The Dow Peaked At 14,000 Before The Last Stock Market Crash, And Now Dow 24,000 Is Here

The absurdity that we are witnessing in the financial markets is absolutely breathtaking. Just recently, a good friend reminded me that the Dow peaked at just above 14,000 before the last stock market crash, and stock prices were definitely over-inflated at that time. Subsequently the Dow crashed below 7,000 before rebounding, and now thanks to this week’s rally we on the threshold of Dow 24,000. When you look at a chart of the Dow Jones Industrial Average, you would be tempted to think that we must be in the greatest economic boom in American history, but the truth is that our economy has only grown by an average of just 1.33 percent over the last 10 years. Every crazy stock market bubble throughout our history has always ended badly, and this one will be no exception.
And even though the Dow showed a nice gain on Wednesday, the Nasdaq got absolutely hammered. In fact, almost every major tech stock was down big. The following comes from CNN…

This post was published at The Economic Collapse Blog on November 29th, 2017.


NOVEMBER 29, 2017
Organizers with the left-leaning group Housing Works told protesters they must ‘risk arrest’ in order to be reimbursed for airfare to Washington, D. C., according to an internal email obtained by The Daily Caller News Foundation.
‘We will transport, house and feed you, and deal with all legal support. Caveat: if you are far away from DC and expensive to transport, we can probably only fly you if you can risk arrest,’ the internal email told supporters.

This post was published at The Daily Sheeple on PHILLIP STUCKY, THE DAILY CALLER NEWS FOUNDATION /.

Corporate Tax Cuts: “The Seen & The Unseen”

Since Donald Trump was elected President, the S&P 500 has rallied over 21% or nearly 500 points. In our opinion, a good portion of the gain is attributable to his promise, as well as congressional efforts, to reform the tax code. In particular, the proposed sharp reduction in the corporate tax rate has the equity market’s attention. At first blush, the simple logic driving equity investors appears reasonable.
Appearances, however, can be deceiving, and history is littered with failed investors that banked on a faulty thesis. As such, instead of tripping head first into that same category, we decided to assume nothing and look at the proposed reduction in the corporate tax rate and historical data to better understand how the legislation might affect the economy and corporate earnings.

This post was published at Zero Hedge on Nov 29, 2017.

WTI Tumbles Below $57 As OPEC-Hype Fades

Goldman’s Damien Courvalin seems to have perfecvtly summed things up – the market was pricing in an OPEC production cut extension of 6-9 months (accounting for around a $2.50 premium in the price). Today’s jawboning from Russia seems to signal April discussions (so a 6-month extension) which is a disappointment – and so WTI prices are tumbling…
Sell the leaked, jawboned news?
As we previously wrote, in conclusion, Goldman believes that oil prices have overshot fundamentals and that price risks are skewed to the downside into Thursday’s meeting.

This post was published at Zero Hedge on Nov 29, 2017.

Did Janet Yellen Just Recommend Buying Bitcoin

Janet Yellen’s last semi-annual testimony before Congress as Fed Chair has just concluded, and as usual it was filled with long-winded platitudes, which were enough to make the blood of anyone actually listening to her slow-motion drawl, come to a boil.
For one, Yellen’s hypocrisy hit bitcoinian levels when she had the temerity to say that she is ‘very disturbed’ about the trend toward rising inequality, noting that the central bank only has a ‘blunt tool’ that can’t be used to target certain groups. She’s right: the “blunt tool”, also known as a money printer, is can – and has – been repeatedly used to target a certain group: the ultra wealthy, i.e., the 0.1%, those who as Credit Suisse showed two weeks ago, have never been wealthier.
And just to make sure all your blood has boiled over, Yellen added that the Fed is very focused on ‘very disturbing long-term trends’ in inequality adding that “our own focus”’ is on taking those trends and studying them… and making them bigger than ever she should have also added.
Demonstrating her extensive skills of pointing out the obvious, Yellen also said that ‘we’re suffering from slow productivity growth,’ and there should be a focus on how that can be improved. It appears that the Fed is unaware that most employees spend several hours a day on Facebook, LinkedIn and SnapChat; it also appears that the Fed is unaware that most employers are aware of this, and is why there has been so little wage growth to “reward” this collapse in productivity.

This post was published at Zero Hedge on 29, 2017.

Canadian Households Most Debt-Heavy in the World

Time to get some financial consulting from those who are not paid to sell us debt and risk. Listening to the banks/broker/dealers/auto sellers have dug undisciplined households a very deep hole. Debt weight will continue to hold back our economy, savings, and investment until it is paid down and written off over the coming years and months. In a heavily indebted world, Canada is leading the pack in terms of household debt to GDP. Nothing to be proud of here. This data is at the end of Q4 last year, debt has climbed further in 2017.

This post was published at FinancialSense on 11/29/2017.

What Happens to the Federal Debt If the Bond Bubble Pops?

Earlier this month, Mint Capital strategist Bill Blain warned that the bond bubble is about to burst.
A crash in the bond market would likely take stocks down with it, but there is another impact that is less obvious. It could have a huge impact on the United States’ ability to finance its massive debt.
As Dan Kurz of DK Analytics points out, the federal government would have a difficult time even paying the interest on the debt in a ‘normalized’ interest rate environment.
Neither US federal debt, nor virtually any OECD government debt, could be easily carried with ‘normalized’ interest rates, which would readily be 2 to 5 percentage points higher than current short-term (ZIRP-dominated) and long-term (based on 10-year OECD government bonds with no or very nominal yields) rates. For the US government, whose cost of funds is currently around 1.4% thanks to both massively lower, QE-enabled long-term rates and to a propensity to fund deficits and refinance debt with more shorter-term funding – which has been extremely cheap thanks to ZIRP or near ZIRP for nearly nine years – every one percentage point higher average cost of funding $20.5 trillion in debt would equate to a $205 billion higher annual interest expense.’

This post was published at Schiffgold on NOVEMBER 29, 2017.

Best Beige Book Anecdotes: “It’s No Longer Possible To Build A Starter Home For Under $200K In Cleveland,” And More

While many, and certainly the FOMC, tends to gloss over the periodic Beige Book report, it does provide a snapshot of the US economy, if not in quantiative terms, then in qualitative anecdotes, some of which can be rather amusing at times.
First, here are the big picture economic assessments of the Nov. 29 Beige Book, which was prepared by the St. Louis Fed based on information collected on or before Nov. 17, 2017. First, on overall economic activity, courtesy of Bloomberg:
Retail spending largely flat; outlook for holiday sales generally optimistic Residential real estate activity remained constrained, with most districts reporting little growth in sales or construction All districts reported that manufacturing activity expanded, with most describing growth as moderate Some respondents concerned or uncertain about impact of potential changes to taxes and other policies Employment and Wages:
Reports of tightness in the labor market widespread Wage growth modest or moderate in most districts; increases most notable for professional, technical, and production positions that remain difficult to fill Many districts reported that employers were raising wages and increasing their use of signing bonuses and other nonwage benefits to retain or attract employees

This post was published at Zero Hedge on Nov 29, 2017.

GOP “Lovefest” Or McCain Mayhem: McConnell Says Crucial Procedural Vote On Tax Bill Coming Later Today

As expected, McConnell says the Senate will vote later today on the Motion to Proceed to the GOP tax reform bill.
— Frank Thorp V (@frankthorp) November 29, 2017

Update (2:45PM EST): Although no official time has been provided, according to The Hill, Senator Tom Tillis (R-NC), who presided over the Senate floor during lunch, said he expected a vote on the tax bill in the 4 – 5pm EST timeframe.
Meanwhile, Senator Susan Collins (R-ME) has just confirmed she will support the procedural vote for tax reform today but is still on the fence regarding her final support of the legislation.
* * *
Just yesterday a 12-11 party-line vote in favor of the tax reform bill by the Senate budget committee allowed Mitch McConnell to breathe a temporary sigh of relief after earlier objections by GOP members left many wondering whether the bill would even make it out of committee.
Now, the controversial legislation is set for its first key test before the entire Senate after McConnell just confirmed that a crucial procedural vote intended to allow debate on the bill has been scheduled for later this afternoon.

This post was published at Zero Hedge on Nov 29, 2017.

Walking in Their Footsteps: Powell Will Maintain Status Quo at Fed

It looks like Trump’s pick to chair the Federal Reserve plans to walk in the footsteps of his predecessors.
In other words, we can expect the legacy of Ben Bernanke and Janet Yellen to continue unbroken. That means a continuation of interventionist monetary policy, artificially low interest rates into the foreseeable future, and plenty of quantitative easing when the time comes.
Yes. The new boss looks a lot like the old boss.
Jerome Powell testified before the Senate Banking Committee on Tuesday. The New York Times described it as a ‘relatively placid affair.’
Maintaining the status quo doesn’t set off too many fireworks.
Democrats seem OK with the pick. Interestingly, the people who were against Powell when he was an Obama appointee are OK with him now that he’s a Trump appointee.
Some Democrats have indicated they might oppose the nomination. But, importantly, Mr. Powell drew little opposition from conservative Republicans who opposed both his nomination as a Fed governor in 2012 and his reappointment in 2014. Senator Dean Heller, a Nevada Republican who voted against Mr. Powell both times, said he was trying to get to yes.’

This post was published at Schiffgold on NOVEMBER 29, 2017.

Pending Home Sales Jump Most In 8 Months On Hurricane Rebound

Following the bounces in new- and existing-home sales in October, all eyes are on Pending Home Sales to complete the trifecta of ‘proof’ that housing is back baby… and it did rising 3.5% MoM (beating expectations of a 1.0% gain). The driver of the surge was The South (up 7.4% MoM) as September’s 3% hurrican tumble is erased.
September’s data was revsised slightly lower (from 0.0% to -0.4%) but October’s jump is the biggest since Feb..

This post was published at Zero Hedge on Nov 29, 2017.


The NFL is hemorrhaging money right now, at a rate that could add up to a $500 million loss in revenue compared to last year. That revenue loss is being felt by the TV networks that carry NFL games, CBS, ESPN, Fox, and NBC. But revenue losses for networks mean significantly reduced TV contracts for the NFL.
One of the main factors in that loss of revenue has been a 20% drop in audience since 2015, the year the NFL saw a peak in viewership. Many will look at the NFL’s recent spate of National Anthem protests as the main culprit behind this decline. The protests began last season when then-San Francisco Quarterback Colin Kaepernick took a new while the National Anthem played.
To be sure, the NFL is most likely getting some blowback from the protests and from the NFL’s initial support of the protests, as well as the NFL’s continued mixed reaction to the protests. But does that alone explain the loss in ratings, which equals a loss in revenue?
There may be other factors coming in to play that are leading to the loss in ratings for the NFL. One of those factors could very well be the rules changes designed to protect players, changes that happened as a result of discoveries made about the ongoing issues that players suffer as a result of concussions, issues that have led players to experience significant health issues, even mental issues, including suicides (such as Junior Seau) that have been linked to what is called CTE.

This post was published at The Daily Sheeple on NOVEMBER 28, 2017.

What Americans Spent The Most Money On In The Third Quarter

One month ago, when the BEA released its first estimate of the hurricane-impacted economy during the third quarter (which came in at a stronger than expected 3.0%) we were surprised to report that according to the Department of Commerce, in the third quarter the biggest driver of marginal spending was car sales (technically Motor Vehicles and Parts), which increased by $15.6 billion to $463.5 billion. Which, as we said at the time and considering recent US and global automakers data, was paradoxical in light of the ongoing decline in overall sales in the second half of 2017, and it was far too early to expect the post-hurricane spending spree. It was also surprising because as Americans splurged on cars, they pulled back on gasoline purchases, which was the single biggest detractor to spending, subtracting a marginal $3.5 billion in PCE, to $283.6 billion.
In any case, we concluded by saying that “we now await for the revisions to this initial estimate over the coming two months, because something tells us that the auto spending spree will be thoroughly revised well lower.”

This post was published at Zero Hedge on Nov 29, 2017.

Stock Market Lazes Happily on a Powerful Time Bomb, and the Fed Begins to Worry

Pointing at ‘excesses,’ ‘distortions,’ and ‘imbalances.’
Margin debt in the stock market hit another record, $561 billion at the end of October, up 16% from a year ago, the New York Stock Exchange reported on Tuesday. Margin debt and the stock market move together. And even on an inflation-adjusted basis, the surge has been breath-taking.
This chart shows margin debt (red line, left scale) and the S&P 500 (blue line, right scale), both adjusted for inflation to tune out the effects of the dwindling value of the dollar over the decades (chart by Advisor Perspectives):

This post was published at Wolf Street on Nov 29, 2017.

WTI/RBOB Spike On OPEC Headlines After Bearish Inventory/Production Data

Update: WTI/RBOB was fading after DOE data but then Kuwait dropped the following meaningless headline: OPEC JMMC RECOMMENDS EXTENSION, DIDN’T FINALIZE DURATION. And the algos took over…
Last night’s API-reported surprise crude build sparked selling that not even Russia/Saudi jawboning could rescue, but DOE data showed the exact opposite with a big crude draw and even bigger gasoline draw. Added to a new record high in US crude production and RBOB is fading and WTI is not rallying.
As Bloomberg reports, the U. S. has proven at least one thing this year with its expansion of crude and products exports: we are becoming more energy independent than ever before.

This post was published at Zero Hedge on Nov 29, 2017.

The Economics of Gentrification

Gentrification is the new monster to be fought. The term already has such bad press, that almost no one is willing to say anything in its favor – defending gentrification and defending neoliberalism are now almost interchangeable.
In this process of constant attack, gentrification has been accused of a wide array of crimes: destroying local commerce by promoting ‘economic monoculture,’ the incomprehensible ‘reduction of walkability,’ and betrayal of neighborhoods and residents. The enemies of free and voluntary trade, which always lack arguments, do not spare adjectives to discredit the term – which almost always comes in the vague form of ‘economic interests.’
What Is Gentrification? Gentrification comes from the word gentry, and Its meaning is associated with nobility or people of high birth – it also refers to the bourgeoisie.
Gentrification is thus the process by which the original residents of a sector or neighborhood – generally centric and popular – are progressively displaced by others with higher purchasing power.
Who could be in favor of gentrification? Isn’t it just another battle in the endless war between the upper classes and the disadvantaged? To shed light on this matter, let’s examine what the value of housing depends on.

This post was published at Ludwig von Mises Institute on Nov 29, 2017.

Dollar Jumps As Yellen Goes Full Bernanke: Warns “Asset Valuations Are High” But Risk Is “Contained”

Yes, departing Fed chair Janet Yellen used the ‘c’ word…
Federal Reserve Chair Janet Yellen, in prepared remarks ahead of what may be her last appearance before Congress as head of the central bank, somewhat gloated at the steadily brightening picture for the U. S. economy she has left behind for Jay Powell (while downplaying the risks of financial instability).
‘The economic expansion is increasingly broad based across sectors as well as across much of the global economy,” Yellen said in prepared testimony to the bicameral Joint Economic Committee on Wednesday in Washington. ‘I expect that, with gradual adjustments in the stance of monetary policy, the economy will continue to expand and the job market will strengthen somewhat further, supporting faster growth in wages and incomes.”

This post was published at Zero Hedge on Nov 29, 2017.

Goldman: The Last Time This Happened Was Just Months Before The Start Of The Great Depression

Ah Goldman, never change.
One week after Goldman’s chief equity strategist David Kostin predicted a three-year bull market of “rational exuberance“, lifting his 2018 S&P price target from 2,500 to 2,850 rising to 3,100 in 2020, and stating that should the exuberance turn “irrational”, the S&P could rise as high as 5,300 by the end of 2020, another Goldman strategist, Christian Mueller-Glissmann, has decided it may be a good idea to play bad cop and cover all bases.
And so, in a report released on Tuesday “The Balanced Bear – Part 1: Low(er) returns and latent drawdown risk” this now bearish Goldmanite warns that in the medium-term, the two likely scenarios are either i) a “slow pain” deflation scenario of low yields and high valuations “which persist as macro is stable but there are less windfall gains from rising valuations and less carry – as a result, returns are likely to be lower across assets”, or ii) a “fast pain” drawdown scenario in which there is “either a material negative growth or inflation/rate shock, or a combination of both, which drives a drawdown in 60/40 portfolios.”
For those confused, don’t worry – you read it right. While on one hand Goldman is predicting nothing but blue skies for the “medium-term” of the next three years, predicting no recession and double digit equity upside, at the very same time, the very same Goldman is also forecasting either a “slow” or “fast” pain scenario, which while different, share one thing in common (as the name implies): “pain.”

This post was published at Zero Hedge on Nov 29, 2017.