• Category Archives Market Commentary
  • This Flu Season Begins the Risk of a Pandemic 2018-2019

    A possible new pandemic is forming from a deadly strain of flu emerging from Australia and will be headed to the UK as the normal flow of travels would take it. Britain will perhaps be hit with the worst flu season in 50 years. Already, there are about 170,000 cases of flu reported in Australia which is more than double this season than usual.
    The strain of flu is called H3N2, and the number of flu deaths in Australia over winter has not yet been released, but it’s thought to be the worst in many years. The last major flu epidemic was in the 1968 pandemic which began in Hong Kong killing more than a million people worldwide. Flu pandemics have been linked to fluctuations in climate, and new research connects the world’s four most recent pandemics to the cyclical cooling of the Pacific Ocean near the equator.

    This post was published at Armstrong Economics on Dec 29, 2017.


  • Global Stocks Set To Close 2017 At All Time Highs, Best Year For The Euro Since 2003

    With just a few hours left until the close of the last US trading session of 2017, and most of Asia already in the books, S&P futures are trading just shy of a new all time high as the dollar continued its decline ahead of the New Year holidays.
    Indeed, markets were set to end 2017 in a party mood on Friday after a year in which a concerted pick-up in global growth boosted corporate profits and commodity prices, while benign inflation kept central banks from snatching away the monetary punch bowl. As a result, the MSCI world equity index rose another 0.15% as six straight weeks and now 13 straight months of gains left it at yet another all time high.
    In total, world stocks haven’t had a down month in 2017, with the index rising 22% in the year adding almost $9 trillion in market cap for the year.
    Putting the year in context, emerging markets led the charge with gains of 34%. Hong Kong surged 36%, South Korea was up 22% and India and Poland both rose 27% in local currency terms. Japan’s Nikkei and the S&P 500 are both ahead by almost 20%, while the Dow has risen by a quarter. In Europe, the German DAX gained nearly 14% though the UK FTSE lagged a little with a rise of 7 percent.
    Craig James, chief economist at fund manager CommSec, told Reuters that of the 73 bourses it tracks globally, all but nine have recorded gains in local currency terms this year.
    ‘For the outlook, the key issue is whether the low growth rates of prices and wages will continue, thus prompting central banks to remain on the monetary policy sidelines,’ said James. ‘Globalization and technological change have been influential in keeping inflation low. In short, consumers can buy goods whenever they want and wherever they are.’

    This post was published at Zero Hedge on Fri, 12/29/2017 –.


  • Daily Trades for December 29, 2017

    The selection algo generated 9 potential longs and 4 shorts on Thursday. I have chosen 2 longs and no shorts to be added the list. After trades closed out, there will now be 16 open longs and 5 open shorts.
    Here is today’s updated list including new buys, sells, short sales, cover shorts, and updated stops, as well as performance metrics for this month.
    Market Update Pro subscribers click here to download the report.

    This post was published at Wall Street Examiner on December 29, 2017.


  • MIFiD II Delays…

    Talk amongst many traders is that they are so unsure how the new rules and regulations surrounding the implementation of MIFiD II (Markets in Financial Instruments Directive) are to be imposed, that some even said they were keen to extend their holidays until this mess is sorted out. In other words, until they hear that regulators will grant firms a six-month delay for part of the changes about to be implemented for both the company and country, many just do not even know how to conduct business anymore.
    The most critical problem surrounding this nightmare is the fact that every trade (with a European Counterpart) will require a LEI (Legal Entity Identifier). This is not such a critical issue for Wall Street Banks since they have already won a 30-month grace period after the SEC requested time to negotiate terms with the EU. Goldman Sachs has installed another of its board members as the top negotiator inside the SEC – Alan Cohen. Goldman Sachs has now three strategic people in the Trump Administration to steer the legislation in their favor both in the USA with restoring Glass Steagall to reduce their competition (Gary Cohen & Steven Mnuchin) and they have now added Alan Cohen, who was their Head of Global Compliance.

    This post was published at Armstrong Economics on Dec 29, 2017.


  • The EU Bad Loan Crisis to Get Much Worse – The Solution = Financial Pandemic

    The bad loan (‘non-performing loan’ (NPL)) crisis in Europe is well known and many have been calling for this issue to be addressed. In Italy, the bad loan crisis has reached 21% of GDP. While NPLs dropped to 4.8% of all loans in the EU as a whole during the first quarter of 2017, they remained well above 40% in Greece and Cyprus, at 18.5% in Portugal, and 14.8% in Italy according to the European Banking Authority.
    Now comes the bureaucrats with zero experience to save the day – or is that to create a financial pandemic in the EU? The EU Commission (EUC) along with the European Central Bank (ECB), want to ensure that banks promptly sell real estate, stocks, bonds and other assets that serve to collateralize loans according to their Mid-term Review of the Capital Markets Union Action Plan. Member States are required to adopt laws that facilitate the central directive. At this time, any bank cannot just sell a property that secures a loan. The problem is, all loans, whether secured or not, are valued the same.

    This post was published at Armstrong Economics on Dec 29, 2017.


  • The Ghosts of Crashes Past, Recent, and Future as they Appeared on this Blog

    It’s not boasting to state plainly that you were right if you are equally direct about your errors. I have until now rightly predicted all of the stock market’s major downturns, starting with the one in 2007 that gave us the Great Recession. The first of those led to the writing of this blog. The next two were predicted and recorded as they happened on this blog, and the latest, whether it proves right or wrong, waits shortly in the future. Each time I made such a prediction here, I bet my blog on it. The blog is still here, but will it continue to be?
    I am using the term ‘crash’ loosely in this article because one time I clearly stated the impending plunge would not technically amount to a crash (a sudden drop of more than 20%) but it would be much more significant than just a correction (a decline of 10%) because of how drastically it would change the nature of the market. I’ll show here how it did. The next time, I predicted a ‘crash’ that did not quite turn out as significant as I claimed it would be, but it was an historic event in that the Dow fell further in January than it had ever done in its entire history, and it did so exactly the timing (to the day) that I laid out in advance.
    I let myself off easy on that one as being both a hit and a miss because, after all, getting timing of a major plunge right to the exact day as well as the counter-intuitive manner by which it would start on that day is not something one typically sees.
    Now we are about to see whether I will survive the prediction I made many months ago for January 2018.
    The ghost of crashes past
    On September 3rd, 2014, I wrote an article titled ‘Will There be a 2014 Stock Market Crash?’ In that article I predicted something big and wicked appeared to be coming right around the corner:

    This post was published at GoldSeek on 28 December 2017.


  • Citi Fined $11.5 Million For Telling Retail Investors To “Buy” Stocks When It Meant “Sell”

    In a fine that is on one hand bizarre, and on the other vindication for all those who claim that nearly two decades after the Henry Blodget fiasco banks still tell their customers to do one thing (i.e. “buy”) while meaning the opposite, Citigroup was ordered to pay at least $11.5 million in fines and restitution to settle charges it displayed the wrong research ratings on more than 1,800 stocks, “causing many customers to own shares they never would have bought” a market regulator ordered on Thursday.
    FINRA fined Citigroup $5.5 million and ordered it to pay at least $6 million to retail customers over errors that occurred between February 2011 and December 2015, and involved more than 38% of the equity securities that the New York-based bank covered. From the filing:
    FINRA found that from February 2011 through December 2015, Citigroup Global Markets Inc displayed to its brokers, retail customers and supervisors inaccurate research ratings for more than 1,800 equity securities -more than 38 percent of those covered by the firm. Because of errors in the electronic feed of ratings data that the firm provided to its clearing firm, the firm either displayed the wrong rating for some covered securities (e.g., ‘buy’ instead of ‘sell’), displayed ratings for other securities that CGMI did not cover or failed to display ratings for securities that CGMI, in fact, rated. The firm’s actual research reports, which were available to brokers, and the research ratings appearing in those reports, were not affected by these errors.

    This post was published at Zero Hedge on 12/28/2017 –.


  • “Too Much Tech” – The Growing Peril Of Passive Investing

    “Too much of a good thing…” – That’s the message that many passive investors are unknowingly dealing with as they approach the year-end.
    In 2012, FANG Stocks (Facebook, Amazon, Netflix, and Google) accounted for less than 3% of the market cap of the S&P 500.
    At the end of 2017, those four stocks now account for over 8% of the S&P’s market cap…
    And, as WSJ reports, this is not limited to a small handful of stocks, it is worldwide – investors who loaded up on U. S. and Asian stock-index funds might be surprised to learn just what they own now: technology stocks – a lot of them.
    Led by Apple Inc., Facebook Inc. and their peers, the weighing of technology stocks in the S&P 500 index has climbed to 23.8% as of Dec. 26, from 20.8% at the end of last year, according to S&P Dow Jones Indices.

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • Even the Government Knows the Stock Market Is a Huge Bubble

    Last month, we reported on a Bank of America survey that indicated the mainstream has started to acknowledge that the stock market is a big, fat, ugly bubble.
    The latest fund-manager survey by Bank of America Merrill Lynch found that a record 48% of investors say the US stock market is overvalued. Meanwhile, 16% of investors say they are taking on above-normal risk. BoA chief investment strategist Michael Hartnett called this ‘an indicator of irrational exuberance.’
    Now, even the government has taken notice, acknowledging asset prices are floating in dangerous bubble territory.
    The Office of Financial Research (OFR) recently released its 2017 Annual Report. According to its analysis, market risk is flashing red, with stock market valuations at historic highs based on several metrics.

    This post was published at Schiffgold on DECEMBER 28, 2017.


  • The Wall Street Journal Does a Hit Piece on Trump’s Vacations

    The Wall Street Journal is trying to match The Washington Post for anti-Trump investigative journalism.
    Consider this article: President Trump Spent Nearly One-Third of First Year in Office at Trump-Owned Properties. It is a screed on Trump’s time spent vacationing.
    It has a subhead: “Unlike his predecessors, president traveled frequently to places he owns but where others pay to stay.” That is because his predecessors did not own several billion dollars’ worth of prime vacation real estate.
    Would you rather stay at a Motel 6 or Mir-a-Lago if someone else was picking up the tab? To ask the question is to answer it.
    I, for one, applaud the time that he spends vacationing. Any time that a politician spends doing anything other than legislating is time well spent. When they are busy “making things better” by expanding the government, citizens are losers. They lose a little more of their liberty.
    Earlier this year, The Washington Examiner reported this.

    This post was published at Gary North on December 28, 2017.


  • 2017: A Record Smooth Ride For Stocks

    As measured by the VIX, stocks have never enjoyed a less volatile year than 2017.
    Undoubtedly the most notable phenomenon of 2017 was the extremely smooth ride enjoyed by U. S. stocks – unprecedented, in fact. One way to measure just how smooth (or volatile) the market was is by looking at the readings of stock volatility expectations, in this case the S&P 500 Volatility Index, aka, the VIX. And based on VIX readings, 2017 was the least volatile year ever in the stock market.
    Specifically, the average daily closing price of the VIX in 2017 was 11.10 (through 12/26/17).

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • How To Go Bankrupt: Slowly Then Suddenly

    In Hemingway’s, ‘The Sun Also Rises,’ one of the characters, Bill, asks his friend, ‘Mike,’ how he went bankrupt. Mike replied, ‘I had a lot of friends. False friends. Then I had creditors…’ This passage from the novel comes to mind when I hear ads during the local sports radio programming from mortgage brokers urging listeners to use a cash-out refi or home equity loan to take care of credit card debt that piled up during the holidays. Beneath the surface is the message, ‘c’mon in, the water is fine, go ahead and take on even more debt.’
    If in fact the retail sales turn out to be as strong as projected, it’s because the average household has tapped into its savings and used an unusually large amount of credit card debt to fund holiday spending this year:

    This post was published at Investment Research Dynamics on December 28, 2017.


  • Do The Double-up! As Rents Rise, More Renters Turn to Doubling Up (L.A. The Worst!)

    This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
    Zillow has a fascinating, yet troubling study. It says that rent consumes a growing share of household income in many cities, some people must relocate or find ways to offset rising prices. An increasingly popular way to cut costs is by adding a roommate. Nationally, 30 percent of working-age adults – aged 23 to 65 – live in doubled-up households, up from a low of 21 percent in 2005 and 23 percent in 1990.
    Doubing up is a close relative of young adults continuing to live with their parents. Even though U-6 unemployment is at 8%, wage growth continues to be considerably lower than before the financial crisis. This offers a partial explanation for the doubling-up phenomenon.
    Of course, doubling-up is typical is high cost of living areas like Los Angeles, San Francisco, New York City, Chicago and Washington DC. Not surprising is the doubling-up trend in Mexican border cities like El Centro California, Tucson and Yuma Arizona and El Paso and Laredo Texas.

    This post was published at Wall Street Examiner by Anthony B Sanders ‘ December 27, 2017.


  • Venezuela Oil Industry Collapsing & May Take the Gov’t With It

    Venezuela has the largest proven oil reserve in the world. However, they are out of gasoline. The government has attributed this to poor management which has led to the stoppage of 80% of the country’s refineries. So much for socialism. The assumption that government is competent of managing anything is proven by this very example.
    My old friend, Milton Friedman, said it best:
    ‘If you put the Federal Government in charge of the Sahara desert, in 5 years there’d be a shortage of sand.’

    This post was published at Armstrong Economics on Dec 28, 2017.


  • Human Courage And Kindness Stand As Obstacles To The Void

    Among liberty activists, there is a rather universal consensus on what ails our nation. We understand that there is a concerted and deliberate effort by the establishment to undermine individual rights and constitutional protections. We understand that there is a coordinated effort by international financiers to destabilize our economy and siphon wealth from the middle class until it shrivels up and dies. We understand that there is an organized plan to radicalize the public along ideological lines and pit them against each other. We understand that geopolitics and regional wars are exploited to distract us from underlying issues. There is not very much debate over these realities; the evidence is overwhelming.
    However, there is constant disagreement among activists on solutions to these problems, and there are several reasons why this conflict persists. Let’s examine them…
    Ease Versus Struggle
    This is one conflict that I don’t think many people recognize or pay much attention to, but it stands as a key weakness that derails effective action. There is a distaste among some liberty activists for the idea of self sacrifice and struggle in achieving freedom. The reality is most fights are won through persistence and force of will; there are no shortcuts to defeating tyranny. There are no secret weapons. There is only indomitable spirit. That’s it. It doesn’t matter if you have a movement of 100 people or 100 million – any goal is achievable, but only so long as you accept the cost of pain and sacrifice required.

    This post was published at Alt-Market on Thursday, 28 December 2017.


  • I’m in Awe of How Far the Scams & Stupidities around ‘Blockchain Stocks’ are Going

    This can happen only during the very late stage of a bubble. It just doesn’t let up. UBI Blockchain Internet, a Hong Kong outfit whose shares trade in the US [UBIA], filed with the SEC to sell an additional 72.3 million shares owned by its executives. In other words, it isn’t selling the shares to raise money for corporate purposes, but to allow its executives, including CEO Tony Liu, to bail out.
    This is happening after the company – which sports zero revenues and a disconnected phone number in its SEC filings – managed to get its shares to spike briefly by over 1,100%, pushing its market capitalization to $8 billion.
    UBI Blockchain didn’t do an IPO. Instead, in October 2016, it acquired a publicly traded shell company registered in Las Vegas, called ‘JA Energy.’ It then changed the name and ticker symbol to what they’re now.
    Over the six trading days starting on December 11, 2017, its shares soared over 1,100%, from $7.20 to $87 on December 18, as the word ‘blockchain’ in its name and sufficient hype and speculator-idiocy took hold. By December 21, shares had plunged 67% to $29. They closed on Wednesday at $38.50. At this price, it still has a ludicrous market cap of $3.64 billion.

    This post was published at Wolf Street on Dec 28, 2017.


  • Peak Good Times? Stock Market Risk Spikes to New High

    Leverage, the great accelerator on the way up and on the way down.
    Margin debt is the embodiment of stock market risk. As reported by the New York Stock Exchange today, it jumped 3.5%, or $19.5 billion, in November from October, to a new record of $580.9 billion. After having jumped from one record to the next, it is now up 16% from a year ago.
    Even on an inflation-adjusted basis, the surge in margin debt has been breath-taking: The chart by Advisor Perspectives compares margin debt (red line) and the S&P 500 index (blue line), both adjusted for inflation (in today’s dollars). Note how margin debt spiked into March 2000, the month when the dotcom crash began, how it spiked into July 2007, three months before the Financial-Crisis crash began, and how it bottomed out in February 2009, a month before the great stock market rally began:

    This post was published at Wolf Street on Dec 27, 2017.