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12.15.17- Inflation Can Return Much Faster
Than You Think

James Rickards

Consumer price inflation has remained persistently low, despite the Fed’s best efforts. This has led many people to ask where the inflation is, because the Fed has created trillions of dollars since the financial crisis.

But there has been inflation. It’s just been in assets like stocks, bonds, real estate, etc. How about bitcoin? Bitcoin increased about $2,000 yesterday alone! It’s trading at about $16,000 as I write. We’ve never seen anything like it.

The bottom line is, we’ve seen asset price inflation, and lots of it, too. Read More

12.14.17- Have Stocks Reached A Permanently Rigged Plateau?
Fall Street

painting recently sold for a record $450 million, a blanket recently sold for $1.5 million, Bitcoin has gone ballistic, and Cramer thinks there are ‘bubbles’ everywhere except stocks.  Are these the types of signals that bears have been waiting for?  In a word, maybe.

The problem with calling for an end to the good times is that there has been so many false contrarian signals in recent years it is as if the very idea of “risk/reward” has been temporarily laid to waste.

To use a quick example, in early 2016 alarm bells were ringing as junk bonds were imploding, confidence was sliding, and technical market levels were being struck.  At the time it looked like the bull was done. Read More

12.13.17- A Question for Every Investor
Michael Lebowitz

Recently we received the following question from a subscriber:

“If a correction in the stock or bond markets comes, the Central Banks will buy stocks with printed money, like the Japanese Central Bank, etc. Will there ever be a shakeout of the garbage and junk in the system? I am losing all confidence.” –Ron H.

Questions like Ron’s that suggest the decay of capitalism and free markets should raise concerns for anyone’s market thesis, bullish, bearish or agnostic. What stops a central bank from manipulating asset prices? When do they cross a line from marginal manipulation to absolute price control? Unfortunately, there are no concrete answers to these questions, but there are clues. Read More

12.12.17- Today’s Current, Biggest Bubble Ever As Shown In Just Three Charts
(Spoiler Alert: It’s NOT Bitcoin)

John Rubino

John Rubino says “It’s always shocking to see the numbers we’re dealing with, but even more so lately…”

Each quarter, Credit Bubble Bulletin’s Doug Noland posts a “flow of funds” report that analyzes the debt and securities markets data released by the Fed in its Z.1 Report. It’s always shocking to see the numbers we’re dealing with, but even more so lately as history’s biggest financial bubble starts to dwarf its predecessors.

Here’s some of the scarier data in chart form, with Noland’s commentary: Read More

12.11.17- Investment Potpourri
Bill Gross

1. Prior market tops (1987, 2000, 2007, etc.) allowed asset managers to partially “insure” their risk assets by purchasing Treasuries that could appreciate in price as the Fed lowered policy rates. Today, that “insurance” is limited with interest rates so low. Risk assets, therefore, have a less “insurable” left tail that should be priced into higher risk premiums. Should a crisis arise because of policy mistakes, geopolitical crises, or other currently unforeseen risks, the ability to protect principal will be impaired relative to history. That in turn argues for a more cautious and easier Fed than otherwise assumed.

Economists prior to Keynes viewed “modeled” as well as “real time” economies as self-balancing, but subject to imbalances from external shocks like oil prices. Rarely did theory incorporate finance and credit as one of those potential earthquakes. Read More

12.09.17- Bitcoin Doesn’t Exist – 4
Raúl Ilargi Meijer

Dr. D: Well, all parts of the system rely on accurate record-keeping. Look at voting rights: we had a security company where 20% more people voted than there were shares. Think you could direct corporate, even national power that way? Without records of transfer, how do you know you own it? Morgan transferred a stock to Schwab but forgot to clear it. Doesn’t that mean it’s listed in both Morgan and Schwab? In fact, didn’t you just double-count and double-value that share? Suppose you fail to clear just a few each day. Before long, compounding the double ownership leads to pension funds owning 2% fake shares, then 5%, then 10%, until stock market and the national value itself becomes unreal. And how would you unwind it?  Read More

12.08.17- Bitcoin Doesn’t Exist – 3
Raúl Ilargi Meijer

Dr. D: The money, the unaccountable, uninhibited release of tokens can do more than just buy centuries of hard labor in seconds, it‘s also a method of control. Banks, our present issuers of money, can approve or destroy businesses by denying loans. They can do this to individuals, like denying loans to unpopular figures, or to whole sectors, like gun shops. They can also offer money for free to Amazon, Facebook, and Tesla, which have no profitable business model or any hope of getting one, and deny loans to power plants, railroads, farms, and bridges as they fall into the Mississippi. 

The result is banks and their attending insiders are a de facto Committee of Central Planners in the great Soviet style. What is fashionable and exciting to them can happen, and what they dislike or disapprove of for any reason can never happen. And once on a completely fiat system, this is how capital is allocated through our entire system: badly. Read More

12.07.17- Bitcoin Doesn’t Exist – 2
Raúl Ilargi Meijer

Dr. D: You have to understand what exchanges are and are not. An exchange is a central point where owners post collateral and thereby join and trade on the exchange. The exchange backs the trades with their solvency and reputation, but it’s not a barter system, and it’s not free: the exchange has to make money too. Look at the Comex, which reaches back to the early history of commodities exchange which was founded to match buyers of say, wheat, like General Mills, with producers, the farmers. But why not just have the farmer drive to the local silo and sell there? Two reasons: one, unlike manufacturing, harvests are lumpy. To have everyone buy or sell at one time of the year would cripple the demand for money in that season. This may be why market crashes happen historically at harvest when the demand for money (i.e. Deflation) was highest. Secondly, however, suppose the weather turned bad: all farmers would be ruined simultaneously. Read More

12.06.17- Bitcoin Doesn’t Exist – 1
Raúl Ilargi Meijer

A while ago, I asked a regular commenter at the Automatic Earth, who goes by the moniker Dr. D, to try and write an article for us. Not long after, I received no less than 31 pages, and an even 12345 words. Way too long for today’s digital attention spans. We decided to split it into 5 chapters. After we work through those 5, we’ll post it as one piece as well. Dr. D, who insists on sticking with his nom de plume, picked his own topic, and it’s -fittingly- bitcoin. A topic about which one can cover a lot of ground in 12345 words. 

Now, I wouldn’t be me if I didn’t throw in my own two Satoshis: Dr. D claims that “..everyone has an equal opportunity to solve the next calculation..”, but while that may perhaps have been sort of true at the very start, it isn’t now. It’s not true for the computerless or computer-illiterate, for those too poor to afford the electricity required by bitcoin mining, and for various other -very large- groups of people.  Read More

12.05.17- It’s Not Really About Bitcoin Price Surging, It’s Fiat Currencies In Free Fall
 Joseph Young

According to Stefan Molyneux, a highly regarded Canadian podcast host, it is more important to recognize the free fall of fiat currencies, more so than to acknowledge the exponential growth rate of Bitcoin.

Molyneux says:

“It's not so much that Bitcoin is going through the roof - it's that fiat currencies are in free fall, but only Bitcoin is noticing.”

The decline of fiat currencies

For many decades, governments have had absolute control over the global finance sector and monetary policy through the fiat currency system. Read More

12.04.17- Plunder Capitalism
Paul Craig Roberts

I deplore the tax cut that has passed Congress. It is not an economic policy tax cut, and it has nothing whatsoever to do with supply-side economics. The entire purpose is to raise equity prices by providing equity owners with more capital gains and dividends. In other words, it is legislation that makes equity owners richer, thus further polarizing society into a vast arena of poverty and near-poverty and the One Percent, or more precisely a fraction of the One Percent wallowing in billions of dollars. Unless our rulers can continue to control the explanations, the tax cut edges us closer to revolution resulting from complete distrust of government. Read More

12.02.17- Carmageddon for Tesla
Wolf Richter

This is where Hype Goes to Die.

Today was the monthly moment of truth for automakers in the US. They reported the number of new vehicles that their dealers delivered to their customers and that the automakers delivered directly to large fleet customers. These are unit sales, not dollar sales, and they’re religiously followed by the industry.

Total sales in November rose 0.9% from a year ago to 1,393,010 new vehicles, according to Autodata, which tracks these sales as they’re reported by the automakers. Sales of cars dropped 8.2%. Sales of trucks – which include SUVs, crossovers, pickups, and vans – rose 6.6%. Strong replacement demand from the hurricane-affected areas in Texas papered over weaknesses elsewhere. As always, there were winners and losers. Read More

12.01.17- Bitcoin Soars After CFTC Approves Futures Trading: First Trade To Take Place Dec.18
Tyler Durden

Bitcoin is back over $10,000 after the the CFTC confirmed what had been previously reported, namely that it would allow bitcoin futures to trade on two exchanges, the CME and CBOE Futures Exchange, also granting the Cantor Exchange permission to trade a contract for bitcoin binary options. 

The CFTC announced that through a process known as "self-certification," CME and Cboe stated that their contracts comply with U.S. law and CFTC regulations. The US commodity regulator also said that the it held “rigorous discussions” with the exchanges that resulted in improvements to the contracts’ designs and settlement. Read More

11.30.17- 5 Warning Signs the Stock Market’s
Going to Crash

A market never crashes without giving some warning signs that danger is ahead. And when it comes to protecting your wealth, ignorance is never bliss.

Here are 5 red flags occurring in the market right now that everybody should know about (even if they don’t have money in the stock market).

A Carbon Copy of the Most Recent Major Crashes

Conditions are eerily the same today as they were just before the financial crisis in 2007, and the dot-com crash in 1999. Read More

11.29.17- Bubble Dynamics and Market Crashes
James G. Rickards

To paraphrase one of the great gems of Wall Street wisdom, “Nothing infuriates a man more than the sight of other people making money.”

That’s a pretty good description of what happens during the late stage of a stock market bubble. The bubble participants are making money (at least on a mark-to-market basis) every day.

Meanwhile, the more patient, prudent investor is stuck on the sidelines — allocated to cash or low-risk investments while watching everyone else have fun. This is especially true today when the bubble is not confined to the stock market but includes exotic sideshows like crypto-currencies and Chinese real estate. Read More

11.28.17- The Perfect Storm
(Of The Coming Market Crisis)

Lance Roberts

It is always refreshing to step away from the keyboard for a few days and hit the “reset button,” which is exactly what I did last week. My wife and I took a quick trip to Mexico to get a little sun on our face while we wiggled our toes in the sand.

I came back astonished.

Over my 30-odd years of working with money in various capacities, I learned to “shut-up and listen.” This is particularly the case when you are in an airport lounge or packed like sardines in a missile-shaped tube hurling through the air at 35,000 feet. Read More

11.27.17- Will The Blockchain Render This Multibillion-Dollar Industry Obsolete?
Tyler Durden

Blockchain technology is on the cusp of disrupting another billion-dollar industry that most Americans (particularly members of the millennial generation) rarely think about: Boring old title insurance.

Since the blockchain technology craze swept the US in 2015, technologists working to pinpoint new use-cases for the technology have been squawking about its potential to revolutionize how governments store and track ownership of land. The system used by most modern governments was developed centuries ago: In the US, property titles are public documents recorded with roughly 3,600 counties, towns and other jurisdictions. In some cases, the record is available only in writing and can be viewed only by visiting a town clerk’s office. Since the system in its present form leaves plenty of room for error, many homeowners purchase title insurance to protect against the possibility that their claim to the property is challenged – either because the records were lost, or for any other reason. Read More

11.25.17- Weekend Rant: Did Tariffs Really Cause the American Civil War?
Chris Calton

In the first episode of the new season of Historical Controversies, which will focus on the sectional crises that led to the Civil War, I gave a brief explanation of my problem with the “Tariff Thesis” for the cause of southern secession. My arguments on the subject were the primary subject of criticism for the episode, and I feel it may be worth offering a more detailed explanation as to why I reject this popular interpretation for the cause of secession. It is worth mentioning that although this article is only intended to address the tariff thesis for southern secession, there is also a separate tariff thesis “Tariff War Thesis” which states that tariff revenues were the reason for Lincoln’s desire to wage the war. Although I reject both tariff theses, Tariff War Thesis is, at least, more plausible. Read More

11.24.17- The Mother Of All Irrational Exuberance
David Stockman

You could almost understand the irrational exuberance of 1999-2000. That's because everything was seemingly coming up roses, meaning that cap rates arguably had rational room to rise.

But eventually the mania lost all touch with reality; it succumbed to an upwelling of madness that at length made even Alan Greenspan look like a complete fool, as we document below.

So doing, the great tech bubble and crash of 2000 marked a crucial turning point in modern financial history: It reflected the fact that the normal mechanisms of honest price discovery in the stock market had been disabled by heavy-handed central bankers and that the natural balancing and mechanisms of two-way markets had been destroyed. Read More

11.23.17- Holiday Rant: Undoing the Dis-Education of Millennials
Adam J. MacLeod

I teach in a law school. For several years now my students have been mostly Millennials. Contrary to stereotype, I have found that the vast majority of them want to learn. But true to stereotype, I increasingly find that most of them cannot think, don’t know very much, and are enslaved to their appetites and feelings. Their minds are held hostage in a prison fashioned by elite culture and their undergraduate professors. 

They cannot learn until their minds are freed from that prison. This year in my Foundations of Law course for first-year law students, I found my students especially impervious to the ancient wisdom of foundational texts, such as Plato’s Crito and the Code of Hammurabi. Many of them were quick to dismiss unfamiliar ideas as “classist” and “racist,” and thus unable to engage with those ideas on the merits. Read More

11.22.17- Bank of America Is Now Warning Of Full-On Economic Collapse
Tyler Durden

Having predicted back in July that the "most dangerous moment for markets will come in 3 or 4 months", i.e., now, BofA's Michael Hartnett was - in retrospect - wrong (unless of course the S&P plunges in the next few days). However, having stuck to his underlying logic - which was as sound then as it is now - Hartnett has not given up on his "bad cop" forecast (not to be mistaken with the S&P target to be unveiled shortly by BofA's equity team and which will probably be around 2,800), and in a note released overnight, the Chief Investment Strategist not only once again dares to time his market peak forecast, which he now thinks will take place in the first half of 2018, but goes so far as to predict that there will be a flash crash "a la 1987/1994/1998" in just a few months. Read More

11.21.17- And Now, for Something Entirely Different: 5 Unbelievably Stupid Ideas
Governments Actually Tried

corbettreport

View Video

11.20.17- Rob From The Middle Class Economics
Gary Christenson

Much of our financial world functions as a “Rob from the Middle Class” economy. The system robs from the middle class and poor via “money printing” and inflation of the currency supply!

The rich get richer and the poor get poorer.

Little benefit comes from complaining about the process or fighting it. Understand the process, work around it, and use it constructively.

Explaining Our Rob from the Middle Class Economy:

Governments, individuals, pension funds and corporations are increasingly financialized and dependent upon debt, central bank interventions and currency devaluations. Wages are less relevant in a financialized economy because wages rise slowly while debt, currency in circulation, and paper financial assets increase rapidly. Read More

11.18.17- The Great Retirement Con
Adam Taggart

Frankly put: retirement is now a myth for the majority

The Origins Of The Retirement Plan

Back during the Revolutionary War, the Continental Congress promised a monthly lifetime income to soldiers who fought and survived the conflict. This guaranteed income stream, called a "pension", was again offered to soldiers in the Civil War and every American war since.

Since then, similar pension promises funded from public coffers expanded to cover retirees from other branches of government. States and cities followed suit -- extending pensions to all sorts of municipal workers ranging from policemen to politicians, teachers to trash collectors. Read More

11.17.17- The Greatest Fear Today: The Lack of Fear
Jim Rickards

Market crashes often happen not when everyone is worried about them, but when no one is worried about them.

Complacency and overconfidence are good leading indicators of an overvalued market set for a correction or worse.

Prominent magazine covers are notorious for declaring a boundless bull market right at the top just before a crash or correction.

October 19 saw the thirtieth anniversary of the greatest one-day percentage stock market crash in U.S. history — a 22% fall on October 19, 1987. Read More

11.16.17- It’s time to call the housing crisis what it really is: the largest transfer of wealth
in living memory

Laurie Macfarlane

One of the basic claims of capitalism is that people are rewarded in line with their effort and productivity. Another is that the economy is not a zero sum game. The beauty of a capitalist economy, we are told, is that people who work hard can get rich without making others poorer.

But how does this stack up in modern Britain, the birthplace of capitalism and many of its early theorists? Last week, the Office for National Statistics (ONS) released new data tracking how wealth has evolved over time. On paper, the UK has indeed become much wealthier in recent decades. Net wealth has more than tripled since 1995, increasing by over £7 trillion. This is equivalent to an average increase of nearly £100,000 per person. Impressive stuff. But where has all this wealth come from, and who has it benefitted? Read More

11.15.17- Invest like 1987 is about to happen again - because it is, warns hedge fund manager
Shawn Langlois

Every time the market bends but doesn’t break, bears pop up to remind everyone it’s just a matter of time before this thing finally falls apart. We saw it again on Friday, as multiweek winning streaks came to an end on major indexes — yet no real panic ensued. 

But could this be the rare dip that doesn’t find a buyer? That’s the question investors are chewing on as we push into mid-November. 

In our call of the day, Eric Peters, chief investment officer of One River Asset Management, says “people are no longer investing, they’re speculating” — duh — and he is convinced history is about to repeat itself. Read More

11.14.17- Get Ready for the "Crack-Up Boom"
Bill Bonner

For nearly two decades, the world’s central banks have labored hard, sweating to coax more digital money out of a stony and grudging economy.

More than $20 trillion did they bring forth via QE (buying stocks and bonds with newly created cash) – a mighty sum indeed.

But that is past. It is what wrought a Dow at 23,000 points… Amazon shares trading for $1,000… and a $6,000 bitcoin.

What it might wring out of the future is our subject for today. Read More

11.13.17- ‘America First!’ AWOL from Beijing, War with North Korea Looms
James George Jatras

There’s no indication that President Donald Trump’s summit with China’s Xi Jinping achieved any breakthrough on North Korea. But why didn’t it? After all, Trump said that China could “fix” the North Korea problem “easily and quickly” and it was just a matter of Xi’s making up his mind to do so.

No less divorced from reality was Trump’s half-hearted pitch on the US trade imbalance with China. The problem, he said, was not the Chinese – whom he complimented on their cleverness in exploiting our stupidity – but on the flaccid policies of prior American administrations. Quite true! But what will he do differently? Not much it seems, except maybe give a big tax cut with no strings attached to fat corporations that are thrilled to keep moving their operations overseas. Global market über alles! And here we all thought Hillary Clinton lost the election . . . Read More

11.11.17- Become a "Marijuana Millionaire" - Without Risking a Dime in the Market
Jeff Clark

The medical marijuana sector is on fire!

It’s only been legal for a short period of time, but already it’s become a $7 billion market in the U.S. — and is soon expected to reach $500 billion globally.

That helps explain why investors have been pouring millions of dollars into this sector.

But here’s the thing…

Most of these folks are doing it all wrong. Read More

11.10.17- Ron Paul: We Are Reaching
A Point Of No Return

Adam Taggart

When the system will break no matter what the Fed tries

Dr. Ron Paul has long been a leading voice for limited constitutional government, low taxes, free markets, sound money, civil liberty, and non-interventionist foreign policies.

Dr. Paul served as the US Representative for Texas’s 27th Congressional District from 1976 to 1985. He then represented the 14th district from 1977 to 2013. He ran for the office of US President, three times, most recently in the 2012 Republican primaries. Dr. Paul also had a long career as an OBGYN over which he delivered more than 4,000 babies. Read More

11.09.17- Get Politics And Religious Bigotry Out of The Law
Karl Denninger

For the first time, a majority of Republicans are in favor of legalizing marijuana, according to a Gallup poll out Wednesday.

Fifty-one percent of Republicans tell Gallup that, yes, marijuana should be legal, up from 42 percent last year.

That support has led to a whopping two-thirds of Americans (64 percent) supporting pot legalization, the highest ever recorded by Gallup. Gallup has data on the question since 1969.

Marijuana was made illegal in the United States on the back of a campaign financed and promoted by the Hearst paper empire, which was deeply concerned about the ability of hemp to displace wood pulp for paper production. Read More

11.08.17- The plan comes together?
Bill Holter

My original thought was to write further about the left turning on and eating each other. The volume of news, “who” and the timing seemed to indicate something very big coming down. However, another story broke out of the blue this morning from Saudi Arabia that supersedes (though very well may have connections to) the feeding frenzy.

Crowned Prince Mohammed bin Salman had 11 princes and 38 current and former senior officials arrested on corruption and money laundering charges. http://www.reuters.com. Prince Alwaleed bin Talal being the most notable arrested. The thought process of “why” becomes scattered after the initial and obvious thought MBS is consolidating his power after being named as next in line back in June. Read More

11.07.17- PBOC's Zhou Warns Of "Sudden, Complex, Hidden, Contagious, Hazardous" Risks
In Global Markets

Tyler Durden

Just two weeks after warning of the potential for an imminent 'Minsky Moment', Chinese central bank governor Zhou Xiaochuan has penned a lengthy article on The PBOC's website that warns ominously of latent risks accumulating, including some that are "hidden, complex, sudden, contagious and hazardous," even as the overall health of the financial system appears good.

The imminence of China's Minksy Moment is something we have discussed numerous times this year. Read More

11.06.17- And Now, for Something Entirely Different: One Giant Lie for Mankind – Amazing NASA Confession
Bart Sibrel

Has there ever been a milestone accomplishment of mankind, whether it be the four minute mile, or climbing Mount Everest, or breaking the sound barrier, that once achieved, no one from any nation on earth was able to repeat the same accomplishment for seventy years?  Of course not . . . except . . . man allegedly walking on the moon in 1969 (as twenty years from now is the earliest projected “repeat” of the event, though fifty years ago it allegedly only took eight years to develop the technology to do so). Read More

11.04.17- Only Contratians Will Survive
Egon von Greyerz

We are currently standing before one of the most unique and frightening periods in history. Never have there been so many extremes in so many different areas. In the last 100 years everything seems to have developed so much faster, including population, technology, inflation, debt, money printing, budget deficits, stock, bond and property prices, crypto currencies etc.

All of these areas are now in an exponential growth phase. The final stage of exponential growth is explosive and looks like a spike that goes straight up. A spike for a major sample like global population or the Dow never finishes with just a sideways move. Once a spike move has finished, it always results in a spike move down. Read More

11.03.17- A Falling Rate of Discount and the Consumption of Capital 
Dr. Keith Weiner

Warren Buffet famously proposed the analogy of a machine that produces one dollar per year in perpetuity. He asks how much would you pay for this machine? Clearly it is worth something more than $1.00. And it’s equally clear that it’s not worth $1,000. The value is somewhere in between. But where?

We are not sure why Warren Buffett invoked a money printing machine of all things – another interesting way of looking at the concept is by e.g. considering land. Why does land have a finite value? After all, a piece of land that can be used to grow wheat can conceivably do so in perpetuity (even if it is merely valued as standing room, such as a plot of land on 5th Avenue in NYC, it can render that service forever. Read More

11.02.17- The Strongest Melt-Up Gains Start Here…
Greg Guenthner

As the market melt-up barrels into November, investors continue to gorge on high-flying growth stocks.

The Nasdaq Composite launched to new all-time highs yesterday, fueled by the likes of Facebook (NADSAQ:FB) and Apple Inc. (NASDAQ:AAPL). Facebook is now up more than 56% on the year, while Apple is hot on its heels as hype builds over the debut of the new iPhone. Both are perched at all-time highs.

With the market flying higher every week, investors aren’t satisfied hanging onto stodgy value plays. If you want to keep up with strongest stocks on the market, you have to bet on growth… Read More

11.01.17- Take Your Pick: $10,000 or $57,435?
Nilus Mattive

Take Your Pick: $10,000 or $57,435?

Looking to get rich quick?

Well, today’s roadmap isn’t going to help.

But if you’re looking to get rich MORE QUICKLY … then I have a very simple way for you to do that.

It begins with dividend-paying stocks.

When you pick the right dividend stocks, you set yourself up for dependable income no matter what happens next in the markets or even with the underlying investment’s price itself. Read More

10.31.17- Month-End Leaves Market at Crossroads
 Marc Chandler 

Global equity markets are closing another strong month.  The MSCI Asia Pacific Index was little changed on the day, but up 4.3% in October, the 10th consecutive monthly advance.   Europe's Dow Jones Stoxx 600 is also flattish today, but up 1.6% on the month.  It is the second monthly advance after a June-August swoon.  The benchmark is closing in on the high for the year set in May.    The S&P 500 made new record highs at the end of last week.  Coming into today'\s session, the S&P 500 is up 2.1% on the month, and since last October, has only posted a single losing month (March  -0.04%). Read More

10.30.17- Lemmings in Full Gallup Towards Cliff
Michael Pento

It's official…the stock market has broken above 23,000, and its valuations should now scare even the most mind-numbed carnival barker on Wall Street.  The forward 12-month PE ratio is 18, compared to the 10-year average of just 14. The 12-month trailing PE for Pro-forma earnings, which takes into account non-recurring items that seem to recur ever quarter, is trading at 20 times earnings. But on a reported earnings basis—the number you report to the SEC under penalty of the law and according to GAAP standards--the 12-month trailing PE is 25.5 times earnings.

The S&P 500 was 666 in March of 2009 and it is trading at 2,560 today. It has risen to such an absurd valuation that it is now destined to absolutely crash. Read More

10.28.17- Weekend Rant: Bitcoin... A Tower of Monetary Babel
Antonius Aquinas

The promoters of crypto currencies have gushingly touted them as the mechanism by which the present central banking cabal and the system of nation states which derive much of their power from will be brought down and replaced by digital money. 

Despite their meteoric rise as speculative “assets,” there are fundamental economic reasons why they will never act as a general medium of exchange despite the wild enthusiasm for them by the crypto-currency cultists. Read More

10.27.17- Chaos Unleashed: Catalan Parliament Votes For Independence, Spain Activates
"Nuclear Option"

Tyler Durden

Update: Just minutes after the Catalan government voted for Independence from Spain, with a former Decision of Independence likely to follow momentarily, over in Madrid wasted no time in responding, and moments ago, with 214 for and 47 against, voted to approve Article 155 of Spain's 1978 Constitution, aka the Nuclear Option which has never been used before, suspending home rule in Catalonia, and giving Prime Minister Rajoy the power to oust the Catalan government.

What happens next? Read More

10.26.17- If You Want to Understand the Next 10 Years, Study Spain
Michael Krieger

Some of you may be confused as to why a U.S. citizen living in Colorado has become so completely obsessed with what’s going on in Spain. Bear with me, there’s a method to my madness.

I believe what’s currently happening in Spain represents a crucial microcosm for what we’ll see sweep across the entire planet over the next ten years. Some of you will want to have a discussion about who’s right and who’s wrong in this particular affair, but that’s besides the point. It doesn’t matter which side you favor, what matters is that Madrid/Catalonia is an example of the forces of centralization duking it out with forces of decentralization. Read More

10.25.17- Is Capitalism Dead or Merely Dying?
Raúl Ilargi Meijer

New Zealand’s new prime minister Jacinda Ardern calls capitalism a blatant failure. Former Greek finance minister Yanis Varoufakis says capitalism is ‘merely’ coming to an end because it is making itself obsolete. Mathematics professor Bruce Boghosian claims that without redistribution of wealth, our market economy would not be stable, because wealth always tends to concentrate. The people at Artemis Capital Management write that the stock market has begun self-cannibalizing like a snake eating its tail, and the only reason we’re not in a recession already is ‘financial alchemy’. Read More

10.24.17- IceCap Asset Management: "We Are About To Witness The Financial Market Movement Of A Lifetime"
Keith Dicker

"Should I Stay or Should I Go?"

Darlin’ you got to let me know

During the 1970s, The Clash pushed rock and roll to the edge. Their hard charging, explosive, and anger-filled style, inspired spiked hair, rocked generations and forced people to question conventional thinking. 

Along the way, they rocked the casbah. They called London. They got lost in a super market and then they went straight to hell. 

For many – The Clash was the only band that mattered. Read More

10.23.17- In The Shadows Of Black Monday - "Volatility Isn't Broken... The Market Is"
Christopher Cole

Volatility and the Alchemy of Risk

The Ouroboros, a Greek word meaning ‘tail devourer’, is the ancient symbol of a snake consuming its own body in perfect symmetry. The imagery of the Ouroboros evokes the infinite nature of creation from destruction. The sign appears across cultures and is an important icon in the esoteric tradition of Alchemy. Egyptian mystics first derived the symbol from a real phenomenon in nature. In extreme heat a snake,unable to self-regulateitsbody temperature,will experience an out-of-control spike in its metabolism. In a state of mania, the snake is unable to differentiate its own tail from its prey,and will attack itself, self-cannibalizing until it perishes. In nature and markets, when randomness self-organizes into too perfect symmetry, order becomes the source of chaos. Read More

10.21.17- Strangely enough, Vanuatu proves why Bitcoin can never be banned
Simon Black

In the late 1500s, an Englishman named William Lee invented a revolutionary knitting machine that could efficiently do the work of dozens of men.

Given how important the garment industry was at the time in England, Lee’s invention was truly disruptive.

But Queen Elizabeth wasn’t so excited.

When Lee came to visit her to demonstrate the power of his new technology, the Queen grimaced, lamenting that the machine would put too many people out of work, & she refused his request for a patent. Read More

10.20.17- Why I Changed My Mind on Bitcoin
Ray Blanco

Friday of last week, I wrote about the enormous impact blockchain technology could have on retail transactions.

Verifications blockchain tech makes possible could end counterfeiting. It could end lost or stolen goods.

Plus, it could allow for immediate transactions and for goods to be shipped minutes after a confirmed purchase, as opposed to hours or days.

That’s just a quick look at consumer-focused applications.

Banks, brokers, money managers. There are blockchain tech implications for all those jobs too. Read More

10.19.17- The mind game designed
to produce losers

Jon Rappoport

Separating logic from propaganda. Separating illusion from reality.

An individual has the capacity to think independently. A group does not have that capacity.

“My friends, here is the game. On the table before you, you see many stones. Some are expensive gems, and some are worthless fakes. But you must decide they’re all fake or they’re or real. That’s the game.”
(The Underground, Jon Rappoport)

Crazy choices. Untenable choices. A ridiculous game. But many people fall for it. Why? Read More

10.18.17- Who Pays What in Taxes?
Jim Stone

Politicians exploit public ignorance. Few areas of public ignorance provide as many opportunities for political demagoguery as taxation. Today some politicians argue that the rich must pay their fair share and label the proposed changes in tax law as tax cuts for the rich. Let’s look at who pays what, with an eye toward attempting to answer this question: Are the rich paying their fair share?

According to the latest IRS data, the payment of income taxes is as follows. The top 1 percent of income earners, those having an adjusted annual gross income of $480,930 or higher, pay about 39 percent of federal income taxes. That means about 892,000 Americans are stuck with paying 39 percent of all federal taxes. The top 10 percent of income earners, those having an adjusted gross income over $138,031, pay about 70.6 percent of federal income taxes. Read More

10.17.17- The Central Planners Lullaby
J Johnson

We seem to be in a lull in market moving news, or is it more the gyrations within the market that have been put to sleep?  The question offers an implication that the exchanges and human emotions “used” to be connected, which in the past, these major events would have caused market fluctuations in price. It is most famously known as market volatility. We have mentioned previously how the damages to an entire string of islands and flooded land masses seem to mean nothing to the markets, but are there other human events that are not being expressed within all things market besides these examples? Stated another way, is there more evidence to this removal of humanity’s movements from the markets? I sure think so. Read More

10.16.17- Too Good For Too Long
Adam Taggart

I'm writing this from my home in Sonoma County at the end of an intense week of witnessing firsthand the devastation caused by the many current fires burning in northern California. While it's hard to focus on anything other than the moment-to-moment developments of this still-unfolding disaster (which I've been chronicling here), it's already clear that the implications for my part of the state will last for many, many years to come.

It's amazing how instantly the status quo where I live has changed. The world my neighbors and I lived in when we all went to bed on Sunday night simply no longer existed by the time we woke up on Monday morning. Lives have been lost. Read More

10.14.17- Bitcoin now bigger than Bayer, Goldman Sachs & Nike
Jens Kalaene

The value of the world’s largest cryptocurrency bitcoin has broken the $5,800 mark, hitting another all-time high before retreating to the $5,600-$5,700 level, still close to the maximum.

Its market capitalization is approaching $97 billion. If bitcoin were a company, its market cap puts it in the same league as some of the world's biggest corporations.

The cryptocurrency would be in 77th in PwC's list of the top 100 corporations, bigger than Bayer, Goldman Sachs, UPS, Nike, and Mitsubishi.

Bitcoin is up over 480 percent year-to-date. Read More

10.13.17- Hartford Credit Downgrade Foreshadows Nation's Economic Future
Peter Reagan

Connecticut’s debt crisis is coming to a head. Credit-rating firms believe the state’s financial situation is now beyond repair.

What’s more, experts suggest the rest of the country could soon follow.

Here’s what you should know about Connecticut’s seemingly inevitable collapse, why it’s a warning of worse things to come, and how to prepare your savings… Read More

10.12.17- Alarm Bells Ringing For Stock Markets
Steve St Angelo

Are we overdue for the “Big One”?  It seems everyone is buying stocks again.  And no one is interested in precious metals.  Mike Maloney believes we may have reached capitulation.  Mike explains in this short video two indicators that point to a near capitulation of the markets.

Unfortunately, investors are piling into a market that is topping, while they should be purchasing precious metals.  The downside risk to gold and silver is very limited, but this can’t be said for the broader markets.  Instead, the stock market has an extreme downside risk while the precious metals have unlimited upside potential. Read More

10.11.17- US Stock Market Whistles Past the Graveyard
David Haggith

It was a summer fit for the start of the Epocalypse followed by a fall where every event leans into Halloween. Summer began with a total solar eclipse that cast a long shadow across the nation from sea to shining sea, and fall began with hurricanes, mass bloodshed and fire. And through it all, the stock market barely blinked.

I watched a total solar eclipse for the first time. I had seen a 98% eclipse once before, but the difference made by the final 2% that I saw this time was literally all the difference between night and day. I discovered by experience why the ancients saw this spectacle as an omen portending the demise of a king or end of a dynasty. Read More

10.10.17- Nobody Can Stop Puerto Rico Crisis From Hurting Your Bank Account
Peter Reagan

The economic situation in Puerto Rico is quickly escalating from bad to worse. President Trump thinks he has a solution, but Americans shouldn’t count on it to keep them protected.

No matter how things play out in Puerto Rico, the U.S. economy could take a painful blow. Here’s why...

At the Tipping Point

The Puerto Rican economy has been in jeopardy for years, with staggering unemployment, declining growth, and a myriad of other serious issues. But despite that fact, Puerto Rico continued to plunge itself into crippling debt by issuing bonds to private investors. Read More

10.09.17- Forces of Movement
Marc Chandler

Over the past few weeks, the markets have come to accept the likelihood of a December Fed hike. US interest rates have adjusted.  The pricing of December Fed funds futures contract is consistent with around an 80% chance of a hike. The two-year yield is trading at the upper end of what is expected to be the Fed funds target range at the end of the year, after slipping below the current range a month ago.  The Dollar Index formed a bottoming pattern. Read More

10.07.17- Weekend Rant: Everything You Need to Know About the Catalan Independence Referendum
Joe Jarvis

It’s all illegal! That’s Madrid’s position on the referendum in Catalonia. Of about 5.5 million eligible voters, about 2.4 million chose–or were able–to cast ballots. 90% of them voted in favor of independence from Spain.

Spanish courts have ruled, and leaders have repeated, that the country’s Constitution does not allow a region to separate. European Union courts have echoed this position.

Of course, Spain’s response to the vote was completely legal. This involved sending police into the region to close polling stations, seize ballots, and deliver some old-fashioned fascist beatings. But it was all to protect democracy, naturally. Read More

10.06.17- Time to Get Defensive If You’re in the Stock Market
Mike Gleason

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up we’ll welcome back our good friend David Morgan of the The Morgan Report. David has some interesting things to say about the dollar, shares his research on the inverse correlation between stocks and metals and gives us his thoughts on when he expects to see gold and silver finally breakout. Don’t miss another wonderful interview with the Silver Guru, David Morgan, coming up after this week’s market update.

As trading for the third quarter winds down today, investors should prepare to face some new headwinds in the fourth quarter. Read More

10.05.17- Secession Is Sweeping the World, and We Should Let It
Jennifer Maffessanti

Freedom is the thing. Freedom to choose, freedom to be wrong, freedom to correct our mistakes once they’ve been made.

We’re seeing a huge uptick in provinces and territories seeking independence from their parent countries all over the globe. I already wrote about Catalonia— a dramatic situation that is still ongoing — but they are by no means the only ones. And with these attempts to make new sovereign nations, lovers of liberty are faced with hard truths about other people’s choices. Read More

10.04.17- Chris Hedges On The End Of Empire: "The Death Spiral Appears Unstoppable"
Chris Hedges

The American empire is coming to an end. The U.S. economy is being drained by wars in the Middle East and vast military expansion around the globe. It is burdened by growing deficits, along with the devastating effects of deindustrialization and global trade agreements. Our democracy has been captured and destroyed by corporations that steadily demand more tax cuts, more deregulation and impunity from prosecution for massive acts of financial fraud, all the while looting trillions from the U.S. treasury in the form of bailouts. Read More

10.03.17- "The End Of The QE Trade": Why Bank of America Expects An Imminent Market Correction
Tyler Durden

Last Friday, when looking at the historic, record lows in September volatility and the daily highs in US and global equity markets, BofA's chief investment strategist Michael Hartnett said that the "best reason to be bearish in Q4 is there is no reason to be bearish."

That prompted quite a few responses from traders, some snyde, a handful delighted (some bears still do exist), but most confused: after all what does investors (or algo) sentiment have to do with a "market" in which as Hartnett himself admits over $2 trillion in central bank liquidity has been injected in recent years to prop up risk assets. Read More

10.02.17- The US Economy Is Failing
Paul Craig Roberts

Do the Wall Street Journal’s editorial page editors read their own newspaper? 

The frontpage headline story for the Labor Day weekend was “Low Wage Growth Challenges Fed.” Despite an alleged 4.4% unemployment rate, which is full employment, there is no real growth in wages. The front page story pointed out correctly that an economy alleged to be expanding at full employment, but absent any wage growth or inflation, is “a puzzle that complicates Federal Reserve policy decisions.” Read More

09.30.17- Debt-Slave Industry Frets over Impact of Mass Credit Freezes
Wolf Richter

Their doom-and-gloom scenario: Consumers suddenly becoming prudent.

“Let’s face it, 143 million frauds won’t be perpetrated right away; it will take some time to filter through,” Steve Bowman, chief credit and risk officer at GM Financial, the auto-lending subsidiary of General Motors, told Reuters.

He was talking about the consequences of the Equifax hack during which the most crucial personal data, including Social Security numbers, of 143 million American consumers along with equivalent data of Canadian and British consumers, had been stolen. These consumers have all at once become very vulnerable to all kinds of fraud, including identity theft – where a fraudster borrows money in their name. Read More

09.29.17- And Now, for Somehing Entirely Different: Puerto Rico: What It’s Really Like After the SHTF
Daisy Luther

Things are dire in Puerto Rico. We haven’t heard much directly from people there since Hurricane Maria took out power for the entire island, but what we do know is that the situation is desperate. This is a shocking, real-life glimpse into what it’s really like when the S hits the fan.

I saw a post from a friend of a friend who has family in Puerto Rico. I don’t have permission to share names, but here’s what she said:

“My family has lost everything. My uncle with stage 4 cancer is in so much pain and stuck in the hospital. However conditions in the island are far worse than we imagined and my greatest fear has been made reality. The chaos has begun. The mosquitos have multiplied like the plague. Dead livestock are all over the island including in whatever fresh water supplies they have. Read More

09.28.17- Cracks in Dollar Are Getting Larger
Chris Vermeulen

Many Daily Reckoning readers are familiar with the original petrodollar deal the U.S made with Saudi Arabia.

It was set up by Henry Kissinger and Saudi princes in 1974 to prop up the U.S. dollar. At the time, confidence in the dollar was on shaky ground because President Nixon had ended gold convertibility of dollars in 1971.

Saudi Arabia was receiving dollars for their oil shipments, but they could no longer convert the dollars to gold at a guaranteed price directly with the U.S. Treasury. The Saudis were secretly dumping dollars and buying gold on the London market. This was putting pressure on the bullion banks receiving the dollar. Read More

09.27.17- Get ready for the stock market’s
October surprise

 Mark Hulbert

Fasten your seatbelts. October is just around the corner, and historically it’s the most volatile month of all for stocks. 

The data are summarized in the chart, below. (For the statisticians among you: The standard deviation of the Dow Jones Industrial Average’s DJIA, +0.06% daily percentage changes in past Octobers is 1.44%, in contrast to 1.08% across all 12 months taken together.)

You might think that October is an outlier because of the 1987 Crash; on Oct. 19 of that year the Dow fell 22%. But that year accounts for only a small portion of October’s above-average volatility; October tops the monthly volatility rankings even if we exclude 1987. Read More

09.26.17- The Markets No Longer Believe the Fed. Buckle Up.
Graham Summers

The Fed wants us to believe that it remains hawkish, that it will begin the process of unwinding its $4.5 trillion balance sheet next month and that it will hike rates again this year.

The markets aren’t buying it, even for a second.

The top performing asset class after the Fed concluded its announcement on Wednesday was… TREASURIES: the asset class that should DROP hard if the Fed intends to raise rates. Read More

0.25.17- America Is Going Broke… and Nobody Cares
Bill Bonner

Last week, the plot did not so much thicken as congeal.

There’s no changing it now — the cameras are rolling… the costumes are on… and everyone knows his lines.

President Trump went further in becoming the first president independent of either major political party in American history.

After having sided with the Democrats on the debt ceiling, he went back to the swamp to resolve the “Dreamer” issue — the 800,000 children who arrived in the U.S. as undocumented migrants and were allowed to temporarily stay legally in the country. Read More

09.23.17- It's the Debt Stupid!
Trey Reik

The investment climate of 2017 has been characterized by thematic crosscurrents.  Communication from global central bankers has at times appeared more hawkish, yet global rates of QE have only accelerated.  Optimism for the Trump agenda initially levitated sentiment measures, but hard economic statistics failed to follow.   Despite almost continuous upheaval in global geopolitics, volatility measures and credit spreads have remained unfazed near historic lows.  Since economic fundamentals can never compete with the intoxication of fresh weekly highs for the S&P 500, investor consensus now routinely ignores troubling imbalances in the global financial system. Read More

09.22.17- The forthcoming global crisis
Alasdair Macleod

The global economy is now in an expansionary phase, with bank credit being increasingly available for non-financial borrowers. This is always the prelude to the crisis phase of the credit cycle.

Most national economies are directly boosted by China, the important exception being America. This is confirmed by dollar weakness, which is expected to continue. The likely trigger for the crisis will be from the Eurozone, where the shift in monetary policy and the collapse in bond prices will be greatest. Importantly, we can put a tentative date on the crisis phase in the middle to second half of 2018, or early 2019 at the latest. Read More

09.21.17- Embrace The Suck: Debt-Serdom and Our Neofuedal Status Quo
Charles Hugh Smith

Democracy (i.e. political influence) and ownership of productive assets are the exclusive domains of the New Aristocracy. 

I have often used the words neoliberal, neocolonial and neofeudal to describe our socio-economic-political status quo. Here are my shorthand descriptions of each term:

1. Neoliberal: the commoditization / financialization of every asset, input (such as labor) and output of the economy; the privatization of the public commons, and the maximizing of private profits while costs and losses are socialized, i.e. transferred to the taxpayers. Read More

09.20.17- The End Is Nigh
Jeff Thomas

Recently, US Secretary of the Treasury Steve Mnuchin stated, “If China doesn’t follow these sanctions [against North Korea], we will put additional sanctions on them and prevent them from accessing the US and international dollar system.”

By this, he meant that the US would shut China out of the SWIFT system, through which the great majority of international settlements are facilitated. In stating this, the US government is doing nothing less than threatening economic warfare against China, which would unquestionably prove catastrophic to the global economy. Read More

09.19.17- A "Financial H-Bomb" Has Exploded
Jim Rickards

Somebody exploded an H-bomb last week, and it wasn’t North Korea. It was the U.S.

This was not a kinetic H-bomb, the kind that leaves a mushroom cloud.

It was a financial H-bomb.

Financial warfare has its weapons, tactics and commanders, the same as kinetic warfare. In financial warfare, the leading commander is the secretary of the Treasury. The weapons include account freezes, sanctions and financial blacklisting of certain individuals and companies. Read More

09.18.17- Lies, Lies and,OMG, More Lies
James Quinn

“There are three types of lies — lies, damn lies, and statistics.” – Benjamin Disraeli

Every month the government apparatchiks at the Bureau of Lies and Scams (BLS) dutifully announces inflation is still running below 2%. Janet Yellen then gives a speech where she notes her concern inflation is too low and she needs to keep interest rates near zero to save humanity from the scourge of too low inflation. I don’t know how I could survive without 2% inflation reducing my purchasing power. Read More

09.16.17- The Golden Solution to
America’s Debt Crisis

James Rickards

Right now, the United States is officially $20 trillion in debt. Over half of that $20 trillion was added over the past decade.

And it looks like annual deficits will be at the trillion dollar level sooner than later when projected spending is factored in.

Basically, the United States is going broke.

I don’t say that to be hyperbolic. I’m not looking to scare people or attract attention to myself. It’s just an honest assessment, based on the numbers. Read More

09.15.17- America Is Going Broke At Mach 30
"And No One Cares"

MN Gordon

To Hell In A Bucket

“No one really cares about the U.S. federal debt,” remarked a colleague and Economic Prism reader earlier in the week.  “You keep writing about it as if anyone gives a lick.”

We could tell he was just warming up.  So, we settled back into our chair and made ourselves comfortable.

“The voters certainly don’t care about the federal debt,” he continued.  “They keep electing the same spendthrifts to office. Read More

09.14.17-- Do You Trust What JP Morgan CEO Says About Bitcoin?
Joe Jarvis

JP Morgan CEO Jamie Dimon commented that he thinks Bitcoin is a fraud, and that “it will eventually be closed.”

CNBC continues its amazing economic news coverage with his interview.

Yes, the CEO of a major financial institution thinks Bitcoin will be “closed.”

Look, however unlikely, it is possible that the Bitcoin price goes to $0. It is not, however, anywhere within the realm of possibilities that the crypto-currency will be “closed” as Dimon put it. Read More

09.13.17- Challenging the Oldest Monopoly on Earth — Money
Louis Basenese

President James Garfield once said…

“He who controls the money supply of a nation controls the nation.”

Who then, Mr. Garfield, controls the money supply of bitcoin?

Because if such a person existed — an invisible hand that controls everything — then that person would have the entire world in a stranglehold.

Fortunately, there is no god of bitcoin.

In its purest form, bitcoin is a peer-to-peer digital currency. Read More

09.12.17- SRSrocco Issues Warning:
85% Decline IN 5 DAYS

Steve St Angelo

It’s about time that I share with you all a little secret.  The situation in the markets is much worse than you realize.  While that may sound like someone who has been crying “wolf” for the past several years, in all honesty, the public has no idea just how dire our present situation has become.

The amount of debt, leverage, deceit, corruption, and fraud in the economic markets, financial system, and in the energy industry are off the charts.  Unfortunately, the present condition is even much worse when we consider “INSIDER INFORMATION.” Read More

09.11.17- In the Memory of the 911 Victims: You Can't Handle the 9/11 Truth
Dr. Paul Craig Roberts

(Editor's Note: In the days leading up to the sixteenth anniversary of the bringing down of the twin towers in NYC, "the Bear" will feature an article each day which will, hopefully shed some light and bring some insight into the truth of 9/11. I realize that this is a "touchy" subject. I expect to receive many emails from readers whose "comfort zones" have been violated. But now, after sixteen years, Over 50% of Americans believe 9/11 was an inside job. In the same poll, only 28% of the people even knew that a third building (building seven) fell. Building seven is the "canary in the coal mine". One cannot watch the collapse of building seven without realizing, beyond any shadow of a doubt, that its collapse was a result of "controlled demolition". The fact that the planning and preparation required to "pull" a skyscraper (or three) takes several months (more if its occupied) and the odds of building seven being brought down on 9/11 without prior knowledge of the planned destruction of the twin towers is preposterous, and it's a fact that has been conveniently overlooked by the bulk of the sheeple. It's one thing to be born stupid. It's an unfortunate result of being genetically challenged. It's another thing, entirely, to be "conveniently stupid" or stupid on purpose (SOP). Being stupid on purpose is a devolutionary act. It is the antithesis of "survival of the fittest". It is an act that merits a Darwin Award and it is the result of being effectively "dumbed down" for generations. -JSB Read More

09.09.17- Weekend Rant: Expect The Unexpected...
Things Will Be Changing

Richard Sauder

My mini-vision of a couple of months ago of the date, 4 September,  has proved to be prescient. It is clear now that these days in early September are a crucial watershed period for the USSA and possibly for the world, as the USSA undergoes trial by Hurricane(s) and appears to be poised on the brink of possible nuclear war with North Korea. Both Donald Trump and the USSA as a whole are under terrific stress right now -- militarily, politically, economically, socially, meteorologically -- at the individual and national level. Read More

09.08.17- Brick & Mortar Meltdown: Toys R Us Hires Bankruptcy Law Firm
Wolf Richter

Private equity firms did it again.

Brick-and-mortar retail meltdown strikes again – this time, Toys R Us. In what is a classic sign, the company has hired mega law firm Kirkland & Ellis, whose bankruptcy-and-restructuring practice is considered a leader in the now booming bankruptcy-and-restructuring industry.

Toys R Us, with 1,694 stores globally, has $5.2 billion in long-term debt, according to its latest quarterly report, and sports a negative equity of $1.3 billion. Quarterly sales declined 4.8% year-over-year, to $2.2 billion. This isn’t a one-quarter dip: sales are down 15% from the same quarter in 2012. And the net loss jumped 30% year-over-year to $164 million. Read More

09.07.17- The Coming Run On Banks And Pensions
Dave Kranzler

“There are folks that are saying you know what, I don’t care, I’m going to lock in my retirement now and get out while I can and fight it as a retiree if they go and change the retiree benefits,” he said.  – Executive Director for the Kentucky Association of State Employees,  Proposed Pension Changes Bring Fears Of State Worker Exodus

The public awareness of the degree to which State pension funds are underfunded has risen considerably over the past year.  It’s a problem that’s easy to hide as long as the economy is growing and State tax receipts grow.  It’s a catastrophe when the economic conditions deteriorate and tax revenue flattens or declines, as is occurring now. Read More

09.06.17- Prices of Bitcoin & Ethereum recover as panic-selling ebbs
Forex

Investing.com - Bitcoin and Ethereum, the world's two-biggest cryptocurrencies by market cap, were higher on Tuesday, one day after selling off sharply on news that China banned individuals and organizations from raising funds through initial coin offerings.

Bitcoin was at $4,253.60 by 8:40AM ET (1240GMT), up $53.60, or around 1.3%. It fell by more than 7% to an overnight low of $3,900.10. The digital currency rallied to an all-time high of $4,911.80 over the weekend.

Ethereum, Bitcoin's closest rival in terms of market cap, gained 2.6%, or $7.75, to $303.48, bouncing back from a low of $267.64. It briefly rose to a record peak of $394.78 on Saturday. Read More

09.0.17- China's Red October
James Rickards

The 19th National Congress of the Communist Party of China, CCP, will commence on October 18, a little over six weeks from today. This will be the most important CCP meeting since the death of Mao Zedong and the rise of Deng Xiaoping in the late 1970s.

Communist societies such as China have a dual or parallel government structure. On one side is a normal government with a president, vice premier, cabinet ministers and other subordinate posts. On the other side is the CCP leadership consisting of a General Secretary, Politburo Standing Committee, Politburo, and Central Committee. Read More

09.04.17- Keynesian Imbecility Trap,
Not Liquidity Trap

Gary North

First, let us stroll down memory lane.

I shall now perform my legendary Ben Stein imitation for your amusement and edification.

What is liquidity? Anyone? Anyone?

Liquidity is the ability to walk into a store and buy something because you have money.

What is a trap? Anyone? Anyone? Read More

09.02.17- Massive $30 Billion Outflow Streak in U.S. Stocks Raises Red Flag
Birch Gold

Investors are pulling money out of the U.S. market at an alarming rate, resulting in the longest and most aggressive outflow streak since 2004. Meanwhile, stocks are middling. Does this wave of selling mean stock prices have finally reached their peak?

Here’s how the trend could impact markets moving forward, and how you could possibly use it to your advantage… Read More

08.01.17- Eight Days to Destruction
Gary Christenson

Harvey made landfall as a Category 4 Hurricane on August 25. The wind and flooding caused massive destruction. The news mentioned one hundred billion dollars as a preliminary estimate of the damage.

Eight days before on August 17 Harvey became a named storm. There was no apparent cause for alarm on August 17.

Two days later it was upgraded to a tropical depression. Harvey reached hurricane strength on August 24. Much can happen in eight days. Read More

08.31.17- “Stock Market?” What Stock “Market?”
Dave Kranzler

“There are no markets, only interventions”– Chris Powell, Treasurer and Director of GATA

To refer to the trading of stocks as a “market” is not only an insult to any dictionary in the world that carries the definition of “market,” but it’s an insult the to intelligence of anyone who understands what a market is and the role that a market plays in a free economic system.  By the way, without free markets you can’t have a free democratic political system.

The U.S. stock is rigged beyond definition. By this I mean that interference with the stock market by the Federal Reserve in conjunction with the U.S. Government via the Treasury’s Working Group on Financial Markets – collectively, the “Plunge Protection Team” – via “quantitative easing” and the Exchange Stabilization Fund has destroyed the natural price discovery mechanism that is the hallmark of a free market.  Capitalism does not work without free markets. Read More

08.30.17- What will Harvey do to “Carmageddon?”
Wolf Richter

The full extent of the devastation, mayhem, pain, and loss of life that Hurricane Harvey is leaving in its path is still unknown, and people are still trying to get to safety. It sent the oil-and-gas industry reeling. Housing in affected areas took a serious hit; perhaps $40-billion in damage, according to an early guess by CoreLogic.

Fannie Mae and Freddie Mac expect losses on about 400,000 mortgages that they guarantee. This could increase as flood waters rise. They won’t know the extent of the damage until after the wind and rain in Texas and Louisiana subside. Other homes did not have mortgages, or had mortgages that were not guaranteed. So perhaps a total of 500,000 homes. Read More

08.29.17- Hurricane Harvey Has Dumped 15 Trillion Gallons Of Water On Texas And May Be The Most Expensive Natural Disaster In U.S. History
Michael Snyder

Authorities are now telling us that Hurricane Harvey may end up causing more economic damage than even Hurricane Katrina did. We already knew that some parts of southeast Texas are going to be “uninhabitable for an extended period of time”, but the latest forecasts are calling for about 10 more inches of total rain than had previously been projected. At this moment 15 trillion gallons of water have already been dumped on Texas, and the rain continues to fall. You can get some idea of the devastation that has taken place in Houston by watching this drone footage. Essentially, some communities along the southeast Texas coastline have been totally destroyed. Read More

08.28.17- And Now, for Something Entirely Different: A Look Into the Military Mind
Hugo Salinas Price

History does not repeat, but certain patterns of events do recur in political life.

Of course, it is impossible to predict political events with any hope of accuracy. However, we can observe how societies of the past have dealt with the problem of maintaining order in public life. Perhaps we shall see that similar problems of the past, will turn out to be dealt with by similar measures, applied in the present. Read More

08.26.17- Cryptocurrency: The Blackest of Swans
Louis Basenese

In his groundbreaking book, The Black Swan, Nassim Nicholas Taleb defines a Black Swan as follows…

“An event, positive or negative, that is deemed improbable yet causes massive consequences.”

With that in mind, is Bitcoin a Black Swan?

I emphatically answer in the affirmative!

Now let’s get even more granular.

Taleb says that all Black Swans have three characteristics… Read More

08.25.17- Why the US Economy is Stuck in an Irreversible Destructive Cycle
London Paul

In a further signal of the weakening US economy, borrowing amongst US consumers continue to grow which correspondingly sees the total outstanding debt rise to new highs. In addition, and we have discussed this in some detail in our subscription podcasts, there has been a rise also in the delinquency rates across multiple sectors, including auto loans, credit cards and mortgages.

US Household debt now stands at around $13tn, rising around 4.5% in the last 12 months, fuelled in part, by credit card debt and also the auto loan sector. Such unsustainable debt is further compounded by stagnant wage growth, zero contract hour jobs, poorly paid service sector employment and the increasing move towards part-time employment opportunities. Read More

08.24.17- The Safest Way to Get Rich off Marijuana
Justin Spittler

• Regular readers know what I’m talking about…

Two months ago, I sold most of my belongings. I packed up my car. And I hit the road.

That’s right. I left sunny South Florida to travel the world.

So far, I’ve been to Mexico City, Vancouver, Seattle, and San Francisco.

I’m doing this for a simple reason.

I want to discover money-making opportunities that I would never find sitting at a cubicle.

That’s why I met Brian. Read More

08.23.17- This Upcoming Treasury Borrowing Binge Could Hit Markets Harder Than the 2008 Crisis
Lee Adler

The most important governmental advisory committee you’ve never heard of just issued a stunning forecast and warning that every investor needs to hear.

This warning was not reported in the mainstream media, even though it came from the most elite level of Wall Street.

Nor did this crowd release its forecast through its captive media, like CNBC or The Wall Street Journal. Read More

08.22.17- A Tale of Two "Deflationary" Booms — The Gilded Age vs. Today
Brendan Brown

The forces of globalization during the past two decades have been stronger than at any time since the era of “the Great Deflation” which started in the aftermaths of the US Civil War and the Franco-Prussian War, and continued through the 1880s. During the earlier period, the US economy enjoyed record growth in prosperity. But, during the present era of globalization, the US and most advanced economies have grown fitfully and overall slowly. An obvious question is whether that divergence in outcomes is due to the very different monetary environments (The US and most of Europe were on gold in the first era with prices falling, while monetary experimentation under a global 2% inflation standard prevailed in the second). Read More

08.21.17- The Dow Falls 274 Points As ‘Eclipse Fever’ Hits The Financial Markets
Michael Snyder

Have we now entered a time of major financial shaking?  On Thursday, the Dow Jones Industrial Average was down 274 points.  The was the largest decline for the Dow since May, and high yield bonds were down dramatically as well.  Many are blaming the terror attack in Barcelona and “instability in the White House” for the downturn, but could “eclipse fever” also be a factor?  The closer that we get to the solar eclipse on August 21st, the weirder people seem to be getting.  You will see what I am talking about below. Read More

08.19.17- Marc Faber: In the Age of Cyber-Terrorism, Every Investor Must Own Gold
Shannara Johnson

Take it from “Dr. Doom”: own some physical gold and keep it out of the banking system.

Dr. Marc Faber, a legendary investor and the editor/publisher of the Gloom, Boom & Doom Report, is well known for his contrarian investing style.

In a recent Metal Masters interview with the Hard Assets Alliance, he noted that the biggest geopolitical risk for Americans today is not a conventional war but rather cyber-attacks that could take down the US power grid. Read More

08.18.17- The fiscal benefits of free trade
Alasdair Macleod

Western governments have an overriding problem, and that is they have reached or exceeded the bounds of taxation, at a time when legally mandated welfare costs are accelerating. Treasury departments in all the welfare nations are acutely aware of this problem, to which there’s no apparent solution. The economic recovery, so consistently forecast since the great financial crisis, has hardly materialised and has added to the problem.

There is, if treasury economists could only understand it, a solution in free trade. Read More

08.17.17- EXPOSED: The Elite’s Plan to Freeze the Financial System
James Rickards

Today’s complacent markets are faced with a number of potentially destabilizing shocks.

Any one of them could potentially lead to another financial crisis. And the next crisis could see draconian measures by governments that most people are not prepared for today.

You’ll see what I mean in a moment.

But first, what are the catalysts that possibly trigger the next financial crisis? Read More

08.16.17- The U.S. Stock Market Mega-Bubble
Jeff Nielson

Dow Hits Record High as Street Rallies on Strong Q2 Results- July 31, 2017

That’s a nice message, isn’t it? U.S. markets are higher because of “strong Q2 results”. Move along people, no bubbles to see here. The Dow had eight straight record closes because of (supposedly) “strong Q2 results”.

There is just one problem. It’s 100% fiction. There are no strong results. However, before looking more closely at this blatant falsehood it is necessary to provide some context, especially for readers who do not follow U.S. markets closely. Read More

08.15.17- Dick's CEO: "The Retail Industry Is In Panic Mode"
Tyler Durden

With Dick's stock crashing after reporting dreadful results this morning, in which both comp sales and EPS missed as the company slashed its full year guidance below even the lowest sellside forecast (it now sees full year EPS of $2.80 to $3.00, below the previous guidance of $3.65 to $3.75 and the Wall Street estimate of $3.62 ), the management team had no reason to hold back on today's earnings call, and luckily - unlike many other retailers who still hold out hope that the worst is behind them - it did not, for an unvarnished look into the retail space. Read More

08.14.17- Jim Rogers says the ‘biggest crisis in his life’ is less than a year away
Sushruth Sunder

Jim Rogers says,"it would be bizarre if we didn’t have a problem."

Jim Rogers, the renowned co-founder of Quantum Fund believes that there’s an impending crisis, and it’s much sooner than you think. “We could see the worst crash in my entire life pretty soon,” said Jim Rogers in a recent conversation with Kitco news. Jim Rogers founded the Quantum Fund alongside George Soros, who is regarded as one of the most successful investors of all time. From 1970 to 1980, their portfolio returned 4200% while the S&P had posted paltry returns of about 47%. Read More

08.12.17- Cryptocurrency - its status as money
Alasdair Macleod

The cryptocurrency craze is fascinating to an economist, or at least a student of catallactics, because it is a test of the theory of exchange ratios and prices, which is what catallactics is about.

For this reason, the outcome of the cryptocurrency craze is of great theoretical interest. It is also of interest to students of the psychology of speculation. Read More

08.11.17- Are Internal Market Cracks Turning Into Chasms?
Rory Hall

Recently noted deterioration in market internals appears to be getting worse, as evidenced by this rare divergence in the Nasdaq market.

One of the hallmarks of our intermediate-term Risk Model that helps orient our investment posture toward equities is breadth, a.k.a., internals. Internals measure the level of participation in the stock market, e.g., how many stocks are advancing versus declining, the number of new highs versus new lows, etc. The more participation there is, the broader the foundation for a market rally – and the more comfortable we feel being aggressively invested. Read More

08.10.17- The only question is
when the bomb is going off

Fred Hickey

Fred Hickey, editor of the influential investment newsletter «The High-Tech Strategist», warns of trouble ahead for the stock market and spots bright opportunities in the gold sector.

Wall Street is in a champagne mood. Last week, thanks to a rally in Apple (AAPL 159.3 -0.7%), the Dow Jones (Dow Jones 21942.24 -0.48%) surpassed 22,000 for the first time ever. Nevertheless, Fred Hickey doesn’t share the bubbly vein. The renowned contrarian cautions investors of an unpleasant surprise because central banks like the Federal Reserve are pulling back from their super easy monetary policy. “We could experience a severe market decline or even a crash”, says the outspoken editor of the widely read investment newsletter “The High-Tech Strategist”. Read More

08.09.17- Investor Warns Stock Market Is Like Yellowstone: “It’s Beautiful, But It Has A Volcano Underneath It”
Mac Slavo

Anyone putting money in the stock market at this point should have their head examined. The fact that the stock market has reached a record high for the ninth day in a row should be enough for any rational person to see that we’re in a bubble of massive proportions. But there’s also the fact that all of the big players in the investment community are backing out of stocks like there’s no tomorrow. Read More

08.08.17- The Dow Closes At A Record High For The 9th Straight Time But Experts Warn That A Stock Market Crash Could Be Imminent
Michael Snyder

The bigger they come, the harder they fall. On Monday, the Dow Jones Industrial Average closed at a record high for the ninth straight session. It has been a remarkable run, but many experts are pointing out that big trouble is brewing under the surface. As you will see below, 79 components of the S&P 500 have already dropped more than 20 percent below their 52-week highs, and it is mostly just a handful of high flying tech stocks that are still propping up the market at this point. Over the past several weeks, I have been documenting so many of the prominent voices that are loudly warning about an imminent stock market crash, and in this article you will hear some more of these warnings. There is no way that stock prices can keep going up like this, and when the inevitable correction does arrive it is going to be exceedingly painful for millions of investors. Read More

08.07.17- Trump’s Currency War Battle with China Goes Live
Craig Wilson

Welcome to the currency wars. The Trump administration has entered a new low in relations with China. The change comes after the White House announced it is officially beginning to take aim at China’s economic strategy.

As friction between the world’s greatest economic powers deteriorates toward a high stakes currency war, the global economy could see spillover in financial, geopolitical and trade arenas. Read More

08.05.17- Anticipating "VIX Shock", Interactive Brokers Raises Vol Product Margins
Tyler Durden

Even as the VIX has continued to plumb new all time lows, unable to rebound from the realm of single-digits where it has spent a record amount of time in 2017, warnings about a potential surge in the volatility index have been growing in recent weeks.

Last week, in a note looking at what may happen "if the VIX goes bananas", Morgan Stanley's Chris Metli cautioned that it’s easy to become numb to the low volatility environment and the risks it presents.  While trying to pick a trough in vol has been a fool’s errand, Metli said that focusing on the risks resulting from vol being so low is not, and warned that low vol has produced a regime where the risks are asymmetric and negatively convex, so being prepared for an unwind is critical.  "This is not a call that vol is about to spike, but you need a plan if it does", he echoed many other similar warning issued in recent months. Read More

08.04.17- A Dim Outlook for Trumponomics
Nouriel Roubini

"The Gap Between Wall And Main Street Is Widening... Correction Is Inevitable"

NEW YORK – Now that US President Donald Trump has been in office for six months, we can more confidently assess the prospects for the US economy and economic policymaking under his administration. And, like Trump’s presidency more generally, paradoxes abound.

The main puzzle is the disconnect between the performance of financial markets and the real. While stock markets continue to reach new highs, the US economy grew at an average rate of just 2% in the first half of 2017 – slower growth than under President Barack Obama – and is not expected to perform much better for the rest of the year. Read More

08.03.17- Machine Mania in the Marketplace: How Computers Came to Own the World
David Haggith

With 60% of stocks now being traded by bots that fake each other out in order to create buying opportunities, stock exchanges have lost their connection to the reason markets are created in the first place. The exchanges no longer exist as places for people to buy and sell ownership in a corporation. They exist simply as the neural junctions of a conglomerated machine that plays tricks on itself, and your sole goal is no longer to invest, but to put money in the slot machine that is the quickest trickster. Read More

08.02.17- And Now, for Something Entirely Different: Why the MSM Is Quiet
About the Awan Arrest

Dave Hodges

Wasserman Schultz’s Brother Is In Charge of the Awan Investigation

A member of Congress, Debbie Wasserman Schultz, has had her #1 IT employee arrested attempting to flee the country. This is huge news in and unto itself. Adding fuel to the fire is that this employee was working on the controversial emails related to DNC voter fraud. This brings in the Seth Rich Murder. This is bigger than Watergate!

Yet, the mainstream media is strangely quiet on this issue, suspiciously quiet. Crickets chirping is the best way to describe the media’s reaction to this blockbuster news!!! Why? The following video casts light on these questions and more. Additionally, below the video, is information related to new and very concerning information on this case. Read More

08.1.17- And Now, for Something Entirely Different: EXPOSED: IT Hacker, Imran Awan, and His Connections to Bill and Hillary Clinton
Alex Christoforou

(Editor's Note: The extent of the criminality of the Clintons and their minions far exceeds what most people can get their heads around. They are personally responsible for the murders of hundreds and indirectly responsible for the murder of millions. Why these people have not been "put under the jail" is an undeniable testament to the insanity and corruption that is so prevalent in America. - JSB)

Questions are surfacing regarding Imran Awan’s attorney.

Debbie Wasserman Schultz’s IT specialist could very well bring down the entire fake news Russia story that Hillary Clinton and her campaign staff put together in the run up to their election defeat to Donald Trump. Read More

07.31.17- Monday Morning Blues
Marc Chandler

The US dollar is enjoying a respite from the recent selling, but its gains have been shallow, and will likely prove brief. The upticks have been concentrated in the recently high-flying dollar-bloc currencies, and sterling. The tone appears to be more consolidative than corrective, and month-end adjustment provides an additional wrinkle.

The two main political issues are in the background, pending additional developments. The North Korean ICBM test spurred new drills by the US, South Korea, and Japan. The new South Korean President, who initially halted the deployment of the US missile defense, reportedly is seeking more launchers. Read More

07.29.17- Our Brave New '''Markets'''
Chris Martenson

How HFT algorithims risk a massive sudden sell-off

One thing is clear: These aren’t your daddy’s markets anymore.

Why?  Because about 10 years ago the Rise of the Machines (aka high frequency trading algorithms) completely altered the terrain of what we call the ‘capital markets.’ 

Let’s look at this as a before and after story. Read More

07.28.17- Investment Legend Warns of a 1987-Type Market Crash
Graham Summers

Do you know Seth Klarman?

Klarman is founder of Baupost Group and is widely considered to be one of the greatest value investors in history. In 30+ years from 1982 to 2015, he only had three losing years, and is believed to have averaged returns of 16%.

Bear in mind, he did thiswhile keeping 30%-50% in cash at all times.

Put simply, Klarmen’s returns on invested capital are simply astonishing. To be able to churn out those types of returns while being that risk-averse borders on the impossible. Read More

07.27.17- Bitcoin Is Like The Internet In 1995
Tyler Durden

InternationalMan's Nick Giamburno is a strong advocate of international diversification - such as holding multiple passports and offshore assets. It frees you from absolute dependence on any one country. In short, international diversification minimizes the State’s power to coerce you. Bitcoin is an important part of this strategy. It’s an inherently international asset.

Bitcoin has incredible value as an international transfer mechanism. You can take any amount in and out of any country. You don’t need permission from any government.

You can send it across any border—or any number of borders—as often as you want. And there’s nothing anyone can do about it. Read More

07.26.17- And Now, for Something Entirely Different: The road to Rome leads through Mecca and Jerusalem
Benjamin Fulford

The rogue states of Saudi Arabia and Israel are under massive attack from a Russian, Chinese, Pentagon and Iranian alliance and will have no choice but to surrender. It is only a question now of when, not if. When these rogue regimes surrender, their leadership is going to be forced to expose who gives them their orders and they will point to Rome and the black sun worshippers at the P2 freemason lodge. These are the self-appointed social engineers behind most of the world’s troubles. Once they are exposed, it will be game over and a world revolution leading to world peace will take place. Read More

07.25.17- The Future of Money
Michael V. Copeland

Not since the arrival of the almighty dollar has currency been poised for a more dramatic leap forward.

There was a time when people happily used chickens, pigs, or a nice pile of lumber as payment for a cow, some clothes, or anything else of value. And then some smart people got behind a breakthrough—they introduced currency. Read More

07.24.17- A Mystery Investor Has Made A 262 Million Dollar Bet That The Stock Market Will Crash By October
Michael Snyder

One mystery trader has made an extremely large bet that the stock market is going to crash by October, and if he is right he could potentially make up to 262 million dollars on the deal.  Fortunes were made and lost during the great financial crisis of 2008, and the same thing will happen again the next time we see a major stock market crash.  But will that stock market crash take place before 2017 is over?  Without a doubt, we are in the midst of one of the largest stock market bubbles in U.S. history, and many prominent investors are loudly warning of an imminent stock market collapse.  It doesn’t take a genius to see that this stock market bubble is going to end very badly just like all of the other stock market bubbles throughout history have, but if you could know the precise timing that it will end you could set yourself up financially for the rest of your life. Read More

07.22.17- Billionaire Investors Backing A Marijuana Boom In 2017
James Burgess

The biggest multi-decade opportunity for investors right now is the Canadian government’s legislation to legalize recreational marijuana by this time next year—and the first companies to win government approval will the high-risers.

In a sector that’s already seen stocks bust the borders with 1000% spikes, there is one company that currently has 2 of the only 50 licenses to cultivate in Canada, positioning itself to burst out of the gates as new legislation creates a multi-billion-dollar industry over night.

With one of the largest land packages to build cultivation facilities and 2 current licensed facilities located in two provinces in Canada, small-cap Invictus MD (TSX:IMH.VOTC:IVITF) is set to rise. Read More

07.20.17- I read the news today, oh boy
Raúl Ilargi Meijer

Reading the news on America should scare everyone, and every day, but it doesn’t. We’re immune, largely. Take this morning. The US Republican party can’t get its healthcare plan through the Senate. And they apparently don’t want to be seen working with the Democrats on a plan either. Or is that the other way around? You’d think if these people realize they were elected to represent the interests of their voters, they could get together and hammer out a single payer plan that is cheaper than anything they’ve managed so far. But they’re all in the pockets of so many sponsors and lobbyists they can’t really move anymore, or risk growing a conscience. Or a pair.

What we’re witnessing is the demise of the American political system, in real time. We just don’t know it. Actually, we’re witnessing the downfall of the entire western system. And it turns out the media are an integral part of that system. Read More

07.21.17- How to Save Our Nation & Our Lives
Before It's Too Late
Catherine Austin Fitts

View Video

07.20.17- I read the news today, oh boy
Raúl Ilargi Meijer

Reading the news on America should scare everyone, and every day, but it doesn’t. We’re immune, largely. Take this morning. The US Republican party can’t get its healthcare plan through the Senate. And they apparently don’t want to be seen working with the Democrats on a plan either. Or is that the other way around? You’d think if these people realize they were elected to represent the interests of their voters, they could get together and hammer out a single payer plan that is cheaper than anything they’ve managed so far. But they’re all in the pockets of so many sponsors and lobbyists they can’t really move anymore, or risk growing a conscience. Or a pair.

What we’re witnessing is the demise of the American political system, in real time. We just don’t know it. Actually, we’re witnessing the downfall of the entire western system. And it turns out the media are an integral part of that system. Read More

07.19.17- Social Security going bust: The inconvenient issue
Monica Showalter

Buried down deep in the Friday afternoon news dump is the not inconsequential news that Social Security is about to go bust – a lot faster than anyone had predicted earlier. Investor's Business Daily sums up the coming fiasco pretty well:

The Social Security report finds that the "trust fund" will run out of money in just 17 years. The news only gets worse from there.

The program's unfunded liability over the next 75 years is now $12.5 trillion, which is up from $11.4 trillion last year and $4.7 trillion a decade ago. In other words, Social Security's long-term unfunded liability has increased by 166% in the span of 10 years. Read More

07.18.17- Navigating Through the Storms
Jim Quinn

Several weeks ago I had to drive west on the Pennsylvania Turnpike to pick up my son after his sophomore year at Penn State. I’ve made this trip a dozen times over the last few years, since this is my second son attending Penn State, with a third starting in the Fall. It’s a tedious, boring, protracted, four hour trek through the rural countryside of the Keystone State. During these trips my mind wanders, making connections between the landscape and the pressing issues facing the world. I can’t help but get lost in my thoughts as the miles accumulate like dollars on the national debt clock.

More often than not I end up making the trip in the midst of bad weather. And this time was no different. The Pennsylvania Turnpike is a meandering, decades old, dangerous, mostly two lane highway for most of its 360 mile span. Large swaths of the decaying interstate are under construction. Read More

07.17.17- Our Disneyland Economy
Michael Snyder

Disneyland is known as a place “where dreams come true” and where every story always has a happy ending.  But there is going to be no happy ending for the U.S. economy.  Wishful thinking has resulted in one of the greatest stock market rallies in history in recent months, but like all childhood fantasies, it won’t last.  The real economy continues to deteriorate, and we can see this even right outside of the gates of Disneyland.  Every night growing numbers of homeless people sleep on the pavement just steps away from “the happiest place on Earth”.  It can be fun to “play make believe” for a while, but eventually reality always catches up with us.

Without a doubt, the stock market has been on a tremendous run.  Since Donald Trump’s stunning election victory in November, the market has been setting record high after record high, and it is now up a total of 17 percent… Read More

07.15.17- Mark Thornton Explains Our Fake Economy
misesmedia

View Video

07.14.17- Is This The Generation That Is Going To Financially Destroy America?
Michael Snyder

Did you know that the federal government is going to spend more than 4 trillion dollars this year?  To put that into perspective, U.S. GDP for the entire year of 2017 is going to be somewhere between 18 and 19 trillion dollars.  So when you are talking about 4 trillion dollars you are talking about a huge chunk of our economy.  But of course the federal government doesn’t bring in 4 trillion dollars a year.  At the beginning of Barack Obama’s first term, we were 10.6 trillion dollars in debt, and now we are nearly 20 trillion dollars in debt.  That means that we have been adding more than a trillion dollars a year to the national debt.  When you break that down, that means that we have essentially been stealing more than a hundred million dollars from future generations of Americans every single hour of every single day to pay for our debt-fueled lifestyle. Read More

07.13.17- Opinion: The U.S. stock market is 66% higher than it should be
Thomas H. Kee Jr.

The risks are piling up, but does anyone care?

Bubbles everywhere: The price-to-earnings multiple of the S&P 500 (25) is far greater than its historic norm (14.5).

I have, in previous articles here on MarketWatch, pointed out the fundamental risks in the U.S. stock market.

I have identified the liquidity risks created by the European Central Bank and the Federal Reserve in the tightening of monetary policy, in the reduction of the Fed’s balance sheet, and the likelihood that these risks will prick the asset bubble that the market is in today. Read More

07.12.17- Dead Malls of America: The Retail Apocalypse Deepens
Greg Guenthner

We’re kicking off the trading week with another brutal day for the retail sector.

There’s nothing worse than a group of stocks trending lower during a roaring bull market.

These poisonous retail stocks emit a radioactive glow. Even a novice investor can’t miss these losing positions draining the gains from his brokerage account.

Traditional retailers and the “mall stocks” are having a downright terrible year. The S&P Retail Index ETF (NYSE:XRT) is down more than 11% so far this year after pushing to new lows on Monday. For comparison, the S&P 500 is up more than 8%. Read More

07.11.17- Stock Market Tsunami Siren Goes Off
Wolf Richter

Everyone who’s watching the stock market has their own reasons for their endless optimism, their doom-and-gloom visions, their bouts of anxiety that come with trying to sit on the fence until the very last moment, or their blasé attitude that nothing can go wrong because the Fed has their back. But there are some factors that are like a tsunami siren that should send inhabitants scrambling to higher ground.

Since July 2012 – so over the past five years – the trailing 12-month earnings per share of all the companies in the S&P 500 index rose just 12% in total. Or just over 2% per year on average. Or barely at the rate of inflation – nothing more. Read More

07.10.17- Why the Next Recession will be a Doozie for Consumers
Wolf Richter

Tougher for workers, rougher for the economy.

The employment data released today beat expectations nicely. In June the economy added 222,000 civilian jobs. April and May numbers were revised up. In total, over the past three months, nonfarm payrolls rose by 581,000 jobs.

This data will do nothing to deter the Fed from proceeding with its tightening plans. The Fed should never have cut its policy rate to zero, or kept it down that long, and it should have never engaged in QE. However, acting as lender-of-last-resort when credit froze during the Financial Crisis — when even GE and IBM had trouble borrowing to meet payroll — was essential to keep the system from collapsing. Read More

07.08.17- Money, Keynes, and History
Friedrich A. Hayek

The chief root of our present monetary troubles is, of course, the sanction of scientific authority which Lord Keynes and his disciples have given to the age-old superstition that by increasing the aggregate of money expenditure we can lastingly ensure prosperity and full employment.

It is a superstition against which economists before Keynes had struggled with some success for at least two centuries.1 It had governed most of earlier history. This history, indeed, has been largely a history of inflation; significantly, it was only during the rise of the prosperous modern industrial systems and during the rule of the gold standard, that over a period of about two hundred years. Read More

07.07.17- How Retiring Baby Boomers
Could Sink Stocks

Birch Gold

In 2016, the first group of baby boomers turned 70 years old. Millions more will do the same over the next 15 years, and as a result, selling activity in their retirement portfolios could be a big problem for markets.

Here’s why retiring boomers could be the biggest new obstacle for stock prices and market stability, and what you should do about it…

Boomers have always been a growth driver for our nation, but now they’re starting to retire en masse. Analysts believe that, for the first time in history, this will make boomers an economic hindrance. Read More

07.06.17- Auto Sales Tank Again In June – It’s Worse Than Headline Reports
Dave Kranzler

June auto sales on a “SAAR” basis (seasonally adjusted annualized rate) fell 1.2% from May to 16.5 million “SAAR.”  The non-SAAR number available from sources like Autonews.com show a 3% year over year drop from June 2016.  The year over year comparison for the same month eliminates seasonality and it eliminates statistical errors compounded by the annualization calculation.

It was the 6th month in a row that auto sales declined.  June’s 16.5 million SAAR was 11.7% below the all-time high of 18.7 million SAAR (December 2016). This is a large decline that is not being given much attention in the financial media. Read More

07.05.17- The Coming Carmageddon
David Stockman

Ben Bernanke’s successors at the Fed and other global central banks still don’t get it.

Falsified debt prices do not promote macroeconomic stability. They lead to reckless credit expansion cycles that eventually collapse due to borrower defaults. We’re now seeing that play out in the auto sector, especially since anyone who can fog a rearview mirror has been eligible for a car loan or lease.

If that reminds you of the sub-prime housing disaster, you’d be right. Read More

07.04.17- The Broken States of the Union
David Haggith

For the first time in US history a handful of US states is teetering on the edge of bankruptcy. Illinois is about to be downgraded to junk bond status, which will turn its financial problems catastrophic overnight. Illinois cannot possibly pay its accumulated debt, its unpaid medicaid expenses and its future retirement obligations, so bankruptcy almost certainly will be its only way out.

Main, Connecticut, Kentucky and California are also caught in chronic budget deadlocks that may lead to bankruptcy as a solution for dodging their entitlement obligations. Bear in mind they’re called “entitlements” because it’s money promised to you that you already put in the work to earn. It’s your retirement. Illinois, for example, has over $200 billion in pension obligations that will never be paid, or that can only be paid at a diminished level worked out in some form of effective bankruptcy. Read More

07.03.17- The Real Threat of Artificial Intelligence
Kai-Fu Lee

What worries you about the coming world of artificial intelligence?

Too often the answer to this question resembles the plot of a sci-fi thriller. People worry that developments in A.I. will bring about the “singularity” — that point in history when A.I. surpasses human intelligence, leading to an unimaginable revolution in human affairs. Or they wonder whether instead of our controlling artificial intelligence, it will control us, turning us, in effect, into cyborgs. Read More

07.01.17- Bob Rodriguez: "We Are Witnessing The Development Of A Perfect Storm"
Robert Huebscher

In a recent quarterly market commentary Jeremy Grantham posited that reversion to the mean may not be working as it has in the past. What are your thoughts on mean reversion?

There will be a reversion to the mean. We are in a very difficult and challenging time for active managers, and in particular, value style managers. Many of these managers are fighting for their economic lives. Read More

06.30.17- Understanding money and prices
Alasdair Macleod

This article explains the money side of prices, and why government currencies, unbacked by gold, are doomed to collapse. And why gold, which is the sound money chosen by markets throughout history, will retain or increase its purchasing power measured in the goods it buys over the coming years.

Very few people have a full understanding of the relationship between money and goods. This is the relationship that sets prices. Yet, without that understanding, central banks will almost certainly fail in their policy objectives (as they always have done so far), and individuals unaware of gold’s monetary properties will be unable to protect their wealth in monetary and financial conditions that are becoming unstable. Read More

06.29.17- Short All Retail, Especially Amazon
Dave Kranzler

“Bubbles require ever more money to sustain them. Currently that’s not happening. A severe market selloff could come at any moment.”

The quote above is from Fred Hickey, who writes the The High-Tech Strategist newsletter. Mario Draghi, Chairman of the ECB, is under pressure to reduce the Central Banks’ asset purchases (it’s buying corporate bonds, including junk-rated bonds). Apparently some Dutcn legislators presented Draghi with a tulip in reference to the Dutch tulip mania in the 1630’s.

The Bank of Japan and the Chinese Government are working to reduce their money printing. The Fed is still buying mortgages but it seems determined to slowly tighten monetary policy. Read More

06.28.17- The Super Bubble Is in Trouble
Thorsten Polleit

You do not need to be a financial market wizard to see that especially bond markets have reached bubble territory: bond prices have become artificially inflated by central banks' unprecedented monetary policies. For instance, the price-earnings-ratio for the US 10-year Treasury yield stands around 44, while the equivalent for the euro zone trades at 85. In other words, the investor has to wait 44 years (and 85 years, respectively) to recover the bonds' purchasing price through coupon payments.

Meanwhile, however, the US Federal Reserve (Fed) keeps bringing up its borrowing rate; and even the European Central Bank (ECB) is now toying with the idea of putting an end to its expansionary policy sooner rather or later. Most notably, however, US long-term rates have come down since the end of 2016, despite the Fed raising its short-term interest rate. How come? Read More

06.27.17- If We Don't Change the Way Money Is Created, Rising Inequality and Social Disorder Are Inevitable
Charles Hugh Smith

Centrally issued money optimizes inequality, monopoly, cronyism, stagnation and systemic instability.

Everyone who wants to reduce wealth and income inequality with more regulations and taxes is missing the key dynamic: central banks' monopoly on creating and issuing money widens wealth inequality, as those with access to newly issued money can always outbid the rest of us to buy the engines of wealth creation. =

History informs us that rising wealth and income inequality generate social disorder. Read More

06.26.17- Central Banks –
An EXPLOSION Heard ‘Round The World

Mitchell Feierstein

During the past ten years, we have witnessed unprecedented manipulation of stock, bond, and property prices by global central banks. The inflation of these grotesque asset bubbles will not end well as indicators in the USA point towards an economic recession.

For the past twelve years, Ben Bernanke and Janet Yellen have been piloting the US Federal Reserve Bank with the same hubris as Captain Edward John Smith when he cheerily departed Southampton at the helm of the RMS Titanic. Read More

06.24.17- The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare
Matt Taibbi

Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn't take it anymore. 

"It was like watching an old lady get mugged on the street," she says. "I thought, 'I can't sit by any longer.'" 

Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She's had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower. Read More

06.23.17- What to do with a broken Illinois: Dissolve the Land of Lincoln
John Kass

Illinois is likeVenezuela now, a fiscally broken state that has lost its will to live, although for the moment, we still have enough toilet paper.

But before we run out of the essentials, let's finally admit that after decade upon decade of taxing and spending and borrowing, Illinois has finally run out of other people's money.

Those "other people" include taxpayers who've abandoned the state. And now Illinois faces doomsday.

So as the politicians meet in Springfield this week for another round of posturing and gesturing and blaming, we need a plan. Read More

06.22.17- Is the US Dollar About to Make A PARABOLIC MOVE…to the Downside!
Clive Maund

While the dollar has held up better than expected in the recent article "The Sun Rises on the Precious Metals Sector" in that it has not continued to drop, it hasn't risen much either, and what rise there has been has significantly unwound its earlier oversold condition, which, of course, has opened up downside potential again. We can see all this on the latest 8-month chart for the dollar index shown below. While the most optimistic interpretation of this chart is that it is forming an intermediate base here and that the still rising 200-day moving average some way above indicates room for a sizeable rally, the break below the red trendline a month ago is still viewed as a bearish development, especially as until now it has been forced lower at an accelerating pace by the parabolic downtrend shown, and we have seen a bearish moving average cross late last month. Read More

06.21.17- Get Ready for Brexit II
Jim Rickards

Markets were shocked when UK voters chose to leave the European Union, EU, on June 23, 2016. That was the so-called “Brexit” or British exit from the EU. Within hours of the vote becoming official, the pound sterling, GBP, plunged 13% against the dollar, and gold soared 8% in dollar terms, even more measured in GBP.

I was among the few to prepare investors for that shock. In the days before the vote, I urged my readers to short GBP and buy gold. Those who did made huge gains. Some readers even wrote to me to say thanks for paying their kids’ college tuitions for that year — that’s how much money they made. Read More

06.20.17- The Housing Market Bubble Is Popping
Dave Kranzler

As with all other highly manipulated data, the financial media has a blind bias toward the “bullish” story attached to the housing market. Understandable, as the National Association of Realtors spends more on special interest interest lobbying in Congress than any other financial sector lobby interest, including Wall Street banks.

New home sales were down last month, according to the Census Bureau, 11.3% and missed Wall Street’s soothsayer estimates by a rural mile. Strange, that report, given that new homebuilder sentiment is bubbling along a record highs. Existing home sales were down 2.3%. You’ll note that the numbers reported by the Census Bureau and NAR are “SAAR” – seasonally adjusted annualized rates. There is considerable room for data manipulation and regression model bias when a monthly data sample is “seasonally adjusted/manipulated” and then annualized. Read More

06.19.17- Albertson’s Reveals Supermarket Meltdown as Global Deep-Discounters Promise Price War in Stagnating US Market
Wolf Richter

Aldi’s $5 billion bet at a brutal time.

Today, Albertson’s explained in an amended S-4 filing for a debt exchange offering just how tough things have gotten for traditional supermarket chains.

As is so often the case, there is a private equity angle to it. Albertson’s was acquired in a 2005 LBO by a group of PE firms led by Cerberus. In January 2015, it acquired Safeway to eliminate some competition. It then wanted to sell its shares to the public. But in October 2015, as brick-and-mortar retail began to melt down, it scrapped its IPO. Read More

06.17.17- Hawaii may become first US state to adopt basic income
Egon von Greyerz

An unprecedented bill supporting the idea of universal basic income (UBI) has been introduced in the American state of Hawaii.

>Kiwis consider paying people for doing nothing

The bill, titled House Concurrent Resolution 89, was brought by Hawaii State Representative Chris Lee and was passed by both houses of the state legislature in a unanimous vote.

The resolution declares that all the islanders “deserve basic financial security.” Read More

06.16.17- We Are Getting Very Close To An Inverted Yield Curve – And If That Happens A Recession Is Essentially Guaranteed
Michael Snyder

If something happens seven times in a row, do you think that there is a pretty good chance that it will happen the eighth time too?  Immediately prior to the last seven recessions, we have seen an inverted yield curve, and it looks like it is about to happen again for the very first time since the last financial crisis.  For those of you that are not familiar with this terminology, when we are talking about a yield curve we are typically talking about the spread between two-year and ten-year U.S. Treasury bond yields.  Normally, short-term rates are higher than long-term rates, but when investors get spooked about the economy this can reverse.  Just before every single recession since 1960 the yield curve has “inverted”, and now we are getting dangerously close to it happening again for the first time in a decade. Read More

06.15.17- 1984 Was a Warning,
Not an Instruction Manual

John Mauldin

A little bit of paranoia is always healthy.

In the 1980s, the totalitarian fear was that some overenthusiastic government agent would go to the library and pull your library card to see if you were reading seditious texts.

Seems a bit quaint now, doesn’t it? 

It didn’t at the time.

Of course, the East German Stasi went to those lengths to spy on its citizens, but there was never any real danger of it happening in the US. Read More

06.14.17- Zimbabwe: When the Black Market Becomes the Real Market
Martin Armstrong

For many years, I’ve described black markets not as the evil danger to economies that governments profess them to be, but as predictable and sensible reactions to the overregulation of official markets.

Black markets appear whenever an official market has become overregulated or otherwise unworkable due to governmental interference. They then thrive in direct proportion to the failure of official markets to function freely. They are, in fact, both a barometer and a checks-and-balances system for official markets. Read More

06.13.17- The Chinese Trilemma
James Rickards

The trilemma, also known as the “impossible trinity” is a fundamental thesis of international economics. I’ve covered in detail previously, so this is a short overview.

It was developed by economists Robert Mundell and Marcus Fleming in the early 1960s.

In its simplest form, the Mundell-Fleming model says that a country cannot have an open capital account, a fixed exchange rate, and an independent monetary policy at the same time.

It can have any two out of three, but not all three. A country that attempts to have all three will fail in one of several ways including a reserve crisis, an exchange rate crisis or a recession. Read More

06.12.17- Ethereum Price Surges Over $400 - Has The Cryptocurrency Asset Class Arrived?
Tyler Durden

It’s not just Bitcoin anymore. Digital currencies have another big winner now, Ethereum (ether), and as Lombardi Letter's Benjamin Smith explains below, it’s more than just good news for early investors.

Ethereum topped $400 for the first time this morning...

Source: WorldCoinIndex.com

Increasing its relative share of the cryptocurrency market notably (as Bitcoin's market share drops below 50%)... Read More

06.10.17- Parabolic Coin
Pater Tenebrarum

When writing an article about the recent move in bitcoin, one should probably not begin by preparing the chart images. Chances are one will have to do it all over again. It is a bit like ordering a cup of coffee in Weimar Germany in early November 1923. One had to pay for it right away, as a cup costing one wheelbarrow of Reichsmark may well end up costing two wheelbarrows of Reichsmark half an hour later. These days the question is how many wheelbarrows of US dollars one may need to pay for a bitcoin. Read More

06.09.17- “The U.S. Is Going to Have a Crash and It Will Be Massive”
Justin Spittler

A huge crash is coming.

That’s what Mark Yusko is telling investors.

This is a bold call, for sure. But Yusko, who manages more than $2 billion at Morgan Creek Capital, is used to making (and nailing) calls like this.

In early 2015, he said that the price of oil would hit $30. At the time, oil was trading at around $50 a barrel…or half of what it traded for just eight months prior. Read More

06.08.17- The Real Economic Predicament Trump Inherited from Obama
Robert Carbery

President Trump has said on multiple occasions that he inherited an economic mess from his predecessor. The mainstream media fact checkers moved quickly to disprove him, pointing to the grossly misleading low unemployment rate as all the proof you need. While the current economy looks better on the surface compared to 2009, there are still many danger signs pointing to perhaps a second Great Recession coming much sooner than you think.  

Just about all presidents discuss the direness of the economy in order to quickly claim credit for any uptick in growth, blaming the current state of affairs on the previous administration’s policies. While many think the chief executive has the ultimate power to steer our economy in the right direction, he or she can only do so much. But the blame game is useless. Let’s stick to the economic reality. Read More

06.07.17- "Forget Terrorism": The Real Reason Behind The Qatar Crisis Is Natural Gas
Tyler Durden

According to the official narrative, the reason for the latest Gulf crisis in which a coalition of Saudi-led states cut off diplomatic and economic ties with Qatar, is because - to everyone's "stunned amazement" - Qatar was funding terrorists, and after Trump's recent visit to Saudi Arabia in which he urged a crackdown on financial support of terrorism, and also following the FT's report that Qatar has directly provided $1 billion in funding to Iran and al-Qaeda spinoffs, Saudi Arabia finally had had enough of its "rogue" neighbor, which in recent years had made ideologically unacceptable overtures toward both Shia Iran and Russia.

However, as often happens, the official narrative is traditionally a convenient smokescreen from the real underlying tensions. Read More

06.06.17- Summer Storm Keeps Building as Second Dip of Great Recession Approaches
David Haggith

These updates to my list of “Seven Troubles Assailing the US Economy” are far too important to remain buried at the end of that article since many readers may not return to the article to check for updates. The summer economic crisis I’ve been predicting is building even more rapidly than when I reported a week ago. It’s almost here:

Total household debt now exceeds the peek it hit just before the economic collapse into the Great Recession. While the number of households is also up, wages are correspondingly down, so households have maxed out … again: Read More

06.05.17- And Now, for Something Entirely Different: The Vile Despicable Tactics of the Left
James Quinn

Liberals have always portrayed themselves as the champions of the people. They love to call themselves Progressives, as if they and only they know how progress should proceed. The truth, as revealed by Kathy Griffin, Black Lives Matter terrorists, the brain dead SJW’s on college campuses across the land,  the Soros funded ironically named Antifa fascists, the left wing fake news media, and despicable lefty politicians like Maxine Waters and Nancy Pelosi, is that left wingers are violent, lying, bullying, anti-First Amendment, thugs willing to do anything to crush anyone who doesn’t bow down to their fascist agenda. Read More

06.03.17- The Chinese Economic “Death Spiral”
James Rickards

China has reported annual growth rates since the panic of 2008 of between 6.7% and 12.2%, with a steady downward trend since early 2010. If China’s growth engine is running out of steam, as I’ve described, how has China managed to maintain such relatively high growth rates?

The answer is contained in three key words: debt, deflation and waste.

Waste is a blunt word referring to non-productive investment. The investment component of China’s GDP is about 45% of the total. Most major economies show about 25% to 35% for investment. Read More

06.02.17- The Cultural Consequences of
the Federal Reserve

Jörg Guido Hülsmann

It may seem unusual that an economist would talk about culture. Usually, we talk about prices and production, quantities produced, employment, the structure of production, scarce resources, and entrepreneurship.

But there are certain things that economists can say about the culture, and more precisely, that economists can say about the transformation of the culture. So what is culture? Well, to put it simply, it is the way we do things. This can include the way we eat — whether or not we dine with family members on a regular basis, for example — how we sleep, and how we use automobiles or other modes of transportation. And of course, the way we produce, consume, or accumulate capital are important aspects of the culture as well. Read More

06.01.17- China’s Next Step to Destroy the Dollar
Byron King

China is currently modifying the terms of its oil trade with Saudi Arabia. Specifically, China is working on a deal to pay for Saudi oil using Chinese yuan. This effort poses a direct threat to the security of the dollar.

If this China-Saudi deal happens — yuan for oil — it’s another step closer to the grave for the petrodollar, which has dominated global finance since 1974. You can revisit Jim Rickards article about the Assault on the Dollar, here. Read More

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