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Janet Yellen Channels Scott Nations – Ep. 142
12 februari 2016 · 28 min
* Big day in gold today; gold broke over $1200 for the first time in almost over a year, in fact we hit a new 1-year high Lees meer
* I saw gold trading above 1260 at one point in the morning, that was up better than $60 on the ounce; It closed up 49.10, I believe at $124.90
* Remember, I was on CNBC "Futures Now" earlier in the week and gold was around $1180-$1190 and they were trying to press me on where I thought it would go, and I said, it's going to go higher, I'm bullish in the short term, the medium and the long term
* But I'll tell you one thing: when gold brakes through $1200, it's going to move to $1300 very quickly and people are going to be surprised
* It's just been one day and we're halfway there
* Gold stocks still reflect a lot of skepticism on this rally; Gold stocks were up about 7% on the day
* Gold stocks have a long way to go to catch up
* I mentioned on the last podcast, Dennis Gartman, who got bullish on gold, told people not to buy, he said wait for a pull back
* Well the people who are waiting f or a pull back are still waiting and they missed this entire $50 move
* The stock market was the mirror image of the gold market today; at one point, with less than an hour to go, the Dow was down 400 points again, the NASDAQ was maybe down about 60
* Then all of a sudden there was a rumor floated that the United Arab Emirates was considering meeting with other OPEC nations about a production cut and all of a sudden the market rallied
* The NASDAQ actually rallied positive; the Dow got to about -170 and then they rolled over on the close, Dow down 254, NASDAQ down 16.76 - horrible close
* Of course the weakest stocks on the day continue to be the financials getting decimated to new lows
* Goldman Sachs down about 4.5%, Morgan Stanley down 4.5%, Bank of America down 6.8% - many of these companies making new 52-week lows
* But outside the financials, the debacle du jour, in the stock market is Boeing, which is a Dow component, was down 7% on the d…
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Yellen Throws Sinking Market an Anchor – Ep. 141
11 februari 2016 · 34 min
* Janet Yellen was up on the Hill today for the first of her two-day testimony before Congress Lees meer
* Remember I said the only way that Janet Yellen could stop the market from falling is to admit that the Fed will alter its 4-rate-hike trajectory for 2016, and she didn't do that
* As a result, the stock market failed to sustain its early morning gains; the Dow was up better than 100 points - closed near the low of the day down 99.64
* The NASDAQ, which was up not quite 100 points earlier in the day closed on the low of the day, up only about 14 points on the day
* It was the opposite for gold; gold was actually down this morning before Yellen spoke, down around 1180-ish on the lows; we closed up $8 on the high of the day - $1197 - knocking on the door of $1200
* The gold stocks were clobbered this morning and they closed positive; the gold index was up about 2-2-1/2% - it was down 4% earlier when gold was down but by the stock market opened gold wasn't down $8 anymore, it was down about $2 or $3, yet gold stocks were clobbered
* Maybe it's still the overhang from Goldman Sachs coming out yesterday and predicting that gold would fall below $1000/oz in 2016
* That probably means that Goldman Sachs is short a bunch of gold and they want to cover, or they just need to buy and they're trying to convince the muppets who actually pay attention to what they say, to sell their gold to them
* Janet Yellen continued with the narrative that everything is O.K. - the economy is fine, the recovery is on track, yes, she acknowledged some headwinds: growth was a little bit slower at the end of last year, but no big deal
* There are some problems overseas that they're monitoring , there are some financial tightening: overseas markets are weak, domestic markets are weak, yes the Fed is paying attention to all that
* But so far, from their perspective, everything is on track, the recovery is moving along, the labor market is strong, despite the fact that there is no improvement i…
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Scott Nations Claims Peter Schiff Was Never Right – Ep. 140
10 februari 2016 · 35 min
* It was another volatile day in the U.S. stock market, with the Dow swinging from positive to negative to positive to finally closing negative, but well off the lows and the highs of the day Lees meer
* The NASDAQ was only down about 15; the Dow down about 12 points
* The real action was in the currency markets: the dollar got clobbered today, a new 4-month low in the euro, 2-year low in the yen, the Swiss franc was probably the strongest currency on the day
* The dollar index actually traded in the 95 handle before recovering slightly back up above 967
* Gold, several times flirted with $1200 again, couldn't quite make it there; the highest I saw it was $1198, it didn't touch $1200
* The gold stocks got hammered - they were down about 4% today, I guess the fact that gold could not break through to $1200 caused people to sell gold stocks, even though there was very little selling in gold itself
* What I want to discuss on today's podcast is my appearance on CNBC's web program, "Futures Now"
* My appearance was promoted on television, although this appearance was actually on CNBC.com
* They like to have me on, because I am good for their ratings online
* The YouTube video of my appearance is posted on my Facebook page
* Go back and look at my last several appearances on Futures Now with Scott Nations, who constantly wants to remind everybody how wrong I am about everything
* They have to admit that I was right about several things
* When I was on their show the day after the rate hike and also several times before the rate hike
* I said I did not think the Fed could raise rates because it would push the economy into recession, cause a bear market in stocks - basically prick the bubble
* I did not think the Fed would be willing to put themselves in the difficult position of having to reverse the rate cut and lose credibility
* Up until December, I was right. But even I had started to admit that the Fed might do such a thing by the time they actually did it
* L…
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Gold Hits $1,200 as Financials Get Hit – Ep. 139
9 februari 2016 · 25 min
* As I mentioned in my video blog I recorded on Friday, the jobs data that came out on Friday was just not weak enough for the market Lees meer
* So the markets' carnage continues, because everybody still believes the Federal Reserve may in fact be raising interest rates - the only question is, will it be in March, will it be in June, the markets don't know and so they continue to be under pressure
* At one point today, the Dow Jones was down nearly 400 points
* The NASDAQ was down about another 150 intra-day
* We had one of these last hour rallies, just to keep hope alive so the Dow closed down just 177 points, the NASDAQ down 79
* At the lows today, we were within 1% of a bear market, in the NASDAQ, so technically Wall Street can pretend they are not in a bear market, maybe for a few more days
* The same thing is going to happen with the recession - everybody is saying there is no recession, but eventually they will have to admit it
* I was reading an article by an economist from one of the bigger banks, who said, there will be some more downside, maybe the NASDAQ will go down to about 3900
* But, he said, "Don't worry, it's not going to be as bad as 2000 or 2008 because the economy is in good shape and the odds of a recession are very slim."
* What would make him think the odds of a recession are slim? All the data is horrible.
* Manufacturing is already in a recession; the service sector is contracting rapidly
* It has been seven years since the last recession so we're overdue…
* The Fed is tightening, raising interest rates, as a matter of fact they've been tightening for 2 years if you understand that the "Taper Talk" was the beginning of the tightening
* Plus, we're in a bear market
* We often hear, "The market has predicted 10 of the last 5 recessions"
* OK, well, the Fed has predicted zero of the last 5 recessions
* They always say there's not going to be a recession right before there's a recession, in fact, they have a history of saying there won't…
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Weak Jobs Report Not Weak Enough For Stocks – Schiff Report
6 februari 2016 · 28 min
* It really was a brutal week on Wall Street, led by the tech-heavy NASDAQ, which is down about 5-1/2% on the week; 3% of that alone came today, now down about 17% from its high Lees meer
* Not officially in a bear market yet, but getting there
* The vast majority of NASDAQ stocks are in bear markets, in fact, many of those stocks are down 40 or 50% or more - a number of those stocks down 40 or 50% today alone
* The Russell 2000 is already in a bear market; it's down 24%
* Dow Transports also down 25%, and transports were actually up this week
* The S&P and the Dow are only down about 12% - in correction but not quite a bear market, but remember, all bear markets begin as corrections, and I think this is just the early stage of a bear market
* You can contrast that with what's going on with gold; gold was up 5% on the week. It added $18 today alone to close above 1170, in fact the price of gold has risen by $120/ounce since the Federal Reserve raised interest rates in December
* The dollar also had a bad week, despite rising somewhat today on the jobs numbers, the dollar index had its worst weekly decline since 2009
* So now, the opposite of what everybody expected has happened
* Everybody thought the stock market would go up, because the rate hike was proof that the economy was stronger; instead the stock market has tanked, in fact the beginning of January was Wall Street's worst start to the year in history
* In contrast, the expectation was that rising interest rates would help the dollar; instead the dollar has actually declined
* Higher interest rates were expected to be bearish for gold; instead it was the catalyst for a huge rally in the price of gold
* The weaker than expected jobs report was assumed to be the reason for today's stock market carnage, because we only created 151,000 non-farm payroll jobs and the Street was looking for 188,000 jobs
* The reality is not that the report was weak, it is that it was not weak enough
* The only thing that could…
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Recovery Fantasy Persists Despite Recession Evidence – Ep. 138
5 februari 2016 · 26 min
* So far the month of February is just 4 trading days old, and already the U.S. dollar index is down just over 3 percent Lees meer
* We closed January at 99.6 and we closed at 96.5
* Gold, going the other way, now up about $13 today, closing above $1,155; the price of gold is up almost 3.5% in the first 4 days of February
* That shows you that most of the move in gold is the result of the dollar going down
* This move is just getting started
* The markets are just beginning to price in the fact that the Fed is not going to raise rates in March
* They are pricing 3, rather than 4 rate hikes this year, and that's the only thing that is not driving the markets
* A more realistic look what the Fed is likely to do is to not raise rates, but cut them below zero
* Despite that we're seing all this momentum in the dollar and in gold
* Gold stocks are just soaring, many of these names have been up 5-10% each day in February
* None of this is attracting the attention of Wall Street
* A guest on CNBC today alluded to short covering as the reason for gold going up
* He commented on how lousy the fundamentals are for these stocks
* The fundamentals have never been lousy
* They have appeared lousy because there was so much belief that the dollar would continue to rise because the U.S. is having a genuine recovery and the Fed will continue to raise rates
* The media and Wall Street are still very biased; I was on CNBC Asia last night debating an American guest who touted the strength of the economy based on the strong jobs market, how household balance sheets are better than ever and real incomes are rising
* The only reason homeowners have better balance sheets is because they no longer have a house; home ownership is at a 50 year low
* While gas prices are lower, rents, healthcare and most other costs are going up
* It was an example of how the public ignores all the bad economic news and assumes that the economy is great
* Another writer for CNBC.com attributes gold's…
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Dow Tumbles on Cruz Iowa Caucus Win – Ep. 137
3 februari 2016 · 32 min
* It was another tough day in the stock market today; the Dow Jones finished down 295 points, NASDAQ fared even worse, down 103 points, that's about 2.25% Lees meer
* These 100-point moves are coming quite often now; in the NASDAQ, the transports were hardest hit once again down 204 points - that's almost 3%
* When I saw this carnage, I wondered if North Korea had tested another nuclear bomb - early in January the market was down about 250 points and they blamed it on the North Korean bomb test
* The markets have been moving about that much every single day! What are the odds that the Korean test had anything to do with the market drop that day?
* Everybody wants to find a way to rationalize a weak market, but look, nothing happened today
* The financials got clobbered - Goldman Sachs is down 5% on the day, getting ready to break through $150; it was a $200 stock not too long ago
* There's a lot of air beneath this chart - is that all oil related?
* You might as well blame today's selloff on the fact that Ted Cruz won the Iowa Caucus
* The reality is the market is going down because it's a bear market
* The market's going down because the U.S. economy is in a recession
* There's nothing the Fed can do without loosing credibility or acknowledge that the economy is much weaker that it thought
* Going back prior to the rate hike, one of the reasons I constantly said I did not expect the Fed to raise rates is because I knew if they did, they would be in a very bad position
* I said, what's going to happen if the Fed raises rates and the stock market starts to decline, how are they going to stop it? They cant.
* Since QE1 in 2009, every time the stock market has faltered the Fed has either launched another round of QE or hinted that it was considering another round
* That's what saved the market
* That how "Buy the Dips" worked - you had the Bernanke put or the Yellen put
* If that put expired with that rate hike in December, then how was the Fed going to stop the…
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BOJ Goes Negative, 2 Down 1 To Go ! – Ep. 136
30 januari 2016 · 29 min
* First it was the ECB, and then it was the Bank of Japan, cutting interest rates overnight to -.1% Lees meer
* That is the first time in this 20-year experiment of cheap money - I think they've been at zero, but they've never gone negative until just now
* One of the most ironic aspects of the move is that Kuroda, just 8 days ago told the Japanese Parliament that the Bank of Japan was not seriously considering negative interest rates, yet in a span of a week, they went from not considering it, to actually doing it!
* In fact, what Kuroda said is that, not only have they moved rates to negative, they may make them even more negative in the future, so no who knows how much more negative they will go
* He also hinted that they might expand their asset purchase program, their own Quantitative Easing
* That was enough to send global stock market rising, in fact, here in the U.S. the Dow Jones finished up almost 400 points - 396 points - the NASDAQ was up better than 100 points
* Obviously this is still a big down month, but not the worse January ever
* As I said from the beginning, 2 out of 3 ain't bad, but it won't work
* The Fed is going to have to join the rate-cutting party
* Right now the Fed is the lone hold-out among central banks and that is still helping the dollar
* The dollar was very strong today against the yen and also against the euro - the dollar index now almost back up to 100
* The QE currencies got clobbered
* The economic data in the U.S. is not good. We got the first estimate of Q4 GDP
* When the year began, everybody was looking for Q4 to be around 2 - 2.5%
* As all the horrible economic news poured in throughout the quarter, expectations gradually reduced so that by yesterday, the consensus for Q4 was just .9%
* We managed to come in below that at .7%
* I have been saying that by the time we get the final revision of this GDP number, we could be below zero. It doesn't take much to take an initial estimate of .7 to below zero and we still ha…
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The Short Lady Has Not Sung Ep.135
29 januari 2016 · 28 min
* As I said in my last podcast, when the the Federal Reserve issued its press release yesterday at 2:00pm, Janet Yellen did not give the markets they were hoping for; in a way, it was almost as if she threw them an anchor instead, because the Dow Jones ended up falling about 200 points as a result of the disappointing statement Lees meer
* The statement was dovish, but it wasn't dovish enough, and even though the Dow recovered about half those gains, I think the market is still on the defensive, given the fact that Janet Yellen still did not veer from the projected rate hike path, even though the Fed went out of its way to say that the tightening would be very gradual and that rates would still be low for a long time
* And the Fed will continue reinvesting all all the maturing bonds, so the balance sheet will not shrink at all
* They will continue to reinvest interest and principal payments, meaning the balance sheet will continue to grow, so it's still QE, just a slimmed down version
* But I do expect full-blown QE4 to come before the November election
* I do believe that this is the first step in a reversal of policy because Janet Yellen did acknowledge that economic growth slowed last year
* In fact, it slowed more at the end of the year, as we will see when we get the first look at the Q4 GDP tomorrow; I think the economic slow-down is continuing in 2016
* The Fed also said that they were monitoring the financial and global markets and will take in consideration the effects that these might have on economic growth, inflation and employment
* Obviously, the effects on economic growth are going to be negative - it's the reverse wealth effect
* The Fed puts a lot of stock in the wealth effect, but it's a two-edge sword
* The Fed statement also mentioned that they are still targeting 2% inflation but that they're not quite there, and expressed concern that they might not meet that goal
* To me, acknowledging the economy is slowing, going out of their way to mentio…
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This Time It’s Different Ep. 134
27 januari 2016 · 30 min
* The Mario Draghi "No-Limits"-inspired rally from Thursday and Friday of last week ended on Monday with the Dow Jones down just over 200 points; the NASDAQ was down about 75 points, so an even bigger percentage drop Lees meer
* But today the market reversed; the Dow actually recouped 100% of what it lost, it rose 282 points by the close
* A lot of volatility in the oil markets; down yesterday and up above $30/barrel today
* The bigger action today was in gold, up another $12 or so, the highest price for gold since the first week in November, last year
* Gold stocks had a big up day today, but they still have to rise about 8% to get back to where they were when gold was the price it is today
* Some of the battered down currencies in the commodities space had a good rally; the Canadian dollar and the Aussie dollar
* I think what the markets are preparing for is some type of statement from the Fed tomorrow; they began their 2-day meeting today and they will release a statement - there's no press conference
* People are looking for the Federal Reserve to acknowledge some type of change in the economy and therefore soften their stance on their 2016 rate increase projection
* The last time we heard from Janet Yellen, the Fed was on track for 4 rate hikes in 2016, and since then, no one has said anything to contradict that, despite what has happened in the U.S. and global markets
* Perhaps this recent market rally will give Janet Yellen a reason not to show her hand
* Of course, if she disappoints the markets and continues to pretend everything is great, this market's going down hard and all the gains will be surrendered
* Maybe she'll try to walk a middle ground by acknowledging the problems in China and in the oil market and say that the Fed is monitoring the situation in case there us unexpected spillover to the U.S. economy which is still otherwise in great shape
* She may save face by suggesting that if these outside influences somehow wash up on our shores, and t…
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The ECB Rescues The Markets – Ep. 133
23 januari 2016 · 24 min
* The U.S. stock market ended the week with a 2-day rally, in fact the Dow Jones closed better than 200 points today, to about 1690 Lees meer
* NASDAQ, even stronger, up 119, closing at almost back up to 4600
* The rally actually began early yesterday morning, and not just in stocks
* Oil had a huge rally, in fact, today alone, crude was up $2.72 back above $30, at $32.25
* What sparked the rally was comments made by Mario Draghi at an ECB press conference that followed their official statement that they were leaving interest rates unchanged - they are already negative
* Right about that time, the Dow futures were already down 100 points and it wasn't looking good for the open of the U.S. stock market
* But then, in Draghi's press conference, he said there was no limit to what the ECB is prepared to do to generate more inflation in Europe
* He strongly hinted that in the next meeting in March, they may announce additional stimulus
* He saw the weakness in the markets and decided to take one for the Fed, because ultimately it's the Federal Reserve who has to come out with the "Whatever it takes" comment" to shore up the markets
* I don't think the ECB is going to be enough, even if Japan joins the party, it won't be a real party until the Federal Reserve shows up
* This was enough to cause a small, short-covering rally
* What's interesting, though, about the Draghi comments, is that he specifically addressed the problems of low oil prices and low food prices
* Do you think the population of Europe worries that food is too inexpensive?
* Is it really so important that gas is more expensive in Europe?
* None of these are real concerns, and the proof is, if they really wanted the prices to be higher, they could just adjust the Value Added Tax to increase prices to exactly 2%
* Why print all this money, hoping that the result is higher gas prices?
* The truth is, the price of gas and food in Europe is not the problem - Mario Draghi knows its not the problem
* He …
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It Looks Like a Recession Because It Is One – Ep. 132
21 januari 2016 · 29 min
* The bear market in global stocks continues, and I believe we're in a bear market in the U.S. Lees meer
* Technically the major averages are not quite down 20%, although some of the averages are
* Transports were down 30% from their highs
* The Russell 2000 was down more than 25%
* Many individual sectors are way down into bear market territory, as are some individual stocks
* IBM hit a new 6-year low; and, of course, IBM is the poster boy for share buy-backs
* Imagine how much shareholder money has been flushed down the toilet buying back stock at over $200/sh and now we're looking at 12o and falling
* But remember: all bear markets begin as corrections
* The bear market of 2001, when the S&P was cut in half, and the NASDAQ fell by 80%, started as a correction
* The same thing in 2008 - they were calling that a correction, too, until they realized that it was a bear market
* In fact, the main thing I am hearing today is the comeback - the Dow had a huge comeback because it was down more than 560 points at the low and it closed down at just 249
* The NASDAQ was down more than 160 and it closed down only 5
* Had we closed at the lows of the day maybe we would be closer to a short-term bottom
* This is another short-covering inter-day rally creating a slippery slope of hope for the market to continue to slide down
* Today, we have hit the most 52-week lows in any month since September of 2008
* Earlier in the day, we were showing the biggest monthly point drop in the history of the stock market
* It's not just the worst January, it's the worst month of any year, ever
* The market has got to be telling us that not only are we in a bear market, but we are in a recession
* The market is forward-looking: it is telling us that we are in a recession
* The bond market is priced as if we are in a recession
* Maybe that is because we are in a recession
* All the economic data indicates a severe recession
* The market is behaving as though something bad is happeni…
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Fed’s Denial Risks More Than Its Credibility Ep.131
16 januari 2016 · 34 min
* The Dow Jones ended another down week on a down note, dropping 390 points Lees meer
* The NASDAQ was down 126 points
* This is the worst January in the history of the stock market the Dow is off about 13% from its highs, the NASDAQ about 15%, firmly in correction territory
* We are probably in a bear market right now, because ultimately these indexes will be down 20%
* Some indexes are already firmly in the bear camp; the transportation average is down about 27.5%; the Russel 2000 is down aboutr 23%
* Many sectors are in a bear market - the auto market, retailers, financials
* Home builders not quite in bear market territory yet but they are at 4-year lows
* Beneath the sectors there are many individual stocks that are down 30 - 80% - GoPro now down 82% from last year as a highly touted IPO
* Yesterday we had about a 200 point rally because the Fed's Dudley, who saved the market in October of 2014 by hinting of QE4 causing the market to take off
* This time, Bullard came out and did say something dovish, but not dovish enough, and did not want to say there was something wrong with the economy, so he simply stated that oil prices were too low and inflation might not rise quickly enough, so the Fed should hike more slowly
* Today, another Fed governor came out, William Dudley and contradicted Bullard, strongly optimistic, saying the market is going to grow above trend in 2016 and he said that some of the negative economic data that has come out recently (which may qualify as the understatement of the decade) should be ignored, in the context of a strong labor market
* In other words, no matter what other negative data is out there, in the markets or in the economy, as long as we're still creating 200,000-300,000 mostly low-paying, part time jobs monthly, everything is fine
* If everything is fine, and there are so many people with jobs, why are retail sales plunging? Why are corporate earnings plunging?
* Assuming all these jobs really exist, they won't for long…
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Obama Delivers the Most Clueless SOTU Address Ever – Ep.130
13 januari 2016 · 29 min
* Last night I watched President Obama deliver the State of the Union Speech and probably the only good thing about the speech is that it was his last one Lees meer
* It will probably go down in history as the most clueless State of the Union Address ever
* All he talked about was how great the economy is - how he created all these jobs
* He even had the chutzpah to take credit for reducing the budget deficit!
* President Obama will have doubled the national debt during his presidency
* He added more debt than every president from George Washington to George Bush, combined, yet he's taking credit for reducing the deficit
* At least when George Bush gave his final State of the Union Address he acknowledged problems brewing in the economy
* He acknowledged concerns being addressed by the American people and validated them
* He talked about the stimulus plan he had, which I did not agree with, but at least he knew the economy was in some trouble
* Although he acknowledged that economic growth was slowing and that housing was down, he didn't come close to preparing Americans for what was about to unfold by the middle of the year
* In fact, when the President delivered that State of the Union Address, the economy was already in recession, although the government had not acknowledged it yet
* He had no idea how precarious the state of the economy was, we were on the precipice of a big cliff and he was still optimistic, long term, but cautious given the slowdown in the economy and he wanted to come up with some kind of stimulus to mitigate the slowdown
* He did not foresee or warn about the severity of the problem, but at least he acknowledged some problem
* In contrast, rather than at least acknowledging weakness in the economy, President Obama claims victory over the Great Recession, that he restored economic health and vitality
* The few problems in the economy are beyond his control because the economy is changing
* What we do need is more government money for ed…
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Deja Vu All Over Again – SchiffReport January 8, 2016
9 januari 2016 · 29 min
* Hi everybody, this is Peter Schiff and I am recording this on Friday, January 8, and Wall Street just finished the worst opening week to a new year in the history of the stock market Lees meer
* The Dow Jones was down another 1% on Friday to finish the week better than 1,000 points - it was a 6% decline on the week
* Now there have been weeks that have been down more than 6% in the history of the stock market, in fact we had one about 4 years ago, but we've never had a week this bad in the first week of January
* Now, the financial media is coming up with all sorts of excuses to blame this big decline on
* On Monday, they were blaming the sell-off on the rumors that North Korea tested a hydrogen bomb
* But for most of the week, they were blaming the sell-off of the U.S. stock market on the sell-off in China, despite the fact that China rallied on Friday and we sold off
* The Chinese market was down about 10% on the week, despite the Friday rally
* The U.S. stock market is not falling because of the Chinese stock market. The Chinese stock market and the U.S. stock market are falling for the same reason
* It's not that one is causing the other, they're both going down and the reason they're falling is because the Federal Reserve raised interest rates in December and they are threatening to raise them at least 4 more times, according to the most recent minutes.
* The belief that the Fed is going to keep raising rates is putting pressure on the Chinese currency, the Yuan, to decline along with a lot of other currencies that have already fallen substantially against the dollar, on the anticipation of higher interest rates
* It's the weakness in the Chinese currency that is pulling down the Chinese market, but it's all because of the Fed - but that's the same reason we're going down
* If you remember, all year I was saying that I didn't think the Fed was going to raise rates at all in 2015, and the reasons were:
* I thought thee economy would not be able to handle it…
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Fallout From the Fed Not North Korea Shocked the Markets – Ep. 129
7 januari 2016 · 33 min
* Well the Dow Jones got clobbered again today, down 252 points at the close Lees meer
* The NASDAQ down about 55
* The transports continue to get clobbered down another 146 points, decisively in bear market territory
* CNBC blamed the entire decline on jitters over North Korea's hydrogen bomb test
* I admit that this prospect is not good, but I don't believe that announcement was the reason for the decline
* The real problem is the Fed removing the monetary herion from the addicts on Wall Street and this is the withdrawal
* Former President and CEO of the Federal Reserve Bank of Dallas, spoke on CNBC yesterday and he admitted that the Fed "engineered a stock market rally"
* They wanted all this phony wealth to cause us to make irrational decisions
* That's what happened during the dot com bubble and to a greater extent during the housing bubble
* Here you have it from the words of a former Fed president, a voting member who voted for QE 1 & 2 who is saying that the Fed did this to create a "wealth effect"
* He even said, don't be surprised if the market goes down 20% - it's still overvalued - he admits the Fed was propping it up
* Obviously if the Fed removes the props the market will go down
* After Simon Hobbs asked Fisher if he is going to apologize, he said," Don't blame me, I voted against QE3!"
* He is throwing his colleagues, including Janet Yellen, under the bus
* Now that he is no longer at the Fed, he refers to it as a "giant weapon that is out of ammunition"
* The Fed still has ammo: cut rates (in this case, even to negative) and QE4, their big bazooka
* There's plenty of ammo left and it will be fired a lot sooner than people think
* Korea is an excuse, but Richard Fisher is letting the cat out of the bag, but no one in the media is picking up on this
* Also in the markets today, while stocks were going down, gold was going up - gold hit a 2-month high today
* As fast as it is going up in dollars, it is going up even faster in other currencies…
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Stocks Start Year With Biggest Drop in 84 Years – Ep. 128
5 januari 2016 · 24 min
* The U.S. stock market opened the first trading day of 2016 with a bang, but not the type of bang the bulls were hoping for Lees meer
* The Dow was down 276 points-it was down as much as 450 points in the last hour of trading
* In fact,we opened down 300 and change and we hung around the down 350 - 400, in fact down 276, at the close was about the best level of the day
* The NASDAQ closed down around 104
* The Dow Jones transports continues to get crushed - the weakest index on the day, down 156 points
* We're now down more than 20% from last year's high, officially in bear market territory in the Dow Jones transportation - and don't blame this on weak oil prices because transports benefit from weak oil prices
* This is all about weakness in the economy
* A lot of the carnage was blamed on China because China was down 7% overnight, the worst first day of the year in the history of Chinese stocks
* Supposedly the catalyst was a weaker than expected PMI in China - I don't believe for a second that the market was down 7% based on that report
* First, there were two PMI's released, and one was slightly better than estimates and the one that was slightly below came in at 48.2 vs. expectation of 49
* I think the Chinese market would have gone down regardless of the PMI numbers
* The irony of it is that our own recently-released Chicago PMI on New Year's Eve and our number was way worse than the Chinese number
* We were expecting 50, an improvement from 48.7 - instead we went down to 42.9
* Bad economic news in China creates a terrible response, but bad economic news in the U.S. and no one even cares!
* Why, because the Fed tells us everything is awesome and we can ignore all the evidence that the economy is far from awesome
* Singapore reported a 5.7% increase in GDP for its 4th quarter, yet that number is being discounted
* Yet no one wants to believe the good news from foreign governments, and no one believes bad news from the U.S. because the Fed's narrative is…
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Bubbles Popping On Wall Street This New Year’s Eve – Ep. 127
1 januari 2016 · 27 min
* Let me begin my final podcast of 2015 by wishing all of my listeners a Happy New Year Lees meer
* It certainly wasn't a happy New Year's Eve Day on Wall Street
* Normally the last day of the year is a positive one; you normally have a Santa Clause rally and it continues on to New Year's Eve
* That wasn't the case today. The Dow Jones finished its first down year since 2008 - down 178 points
* The S&P also negative on the year, the NASDAQ managed to gain about 5% or so
* I'm hearing a lot of people blaming the weakness on oil prices
* The transports were the weakest index of the year, I think they were down about 17% and this index stood to gain the most from low oil prices
* So clearly, if transports are the weakest index, the overall weakness can't be solely because of oil prices
* It has to be another reason, and I think it has to be the economy
* Oil is being affected by weakness in the economy
* Another interesting observation about today's selloff - the market not only closed on the lows, but made its lows on the close
* We've been seeing this volatility - all of this selling into the close says that something big is going on here
* You get more professionals selling when you sell market on close, and I think this is what is going on here
* People are bracing for a very weak 2016
* The Fed had interest rates for all of 2015 - it didn't raise rates until the waning weeks of the year
* Imagine how the Dow will contend with the threat of rising interest rates as 2016 continues
* But the other problem for 2016 is the economy and we got more evidence of an extremely weak economy
* I mentioned before the the Atlanta Fed GDP Now has Q4 GDP estimate down to 1.3
* Based on the numbers we got today, they are going to ratcheting those estimates down again
* First, we got the weekly unemployment numbers, which have been low for a long time - We got the biggest unemployment claims numbers in one week in 10 months
* The 4-week moving average is also the highest …
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CNBC Calls Me Out on Gold – Ep. 126
22 december 2015 · 28 min
* Recording this podcast on Monday afternoon; the stock market closed about an hour ago, and the stock market was up over 100 points today, but the more dramatic days happened on Thrusday and Friday Lees meer
* Despite the initial euphoric increase in the stock market that greeted the Fed's highly anticipated quarter-point rate hike on Wednesday the market tanked on Thursday and Friday, down over 600 points
* The most significant part of the sell-offs is that on both days the markets closed on the lows for the day
* The Fed is getting dangerously close to losing what remains of its credibility
* The Credibility Bubble might be the first to deflate in this recession
* The Fed has been saying that the economy would be strong enough for a rate hike by the end of the year, so if they did not raise rates in December it would have been an admission that they were wrong
* The Fed raised rates even though the economic data showed that, based on their own criteria, they should not have done it
* More and more people are questioning whether the Fed has made a policy mistake
* Look at the data that came out since the rate hike:
* On Friday we got the PMI Flash Services Index came out at 53.7 - last month it was 56.5
* The Kansas City Fed Manufacturing - last month was +1 and December was -8
* Today we got the Chicago Fed National Activity, expected to be +.15 for November, instead it came out at -.3 and they revised down the prior month to -.17
* With all the horrible economic data, horrible retail sales, horrible corporate earnings it is obvious that the U.S. economy is heading toward recession
* As the economy slows and the Fed is forced to admit it was wrong, there goes it's credibility
* This coming collapse is the culmination of decades of bad monetary policy
* Where we really went off the rails was in the Greenspan era, which sent us off on this trajectory of loose money
* Yellen admitted in her recent press conference that they will still roll over all the maturi…
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Janet Yellen Gets Nuts – Ep. 125
18 december 2015 · 33 min
* Yesterday, the Federal Reserve finally met market expectations and increased interest rates to .25% Lees meer
* Actually, the official rate was 0 - .25 and now, the official rate is .25 to .5
* The actual rate was always in the middle between zero and .25
* Assuming the Fed tries to keep the rate closer to .25 than .5, the actual increase in rates could be less than 25 basis points
* The initial reaction to this rate hike is to proclaim the end of the era of "cheap money"
* .25% is still cheap money. Alan Greenspan never went below 1%.
* Some people are saying "Peter Schiff was wrong" because the Fed did raise rates
* Actually, in a recent podcast I noted that the Fed changed their narrative away from "data dependent" to an expression of faith in the economy, opening the door to a symbolic rate hike unsupported by data
* I was alone throughout the year believing that the Fed would not raise rates prior to this change in narrative
* The Fed was afraid that to not raise rates this year, it would be a vote of "no confidence" in the economy
* Ultimately, the Fed felt that even though the data didn't justify it, they had to raise rates because of psychological damage to the markets
* If the economy were really sound, we would not need Janet Yellen to express confidence in the economy - a strong economy creates its own confidence.
* We don't need propaganda in the form of a symbolic rate hike
* The Fed did not even have the last recession in their forecast until we were well into the recession, so who cares about the Fed's level of confidence?
* In an earlier podcast, I referred to Ben Bernanke's comment that he felt he was a representative of the administration
* Janet Yellen is creating a sense of confidence in the economy for the same reason
* The Fed is now pretending that we will have more rate hikes in the future, forecasting 4 more hikes during 2016
* I believe the economy is not strong enough to accommodate these rate hikes and neither does Janet Yellen
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Is the Fed Playing Chicken With the Stock Market? – Ep. 124
12 december 2015 · 28 min
* The U.S. stock market finished up its worst week since August, when everybody though a rate hike was just around the corner Lees meer
* Substantial triple-digit losses across the board
* The Dow Jones closed down 309 points - almost 4%
* Similar percentage decline for the S&P 500
* The NASDAQ dropped 111 points, over 4% decline for the week
* The media is blaming this decline on oil prices, and yes, oil prices are weighing on some stocks
* Some stocks benefit from lower oil prices - case in point: transportation
* Dow Transport was weaker than any other index - down more than the markets on a percentage basis
* The truth is that oil prices and stock prices are going down for the same reason
* The reason is a slower growing global economy, including the U.S. economy, and the fact that the Fed is threatening to slow it down further with an interest rate hike
* Some of biggest losers are not even in the stock market, but in the bond market
* The high-yield bond market is getting obliterated
* A chunk of the high yield market is energy companies
* Two things are hurting them: the fear of rising interest rates and the slowing of the U.S. economy
* We are heading for a recession, if we are not already in one
* This does not bode well for the high-yield bond market, because in a recession these companies will have more trouble servicing their debt
* The Fed's monetary policy of zero percent interest rates forced a lot of Americans into these high-yield bonds - people are hungry for yield
* A lot of risky companies who did not have access to credit, were able to borrow all sorts of money because of this hunger for yield
* This is the same thing that happened in the sub-prime market
* Customers all over the world needed yield, and the mortgage market was where they got it
* There was so much demand for mortgage debt on Wall Street it was easy for non-credit-worthy customers to get a loan
* The same thing is happening in this high-yield market. Carl Icahn was on…
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Data Be Damned, Rate Hike Ahead?
9 december 2015 · 31 min
* We are just about a week away from the Federal Reserve's first rate increase in about 10 years Lees meer
* Everybody believes the stage is set for liftoff based on the most recent better than expected Non-Farms Payroll report
* The idea is that the only thing preventing the Fed from liftoff would have been a horrific jobs number
* In fact the markets estimated 190,000 jobs added and we got 211,000
* We did beat estimates, and in fact they revised last month's number up to 298,000
* The unemployment rate held steady at 5%
* This was not a strong report, any way you look at it
* The labor force participation rate: 62.5% is just one-tenth of a percent from the lowest level since the mid-1970's
* That is still going in the wrong direction
* We had the biggest surge in involuntary part-time workers - 300,000 new workers really wanted full time employment - the biggest jump in more than 3 years
* Janet Yellen has consistently stated until recently that before moving up interest rates she wanted to see improvement in the job market, specifically in participation and full-time vs part-time jobs
* Thus far that has not happened
* So why does everybody believe that the Fed is about to raise interest rates regardless of its stated criteria?
* I believed that the Fed had no intention of raising rates and I believe they did not, except one thing has changed: they have backed themselves into a corner
* They have floated some trial balloons as a litmus test
* One change of rhetoric occurred during Yellen's press conference last week as she switched from waiting for the data to improve to confidence that it will improve some time in the next year
* Another change is the idea that a rate hike would trigger a series of hikes with the goal of normalizing interest rates
* That's why they were calling it liftoff
* Now, since the markets tanked after September did not deliver a liftoff, the Fed Chair has changed her tune - liftoff does not matter, the trajectory does
* She ma…
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Draghi Fails To Deliver. Will Yellen Be Next? – Ep. 123
4 december 2015 · 31 min
* Mario Draghi of the ECB sent shockwaves through the foreign exchange and currency markets today Lees meer
* He didn't deliver the stimulus traders expected
* The big question is, will Janet Yellen surprise the market by failing to raise rates?
* The ECB did slightly lower interest rates, and extended QE if it will be needed
* Draghi's goal is inflation
* He equates 2% inflation to "price stability", when prices in Europe are stable now
* The big divergence that everybody is trading on a tightening in the U.S. at the same time Europe continues to ease
* The reality is more likely to be the reverse
* If anything, the European recovery is just getting started, and the U.S. recession is just getting started
* As a result of Draghi's decision to hold off on stimulus, the euro was up more than 3% on the day
* The dollar was weak across the board
* The stock market, including the DAX, fell accordingly
* Both U.S. stocks and bonds experienced a selloff
* Cheap money has been fueling rallies all over the world and when the ECB did not deliver it triggered a selloff in the U.S. assets
* The Dow rallied over 2000 points off its September low based on rate hike expectations that did not materialize
* We also got a key reversal in gold
* Overnight it made a new low, but closed substantially above that level
* The euro is still weak, it is just not as weak as the market expected
* The best environment for gold when the weakest currency is the dollar
* I wanted to address Janet Yellen's testimony today responding to questions
* Yesterday, Yellen referred to Q4 GDP forecast consensus as 2-1/2%
* She did not even realize that on that same day the Atlanta Fed reduced their forecast down to 1.4%
* I think the real shocker will be that the Europea Q4 GDP will realize greater growth than the U.S.
* Yellen was asked about Citibank's recent projection that the U.S. will experience a recession in 2016
* Obviously, she can't agree with the projection, as this runs contrary …
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Yellen’s Confidence Defies Data, Logic, and Common Sense – Ep.122
3 december 2015 · 29 min
* The price of gold was down another $15 today, a 6-year low Lees meer
* Selling began early this morning following a better than expected jobs report from ADP
* This is private payrolls released a couple of days before the official government Non-Farm Payroll number, coming out on Friday
* Last month's ADP report was 182,000 jobs, which was below expectations
* But the government reported better than expected jobs numbers
* Today's number was not significant enough to have triggered a sell-off in gold within seconds of the release of the news
* So far, ADP has missed 8 of the 12 expectations this year
* By the way, hedge funds are the most short they've ever been in gold
* We'll see what happens between now and the end of the year if we get a lot of hedge funds that want to book those profits
* Paper profits may be difficult to realize if everyone needs to take them at the same time
* In the physical world, demand for gold continues to hit records
* 98-99% of the gold market is people selling gold they don't actually have to people who don't actually want it
* It's interesting to me the difference between the market reaction to positive economic news versus negative news
* The November PMI number, although slightly better than expected it is still a 2-year low
* Where the news went from bad to horrific was when we got the November ISM number. Manufacturing is considered insignificant now because it is a smaller part of our economy, but the last time it was almost as low as this, the Fed immediately launched QE3.
* Now with ISM number nearly as weak as it was when we launched QE1, the Fed is hinting at a rate hike, which is absurd if you believe that the Fed is data dependent.
* If the Fed does raise rates in December it proves conclusively that they were never data dependent and that they were using it as a delay tactic
* Had the Fed raised rates years ago, it would have pushed the economy into recession that much sooner, but they've now waited so long, tha…
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Weak Holiday Sales Confirm The Best Bargain Is Gold – Ep. 121
30 november 2015 · 39 min
* I am recording this podcast on Cyber Monday Lees meer
* Cyber Monday first got its name because e-commerce wanted its own version of Black Friday
* It's losing some significance, given it is losing some of its competitiveness because of the strong online sales during Black Friday
* Online sales were up about 20% over last year, but the brick and mortar retail sales were down about 10%
* The retailers' inventories were positioned for a big increase
* I think this holiday sales season will be weaker than expected, just as last year was
* I think we may see more returns on the online sales this year
* When the after Christmas sales start, we'll see more aggressive pricing in the brick and mortar stores, getting rid of excess inventory
* What is the Fed going to do with weak Black Friday sales data?
* We got more data out this morning, the Chicago PMI, horrible number
* Last month we got a bounce up to 56.2
* It turned out to be a dead cat bounce - November's number was expected at 54 and delivered 48.7
* We are back in contraction mode
* If the Fed does raise interest rates in December, it will prove that it was not data dependent, and that the Fed's credibility was the primary reason for the hike
* This Friday, the Non-Farm Payroll number will be the last number before the Fed's December meeting, making it once again, the most important jobs number ever
* Former Fed Governor Lawrence Lindsey recently pointed out on CNBC that the Fed has created another bubble
* He stated that asset price inflation is going to end badly
* In response, Joe Kernan questioned the assumption that the asset bubble will end badly
* Historically, all bubbles end badly
* I also wanted to comment on a WSJ article today predicting that the Fed would continue to raise interest rates, while the ECB would continue to ease rates into negative territory, and that U.S. interest rates would be 2.75% by early 2018
* How can they know that this will happen?
* If this is the case, it also as…
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Retailers May Still Be In The Red After Black Friday – Ep. 120
26 november 2015 · 37 min
* Tomorrow is Thanksgiving Day, one day before Black Friday Lees meer
* The one day of the year where Americans make their annual pilgrimmage there they stampede to the nearest mall to buy stuff they really don'[t need and can't afford
* It's almost like a black and blue weekend
* I believe that this will be a pretty weak holiday weekend; by the time we get the sales numbers next week, it's going to be pretty dismal
* The news that brought the euro down this morning was rhetoric coming from Mario Draghi , head of the ECB
* He's talking about expanding the QE program to a 2-tiered system
* Why is Draghi so determined to talk down the euro and talk up inflation?
* He is in pursuit of Keynesian economics' holy grail - inflation
* If only we can succeed in getting prices to go up faster then we would have economic growth and prosperity
* Believing that a rising cost of living is the secret sauce of economic growth
* If you search the internet, you see that no one is critical of this
* If rising prices are so important, why not just raise the VAT?
* You could obtain the exact amount of inflation desired if the real goal is to rais prices
* But that's not really the goal, because they would just raise the VAT
* The real goal is to wipe out government debt and to mitigate the effects of wage hikes imposed by the government
* Academia and the press all give them a pass on the idea that rising prices create prosperity
* The truth is the reverse: prosperity comes from reducing costs
* As things get cheaper, more people can afford them - I use the example of cell phones
* Now even poor people can afford a cell phone
* Falling prices lift standards of living and falling prices result from a productive economy
* Inflation results from government interference and it doesn't make things better
* Let's go over the economic data this week
* It's been a mixed bag
* On Monday we did get the manufacturing PMI number, expected to come in at 54.5 which would have been an im…
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Did The Fed’s Luck Run Out On Friday The 13th? – Ep. 118
14 november 2015 · 19 min
* Friday the 13 was an unlucky day on Wall Street Lees meer
* The Dow was down over 200 points - the second back to back decline of over 1% since August
* What was happening in August? Everybody was convinced the Fed was going to raise rates in September
* Now, everybody is just as convinced that the Fed will raise rates in December
* Once again, as I predicted a week ago, the market sold off
* We are down over 650 points on the week
* Nasdaq is down today even more - 1-1/2%
* The carnage was once again led by the retailers
* Bad earnings out of Macy's Nordstrom's Walmart and others set the scene for new share price lows
* I have been warning about this all year, based on inventory numbers
* All the evidence is flashing recession
* The Fed has been saying that they are data dependent - open your eyes and look at the data!
* This data is consistent with the beginning of a recession
* Yes, unemployment is low, but unemployment is always low when recessions begin
* I think the Fed knows they are not going to raise rates
* The Fed minutes are coming out next week and we'll get an insight into the deliberation between the members
* All Janet Yellen said was that an interest rate hike was a "live possibility" - The market did the rest.
* They took the word "possibility" and assumed that it was a probability
* Let's look at the economic data that came in today:
* First, October Producer Prices - they were looking for a rise of .2, because last month, they actually fell by .5
* We didn't get .2; we got -.4
* As of last month, year over year producer prices have declined 1.1%
* Now they are down 1.6% on the year
* This is going the opposite direction of the Fed's goal of 2% inflation
* The worst number was retail sales:
* They were looking for a rise of .3, which is still not a big rise - but we got an increase of just .1
* To add insult to injury, they had adjusted last month's forecast to zero
* Also x auto, they were looking for a gain of .4 and instead …
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Markets, Economy, Republican Debates – Ep. 117
13 november 2015 · 35 min
* When I recorded my last video blog, I mentioned how positively the market reacted to jobs report, which could signal the Fed to raise rates Lees meer
* I said there might be a delayed reaction and, in fact it did
* Four days into this trading week we are down more than 450 points
* Also, I did an interview on CNBC.com where I said I felt the retail markets would have a a tough time this Christmas
* That was translated into headlines that I stated that consumers would have a horrible Christmas, which was not my point
* So far, my prediction about the retail space is bearing out, bad earnings reports from Macy's Walmart, Men's Wearhouse, and its subsidiary, Joseph A. Bank, Nordstrom and Neiman Marcus
* The data that the Fed depends on is getting worse and worse
* If the Fed raises rates in December, it will prove that they have not been data dependent, they were delaying
* Copper a six-month low today, oil prices are down, gold hit a new low inter-day but rallied back and the dollar finished broadly lower for the day
* Based on these market prices, the Fed will have another excuse to delay rate hikes, again
* What will stop the stock market from falling? The only thing that will stop it is if the Fed takes a rate hike off the table
* I recently wrote a commentary where I reference the shadow rate
* Tightening actually began about 18 months ago when the Fed started tapering
* The Fed's monetary policy is not just about rates, it is also about easing and foreward guidance
* When the Fed began tapering they were tightening
* When they began talking about raising rates that was the equivalent of tightening, because the markets braced for the hikes
* That's why the economy is rolling over, that's why the stock market is rolling over
* Given how weak this recovery has been and the enormity of the stimulus required, if the Fed removes all stimulus it will result in a worse than normal reaction in this over-valued stock market compared to previous tightening cycles
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Over-Hyped Oct. Jobs Report Does Not Assure Dec. Rate Hike – Schiff Report
7 november 2015 · 23 min
* Friday, November 6, 2015 Lees meer
* Earlier today the government released the Non-Farm Payroll Report for the month of October
* I was told that this was the most import Non-Farm Payroll report ever
* They were looking for 190,000 jobs and we created 271,000 jobs
* Everybody now has jumped to the conclusion that a December rate hike is a lock
* There is nothing in this jobs report that indicates that
* The reason everybody believes that the Fed is like to raise rates is because Janet Yellen testified before Congress earlier in the week
* This is what the Fed Chair said about interest rates:
* If we get further improvements in the labor market and we make progress at achieving the Fed's inflation goal of 2% in the medium term
* How much improvement and what kind? We don't know, because thus far, no improvements have been enough to prompt a rate hike
* Yellen said that if we got those improvements, then a rate hike in December would be a "live possibility"
* This does not mean it will actually happen - it means it is possible
* She did not even use the word probable
* I don't think the Fed is going to raise rates in December
* We have one more "most important" jobs report between now and December and this month's numbers may be revised down, as others have
* From my perspective, if the Fed does not know that they will raise rates by now, they will not decide on the spur of the moment after a jobs report
* Even with positive economic news, the Fed still does not have to raise rates; they can come up with another excuse, real or unreal
* What happens if the stock market declines after a rate hike? what would the Fed do then?
* "Extend and Pretend" is working like a charm for the Fed now
* Getting back to today's job's report:
* This is the strongest month of the year following the two weakest months of the year
* Both of those months arrived with expectations of upward revisions, and they did not happen
* The three month average is 187,000 jobs
* The la…
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The Great Rate Hike Hoax – Ep. 116
5 november 2015 · 27 min
* Here we go again; Janet Yellen was on Capitol Hill testifying about the banking system Lees meer
* Forget about all her comments about how solvent the banking industry is - of course it's not
* The banking system is more vulnerable and more highly leveraged than before the bailout
* I am focusing on what she did or did not say about the Fed's intentions to raise rates in December and how the markets reacted
* Headlines following the testimony were about the probability that the Fed will raise rates in December
* The December meeting will be a live meeting with a rate hike on the table
* The official probability of a December rate hike rose from 50% to 60%
* When the Fed did not raise rates in October they removed language referencing concerns about international markets
* This was interpreted as a more hawkish stance on the part of the Fed
* The global economy was used as an excuse, but the Fed had no intention of raising rates in October
* In December when it doesn't raise rates, it'll use another excuse
* The markets wants to believe that the Fed will rates, and as soon as Yellen's comments were released, the dollar soared and gold tanked
* Let's look at what Janet Yellen actually said: first I am going to go to a Reuters story, Fed's Yellen sees possible December rate rise
* That's all it takes, just the mention of a possibility makes everybody jump to the conclusion it is going to happen
* Here's Yellen's quote directly from the artice:
* "What the committee has been expecting is that the economy will continue to grow at a pace that is sufficient to generate further improvements in the labor market and to return inflation to our 2 percent target over the medium term,"
* "If the incoming information supports that expectation then our statement indicates that December would be a live possibility."
* She is saying, if we get the improved data we're expecting
* The labor market has been weakening and the last two jobs numbers have been quite weak
* Yelle…
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Fed Continues To Extend And Pretend On Rate Hikes – Ep.115
29 oktober 2015 · 27 min
* I am recording this podcast from New Orleans, where I am attending the Investment Conference Lees meer
* Today, I am going to talk predominantly is the FOMC statement that came out yesterday following the conclusion of their 2-day October meeting
* It was largely expected that the Fed would not raise interest rates in October and that's exactly what happened
* I predicted this a long time ago
* What is amazing is that, as a result of this announcement, more people expect the Fed to raise rates in December
* Going into this announcement, the dollar was on the defensive, silver was up about .50, gold was up $15.00
* It sure looked like people were expecting a more dovish tone from the Fed
* After all, a lot of bad economic news has come out since the September meeting
* When the Fed statement was released, there was no such change in language
* This now leads people to believe that the statement was hawkish
* They still don't understand the game: Nothing has changed.
* the Fed has to pretend that a rate hike is right around the corner in order to pretend that the recovery is real
* They can't admit that the economy is weak because they want to take credit for saving the economy
* They have to keep pretending, and they have to keep making up excuses
* Steve Leesman was asking why we need emergency rates when the emergency is over
* The emergency is not over, as far as the Fed is concerned because there is no real recovery
* If we had a legitimate recovery, of course the Fed could raise rates
* Thus the game: they continue to talk as if they might raise rates, and the markets buy it
* As soon as their statement came out, gold tanked, it ended up down about $10, silver gave up most of its gains, and the dollar was broadly higher
* If you actually read the statement, there is nothing hawkish about it
* It is basically the same as the September
* The only thing that stands out is an absence of concern
* The FOMC is not worried about all the bad news
* "In d…
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ECB Opens The Door To More QE – Ep.114
23 oktober 2015 · 26 min
* This is the first podcast I've been able to record since the death of my father, Irwin Schiff, who passed away on Friday Lees meer
* If you're interested in learning more about him and the circumstances surrounding his death, I would encourage you to read my commentary, "The Death of a Patriot"
* There also links to many other articles written about him on my Facebook page
* You can also find on my YouTube channel, my father's debate for the 1996 Libertarian Nomination for President
* You can also find on the internet a video he created called, "The Secrets of a Tax Free Life"
* He died in jail because of his political beliefs and for standing up for his Constitutional rights
* While in prison, my father got insufficient medical care, he lost all his teeth, lost his eyesight and eventually died of cancer
* In my father's case, even if he were wrong, the penalty should have been a civil case
* My father was steadfast in his beliefs, and did not want to be released unless he won his appeals
* The Dow was up more than 300 points today
* The strength came from the ECB, as Draghi suggested that the ECB was considering expanding QE
* The ECB is trying to talk the euro down
* The ECB did not actually do anything, they just jaw-boned the markets with the idea of more QE
* This was a euro story - the dollar was only up against the euro
* The New Zealand dollar was up 1.3% against the U.S. dollar
* Gold was up 2% in terms of euros
* Silver was up .15 in dollars despite the big jump in the dollar index
* This lays more foundation for the Fed not to raise rates
* At some point, I think the Fed will another round of QE
* The reason Draghi suggested QE was over fears that inflation is too low
* It is running at .9%, but according the ECB, the holy grail is 1.9%
* Draghi was asked why he is spending so much money to raise inflation when he earlier said that low inflation is good for purchasing power
* How does the ECB think they can pinpoint inflation to exactly 1.9…
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Walmart Is The Canary In The Retail Coal Mine – Ep.113
15 oktober 2015 · 25 min
* We finally got some economic news today, all of it bad Lees meer
* All of it "unexpected"...
* Hope springs eternal on Wall Street
* That's why the Federal Reserve can maintain its forecast of an interest rate hike before the end of the year
* Although now a second Fed official has come out saying he doesn't think a rate hike will be appropriate this year
* All this was forecasted by me; there was a method to their madness to maintain the theater that a rate hike is even possible
* When is the Fed going to admit that their earlier forecast of a big recovery and liftoff is wrong?
* CNBC finally admitted they do not want me on because I correctly predicted that the Fed would not raise rates
* The same is true for Bloomberg
* However, the last time I was on Fox Business, that video on my YouTube Channel got over 80,000 views
* That is probably more people who viewed the live show!
* By the way, don't forget to like me on Facebook follow me on Twitter and and subscribe to my YouTube Channel
* It's not going to be too much longer before more and more people will agree the Fed is not going to raise rates
* If I am right and the Fed launches QE4, it will be hard for the conventional media to ignore me - I am not saying it will be impossible, though
* These podcasts are developing a greater and greater audience, and you can help spread the word by sharing them, to get the word out
* Let's get to the economic data, starting with the Weekly Mortgage Applications
* This number was significant in the precipitous 27.6% drop in the composite index with purchased mortgages dropping 34%
* Part of this was due to last week's big jump as mortgage applicants tried to get ahead of new government rules
* But the drop is much bigger than the pop - this is a bad sign
* The consensus forecast for the Producer Price Index was for month over month prices to drop .2% instead they dropped .5%
* Year over year, down 1.1%; last month it was down .8%
* This is bad news to the Fed, w…
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Fed Worried Cost of Living Not Rising Fast Enough – Ep. 112
9 oktober 2015 · 25 min
* The Dow Jones finished up almost 140 points - back over 17000 Lees meer
* The Dow has now rallied 1,000 points since its lows on Friday following the lower than expected Non-Farm Payroll number
* The market originally sold off until traders realized that bad news is good news and they bought the dip
* The buying intensified today following the release of the FOMC minutes from the last meeting
* I predicted the markets would experience a rally based on the weak Non-Farm Payrol number
* The U.S. market looks like it's standing still compared to the markets overseas
* Now that so many traders are starting to connect the dots and realize that a rate hike is not around the corner we've seen a huge rally in overseas stocks, particularly in emerging markets
* All currencies continue to gain against the dollar
* Silver prices earlier in the week hit a 3-1/2 month high
* Gold got back above 1150
* Oil prices are close to $50/barrel
* All of this is happening because traders are beginning to pare back their rate hike bets
* In light of today's release of the dovish September FOMC meeting minutes the trend will intensify
* Why were people surprised by the dovish minutes?
* If you read the minutes, the real reason the Fed did not raise rates is because inflation is too low
* They also said they would risk credibility raising rates below 2%
* Lose credibility with whom?
* If they are afraid to raise rates with inflation below 2%, they why have they been bluffing that they are about to raise rates?
* The official inflation number has been below 2% the entire time they have been talking about a rate hike
* I have been saying that they will continue to pretend to raise rates, but they won't
* I thought it was funny that Netflix raised their rates 11% - the Fed must have thought this was good news
* The real reason the Fed won't rais rates is that they don't want to prick the bubbles
* We have a bubble in the stock market
* A bubble in the real estate market
* A bub…
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Video Blog: September Jobs Report Confirms Weakening Labor Market
3 oktober 2015 · 30 min
* It is the first Friday of the month, and that means that this morning we got the September Non-Farm Payroll number Lees meer
* Anyone who has listened to my podcasts and video blogs knows that for months I have criticized these so-called strong jobs reports
* I think what's going on is a transformation of the economy from full-time jobs to part-time jobs and that necessitates creating more jobs that you destroy, but the real story is beneath the surface
* The report we got today was one of the weakest reports relative to expectations than we've had in years
* This may be the final missing piece to the economic puzzle that shows that the economy is not as strong as everybody, including the Fed pretends it to be
* And that the rate hikes expected to be around the corner are a distant blur on the horizon
* Soon more will join me in recognizing the more QE is coming
* Of course QE is not medicine; it is toxic
* Let's get down to the tale of the tape with the jobs numbers
* First, the bigger number is the August number, which was expected to be revised up, was revised down to 136,000 jobs
* July was also revised down
* The September number was expected to be 203,000 and actually came in at 142,000
* This is an average of 163,000 jobs for the last 3 months
* Six of the last 8 jobs numbers have been revised downward
* The August labor force participation rate was 62.6, which was the lowest of the "recovery"
* The September rate dropped another .2 to 62.4, which is the lowest since 1977
* Another 579,000 left the labor force in September - now there are 94.6 million Americans not working
* Average hourly earnings, expected to rise .2, remained flat
* In fact, the average work week declined from 34.6 to 34.5
* If you remember, what has Janet Yellen stated as a requirement for a Fed rate hike? - An improvement in the labor market.
* The labor market was singled out as a reason why rates remained at zero in September
* While others speculated that rates might hik…
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President Trump and Treasury Secretary Icahn? – Ep. 111
30 september 2015 · 27 min
* It's been over a week since I did my last podcast there's been a lot of economic news - almost all bad Lees meer
* The markets have been under pressure - we're back down near the mini-Black Monday lows, solidly in correction mode
* The pressure on international markets has been greater
* Yet the vast majority of economists expect the Fed to raise interest rates by December
* This would really mean last minute - as the Fed's messaging hints at an interest rate hike by the end of the year
* If you look at the Fed's reasons it listed were:
* Weakness in overseas economies
* Lack of inflation, as the Fed measures it
* Increased improvement in the labor markets
* Why would the Fed move if all these concerns still exist?
* The answer is, it would not move
* No one wants to connect the obvious dots
* When the Fed refused to rule out an interest rate hike in October or December it might have been the worst thing for the markets because it is admitting it is considering kicking the economy when it is down
* Initially I thought the Fed would indiciate a dovish hold, but they opted for a hawkish hold, which exacerbates the issues with the markets, as the hike is already priced in
* International markets assume America can handle higher interest rates; but the Fed is still talking up the economy to send the message that the U.S. can handle higher rates, even though it can't
* I discussed this at length in my recently released video of my address in Jackson Hole, Wyoming
* I really want discuss in today's video two people who are in the news: Donald Trump and Carl Icahn
* Trump was on 60 Minutes this week and Carl Icahn recently released a video called, 'Danger Ahead'
* Trump's performance really hit the ball out of the park with his delivery, not that I agree with everything he said
* The typical voter will buy his bill of goods
* The interview was a commercial for Donald Trump in which he promises everything to everybody
* The promises to cut taxes on everyone bu…
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Yellen Admits Rates Could Stay at Zero Forever – Ep. 110
18 september 2015 · 24 min
* Tuesday's podcast was titled, "Will She or Won't She?" referring to whether or not Janet Yellen would announce an interest rate hike for the first time in almost 7 years Lees meer
* Today we got the official answer: "No."
* For the 54th consecutive time, the Fed has left interest rates unchanged at zero
* What is even more amazing, in the Q&A immediately following the announcement, Janet Yellen admitted that she could not rule out the possibility that interest rates would stay at zero forever
* A reporter asked her if the Fed may be trapped at zero forever
* Among the excuses the Fed used was problems in overseas markets, which opens up a grab bag of excuses for the Fed conveniently explain why it is not going to raise rates
* I said from the beginning the Fed has no intention of raising rates
* They also mention that these problems may spill over into the U.S. economy
* She also mentioned additional problems in the labor force: wages, people re-entering the workforce and more full-time jobs
* That is not going to improve in the next three months, yet the Fed is still pretending that it could raise rates in October or December
* Yellen is also no ruling out that the Fed could keep interest rates at zero forever, so who cares about what she won't rule out?
* Janet Yellen answered the reporter's question by saying, " We don't think we are going to be in that situation, however I can't rule it out."
* So the fact that she is not ruling out an October or December rate hike means nothing, because she also can't rule out zero interest rates forever
* What else does this tell you?
* She is concerned that rates will be at zero for a long time
* Janet Yellen believes that the Fed could actually keep interest rates forever
* They won't even stay at zero for the end of this decade because ther is going to be a currency crisis that forces the Fed to raise rates
* The only reason the Fed has maintained the illusion of control for so long is that the market is believing…
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Will She or Won’t She? Ep. 109
16 september 2015 · 24 min
* Tomorrow we have the most highly anticipated Fed meeting ever, but this will not be the last time I'll say this Lees meer
* We'll also be anticipating October and December if the Fed does not raise interest rates in September
* The odds are they won't do it
* I put a Bloomberg story on my Facebook page: Yellen's former aid says a rate hike would be a serious error
* Why? The official target for the Fed Funds Rate now is at a range of 0 to .25 basis points
* The Fed is contemplating a rate of .25 which is the high end of the existing range
* If they decide to keep the rate at .25, all they've done is fixed the rate at the high end of the range
* This is not even a rate hike
* Why would this be a disaster?
* Isn't that an admission that the economy is fragile?
* When Alan Greenspan lowered interest rates to 1% after the dot com bubble and after Sept 11, people though, this is ridiculous!
* Now we are talking about raising rates to a quarter of that and it is considered a disaster
* What is going to change between September and October and October and December - unless they get worse
* The serious error is to prick the bubble economy
* The more serious error is for the Fed to raise rates and then admit that it was a mistake they lose credibility
* We're going into recession regardless
* If they raise rates, they will have to launch QE4 sooner
* Any rate hike will sow the seed of a rate cut
* On the topic of a recession, let's talk about the economic news we got today
* The first release we got was August Retail Sales
* A rise of .3 was expected and we got a gain of .2
* These are not great numbers
* The worse number of the day was Empire State Manufacturing: last month's horrible number was -14.92 the lowest since 2009
* Wall Street was looking for -.5
* September was -14.67; barely an improvement
* Back to back the worse numbers since the great recession
* The media barely reported on this number at all, but if it were good, it would have been in th…
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Weak Data Belies Fed’s Upbeat Narrative – Ep. 108
12 september 2015 · 22 min
* The U.S. stock market finished out this holiday-shortened week on an upnote with the Dow Jones up just over 100 points Lees meer
* This was the best week the market has had since March
* The dollar was softer on the week; the euro ended solidly above 113
* Gold was under pressure throughout the day but closed only off about $3.00
* Gold stocks earlier this morning were at the lowest I've seen in this cycle but then had a sharp reversal finishing much stronger on the day
* The markets are looking forward to no rate hike in September
* Michigan Consumer Sentiment Numbers may have been the catalyst to turn the market
* They were looking for 91 - slight below last month; instead we got 85.7 - a huge miss
* This is the biggest miss in the history of the index
* The bigger number was the Wholesale Trade Number, which was expected to reflect inventories to rise .3%
* Instead, inventories declined by .1%
* This will notch a little off of Q3 GDP
* More importantly, inventories went down, but sales also declined by .3%
* This means the inventory to sales ratio rose again
* It is not at the highest it has been since the 2008 financial crisis
* This level has only existed twice in the last 15 years and both of those times, the economy was in recession
* Another interesting chart is inventory to sales in the Auto sector
* Auto inventory to sales level has risen to 1.73% - the highest since 2009
* Today's inventory to sales ratio is even higher than the recession of 2001
* This is a sign that the Auto bubble is bursting
* If the Fed were going to raise interest rates in September, wouldn't we already know by now?
* The longer the Fed waits to raise rates, the less likely is is to do it
* If the Fed does rates and then has to go back to zero, it will look like the Fed was wrong about the economy
* It would be better now to keep rates at zero, indicating they understand the weakness in the economy
* The other risk of raising rates, and weakening the economy is that…
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Rate Hike Fear JOLTS Markets – Ep. 107
10 september 2015 · 31 min
* Another day, another 450-point swing in the Dow Jones Lees meer
* The market opened about 250 points higher off the back of overseas markets
* Japan was the standout; it was up about 7% on the hope of more money printing
* All overseas markets were stronger and the U.S. followed that lead, but at the end of the day, the market was down about 240 points, a lot of selling coming in the final hour
* Huge swings almost daily over several weeks generally indicates a change in trend
* The long-term trend of a rising market followed by extreme volatility usually marks the end of that trend
* All this volatility is based on rate hike uncertainty
* Sentiments range from rate hikes coming either in September, October, or December
* The first rate hike is not scaring everybody, it is the consequences of interest rate normalizaion
* If the Fed does raise rates, I think the market will start looking toward the next rate cut
* This bubble is so big, the slightest pin will prick it
* The Fed's only option will be stimulus to get out of the next recession
* The cycle will be much shorter because of the amount of debt we have
* Sentiment is coming from everywhere asking the Fed not to raise rates, which plays into the Fed's hand
* This disguises the Fed's actual intention not to raise rates
* Market volatility today was probable due to the JOLTS report today which unexpectedly jumped up to the highest level in years, indicating a huge number unfilled jobs
* The JOLTS numbers have been good for years, and wages still have not gone up
* This is just the raw number of jobs, so these may be a larger number of part time jobs open replacing full time jobs
* Many low-paying jobs won't be filled because entitlements provide higher compensation
* Everyone is on pins and needles because they know that cheap money is the only thing that is fueling the economy - it's not real earnings
* The market may have sold off anyway because there has been a lot of technical damage done to thi…
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Did August Jobs Ready Fed for Sept. Rate Hike?
5 september 2015 · 30 min
* Earlier today we released the most important Non-Farm Payroll report ever, at least according to the media Lees meer
* A WSJ article stated that this report could "seal the deal" on rate hikes
* Interest rates have been at zero for 7 years as the Fed contemplated lift-off
* It all boiled down to one jobs report?
* If the Fed were going to raise interest rates in 2 weeks, how can it count on its accuracy or the fact that numbers will change next month?
* Let's get into the numbers:
* The number we got was 173,000 - well below the consensus forecast
* One of the weaker components was private payrolls, which only grew by 140,000 vs and expected 211,000
* The headline number is the unemployment drop to 5.1% - the lowest in the Obama presidency
* Once again, the devil is in the details
* The unemployment rate is falling because of the mass exodus from the labor force
* Another 261,000 Americans left the labor force this month
* The participation rate held steady at 62.6%
* The lowest rate since 1977
* I think it's heading lower
* The total number of persons not in the labor force rose to a new record: 94,031,000
* Also this month another 158,000 Americans find themselves involuntarily employed part-time
* That's what's responsible for the "improvement" in the labor numbers
* Janet Yellen specifically wanted to an increase in labor force participation and more full-time jobs before contemplating raising rates
* Those numbers have gone in the wrong direction
* Why is nobody pointing this out?
* This is the 9th month in a row that year-over-year factory orders have declined
* The only other time that has happened is during recession
* Every time we've seen a sharp decline in the market accompanied by an increase in the volatility index, the Fed has responded with Quantitative Easing
* More and more people now do not believe the Fed will raise rates in September
* If the Fed raises interest rates and the market keeps falling and the economy rolls over, the …
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Fed Casts Extras In Its Rate Hike Show
1 september 2015 · 33 min
* The Dow just finished its worst month in over 4 years Lees meer
* A lot has happened in the market since I recorded my last podcast
* When I recorded that podcast, I had anticipated a "Turnaround Tuesday" where the market would gap up, but then sell off by the close
* That is exactly what happened
* Then the Dow had its biggest 3-day rally in history
* Still that record-setting rise was not enough to repair the damage done that was done earlier
* The Dow had its biggest down month in over 4 years
* Still in official correction territory
* Adding woes to the stock market are Fed comments that September rate hikes are not off the table
* This will continue to add pressure on the markets
* If this week's Non-Farm Payroll number is positive, it could be very dangerous for the Dow Jones
* Technically, the market is very vulnerable, and without the Fed's support there is little to stop the correction from progressing into a bear market
* All of the big money is starting to sell stocks because they believe the Fed may raise rates
* The market will keep falling until the Fed cries, "Uncle!"
* Once the Fed comes to the rescue, big money will start buying again
* The Fed is still ignoring negative economic data, such as today's August Dallas Fed Manufacturing Survey which came in at -15.8
* There is probably not going to be much change in the unemployment number, no matter how weak the economy is
* Walmart is now cutting back on hours because they increased wages earlier
* As long as the Fed is continuing to bluff that rate hikes are on the table for September or October, this market will be under a lot of pressure
* If we close below the lows of last Monday, it is going to get ugly really fast
* The Fed doesn't want the market to connect the dots directly from monetary policy to market performance
* That would illustrate how unsustainable its policies really are
* I compared the Fed's tactics to trying to yank the table out from under the tablecloth, rather th…
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Will the Fed Rescue the Stock Market? – Ep. 105
25 augustus 2015 · 23 min
* It wasn't a Black Monday of the 1987 variety, but it was one for the record books Lees meer
* The Dow was down opened downjust over 1,000 points - the biggest intra-day point drop ever
* When the market opened down that low, bargain hunters came in for a spectacular rally
* Bringing the Dow almost back into positive territory before surrendering those gains and ending the day down 588 points, another 3.5% drop, closing at 15,871
* Taking out the 16,000 handle just a few days after taking out the 17,000 handle
* All of these drops are being blamed by the media on China
* The Dow Jones is down about 11% year to date
* After today's drop, the Chinese market was down less than 1%
* This is not all about falling Chinese stocks
* It's the Fed - Everybody believes the Fed is going to end the party
* As we got closer to September, the stock market was already going down
* I've said all along that the Fed was bluffing - it is a game of chicken
* Finally, today, Barclay's is predicting a Fed rate hike in March of 2016
* I think the Fed will launch QE4 before we get to a rate hike in March 2016, which is an election year
* The media wants to blame the correction on China, as if there are no domestic problems to worry about
* China should be blaming it on us - we're the ones who got the world hooked on zero percent interest rates
* The fantasy was that we could raise rates without an impact on the economy
* The falling stock market is going to have an impact on the real economy
* The economy is weak and getting weaker
* This correction will turn into a full-fledged bear market unless we get some official statement from the Fed that they will not raise rates
* That may come later this week in Jackson Hole
* I am going to be in Jackson Hole at an anti-Fed conference
* Here's an example of how ridiculous the "Blame China" rhetoric is:
* Maria Bartoromo was talking about the market decline with respect to the China currency devaluation
* She actually said that by d…
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U.S. Stock Market Correction Not Made In China – Ep.104
22 augustus 2015 · 27 min
* What a week for global stock markets, but in particular, the U.S. stock market, which had its worst week in 4 years Lees meer
* The Dow Jones down better than 1,000 points - over 10% from its peak puts it in official correction territory
* One-third of the stocks in the S&P 500 are already down 20% from their highs
* The Dow lost more than half of the 1,000 points today - 530 points, which is the 9th biggest point decline ever
* This is on top of the 350 points dropped on Thursday
* Thursday we broke below some key technical levels so Friday's drop was inevitable
* There could be a bigger one looming for Monday
* This is reminiscent of the weekend before Black Monday back in 1987
* We are only about 300 points above the lows from October last year when St. Louis Fed President James Bullard saved the market and sent the Dow up 2,000 points
* This time he is throwing the market an anchor
* He still indicates the Fed is undecided
* What data over the next couple of weeks could be that significant?
* The Fed does not want to admit that they can't raise rates
* When is the Fed going to blink?
* Valuations are extremely high, and the Fed is about to go from supporting the market to leaning against it
* The economy is decelerating
* I think the market is going to surrender all the gains it has made since March of 2009
* None of those gains have been real - they did not come from increased production or a genuine increase in corporate earnings, it was all Fed engineering
* The market has gained no ground since QE was suspended
* If the market goes down on Monday, what is the Fed going to do?
* The Fed needs an excuse not to raise rates
* The drop is not because of China
* The problem in China and in the emerging markets is caused by the perception that U.S. Fed is going to raise rates
* The markets want to blame the market correction on China but that is not why our market had a correction
* Emerging market currencies are taking the brunt of the selling by …
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FOMC Minutes Confirm Fed Rate Hike Rocket Not Ready for September Liftoff – Ep. 103
20 augustus 2015 · 20 min
* Today the FOMC minutes were released at 2:00 today and this is the last look inside the head of the FOMC members before September Lees meer
* Now expectations are being pushed back to December
* Gold and silver prices were up today in spite of expected hawkish Fed comments
* We are at more than a one-month high in the gold price now above 1130 against a backdrop of extreme bearishness suggests we've seen the low in this cycle
* Silver was down yesterday and recovered dramatically today which suggests an upward trend
* There is no more upside in the "Fed is raising rates" trade
* The Fed may not raise rates at all, or say they might not raise rates again
* Is the Fed raising rates just so they can cut them? Raising rates will accelerate the recession
* Whether the Fed raises rates or does not raise them, this may be the end of the dollar rally and the end of the gold and silver decline
* The FOMC minutes do not indicate a plan for a rate hike in the future
* The Fed does not want to admit we're not progressing in the direction the Fed wants; we're moving the other way.
* Case in point: the Empire State Manufacturing Index came out on Monday
* Last month, in July the Index was 3.86% - a low number
* The consensus for August was a slight improvement to 4.75%
* We actually got -14.92%
* This is the lowest number since April of 2009 and the biggest miss since 2010
* The Fed is worried that there is not enough inflation
* There's not enough growth and the job market is not there yet
* If the Fed is further away from their goal than they have been in this ridiculous monetary experiment of zero percent interest rates and quantitative easing
* Walmart earnings are down - blaming weak earnings on the strong dollar
* How much weaker will their earnings be with a weak dollar?
* Americans are spending more money on food - inflation that is not being measured
* The Stock Market is still selling off, because a rate hike is not priced in, as it is in the currency mar…
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Don’t Expect a Normal Reaction to an Abnormal Situation – Video Blog
11 augustus 2015 · 25 min
* On Friday we finally got the Non-Farm Payroll numbers for July Lees meer
* The consensus is that this reports indicates that an interest rate hike is inevitable
* This is the rate hike that everybody has been expecting and this report see
* The report is weak, relative to previous months, but slightly ahead of the consensus
* It seems like we are going in the wrong direction
* Labor Force Participation Rate is stagnant at the lowest in decades
* Q2 GDP was much lower than expected
* the Atlanta GDP Now Forecast for Q3 at 1% - a third of the official forecast
* If the Fed was not willing to raise rates last year, when the economy grew at 5%, why would they raise rates now?
* The Fed may have backed themselves into a corner where they have to raise rates
* If so, Yellen has already prepared the market for a tiny raise
* They recognize that the market is fragile
* It would be a more credible move for the Fed to not raise rates at all
* The market's reaction to the jobs data and the "certainty" that rates are going up
* The dollar sold off somewhat
* Gold rose slightly
* Higher interest rages are expected to be bullish for the dollar - Why didn't the dollar rise?
* The old adage, "Buy on the rumor, sell on the fact"
* If the Fed raises rates in September, it will be the most highly anticipated rate hike ever
* If the market buys on the anticipation of a rate hike, the actual rate hike will be the sell signal
* The market is telling us it has gained all that it is going to gain from any future rate hike
* The Fed will deliver much less in the way of rate hike than the market expects
* The reaction in the stock market was more interesting - The market was down again
* The longest losing streak in the Dow in about 4 years
* The fact that the U.S stock market is still falling indicates whereas the currency markets may have factored in a rate hike, the equity markets have not
* I have been hearing the refrain,"There is no reason to fear a rate hike!"
* Thi…
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Will The Bad News Finally Matter? – Ep. 101
10 augustus 2015 · 21 min
* One piece of positive economic news ISM Non-Manufacturing Index for July surged to 60.3 - highest number in 10 years Lees meer
* The ADP Employment Report came in at 185,000 jobs, well below the consensus
* June Trade Deficit rose 7.1% - in line with expectations
* June Layoffs rose to 105,696 biggest layoff number in 6 years
* Consumer Comfort Index down to 40.3 second lowest number since November
* The Atlanta Fed dropped a bombshell forecasting Q3 at just 1%
* Given this slowdown, could we possibly have a rate hike?
* The stock market has had 6 consecutive down days
* The stocks with no earnings are doing the best
* Very reminiscent of the dot com era
* The "story stocks" are selling in 2015
* Companies that actually have earnings are experiencing the greatest pressure on their share price
* Every time we have a dip in the stock market, the Fed always comes to the rescue
* Why wait until the economy is slowing down to raise rates?
* They can't do that this time, unless they want to abandon their rate hike rhetoric
* They will have to take the rate hikes off the table
* Janet Yellen continues to say rate hikes are data dependent
* The data has been bad for quite a while
* The economy is growing at the slowest pace of the entire "recovery"
* All the Fed can do is go back to the drawing board with more QE, because they can't admit that it never worked
* The money printing is just getting started
* Not that it is going to work, but it is the only policy remedy the Fed has
* Some stocks are really getting beaten up as earnings continue to disappoint
* This topping pattern has got to worry the Fed
* Any rate hike will accelerate the decline
* We have a stock market bubble and raising rates will prick that bubble
* Ben Bernanke created the stock market bubble thinking the "wealth effect" would cure the economy
* Bernanke would not acknowledge that bubbles weaken the economy because it was not politically advantageous
* The First Republican Debate wa…
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Upon What Data Does the Fed Depend? – Ep. 100
4 augustus 2015 · 30 min
* This is my 100th Podcast Lees meer
* This new format allows for timely analysis when is is most convenient for me and for you, the listener
* Please share these podcasts, to get this valuable information out
* My podcasts can be accessed on YouTube, on iTunes and other podcast sites and right here on my website
* Also don't forget to check out my Twitter feed, because I comment much more frequently on daily economic news
* Check out my post on Facebook about the CEO who established a $70,000 minimum salary for all his workers, and the latest news is that his policy is about to take the company down
* Today a bombshell was dropped on the labor markets on Friday in the form of Employment Cost Index
* Measures the cost to employers: wages and benefits
* The expected increase was .6, but the actual number came in at just .2 for the quarter
* This the weakest number since 1982, since they began keeping records
* Janet Yellen has been saying that improvements in the labor market must precede a rate hike
* This is understood to mean wages, labor participation rate and full time vs part time jobs
* We're 0 for three, right now - all three are falling
* As soon as this number came out, they dollar sold hard
* But then, the dollar clawed its way back, and gold was down again - gold stocks got crushed - Why?
* Jon Hilsenrath, the chief economics correspondent for The Wall Street Journal, came out with an article, speaking for the Fed, stating that the Fed does not need wage growth to hike rates
* Really? The Fed is going out of its way to preserve the pretense that it can actually raise rates
* They are seeking the psychological effect of rate hikes without the real world damage of actual rate hikes
* If the Fed still believes it won't raise rates unless the labor market improves and they are taking wage hikes off the table, then what are they waiting for?
* The other two remaining criteria are still down
* Janet Yellen still says she's data dependent and all the …
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Worst Recovery Since WWII Just Got Worse – Ep. 99
31 juli 2015 · 21 min
* This morning we got the first look at Q2 GDP Lees meer
* Q1 had been reported most recently at -.2
* Everybody was looking for an upward revision due to the double seasonal adjustments
* The revision brought Q1 into the black, but only by .6
* Q2 expectation was 2.9; instead it came in at 2.3
* I had mentioned that at best, Q2 GDP would be in the low 2's, which is what we have
* After revisions, however, we could end up at below 2 for Q2
* Wall Street and the Fed were too optimistic about Q2
* Now previous GDP years have been revised, with the net effect of lowering U.S. GDP growth almost 1 percentage point for the past three years
* After revisions, the average growth rate is 2% per year
* 2015 Q1 & Q2 average GDP growth rate is just 1.45%
* The worst first half of the "recovery"
* What is the point of raising rates now, when the economy is at its weakest?
* The Fed is still waiting to see improvements in the labor market
* Unemployment is low
* The Fed is waiting to see increases in wage growth and in labor force participation
* It is unlikely that there will be more part-time workers finding full time jobs
* The Fed is still putting on a show, pretending that a rate hike will be appropriats
* This recovery is the weakest recovery in the modern era, since WWII
* We have had the most Keynesian monetary stimulus ever
* The Keynesians will not consider that their policies are an economic sedative
* Even though this is the biggest economic ever, the Keynesians still want more
* Redbook Year-Over-Year Same Store Sales rose by just 1%
* Last year, the year-over-year growth was 3%
* Pundits blame poor retail sales on "hot weather"
* People aren't shopping because they aren't making enough money
* The U.S. home ownership rate fell to a new low of 63.4%
* The result of government efforts to increase home ownership is the the lowest rate since 1967
* Rental prices are at an all time record high
* July Consumer Confidence plunged from 99.8 in June to 90…
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Fed Leaks, Fast Food, Housing & Gold – Ep.98
26 juli 2015 · 41 min
* The Dow Jones had its worst week since January - closed the week at 17,568, down 518 points Lees meer
* Friday's drop alone accounted for 163 points
* Capital One had a huge earnings miss and announced big layoffs
* Big losses on bad debt
* All the economic data from this year has been negative
* There is no precedent for the Fed to raise rates when all economic indicators are down
* Normally The Fed stimulates when the economy is down
* The most interesting economic news on Friday was a leak from the Federal Reserve
* Fed employees' internal projections are way below the Fed's public estimates
* Projections go all the way out to 2020 and can only amount to guesses
* The document is posted on my Facebook page
* Real GDP: 2015: 2.31 way below the official forecast but still overly optimistic
* Real GDP for 2016: 2.38 - 2017: 2.17 - 2018:1.76 - 2019:1.75 - 2020:1.74
* This shows an average of under 2% for the next 5 years
* If the Fed believes its staff's estimates, why would they be talking about raising rates?
* Inflation numbers are even more difficult to believe:
* 2015: 1.15 - 2016: 1.54 - 2017:1.76 - 2018:1.89 - 2019: 1.92 - 2020: 1.94
* How can they possibly know? It looks like they just picked numbers somewhere below 2%
* They even have the core PCE
* 2015: 1.33 - 2016: 1.52 - 2017: 1.78 - 2018: 1.9 - 2019: 1.92 - 2020: 1.94
* Fed Funds Numbers:
* 2015: .35%(implies one rate hike) - 2016: 1.26% - 2017: 2.12% - 2018: 2.8% - 2019: 3.1% - 202 : 3.34%
* After 5 years of tightening rates would still be at historically low levels
* This indicates how little confidence the Fed has in the economy
* They predict the yield on the 10-year note to rise 2.63% in 2015 up to 4.2 in 5 years
* One of the most ridiculous assumptions is unemployment: 2015: 5.34% - 2016: 5.24% - 2017: 5.18 - 2018: 5.15 - 2019: 5.15 - 2020: 5.16
* These are all just guesses. How do they know?
* This shows by the Fed's own estimates that employment is not expected to improve
* …