond market and break out in yield.
Gold Market
I think it is the weakness in bonds and the backup in yields that is one reason the gold market has been acting as weak as it has. There is still a false perception that rising interest rates are bad for gold. That, coupled with the fact that the dollar has been falling recently and gold has not been rising (meaning gold prices are falling in terms of other currencies) is causing a breakdown in the charts, resulting in selling. Even North Korea's recent successful ICBM testing did not cause gold to catch a bid.
Silver Dropped
Early last night, around the opening of the Japanese stock market, there was a bit of a flash crash in silver. Silver prices dropped abruptly by about fifty cents an ounce within a second. The market quickly recovered but then re-tested those lows. Silver was down over .40 today in the U.S. market. It didn't open down that soft, but it traded lower all day. The price of silver hit a new 52-week low.
Gold Stocks Signalling a Reversal
I have been talking about the relative strength of the gold miners in the face of this correction and once again, the GDX, which is an index of gold stocks, was only down 1.3% on the day, which is not a big drop, considering the price of gold was down by 1% on the day and the price of silver was down close to 3% on the day. I think this is a good sign for a reversal.
A Weaker Japanese Yen
Another reason for the recent weakness in gold and silver prices has to do with the weakness in the Japanese yen. While the U.S dollar has been losing ground against other currencies, i…
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What It Means To Be An American – Ep. 265
6 juli 2017 · 38 min
Summary: Lees meer
One of the key differences between Americans and citizens of other countries is that in most nations of the world, individuals gradually won freedoms and privileges from a monarchy. In the U.S., however, we started with all of our rights. Then, Americans created government by surrendering some of their power, empowering government. These rights are spelled out in Article 1 Section 8 of the Constitution.
Free Stuff Rather Than Freedom
We have government not to give us stuff, but to secure our freedom. Americans today really don't want freedom. They want free stuff. When the government gives you something they take away your choice; they tell you what you are going to get and how you are going to get it. When the government gives you something, however, they must take away from someone else, diminishing that person's freedom.
Article 1, Section 8 of the Constitution
The Constitution created a Federal Government. Prior to the Constitution we were organized under the Articles of the Confederation. But the framers of the Constitution wanted the government to have a little more power. All of the powers of the Federal Government are contained in Article 1, Section 8, and it's not a big section. It has 18 enumerated powers.
Government Powers vs. State Powers
The Constitution is written in two ways: it grants powers to the Federal Government and it denies powers to the states. You know that by reading the 10th Amendment to the U.S. Constitution, The Bill of Rights ,which lays out how the Constitution is organized, and that the Federal Government has only the powers expressly granted. The states retain certain powers owned prior to the formation of the Federal government. So, if the Constitution did not specifically prohibit the states from doing something, they could do it.
Ignoring the Constitution
We know what the Constitution means because its writing is clear. Today they say the Constitution needs to be interpreted - that the Supreme Court is there to …
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Dependence Day. Americans Celebrate Free Stuff, Not Freedom – Ep. 264
6 juli 2017 · 27 min
Summary Lees meer
Independence Day is a great American holiday, but it fills me with joy and sadness. I love to commemorate what America was, and the whole idea of what made America different. Once we declared our independence in 1776 the people created a government. We the people had all the power and we surrendered some of our power to form a limited government. The government was a creation of the people and they ceded some power to the government. This was unique. As a result of this limited government, this uniquely American way of life, America prospered and created the wealthiest country in the history or the world. So we celebrate the beginning of this experiment in freedom and limited government. Benjamin Franklin famously responded to the question, "What have you given us, Mr. Franklin?": "A republic, if you can keep it." We have become what the founding fathers feared most, a democracy.
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Blue Apron: All That’s Missing is the Sock Puppet – Ep. 263
30 juni 2017 · 32 min
Summary: Lees meer
Blue Apron Holdings IPO
The Blue Apron Holdings IPO today is reminiscent of the dot com boom. The market is saying the 5-year old company is worth close to $2 billion. This IPO represents a "down round" which may occur after a company suffers a decline in valuation after it has received initial rounds of capital investment. The initial offering was $10/share, and by the closing bell it only managed to close at $10. This stock may go below $10 as early as tomorrow, as many investors were planning to flip the stock. The concept of this company is not proprietary; indeed the recent merger of Amazon and Whole Foods could pose a serious market threat to this company.
Rand Paul
In more news on this ever-evolving Republican Health Care saga. the Republicans are caving in to media and left spins the Republican Healthcare bill as a re-distribution of wealth from the poor to the rich. You are not taking from the poor by stealing less from the rich. For some reason, the voting public expects American profit-seeking companies to sell insurance to people who are already sick. This would be the equivalent of selling home insurance for a house that has already burned, or car insurance for a car that has just been in an accident. Rand Paul is getting a lot of press recently because he is the only Republican who opposes this on principle. He believes in the freedom for Americans to purchase the kind of insurance they need. They can pick their deductible; they can pick their co-pay. They can have the freedom to buy or not to buy health insurance. But this can only happen in a market where insurance companies are allowed to make a profit and are free to compete for insurance business without government intervention.
U.S. Dollar Continues Decline
* The U.S dollar continued its decline today falling to a fresh 8-month low, closing to about 95.60
* The dollar is being led lower by a surging euro; the euro is actually at a 12-month high against the U.S. dollar
* Trading …
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Republican Replacement Won’t Fix ObamaCare – Ep. 262
28 juni 2017 · 36 min
Summary: Lees meer
Once again the solution doesn't work. As with the Democrats' solution, the penalties are too low. In both the House and the Senate, trying to force people to buy insurance won't work because the penalty for not buying insurance is not stiff enough. The reason they aren't doing that is, politically, it is a losing proposition. This is why the Republicans never should have touched this issue. If they did not have the guts for outright repeal, they should have never done anything. They should have left it alone and the Democrats would have owned this disaster. The best thing the Republicans can do, politically, is do nothing. In this way any collapse cannot be attributed to ambiguity in the market.
Downward Pressures on the Dollar
* Very big day in the market today; the most significant being the breakdown in both the NASDAQ composite and the U.S dollar.
* The dollar was down sharply and broadly today, led lower by a rally in the euro
* The catalyst for the euro rise was statements by Mario Draghi early in the morning where he commented that downward pressures on inflation were transitory
* A somewhat hawkish stance on inflation and the markets took that to mean that QE will come to an end sooner rather than later
* But I think the markets are looking for any reason to trade the dollar lower
* I have been talking about that on this podcast, that the dollar has been looking weak
* It broke down again today, the dollar index down just over 1 full percentage point on the day
* The dollar trading at its lowest level in 8 months
* I think this was the lowest closing level in about 9 months
* The euro is trading at a 113 handle
NASDAQ Woes
* At the same time the dollar was breaking down, so were tech stocks, the FANG stocks were particularly weak
* The NASDAQ composite down just over 100 points on the day
* That's a pretty big move; a 1.6% decline
* The Dow was only down about 100 points, just under a half percent
* So the NASDAQ experienced about…
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Senate Plan Makes ObamaCare Worse – Ep. 261
24 juni 2017 · 45 min
Summary: Lees meer
Let the SS ObamaCare Ship Sink
The Republicans in the Senate finally unveiled their version of ObamaCare Repeal & Replace. It's very heavy on replace, but there really isn't any repeal. They are replacing it with something that may even be worse. Regardless, we still should let the ObamaCare ship sink while it's called the SS ObamaCare.
Senate Bill Leans Toward Socialized Medicine
The House already passed their version. The Senate version is even worse; it takes away all penalties for not buying insurance. At least the House version tried to create some kind of penalty. Now, a penalty of any sort would not be necessary if the government did not mandate insurance companies to cover people with preexisting conditions. The only way insurance companies can survive, if the Senate bill were enacted, is with massive government (taxpayer) subsidies.
Moral Hazard
Of course the Senate does not consider the moral hazard of offering a "medical bill-paying service", so the cost will be enormous. This solution will collapse the health insurance industry and lead to socialized medicine. If the Senate Republicans really want socialized medicine, they should just come out and say it. If you don't believe in the free market, just come out and say it.
Something For Nothing
If the government can deliver healthcare cheaper and better than the free market, then why not socialize everything? Republicans are afraid to say that they don't believe this because they want to get elected and they know that the voters don't understand that capitalism works. They just want something for nothing. The Senators want to get elected so they are going to provide it for them.
* It was a relatively quiet week, this week; not a lot of market-driven data
* Next week, things might pick up a bit; we'll get the final week of Q2
* So I have a feeling there may be a little more action as some of the portfolio managers look to window-dress a bit or get their portfolios looking better for the…
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All Tax Cuts Are Temporary – Ep. 260
21 juni 2017 · 33 min
Summary: Every tax cut is temporary. Ryan's premise that we can't get the stimulus we need without a permanent tax cut is complete nonsense. Congress has no idea what the budget's going to be next year, let alone 10 years from now. The only budget that really counts, and even then they can't get it that accurate, is the current year. When the government cuts taxes it doesn't come with a guarantee that the rates are never going to go up. Lees meer
* We had a bit of a turnaround Tuesday today; all of the major U.S. stock market averages were higher in the morning and we closed broadly lower on the day
* In fact, the Dow Jones did make an all-time record high this morning before closing down about 60 points, although the decline in the NASDAQ was greater
* We had a .082% decline in the NASDAQ; the Dow was only down by about .03%
* S&P 500 though had a bigger decline, it was down about .07%
* So the broader averages took a bigger decline than the Dow
* I don't think the technical damage is extreme
* Yes, we made new highs and closed lower, but it really wasn't an outside day
* It didn't close below Monday's lows, which would have been an outside reversal
* But when markets are as extended as they are, they can top on just about anything
* I put up an interesting article on my Facebook page that tried to draw a comparison between Amazon and Whole Foods merger and the big high-profile AOL-Time/Warner in 2000
* You had a big, internet darling making a big brick and mortar purchase and that marked the peak of the internet bubble
* And the author was making the case that this is another major internet company buying a brick and mortar company, a lot of fanfare, a lot of hype and maybe this is also going to mark a major top
* It's an interesting analysis, because I think we're at about the 15-year anniversary of the purchase
* It is an interesting comparison, not a perfect analogy; some things are similar and some things are not
* I do believe that the U.S. stock market…
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Government, Not Amazon Putting Cashiers Out of Work – Ep. 259
17 juni 2017 · 34 min
Summary: Lees meer
Amazon Buys Whole Foods
The Dow was up today; mainly on the surprise announcement that Amazon, the king of on-line retailing, is buying Whole Foods. In a labor market significantly altered by ObamaCare-style government intervention, this news could signal further changes to the labor market. Retail has experienced a steady decline, and this move could usher in a new wave of Amazon Go-style services.
Economic Surprise Index Headed For 2009 Territory
According to an article in Zero Hedge: For the 13th straight week, US economic data disappointed (already downgraded) expectations, sending Citi's US Macro Surprise Index to its weakest since August 2011 (crashing at a pace only beaten by the periods surrounding Lehman and the US ratings downgrade). The last time, Us economic data disappointed this much, Ben Bernanke immediately unleashed Operation Twist... but this time Janet Yellen is hiking rates and unwinding the balance sheet.
"Unexpected" Bad News in Housing Starts and Building Permits
Another "unexpected" big drop in housing starts; the third month in a row is accompanied by a drop in building permits, so that means that this trend is likely to continue. The last time we had 3 consecutive monthly declines it was 2009.
* We got some more bad economic news coming out today, and it capped a week of generally worse than expected news
* I was looking at a chart of the Economic Surprise Index on an article on Zero Hedge and it was a new low for this cycle
* They went back to find the last time the Economic Surprise Index was this low
* It was right about the time the Federal Reserve launched "Operation Twist"
* Remember that? I was calling it "Operation Screw"
* When the Fed was lengthening the maturity of its balance sheet
* It was selling some of its short term bonds and buying longer term bonds
* To have a better impact on pushing down long-term interest rates
* Yet today, when the market is being surprised by the same amount of negative econo…
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Hawkish Hike May Backfire on Fed – Ep. 258
15 juni 2017 · 25 min
Summary Lees meer
Quantitative Tightening Ahead:
The Federal Reserve came out with a surprisingly hawkish rate hike today, announcing plans to shrink the balance sheet by $50 billion per month. This would mean an annualized rate of $600 billion per year in new treasuries to hit the market. This does not take into consideration existing budget deficits or future spending. The Fed's policy reversal, in the face of no corroborating positive economic data, is still "data dependent".
No Good News:
Meanwhile, the "recovery" was the weakest recovery in history, with a doubling of the national debt, we have bubbles in the stock market, the real estate market, in the bond market market, the automobile market, student loans. We have eviscerated our labor market with people having multiple part time jobs and this is the Fed's definition of success!
Perfect Storm
Now you've got a perfect storm for stocks: falling earnings, weak economic data, rising interest rates and the Fed flooding the market with treasuries. Now maybe the stock market will take a second look at this hawkish hike and the implications of the Fed's rate hike plans in conjunction with quantitative tightening later this year in the face of a weakening economy.
* A lot of people, myself included, were looking for a dovish rate hike today coming from the Federal Reserve
* What I mean by a dovish hike was that the Fed would hike rates, because after all, everybody expected them to hike rates and they don't want to disappoint market expectations
* They don't want to raise any cautionary flags that they know something that they have not been forthright about
* I was expecting the Fed to acknowledge somewhat the weakening economic data to the point that itis now waiting for some confirmation that Q1 weakness was transitory
* And since such confirmation has not been forthcoming they may have acknowledged it
* But that's not what happened
* We actually got a hawkish hike
* Not only did the Fed raise rates but they …
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Statehood Would Be a Step Down for Puerto Rico – Ep. 257
14 juni 2017 · 28 min
Summary: Lees meer
In Puerto Rico's recently held non-binding referendum on statehood, just 23% of the eligible voters who actually voted overwhelmingly chose statehood. This would mean that Puerto Rico would keep its current debt and take on the $20 trillion U.S. national debt. This would offer the moral hazard of offering Puerto Ricans additional welfare benefits. The last thing Puerto Ricans need is to be in a situation where it is more attractive not to work.
* A lot of people are asking me abo0ut the recent non-binding referendum in Puerto Rico on statehood
* 97% of the people who bothered to vote voted for statehood over independence or maintaining the status quo
* Only about 23% of the eligible voters actually voted
* So most people who objected to statehood boycotted the election
* So most of the people who voted were predisposed to vote for statehood
* The last statehood referendum held in 2012 was even more in favor of statehood
* Nevertheless, the governor of Puerto Rico, Ricardo Rosselló is going to go to Washington demanding that the will of the Puerto Rican people be addressed
* If you do not know by now, I am Puerto Rican
* I am an American citizen residing in Puerto Rico so I vote in Puerto Rican elections I do not vote in U.S. National elections, but I am away from Puerto Rico at present
* Had I voted, I would have voted to maintain the status quo
* I don't want Puerto Rico to become an independent country, but the last thing I would want is for Puerto Rico to become a state
* That's why I am doing this podcast
* Most of the articles I'm reading on this issue address the idea that state will somehow benefit Puerto Rico, because they have been in a recession for 10 years, they have high unemployment
* They have a lot of debt and somehow they see statehood as a solution to this problem
* Statehood for Puerto Rico is like throwing a drowning man an anchor
* The worst thing that could happen to Puerto Rico is for it to become a state
* If Puert…
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Volatility Rises as Fed Readies Another Rate Hike Ep. 256
13 juni 2017 · 30 min
Summary: Lees meer
Friday's Tech Wreck continued today, some stocks making key technical reversals. The crypto currencies, also experienced volatility as Bitcoin seems to be losing some of its market share to other competing crypto currencies, but volatility remains a key component of the market. Volatility may be exacerbated by Wednesday's anticipated Federal Reserve rate hike.
* Friday's Tech Wreck continued today; the NASDAQ composite led lower by the same momentum stocks that got clobbered on Friday
* Some of them making key technical reversals where they made new all-time highs in the morning and yet got clobbered and closed below the lows of prior trading days
* Some of them went below the lows of the prior week
* So a lot of these stocks looking very weak coming in to today's trading and continued although some of the losers did manage to eke out a gain
* Novita was one of the earliest stocks to reverse on Friday, which had a big technical reversal took out a low and managed to eke out a gain
* Tesla also was positive
* Google, Apple getting clobbered again, Netflix, Facebook, a lot of these big stocks continue to decline
* And this time the overall market did not escape the carnage because the Dow and also the S&P were also down on the day
* There was still some strength; the energy stocks were up again today building on the rotational strength that they enjoyed on Friday
* But it wasn't just the stock market that had big reversals
* It was the cryptocurrencies as well, particularly Bitcoin
* I mentioned the last couple of podcasts that when I was talking about Bitcoin and the cryptos
* Bitcoin's shrinking market share in the crypto world, and that continues
* Right now, the market cap of Bitcoin is now down to about 40% of the total market cap of all cryptocurrencies
* Ethereum, Bitcoin's biggest competitor right now, if you look at its market cap, it's actually not that much lower now
* Total market cap as I'm looking right now, of course it change…
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Political Theater Trumps Economic Data – Ep. 255
10 juni 2017 · 31 min
Summary: As an unexpected pro-labor vote in the U.K. weakened the pound and strengthened the dollar, the market reacted more to political news, abroad and at home. The uncertain results of Comey's testimony dampened concerns about the Trump Presidency. Prior to Comey's testimony someone sold a huge amount of gold, causing gold to drop, although it finally closed only down about $7, with another selloff this morning. Gold stocks, though continue to trade much better. NASDAQ got clobbered, Meanwhile, economic data continues to bring bad news: Consumer Credit numbers was a big miss with $8.2 billion instead the expected $17 billion. Lees meer
* Yesterday we had the trifecta of potentially market moving events
* In hindsight, what looks like the most significant was the elections in the U.K.
* With the surprise strength coming from the Labor Party to deny the Conservative Party a majority
* It looks like May will remain Prime Minister even though the Conservatives do not have a majority in Parliament, because they can form a coalition, a minority government with another party
* But May's position is weakened and she did not get the results she gambled on when she called the election
* The reason the Labor party did so well was because of the young vote who overwhelmingly voted for Labor
* Which shouldn't be much of a surprise, after they're the ones who are promising the most free stuff, and it's younger people who are the most susceptible to that message
* Particularly people with little work or life experience
* That's one of the reasons the voting age should be higher
* In the U.S. the voting age is 18 and it was changed by Constitutional amendment
* It used to be 21, and it was the Vietnam war that caused the voting age to be lowered from 21 to 18
* The cry was, if you're old enough to fight, you're old enough to vote
* That's another example of how we lose every war
* I would prefer the voting age stay at 21, in fact I think it should be 25
* "Old enough to f…
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Will Gold’s Breakout be the Pin that Pricks the Crypto Bubble? Ep. 254
8 juni 2017 · 21 min
Summary: Gold and gold stocks are moving to new highs as the dollar index continues its slide. Although some connect this move to market jitters over the outcome of the upcoming James Comey testimony, economic factors are a more likely the force behind the move. Moves in gold stocks have been telegraphing gold prices more often than not, and gold stocks have a plenty of room to move to even reach its highs of earlier this year. Lees meer
* Many of you probably expected me to do a podcast yesterday as a result of gold's move to new highs for the year
* And the dollar's move to new lows
* I happened to be traveling to Toronto, so I decided to wait until I got back to Connecticut where I can do the podcast from my studio
* So we had the price of gold up about $15.00 yesterday, and of course the price of gold has been creeping higher and higher ever since its correction
* And by the way, I think I did a pretty good job of nailing the correction itself
* I said it would be a very shallow correction
* I'm pretty sure I nailed the bottom
* I did a podcast when it looked to me that the gold stocks were confirming and end of the correction in gold
* Gold did rally, and initially gold stocks rallied, too, but then gold stocks came back down and almost re-tested their lows, didn't quite do it
* But the price of gold never came back down
* And yesterday, the price of gold hit a new high for the year
* It reversed all of the correction and then went on to higher highs
* Yet gold stocks are not even close to where they were a few months back
* In fact, the smaller gold miners, if you look at the GDXJ, I think this think could move up 35% or so
* But what we did get yesterday was finally a big move up in gold stocks
* Most gold stocks were up 4-5%
* I did notice some of the stocks I own up 8-10%
* So this was one of the biggest up days that gold stocks have had in a while
* In fact, we got a little bit of a warning about that the day before
* I've been watching these st…
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Weak Data Further Undermines Fed’s Credibility – Ep. 253
3 juni 2017 · 31 min
Summary: Today's big miss in the Nonfarm Payroll report indicates further proof for the Fed that the Q1 weak economic data was not transitory. Coupled with disappointing Labor Force Participation declines and increasing Trade Deficit numbers, the Fed will have no good news to justify a rate hike. All this news does not bode well for the U.S. dollar index, which closed at a new low for the year today. The next crisis is the dollar. Lees meer
* Following yesterday's much stronger than expected May ADP Jobs report, the consensus was for 170,000 jobs and the actual number was 253,000
* The stage was set for another strong number for today's employment report
* But we didn't get it
* We got the official number from the U.S. government earlier this morning
* The consensus was for 185,000 jobs created
* We actually created, according to the government, just 138,00 jobs - a big miss
* In addition to that, they took last month's initial 211,000 report and they lowered that down to just 174,000
* In fact they made revisions to the prior month as well
* The official unemployment rate actually went down to 4.3%
* I think that is a new low
* Why did the unemployment rate drop?
* For the same reason it has been dropping; lots of people left the labor force
* Labor Force Participation once again dropped .02 to 62.7%
* That matches the all time record low
* We actually had more than 600,000 people leave the labor force in the month of May
* A new all-time record high
* In fact, breaking it down by part-time and full-time, all of the net new jobs added were part time jobs
* We actually lost 367,000 full-time jobs during the month of May
* That is the biggest decline in full-time employment in 3 years
* Of course, as usual, the jobs that we do create were in leisure and hospitality, education healthcare, temporary services
* We actually lost some information technology jobs, we lost jobs in the retail trade; small gains in the wholesale trade, a little better than normal …
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Does Weak Box Office Reflect Weak Economy? – Ep. 252
1 juni 2017 · 24 min
Summary: Box office revenues for this holiday weekend were the weakest since 1999. Why is that? Some say the movies were not very good, but I think it's more likely that this is just another piece of evidence that supports the fact that the consumer is in much worse shape than is generally perceived. Lees meer
* Hopefully everybody had a happy Memorial Day weekend; I spent my holiday weekend up in Vancouver at the International Metal Writers Conference
* And when I came home, I came back to my home in Connecticut
* This was the first year I spent the winter in Puerto Rico, from January 1 until just a few days ago
* I bought a condo in Puerto Rico a few years ago, I moved my Euro Pacific Asset Management Company there from California at about that time, but I'd never moved there myself until this year
* I like snow, it's pretty, but the next time I see snow it's because I'm skiing on it
* I'm a snowbird now
* But this time I'm not only flying out of bad weather, I'm flying out of high taxes
* It's not just the high taxes in Connecticut; it's the high taxes in the U.S.
* By the way, Connecticut is basically broke, if you read a lot of the articles now
* The tax revenue is collapsing
* I'm moving from a bankrupt state to a bankrupt territory
* Puerto Rico has already declared bankruptcy; Connecticut hasn't actually done that
* Connecticut is admitting that they can't raise taxes on the rich anymore, because the rich are leaving
* I moved down to Puerto Rico with my wife and two young children, and I love it
* I live in a nice community, Dorado Beach; great neighborhood, many in the same situation as me
* I read this article about box office - holiday weekends are usually a good time for Hollywood
* Memorial weekend is a big weekend to kick off the summer movie season
* The article I read stated that box office revenues for this holiday weekend were the weakest since 1999
* Why is that?
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Fed Admits It Needs Evidence Q1 Weakness Was Transitory – Ep. 251
27 mei 2017 · 26 min
Summary: The Fed is now indicating it needs evidence that the Q1 weak economic data is transitory and not a trend. This is interesting for 2 reasons. The Fed's narrative has always been to tout economic growth even in the face of flimsy or no supporting data. Now the Fed is actually admitting there is weakness. The other interesting thing is that, although the Fed continues to claim it is "data dependent", it has been ignoring the economic data ever since the first rate hike. The market puts chances of a June rate hike at almost 100%. Maybe that is because it believes the Fed will raise rates regardless of proof. Lees meer
* On Wednesday we got the release of the Federal Open Market Committee's minutes
* As usual, the FOMC is indicating that as long as the economy continues to evolve according to their forecast, that it would be appropriate to remove additional accommodations soon
* And, I guess the markets are assuming soon is in about 3 weeks when the Fed meets in June everybody anticipates that the Fed will hike rates again
* Actually raising interest rates all the way back up to 1% - that would be the new floor on rates
* That was the lowest that rates got during the Greenspan era that gave us the housing bubble and ensuing financial crisis
* It's taken a long time even to get up to that insanely low level of interest rates
* But everybody still assumes - I think the probability is near 100% - that the Fed is going to raise rates in June
* But what I thought was interesting about those minutes, and nobody's talking about this
* In the minutes, the Federal Reserve said that they are also looking for proof that the weak economic data from the first quarter was transitory
* They're looking for proof in order to continue to raise rates
* I'm thinking, if the Fed says they need proof that Q1 data was transitory, are they actually going to get that proof by the June meeting?
* If they don't have the proof yet, are they going to have it by June?
* Almost all the ec…
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The Dollar’s Decline Is Only Just Getting Started – Ep. 250
23 mei 2017 · 34 min
Summary: The dollar's decline really started with the Fed's too-little-too late rate hikes. The rally of 2014 - 2015 was fueled by expectations of more aggressive Fed monetary policy that did not materialize. We've been trending sideways since then with the exception of an upward spike after the Trump victory. Now, as much of the hype surrounding Trump's election is losing its momentum, support for the dollar is waning. This is not a case of "buy the rumor, sell the fact". This is going to be a situation where the fact does not live up to the rumor. Lees meer
* The dollar continued its losing streak today. The dollar index was down for the 8th time in 9 days
* The 9 day decline is about 2-1/2 percent
* The dollar index actually traded below 97 today for the first time since Donald Trump was elected President
* So we have wiped out 100% of the ill-gotten dollar gains that were racked up in the wake of that victory
* If you remember, when the dollar was rallying as a result of the trump victory, I said it was a sucker's rally and sure enough, that's exactly what it was
* The dollar's decline is only just getting started
* I think the dollar would have begun its decline a while ago had Hillary Clinton been elected
* But because of Trump's unexpected victory and the prospects of faster economic growth,
* Trump-flation (as if inflation were even good for the dollar) but to the extent that it made the Fed raise interest rates
* That's what created the rally and it was a great selling opportunity for people who understood what really was going on
* But all we've done thus far is get rid of gains that never should have been racked up
* The dollar hasn't really even begun its decline, but I think that decline is going to begin in earnest
* In fact, my next target for the dollar index is going to be around 92, which is about 5% below current levels
* But if we get below 92, that will be the dollar's lowest level since January 2015, so about a 2-1/2 year low, assuming we …
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Will Republicans Dump Trump for Pence? – Ep. 249
18 mei 2017 · 29 min
Summary: Republicans face chaos around Trump's political difficulties, causing some to consider potential advantages of a President Pence. Market volatility has not yet brought the DJIA below pre-Trump numbers while the dollar index slides and gold moves up. Meanwhile, household debt is higher than 2008 levels even as fewer Americans own homes. Lees meer
* It looks like I picked a very volatile week to go out to Las Vegas, although I didn't pick this week; the week picked me
* I have two conferences that I am attending here: the Las Vegas Money Show and the SkyBridge Alternatives Conference otherwise known as SALT
* A lot is going on, certainly the political chaos in the United States, the Dow was down 365 points yesterday based on new revelations with respect to why Donald Trump may have fired FBI Director James Comey
* Was he doing it because Comey refused to give up on his investigation of Trump's Russian ties?
* Now you've got Congress members on both sides of the aisle questioning whether the allegations are true
* Apparently Comey has some contemporaneous notes of conversations he had with Donald Trump
* Donald Trump may have asked him to give up the investigation
* Although from what I've heard President Trump said it would be nice if Comey gave up the investigation - was that some kind of idle threat?
* Did that mean "You'd better do it, or you're fired."
* I have no idea, but this obviously is creating concerns for the Trump Administration
* The market, as far as I'm concerned, is really not down very much at all, given how much it had rallied based on nothing but the optimism surrounding expectations for all the good things that would happen as a result of a Trump Presidency
* We were going to get tax reform, we were going to get regulations; we were going to have all this stimulus
* Not only has none of these things materialized yet, even before the scandals broke, it was obvious that even if we got any of the promised legislation
* Of course I've al…
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Fed And Markets Excuse Retail Bloodbath – Ep. 248
13 mei 2017 · 25 min
Summary: The retail sector is in worse shape today than it was in 2008 during and immediately following the financial crisis. Retailing has been responsible for 10% of the jobs gained during this so-called recovery. Clearly part of the problem is the increase in minimum wage. Why are retailers adding so many jobs when their business is declining? Lees meer
* A quick little announcement at the beginning of this podcast; I'm going to try to keep the length of these podcasts down to 20 minutes in the future
* It seems we have quite a bit of audience falloff after about 17 minutes
* We're also skipping our ads at the end in favor of more informative content about Euro Pacific Capital, SchiffGold, Goldmoney and Euro Pacific Bank.
* So I am going to do these shorter podcasts more frequently
* First of all, it's the RetailPocalypse, which I have been talking about on this podcast that, from my perspective - not just my perspective,
* In reality, the retail sector is in worse shape today than it was in 2008 during and immediately foll0wing the financial crisis
* We got a lot of bad news from the retailers this week
* Including JCPenny and Nordstrom's - horrible sales from these companies
* We had other retailers earlier in the week that came out with bad news
* Kohl's Department Store, Dillards
* Kohl's stock is at 36.5 as I record this
* That stock's high was $75-$80 in the summer of 2015
* So it's down 60% or so
* Dillard's is at a 52-week low today, at just under $47
* That was over $120 - more than a 50% decline
* Macy's was down another 3% today - a new 52-week low
* Macy's is at $23.60 -it was a $70 stock
* These are huge markdowns for retail stocks
* Look at Nordstrom's - down almost 11% today on the bad news
* $41.20 - Nordstrom's was an $80 stock is one of the best performers
* JCPenny is going to get the prize for the biggest decline overall
* This stock's been falling for a long time
* It closed today at $4.55
* A lot of people are very complacent …
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Fantasy Trumps Reality – Ep. 247
11 mei 2017 · 43 min
Summary: Trump fantasy persists in the face of weakening economic data, health care and tax reform uncertainty. The reality is that the damage done to the economy will not right itself just because Trump has been elected and we are in for a wild ride whether or not President Trump decides to do the right thing for the American economy. Lees meer
* It didn't take long for the Atlanta Fed to already reduce its inflated Q2 GDP forecast
* Remember, they initially came out with their first estimate of 4.3% growth in the second quarter
* Following the dismal .7% that was initially released for Q1
* My guess is, still, that they will continue lowering that estimate as more economic data comes in
* Nonetheless, the Atlanta Fed boldly came out with 4.3% for Q2
* Already, earlier this week, they have reduced that estimate to 3.6%
* That was their first downward revision; I think it is going to be the first of many
* We did this exact same dance last quarter
* Where the Atlanta Fed starts high and as more and more weaker data comes in they keep notching down the estimate
* It's like a GDP forecasting limbo
* The question is:"How low can the bar go?"
* Remember, I mentioned on my last video blog that the New York Fed is already down to 1.8% for Q2, so the Atlanta Fed has a long way to go to catch up to the New York Fed's estimate
* Friday will bring the next update to the GDP estimate
* And that's when we will get the retail sales numbers
* My guess is that we will continue the trend and those sales will be less than expected
* We already got some news today that should weigh on Q2 GDP and that is Import/Export Prices for the month of April
* This is important because obviously what we pay for our imports and what we get for our exports will be a big determinate of the trade deficit
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Fed Dismisses Weak Data to Posture for Another Rate Hike
7 mei 2017 · 36 min
SchiffReport recorded Saturday, May 6 Lees meer
* On Wednesday of this week, the Federal Reserve against a rate hike in May
* But based on their official statement, the market assigned a much higher probability
* To a rate hike coming in June
* In fact, following Friday's slightly better-than-expected Non-Farm Payroll report, the probability of a June rate hike is not near 100%
* In other words, the markets are certain that a quart-point hike is coming next month
* If the Federal Reserve does raise its rates by a quarter point, that will bring the floor of the official rate finally up to 1%
* The ceiling being 1.25%, so presumably the Fed will target a Fed funds rate somewhere between 1 - 1.25%
* This is still an exceptionally low interest rate indicating extreme monetary accommodation
* Remember, 1% is the absolute low that Alan Greenspan lowered interest rates to in the aftermath of the 2001 recession and the 9/11 terrorist attack
* That artificially low interest rate really provided the air for the housing bubble that resulted in the 2008 Financial Crisis
* So despite these rate hikes, the Fed monetary policy remains extremely accommodative,
* Just not as accommodative as they were before
* If you recall, the main reason I was certain that the Fed was not like to deliver these rate hikes
* Is because I took the Fed at its word that it was data dependent
* And I believed that the Fed would use weak data as an opportunity or an excuse to not raise interest rates
* I was wrong about that, because the Federal Reserve has ignored all of the weakening economic data and has raised rates anyway
* It has raised them very slowly, but nonetheless, it has raised interest rates despite the fact that all the data they claim to depend on would not support that decision
* I thought for 2 reasons the Fed would not want to hike rates
* The first be to delay the onset of the next recession
* After all, raising rates into a weakening economy it would accelerate the onset …
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Fed Forecasts – Propaganda or Incompetence? – Ep. 246
2 mei 2017 · 34 min
Summary: Last quarter the Atlanta Fed's Q1 GDP forecast was 3.4% in February. The most recent number was actually .7%. After all the negative economic data that came out today suggesting that Q1 could be revised lower, the Atlanta Fed came out with their forecast for Q2 GDP at 4.3%. How is this possible, with no economic data to support this projection? Either they believe their policies are still valid in the face of data on a downward trajectory, or they are simply acting as salesmen, promoting economic health regardless of the actual data. Lees meer
* Today was Donald Trump's 100th day as President of the United States
* The media is covering this event and looking back over the last 100 days
* Trying to assess the effectiveness of Trump's presidency thus far
* What has he accomplished, how much progress has he made;
* I think the origin of assessing the first 100 days of a presidency goes back to Franklin Delano Roosevelt
* Who of course became president during the Great Depression
* I think the President accomplished a lot during his first 100 days
* That's been the benchmark for which future presidents have been judged
* It's not about which President did the most good for the country during the first 100 days
* It's just, "Who did the most?"
* Because, FDR did a lot, all of it harmed the economy
* Not only did FDR's exacerbate and expand the depression,
* His actions had repercussions for decades
* We are suffering today from the mistakes that FDR made in his first 100 days
* He accomplished a lot, but he accomplished a lot of mistakes
* I would rather have a president do nothing for his first 100 days
* If a President just played golf for 100 days and did nothing
* Chances are he might be the best president we've ever had
* Most Presidents do damage to the economy during their first 100 days
* To the extent that they pass a law, chances are, the law just limited our freedom and reduced our standard of living
* That's true for most politicians: do…
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U.S. GDP Cools As Eurozone Inflation Heats Up – Ep. 245:
29 april 2017 · 38 min
Summary: The Europeans released their inflation numbers today. Year over year, inflation in the Eurozone are increasing at an average of 1.9%, which is Mario Draghi's objective. This is a 4-year high in CPI increase. How does Draghi justify more stimulus? In the U.S. growth is lower than forecast, while inflation is higher than forecast. That trend should be disturbing and it will continue. Lees meer
* Today we got the government's first estimate of GDP growth for the first quarter of 2017
* If you remember, the Atlanta Fed has been steadily reducing its estimate for first quarter growth since February 1 of this year when it was estimating 3.4% GDP growth
* The last downward revision happened yesterday as a result of more weak economic data that came out yesterday
* Particularly on inventories
* The Atlanta Fed made its final revision to the estimate for Q1, at least the estimate that we got today
* And they were down to .2%!
* The consensus for Q1 had also come down; but not nearly as much as the Atlanta Fed
* Going into this morning, the consensus estimate was 1.1% GDP growth which would be a sharp reduction from the 2.1% GDP growth that the government claims we had last year
* And the range of forecasts went from a high of 1.7% to a low of .7%
* Nobody was quite as low as the Atlanta Fed
* We got the actual number this morning and it was .7%
* This is just the first estimate
* If you look at the economic data that has been coming out this year, the later the data comes, the worse it is
* So if that trend continues over the next month, as the government continues to get additional data from which to determine GDP
* There's a very good chance that they will revise this number down
* And maybe the Atlanta Fed's .2% will end up being correct or too optimistic
* I think there is still a good chance that by the time they get the final revision, which will not happen for a couple of months
* We could end up with a negative number for Q1 very easily
* I think t…
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Trump Tax Cuts To Starve The Beast – Ep. 244
27 april 2017 · 35 min
Summary: President Trump actually delivered on his promise of the largest tax cut in American history, and he delivered it on time. Trump may have presented a plan with built-in bargaining positions, or he might even intend to pass a tax bill that will "starve the beast". The interesting thing is that the President is applying this 15% tax rate to pass-through entities, such as LLC's, which will encourage most businesses to shift into a different business model to take advantage of the low tax rate. In other words, people currently at a 43.4% rate will pay 15%. This is going to cause two things to happen that will hurt the economy and a lot of people in the middle class: a big increase in consumer prices and inflation. Will Republicans vote against the biggest tax cut ever based on the fact that it adds to the debt? Ultimately, a resulting fiscal crisis might force Republicans to vote to cut spending. Lees meer
* Donald Trump was right. He actually lived up to expectations, in fact, he might have exceeded them
* When it comes to the magnitude of the tax cut that he proposed - on schedule
* On Wednesday, today, Donald Trump unveiled his idea for what could well be the biggest tax cut in American history
* Ordinarily, I would be all in favor of the biggest tax cut in American history, if it were accompanied by the biggest spending cuts in American history
* Government costs what it spends - you have to pay for government, one way or another
* So if you're going to have big government and you're going to spend all kinds of money, the most efficient way to raise the money is through taxation
* And of course the most efficient form of taxation would be a consumption tax, sales tax, tariffs
* Not an income tax
* An income tax is the worst way to raise revenue
* An even worse way to raise revenue is by going into debt
* Borrowing money and then printing money will cause prices to rise, eventually interest rates to rise
* And ultimately will result in enormous tax hikes
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Spending, Not Taxes, Measures Government’s True Burden – Ep. 243
22 april 2017 · 41 min
Summary: Government spending creates the greatest drag on the U.S. economy. Cutting taxes, even the "biggest tax cut ever" cannot stimulate the economy alone. So if you're fed up with paying taxes, if you think you are over-taxed, and you are, it's because the government is spending too much money. The only real way to get relief is to dramatically cut government spending. No one want's to do that, however, because the people who benefit from government spending, vote, and none of the politicians are willing to lose their votes to ease the burden of everybody else. Lees meer
* On Friday, President Donald Trump said that he would be unveiling on Wednesday of next week, a massive tax cut
* In fact, he actually went out on a limb and stated that it is going to be the biggest tax cut ever
* Now, I'm really not sure why Donald Trump feels he has to keep promising something and then failing to deliver; that's been a problem
* You don't want to over-promise and under-deliver
* I understand as a candidate you want to do that; you want to promise anything to get elected
* But somebody ought to tell Donald Trump that the election is over and he won
* He's President, and he doesn't have to come out and just say things
* What I think is that he should say nothing about tax reform until he actually releases a plan
* That way he can over-deliver
* Don't promise anything - "I'm working on it." - and don't put up a deadline for Wednesday
* What if it doesn't happen?
* What if there is no tax cut on Wednesday
* What if it's not the biggest the biggest tax cut ever
* Why make those promises?
* Maybe his is going to release a massive tax cut on Wednesday and maybe it will be the biggest ever
* I'm not going to take credit away from the President; I'm just saying, "Why not just wait until Wednesday?"
* Just in case something goes wrong
* Maybe this time there actually is a vote
* But the problem, is if you cry wolf to often, then eventually no one's going to believe you
* Th…
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Crowd Beginning To Exit Long Dollar Trade – Ep. 242
19 april 2017 · 32 min
Summary: Goldman Sachs is no longer recommending a long trade on the dollar. The dollar was previously regarded as a conviction trade, first over speculation over Fed rate hikes and then over Trump exuberance with the expectation of tax cuts, infrastructure spending and other moves that would continue to inflate the dollar bubble. The dollar was the most crowded trade out there. I believe, however that as we get close enough to the next recession, that we are going to get another big Keynesian stimulus of increased government spending and tax cuts, which will send the budget deficit through the roof and that will send the dollar through the floor. Lees meer
* We've been having quite a bit of volatility in the U.S. stock market, with back-to-back triple-digit moves in opposite directions
* Yesterday, the Dow was up well over 100 points, closer to 200
* But today the Dow Jones was down better than 100 points
* Between the 2 days it was still positive, but we'll see what happens tomorrow
* We did get some worse than expected new after the bell on IBM; I'm seeing the stock down close to 5% in after hours trading
* That could set the tone for some weakness tomorrow
* Goldman Sachs helped set a weak tone today; they came out with earnings earlier in the day and their stock was down close to 5%
* What was more interesting about Goldman Sachs was not their missed earnings,
* But the fact that they are now throwing in the towel on their long-term recommendations to buy the dollar
* Of course, the dollar has been strong over the past few years
* Although really since March of last year the dollar has gone sideways
* It did make a marginal new high during the Trump mania, after the election
* But only against a few currencies, not against all currencies
* The dollar index today was down sharply; it closed at about 99.50
* The strongest currency today was the pound sterling; it was actually up about 3 full cents; a 2.25% move
* The dollar was also down today against the …
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Is Donald Trump The Next Jimmy Carter? – Ep. 241
14 april 2017 · 40 min
Summary: Donald Trump's promises on healthcare and smaller government appear to be fading behind news of increased military spending, infrastructure spending and compromises on health care and tax reform. This scenario looks far more like Jimmy Carter than Ronald Regan. We continue to get bad economic data, telegraphing that the air is already leaking out of the economic bubbles created over the last 8 years. This bad news may encourage the Fed to walk back their current interest rate hike schedule, which would, if implemented, put a match to growing recessionary trends. Lees meer
* It is Good Friday today and most of the world's markets are closed, including the U.S. stock market
* I want to wish all my listeners happy Good Friday and Easter and to my Jewish listeners happy Passover
* But let me get to the economic data that came out this morning because some of the government offices are open today
* I am starting with the Consumer Price Index, which is not bad from my perspective, but will be bad from Wall Street's perspective or the Fed's perspective
* Although bad is good, in that it will give the Fed cover to not raise rates
* Because the CPI actually dropped in March my 3 tenths of a percent
* It was unexpected; it was supposed to be flat
* And the Core number was supposed to be up .2 and it was down .1
* I think this is the weakest inflation number in a couple of years
* Of course, year over year, we're still above the Fed's 2% target
* Year over year, CPI headline up 2.4% and the core is up 2.0
* But the most recent number being down, may in fact give the Fed cover to walk back the market's expectations for 2 or 3 rate hikes coming later this year
* But I think the more relevant information is the extremely weak number we got on retail sales
* I was expecting a weak number
* I mentioned that in my last podcast, and we got a weak number
* But not only was it weak, but they revised the February number that was originally weak, much weaker
* The expect…
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Trump Train Ready To Derail – Ep. 240
11 april 2017 · 32 min
Summary: President Trump's campaign promises are falling by the wayside one by one. First the backfire on the replacement for Obamacare, and then, just as talk of tax reform heats up, the administration seems to be gazing toward the Democrats for a bi-partisan solution to tax reform. No good can come from bi-partisanship. When the Republicans and the Democrats are working together, that's when you really have to watch your pocketbook. That's when the most damage gets done. The stock market initially rallied on the jobs number, but sold off by the end of the day; normally, you get a print this low the dollar index would tank and gold would take off. That didn't happen because the night before Donald Trump decided to Make America Great Again by bombing Syria. Lees meer
* Well, I am back on dry land, I was away for a week doing a cruise with the Real Estate Guys Summit at Sea
* One of the presenters was senior vice-president and chief economist of Fannie Mae Doug Duncan
* I thought my presentation would be a big contrast to his, I thought he would present the usual government unrealistic estimates, but
* I was very pleasantly surprised, as I listened to his presentation, I found I agreed with him
* And after a private conversation with him after his presentation, we had a great discussion and we didn't desagree on anything!
* He is very bearish on the housing market, very much against Fed policy
* He's against the minimum wage
* We had a long conversation and we really disagreed on nothing!
* I was quite surprised to find a government insider who showed such economic insights
* So it's just not Peter Schiff who sees these problems looming on the horizon
* In the bond market, in the real estate market
* The is a minority of government economists, just like I'm in the minority of Wall Street or investment economists
* But it's good to know that there are some good people working within the government
* But I wanted to get into topics of this podcast; a lot to talk a…
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Trump Needs To Lead Not Oppose The Freedom Caucus – Ep. 239
31 maart 2017 · 43 min
Summary: President Trump needs to lead, not oppose. He is opposing the very forces who put him in office. By aligning with the mainstream Republican Party, he vacates the opportunity to lead the economy successfully through the inevitable consequences of the Obama Administration's failed economic policies. Lees meer
Investors are jumping on the bandwagon of hype surrounding the Trump Presidency. Abandoning safe havens and emerging markets, they are buying into the American stock market at high valuations, which is the equivalent of abandoning the lifeboat and swimming back onto the Titanic just because the band is playing.
* As I suspected, we now have a bit of a civil war breaking out in the Republican Party
* On the one side, you have the Freedom Caucus, and then you have everybody else, or the mainstream of the Republican Party
* It seems like Donald Trump is the general of the mainstream
* One of the battlefields is Twitter
* Where you have President Trump calling out even specific Congressional members of the Freedom Caucus by name
* And blaming them for the failure of the Republican agenda
* Remember: we don't want the Republican agenda
* Donald Trump ran on a platform of "Making America Great Again"
* One of the reasons America is not great is because of the Republican agenda
* Republicans have played a role in destroying this economy
* It's not like the Republicans are all good and the Democrats are all bad
* That's not the case
* The difference, in terms of the economy, between Republicans and Democrats, is like the difference between Coke and Pepsi
* They're all politicians!
* Their business is perpetuating their own careers and their own power base
* What do they need? They need votes and they need money
* How do you get votes? Promise something for nothing.
* Give out freebies. Take advantage of the fact that the average voter is a moron, and they're just voting for free stuff from the government
* Sometimes there is a difference between the w…
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Over-Confident Republicans Poised For Disappointment – Ep. 238
29 maart 2017 · 31 min
* On Monday the market got its first opportunity to react to President Trump and the Republican Congress' failure to repeal and replace Obamacare Lees meer
* With something more palatable
* And as a result, the market declined
* At the lows, the Dow was down approximately 200 points
* Although the "Buy the Dippers" came out, and by the end of the day, the Dow was UP about 150 points
* But it was the 8th consecutive down day for the Dow
* Which I think was a tie for the longest losing streak since 2011
* Had the Dow been down again today, it would have been the longest losing streak since sometime in the 1970's
* So it wasn't that surprising that the Dow rallied
* We were up about 150 points, so we more than wiped out yesterday's losses
* On the other hand, the dollar sold off yesterday and actually traded with a 98 handle
* For the first time since just after the election
* Almost all of the Trump-related dollar rally has been eviscerated
* The dollar rallied back today closing at 99.71 today
* The pound was weak; the Scottish are getting ready to have another referendum
* Whether or not they want to leave the U.K.
* Remember, the Scots did not want to leave the EU
* They narrowly rejected an independence referendum before and now that there is going to be another vote, the market is nervous
* Maybe that helped push the dollar down, but we're below 100 on the dollar index right now
* Gold got back up to $1260 yesterday; at one point it was up about $17
* I didn't see it hit $1261
* That was about the high for the year
* Gold still closed today above $1250
* Silver was actually up again
* Adding to yesterday's gain, we're now holding above $18
* So gold and silver going up; the dollar going down
* We did get a rally in the bond market yesterday; gave back some of that today
* I think today's rally was more of a technical bounce on the "Buy the dip" mentality
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Obamacare Lives To Die Of Natural Causes – Ep. 237
25 maart 2017 · 31 min
* Earlier I talked about the Trump honeymoon, and my belief that it wouldn't last long, in fact I thought it might have ended before the marriage began with the inauguration Lees meer
* It did carry on a bit after that, but it seems to me that the honeymoon is ending now
* Today, the attempt to repeal and replace ObamaCare went down in flames
* That's something I had predicted a while ago; I said that I doubted that they would be able to repeal Obamacare and it turns out that I was right
* They didn't do it
* In fact, President Trump threw a Hail Mary late in the negotiations by threatening the Republican holdouts: "Pass this bill or else."
* He basically said, it's this or nothing - If you don't replace ObamaCare, you're stuck with the consequences
* I think that was a bad gamble for the President to have made, in fact as soon as he issued that ultimatum
* I thought that was going to be a problem because I didn't think the conservatives were going to buckle as a result of that threat
* And they didn't
* Now, not only has the bill been pulled, President Trump is in a very awkward position because he's already said
* Take it or leave it
* And Republicans left it
* Now how does he come back to the negotiating table?
* Now, if he comes back, he doesn't have a lot of credibility
* I still think it would be better if he went back to the negotiation table
* I think it was a bad tactic for Trump to say, "It's my way or the highway
* I think that if this bill doesn't succeed, they should try again
* They should recognize the problems in the replacement bill and work harder to fix them
* The problems is a lot of Republicans don't have the stomach for real reform
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Why A BAT Will Clobber The Dollar – Ep. 236
18 maart 2017 · 38 min
* U.S. stocks ended the week with marginal gains Lees meer
* In fact, the Dow Jones was up only about 12 points on the week
* The real action happened overseas
* Foreign markets were strong, particularly emerging markets
* They continue to smoke the performance of the U.S. stock market, confounding the experts
* The experts thought making America Great Again would be great for U.S. stocks, but it would be a problem for emerging markets
* And thus far, emerging markets have been the beneficiaries of the rally to a much greater degree than have domestic stocks
* Although the action this week was not really in the stock markets but in the currency markets, in the gold markets
* The dollar dropped by over 1% despite the fact that the Fed raised rates
* In fact, this was one of the worst weeks for the dollar in about 4-6 months
* Gold was up about $25; up 2% on the week
* "Hey! I thought gold was supposed to fall, when the Fed hikes rates
* Instead, the Fed hiked rates and the price of gold rose
* Buy the rumor, sell the fact, gold sold off on the anticipation of this rate hike and it rallied on the realization of what the market had anticipated, so that is not really surprising
* But if you go back to the very first rate hike
* That really marked the bottom in gold; ever since the Fed started hiking rates
* Gold has been rising
* The decline in gold took place when people anticipate those rate hikes
* By the time they realized the rate hikes, gold began to rise
* I think what will really accelerate the prices of gold
* Is the fact that rates are not going to nearly as much as the market anticipated
* So what has been built into the gold prices for rate hikes is not going to materialize
* The rumors were exaggerated
* The fact is not going to bear out the rumor
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