• Tag Archives David Stockman
  • Stockman Warns Of “Huge Air Pocket Between Wall Street Fantasy & Economic Reality”

    Authord by Craig Wilson via The Daily Reckoning,
    David Stockman joined Boom Bust to discuss the massive storm that is building and about to slam into Wall Street. During the discussion Stockman reveals what he believes is ahead for the stocks in the market and the economy.
    The interview began with the Boom Bust host asking the acclaimed author about his concern surrounding a government shutdown. David Stockman began ‘we’re in the midst of the biggest political train wreck in modern history… There will be no governance in Washington. There will be no tax bill, stimulus or infrastructure.’
    ‘We’re heading for an expiration of the debt ceiling and running out of cash that will create an enormous crisis by August or September. They’re not going to be able to cope with it.’


    This post was published at Zero Hedge on Jun 23, 2017.


  • Coming Apart: The Imperial City At The Brink

    David Stockman routinely refers to President Trump as the ‘Great Disrupter’. But this is not a bad quality, he insists. Rather, it is a necessary one: Stockman argues (my paraphrasing) that Trump represents the outside force, the externality, that tips a ‘world system’ over the brink: It has to tip over the brink, because systems become too ossified, too far out on their ‘branch’ to be able to reform themselves. It does not really matter so much, whether the agency of this tipping process (President Trump in this instance), fully comprehends his pivotal role, or plays it out in an intelligent and subtle way, or in a heavy-handed, and unsubtle manner. Either serve the purpose. And that purpose is to disrupt.
    Why should disruption be somehow a ‘quality’? It is because, during a period when ‘a system’ is coming apart, (history tells us), one can reach a point at which there is no possibility of revival within the old, but still prevailing, system. An externality of some sort – maybe war, or some other calamity or a Trump – is necessary to tip the congealed system ‘over’: thus, the external intrusion can be the catalyst for (often traumatic) transformational change.
    Stockman puts it starkly: ‘the single most important thing to know about the present risk environment [he is pointing here to both the political risk as well as financial risk environment], is that it is extreme, and unprecedented. In essence, the ruling elites and their mainstream media megaphones have arrogantly decided that the 2016 [US Presidential] election was a correctible error’.
    But complacency simply is endemic: ‘The utter fragility of the latest and greatest Fed bubble could not be better proxied than in this astounding fact. To wit, during the last 5,000 trading days (20 years), the VIX (a measure of market volatility) has closed below 10 on just 11 occasions. And 7 of those have been during the last month! … That’s complacency begging to be monkey-hammered’, Stockman says.

    This post was published at Zero Hedge on Jun 20, 2017.


  • Inflation Trade: AMZN + WFM

    ‘Markets go up on an escalator, they come down on an elevator. This is the most hideously overvalued market in history.’
    David Stockman
    Last week’s action by the Fed was an effort to restore normalcy, but in the context of extraordinary action by the central bank. When you tell markets that the risk free rate is zero, it has profound implications for the cost of debt and equity, and resulting in different asset allocation decisions. Ending this regime also has profound implications for investors and markets.
    In the wake of the financial crisis, some investors found comfort in the fact that when risk free interest rates are at or near zero, the discounted future value of equity securities was theoretically infinite. Markets seem to have validated this view. But to us the real question is this: If a company or country has excessive and growing amounts of debt outstanding against existing assets, what is the value of the equity? The short answer is non-zero and declining. But hold that thought.
    Reading through Grant’s Interest Rate Observer over the weekend, we were struck by the item on China Evergrande Group (OTC:ERGNF), a real estate development company and industrial conglomerate that has reported negative free cash flow since 2006, but has made it up in volume so to speak. The stock is up over 200% this year, Grant’s reports. The real estate conglomerate has its hands into all manner of businesses and seems to typify the China construction craze.

    This post was published at Wall Street Examiner on June 19, 2017.


  • ‘Look Ma, No Hands!’ — David Stockman

    The Deep State is escalating its war on President Trump but the Wall Street partiers apparently couldn’t care less. When the machines tagged 2402 on the S&P 500 yesterday, it was surely a historic case of ‘look ma, no hands!’
    It’s hard to imagine what more will be needed to ignite an eruption of fear and panic in the casino amidst Wall Street’s record and wholly irrational state of somnolence.
    After all, the Fed is sidelined and out of dry powder. The Red Ponzi is tottering. The U.S. retail sector is descending into an apocalypse. The giant auto bubble is fracturing. The Trump Stimulus is dead in the water, and Washington is heading for an extended stretch of complete dysfunction and acrimonious combat.
    And if that isn’t that enough to upset the apple cart – there are a lot more headwinds coming down the pike.
    But the point is the insane governance process in Washington, which is completely unhinged, is combined with a level of insane complacency on Wall Street. Which is literally off the charts.

    This post was published at Daily Reckoning


  • David Stockman: Trump’s Tax Plan Never Had a Chance

    David Stockman joined Fox Business and Maria Bartiromo on Mornings with Maria to discuss President Trump’s tax plan efforts and what he viewed as a massive calamity unfolding in Washington.
    The Fox Business host began the conversation by asking what he thought on the Trump tax plan proposal. Stockman pressed, ‘I think it is a one page, $7.5 trillion wish list that has no chance of being enacted and is pretty irresponsible this late in the game.’ The host then fired back by asking how the former Reagan budget director placed a price tag on the plan without a score from the Congressional Budget Office.
    The author fired back, ‘The corporate is at 15%, the pass through rate on all unincorporated business is at 15% and that will cost roughly $4 trillion. Doubling the standard deduction will cost over $1 trillion. Getting rid of the alternative minimum will cost nearly $1 trillion.’

    This post was published at Daily Reckoning


  • Stockman On The Coming Fiscal Bloodbath: “Sell Stocks, Sell Bonds, Buy Gold”

    David Stockman joined Greg Hunter of USA Watchdog to discuss what he views as a fiscal bloodbath and the biggest bond market bubble to ever hit the global economy.
    To begin the discussion, the Washington insider was asked about the cash on hand in the United States federal budget and the fiscal conditions that Donald Trump faced where he unloaded, ‘I think it is a total calamity. They capitulated entirely.’
    While speaking on what cuts Trump proposed Stockman pressed, ‘He wants to cut $18 billion in order to ‘balance it out’ from domestic programs like the the National Institute of Health (NIH), Public Broadcasting Service (PBS) and a lot of things in between… and that’s just a down payment for the big reduction proposed for the full fiscal year that starts in October. That proposal is looking for $54 billion for defense and other domestic priorities, met with $54 billion of cuts on the domestic side… the problem is, Trump went to the Hill and they got totally fleeced. They ended up with most of the increases they wanted because that is the way Washington works. More money for the defense and border pork barrel.’

    This post was published at Zero Hedge on May 9, 2017.


  • Former Reagan Administration Official Is Warning Of A Financial Collapse Some Time ‘Between August And November’

    If a former Reagan administration official is correct, we are likely to see the next major financial collapse by the end of 2017. According to Wikipedia, David Stockman ‘is an author, former businessman and U. S. politician who served as a Republican U. S. Representative from the state of Michigan (1977 – 1981) and as the Director of the Office of Management and Budget (1981 – 1985) under President Ronald Reagan.’ He has been frequently interviewed by mainstream news outlets such as CNBC, Bloomberg and PBS, and he is a highly respected voice in the financial community. Like other analysts, Stockman believes that the U. S. economy is in dire shape, and he told Greg Hunter during a recent interview that he is convinced that the S&P 500 could soon crash ‘by 40% or even more’…
    The market is pricing itself for perfection for all of eternity. This is crazy. . . . I think the market could easily drop to 1,600 or 1,300. It could drop by 40% or even more once the fantasy ends. When the government shows its true colors, that it’s headed for a fiscal blood bath when this crazy notion that there is going to be some Trump fiscal stimulus is put to rest once and for all. I mean it’s not going to happen. They can’t pass a tax cut that big without a budget resolution that incorporated $10 trillion or $15 trillion in debt over the next decade. It’s just not going to pass Congress. . . . I think this is the greatest sucker’s rally we have ever seen.’
    But even more alarming is what Stockman had to say about the potential timing of such a financial crash. According to Stockman, if he were to pick a time for the next major stock market plunge he would ‘target sometime between August and November’…

    This post was published at The Economic Collapse Blog on May 7th, 2017.


  • The Trump Reflation Fantasy Ends on Day 100 — David Stockman

    In honor of the Donald’s ‘Mother of All Bomb’ (MOAB) attack on the Hindu Kush mountains Thursday, let me introduce MOAD.
    I’m referring to the ‘Mother of All Debt’ crises, of course. The opening round is coming when Washington goes into shutdown mode on April 28, which happens to be Day 100 of the Donald’s reign.
    In theory, this should be just a routine extension of the fiscal year (FY) 2017 continuing resolution (CR) by which Congress is funding the $1.1 trillion compartment of government which is appropriated annually.
    The remaining $3 trillion per year of entitlements and debt service is on automatic pilot, but the truth is Washington can’t agree on what to do about either component – except to keeping on borrowing to pay the bills.
    There is a problem with this long-running game of fiscal kick-the-can, however. Namely, a 100 year-old statute requires Congress to raise the ceiling for treasury borrowing periodically, but the Imperial City has now reached the point in which there is absolutely no way forward to accomplish this.

    This post was published at Daily Reckoning


  • MARCH 23/TROUBLE IN THE USA WITH THE TRUMPCARE HEALTH BILL: THEY DO NOT HAVE ENOUGH VOTES TO PASS IT/GOLD DOWN $2.90 BUT SILVER RISES 2 CENTS/ITALY’S RULING PARTY IS DISINTEGRATING: THE 5 STAR MO…

    Gold: $1246.90 DOWN $2.90
    Silver: $17.56 UP 2 cents
    Closing access prices:
    Gold $1244.70
    silver: $17.57
    XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: 1254.64 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: 1245.00
    PREMIUM FIRST FIX: $9.64
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: 1256.67
    NY GOLD PRICE AT THE EXACT SAME TIME: 1246.00
    Premium of Shanghai 2nd fix/NY:$10.67
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est 1247.90
    NY PRICING AT THE EXACT SAME TIME: 1246.00
    LONDON SECOND GOLD FIX 10 AM: 1247.50
    NY PRICING AT THE EXACT SAME TIME. 1248.90
    For comex gold:
    MARCH/
    NOTICES FILINGS TODAY FOR MARCH CONTRACT MONTH: 0 NOTICE(S) FOR NIL OZ. TOTAL NOTICES SO FAR: 72 FOR 7200 OZ (0.2239 TONNES)
    For silver:
    For silver: MARCH
    88 NOTICES FILED TODAY FOR 440,000 OZ/
    Total number of notices filed so far this month: 3509 for 17,545,000 oz
    Today the markets reacted in horror with the failure of the House to pass the Trump Health bill (the Ryan bill). The Republicans are very divided and it is going to be impossible to pass anything exactly what David Stockman predicted.
    Let us have a look at the data for today

    This post was published at Harvey Organ Blog on March 23, 2017.


  • More Proof of Janet Yellen’s Idiocy — David Stockman

    During the last 129 months, the Fed has held 86 meetings. On 83 of those occasions it either cut rates or left them unchanged.
    So you can perhaps understand why Wednesday’s completely expected (for the last three weeks!) 25 bips left the day traders nonplussed. The Dow rallied over 100 points that day.
    Traders understandably believe that this monetary farce can continue indefinitely, and that our Keynesian school marm’s post-meeting presser was evidence that the Fed is still their friend.
    No it isn’t!
    Janet Yellen’s sing-song gibberish was the equivalent of a monetary DEFCON 1, alerting all except the most addicted Kool-Aid drinkers to get out of the casino.

    This post was published at Daily Reckoning


  • David Stockman Offers “More Proof Of Janet Yellen’s Idiocy”

    During the last 129 months, the Fed has held 86 meetings. On 83 of those occasions it either cut rates or left them unchanged.
    So you can perhaps understand why Wednesday’s completely expected (for the last three weeks!) 25 bips left the day traders nonplussed. The Dow rallied over 100 points that day.
    Traders understandably believe that this monetary farce can continue indefinitely, and that our Keynesian school marm’s post-meeting presser was evidence that the Fed is still their friend.
    No it isn’t!

    This post was published at Zero Hedge on Mar 19, 2017.


  • Trump Tax Cuts Face Major Hurdle

    Tax cuts are the master key to Trump’s economic agenda.
    No tax cuts and the rest is just gossip and gossamer. They’re one of the reasons for the Trump ‘reflation trade’ that’s sent the Dow’s barreling some 3,000 points since early November.
    But are those tax cuts in jeopardy?
    Trump has said he can’t ‘do’ tax cuts until first ‘doing’ health care. Straight from the equine’s oat hole:
    Statutorily and for budget purposes… we have to do health care before we do the tax cut. The tax cut is going to be major… but I can’t do it until we do health care.
    But Trump might not be able to ‘do’ health care at all…
    His own party’s warring over House Speaker Paul Ryan’s ‘repeal and replace’ Obamacare alternative.
    Ryan lauds his plan from hell to breakfast, says it lands clouts for freedom, slashes costs and red tape, covers everyone and runs the mile in four minutes flat.
    But the party’s budget hawks say Ryan’s plan is all halfway-house options. It’s ‘repeal and replace’ in name only. Or as David Stockman styles it, ‘Obamacare Lite.’

    This post was published at Wall Street Examiner on March 14, 2017.


  • MARCH 10/JOBS REPORT IN THE USA SHOWED A BIGGER INCREASE THAN EXPECTED BUT EARNINGS WAS DOWN AND THAT PROPELLED GOLD AND SILVER FROM ITS NADIR: GOLD CLOSED DOWN $1.70 AND SILVER DOWN: 11 CENTS/TH…

    Gold: $1200.70 down $1.70
    Silver: $16.88 down 11 cents
    Closing access prices:
    Gold $1205.00
    silver: $17.03
    For comex gold: MARCH/ NOTICES FILINGS TODAY FOR MARCH CONTRACT MONTH: 2 NOTICE(S) FOR 200 OZ. TOTAL NOTICES SO FAR: 59 FOR 5900 OZ (0.1835 TONNES)
    For silver: For silver: MARCH 135 NOTICES FILED TODAY FOR 675,000 OZ/
    Total number of notices filed so far this month: 2748 for 13,740,000
    Let us have a look at the data for today
    .
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    In silver, the total open interest FELL by ONLY 1874 contracts DOWN to 189,548 with respect to YESTERDAY’S TRADING. In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e. 0.948 BILLION TO BE EXACT or 135% of annual global silver production (ex Russia & ex China).
    FOR THE NEW FRONT MARCH MONTH: THEY FILED: 135 NOTICE(S) FOR 675,000 OZ OF SILVER
    In gold, the total comex gold FELL BY A TINY 1790 contracts WITH ANOTHER FALL IN THE PRICE GOLD ($6.10 with YESTERDAY’S TRADING) The total gold OI stands at 432,298 contracts.
    we had 2 notice(s) filed upon for 200 oz of gold.

    This post was published at Harvey Organ Blog on March 10, 2017.


  • Stockman: “Trump Will Create A Debt Crisis Like Never Before”

    Having warned that “everything will grind to a halt on March 5th” due to the under-appreciated debt-ceiling debacle that looms over Washington, and exclaiming that “what is going on today is complete insanity,” former Reagan Budget Director David Stockman is rapidly losing faith that anything can be done…
    “I’ve thrown in the towel because he’s not paying attention and he’s not learning anything and he’s making ridiculous statements.”
    Reflecting on Trump’s address to Congress, and what we know of The White House agenda, Stockman told Fox Business’ Neil Cavuto:
    “We don’t need a $54 billion increase in defense when the budget already is ten times bigger than that of Russia. We don’t need $6 trillion of defense spending over the next decade because China is going nowhere except trying to keep their Ponzi scheme together.”

    This post was published at Zero Hedge on Mar 1, 2017.


  • Strange That The Same Point In Time For The Economic Crisis Keeps Coming Up – Episode 1215a

    The following video was published by X22Report on Feb 27, 2017
    Netherlands is making a move to leave the EU. Theresa May is worried that a Scottish Referendum vote will happen at the same time as the Article 50 vote. Former IMF chief sentenced to jail in Spain. The EU says no bail-ins at this time because it would hurt the creditors. Maine drops 9,000 from Food Stamp roll says people need to look for jobs. Pending home sales tumble. Durable goods decline. David Stockman says it will begin on March 15 and the economy will really go down hill in the summer and the fall will be a disaster.


  • Swap Spreads Surge To 5-Year Highs As Debt Ceiling Despair Strikes

    It appears David Stockman’s warnings over the looming debt ceiling debacle has sparked some investors to face up to reality once again. The Treasury-Bill yield curve has inverted further and swap spreads soared to five-year highs.
    The difference between 2-year swap rates and Treasury yields has widened back to 37.5 basis points which is the highest since March 2012. Societe Generale analysts led by Subadra Rajappa expect net bill issuance to drop by about $150 billion as Treasury shrinks its cash balance to $23 billion by the March 15 deadline.

    This post was published at Zero Hedge by Tyler Durden Feb 27, 2017.


  • Retail Apocalypse Gains Momentum As David Stockman Warns ‘Everything Will Grind To A Halt’ After March 15th

    J. C. Penney and Family Christian Stores are the latest retail giants to announce widespread store closings. As you will see below, J. C. Penney plans to close between 130 and 140 stores, and Family Christian is closing all of their 240 stores. In recent months the stock market has been absolutely soaring, and so most people have simply assumed that the ‘real economy’ must be doing well. But that is not the case at all. In fact, the retail apocalypse that I have been documenting for quite some time appears to be gaining momentum.
    J. C. Penney is not in as rough shape as Sears is just yet, but it is definitely on a similar trajectory. In the end, they are both headed for bankruptcy. That is why it wasn’t too much of a surprise when J. C. Penney announced that they are getting rid of about 6,000 workers and closing at least 130 stores…
    J. C. Penney (JCP) plans to close 130 to 140 stores and offer buyouts to 6,000 workers as the department-store industry sags in competition with online sellers and nimble niche retailers.
    The company said Friday that it would shutter 13% to 14% of its locations and introduce new goods and services aimed at the shifting preferences of its customer base.

    This post was published at The Economic Collapse Blog on February 26th, 2017.


  • Stockman Warns: ‘Trump Does Not Yet Understand The Magnitude Of The Problem… It’s Going To Shock The System’

    Though many financial pundits make the argument that the U. S. economy is booming as a result of millions of new jobs, a healthy housing market and record stock market levels, former Reagan budget director David Stockman says that the next few months will see fiscal, financial and economic upheaval.
    In a recent interview with Greg Hunter’s USA Watchdog, Stockman argues that President Trump’s stimulus packages will be ground to a halt as the U. S. debt ceiling is once again breached in March. The resulting uncertainty could lead to widespread panic on Wall Street.
    The trigger, says Stockman, will be a debt ceiling crisis on or around March 15, 2017, which incidentally, just happens to be the same day that the Federal Reserve is supposed to hike interest rates:
    In a typical month we have 250 to 300 billion in revenue coming in… that will easily cover the debt service for a month… that will readily cover social security and other critical payments… but when it comes to paying grants to state and local governments, contractors, or the Army Corp of Engineers, or the Pentagon, or a whole range of other activities, if you don’t have the cash you put the bills in the drawer…
    I think that is what’s going to shock the system… and it will scare the living bejeezus out of Wall Street and financial markets because then you won’t have a sudden clarification or resolution to the problem.. and that could go on for days and weeks.

    This post was published at shtfplan on February 26th, 2017.


  • Stockman: “After March 15 Everything Will Grind To A Halt”

    Two weeks after David Stockman warned that “the market is apparently pricing in a huge Trump stimulus. But if you just look at the real world out there, the only thing that’s going to happen is a fiscal bloodbath and a White House train wreck like never before in U. S. history” and exclaimed that, when looking at markets, “what’s going on today is complete insanity” he is back with another interview, this time with Greg Hunter of USAWatchdog in which he, once again warns, that a giant fiscal bloodbatch is coming soon, and urges listeners to pay especially close attention to the March 15, 2017 debt ceiling deadling, at which point everything could “grind to a halt.”
    As Greg Hunter writes, former Reagan Administration White House Budget Director David Stockman says financial pain is a mathematical certainty. Stockman explains, ‘I think we are likely to have more of a fiscal bloodbath rather than fiscal stimulus. Unfortunately for Donald Trump, not only did the public vote the establishment out, they left on his doorstep the inheritance of 30 years of debt build-up and a fiscal policy that’s been really reckless in the extreme. People would like to think he’s the second coming of Ronald Reagan and we are going to have morning in America. Unfortunately, I don’t think it looks that promising because Trump is inheriting a mess that pales into insignificance what we had to deal with in January of 1981 when I joined the Reagan White House as Budget Director.’

    This post was published at Zero Hedge on Feb 26, 2017.