This is money borrowed by (usually individual or “retail”) investors against their existing stocks to buy more stocks. Investors tend to do this when markets are rising and using leverage seems like an effortless way turbocharge their gains. But eventually the market turns down, leaving stock portfolios insufficient to cover related margin debt and generating “margin calls” in which brokers demand more money and/or start liquidating customer portfolios. This sends the market down sharply and indiscriminately, as fairly-valued babies are dumped along with overvalued bathwater. The result: a quick, brutal bear market. Read More
Members of the American libertarian movement, particularly extremist preppers, are often associated with a belief that a complete breakdown in society is the only outcome from government economic policies and will lead to complete social disintegration. At the centre of their concerns is monetary destruction, with other issues, such as the erosion of personal freedom and the right to bear arms, important but peripheral. They cite history, particularly the hyperinflationary collapses, from Rome to Zimbabwe, and now Venezuela. They draw on Austrian economic theory, which fans their dislike of government and their expectation of total chaos. Read More
A secular bear market lasts anywhere between five and 25 years. The average length is around 17 years. During that time, typical bull and bear market cycles can occur. But asset prices will return to the original level. There is often a lot of debate as to whether we are in a secular bull or bear market. For example, some investors believe we are currently in a bear market that began in 2000.
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
Griffin’s book is a humdinger and will certainly upset brainwashed American super-patriots, but it throughly documents how Washington’s aggression toward other lands is covered up by politicians, media, and court historians with moral verbiage. In my view the hubris, arrogance, and ignorance of “American exceptionism” has the world locked on a trajectory to its extinction in nuclear Armageddon. Read More
I suspect there’s a hidden agenda behind the announcement in The Wall Street Journal op-ed by former Hillary Clinton aide Mark Penn that the Ole Gray Mare is actually eyeing another run for the White House in 2020. No, it’s not just that she would like to be president, as she averred on video last week in a weak moment, or that she has decided late in life to go full Bolshevik policy-wise. It is to establish her in the public mind as a serious candidate so that when she is indicted a hue-and-cry will arise that the move is a purely political act of revenge by the wicked Trump. Read More
The corollary is that investors should bet on what they think will happen over the medium to long term, stripping out their inclination to guess what other investors will do this week or this month. If you think electric cars are going to take over the world, for example, it might well be smart to snag some Tesla while it's on sale, if you can afford to wait for the bounce back.
CHECK OUT Buying Bitcoin is Like Buying Airhttps://youtu.be/XmMQAuO62gIAnother Round of Tax CutsNow the Republicans are talking about another round of tax cuts. Just in time for the November election. Whether or not these tax cuts actually get passed is anyone's guess, but it will be an issue on the campaign trail, either because they delivered ...…
A municipal bond, commonly known as a Muni Bond, is a bond issued by a local government or territory, or one of their agencies. It is generally used to finance public projects such as roads, schools, airports and seaports, and infrastructure-related repairs. The term municipal bond is commonly used in the United States, which has the largest market of such trade-able securities in the world. As of 2011, the municipal bond market was valued at $3.7 trillion. Potential issuers of municipal bonds include states, cities, counties, redevelopment agencies, special-purpose districts, school districts, public utility districts, publicly owned airports and seaports, and other governmental entities (or group of governments) at or below the state level having more than a de minimis amount of one of the three sovereign powers: the power of taxation, the power of eminent domain or the police power.
Several comments have noted other media folks (Rush, etc) reference Sundance/CTH information without attribution. Perhaps thats a way of protecting Sundance/CTH. I’m kinda glad that no story has more than about 1,000 or so comments. Things we read here (and some cool twitters) weeks/months ago are finally finding their way into MSM a little bit. I know we want things now (and hopefully enough gets out before elections), but protection (as much as possible) of quality information source is quite imperative in these interesting days.
In 2012, NASA, the U.S. Forest Service, the Texas Forest Service, and Smokey Bear teamed up to celebrate Smokey's 68th birthday at NASA's Johnson Space Center in Houston. The popular mascot toured the center and recorded a promotional announcement for NASA Television. NASA astronaut Joe Acaba and the Expedition 31 crew chose a plush Smokey doll to be the team's launch mascot, celebrating their trip to the International Space Station. During his tour about 250 miles above Earth, Smokey turned 68 years old.
Major international comparisons have long concluded that Americans’ ability to effectively utilize mathematics is inadequate. Such conclusions divide students, parents, teachers and administrators into camps that share little more than blaming others for the problems. However, it is unclear whether all the finger-pointing indicates a real desire to overcome our innumeracy. In fact, we systematically misuse numbers to distort reality because we want to fool ourselves, making our ineptitude no surprise.
Good read. I have read several of Mr. Kratter's works. His rules for trading keeps you focused and I have learned some good lessons from each of them. While I am not much of a 'short seller', I have made some decent money recently trading put options. If we are headed for a bear market this is a good book to help you make some money while others are just gritting their teeth!
The problem, though, is that for every downward move that actually turns into a bear market, there are dozens of times that the market reverses course and climbs higher. Selling after the initial stage of a brief panic and waiting to buy back your stocks after it runs its course will usually force you to pay more, eating into your long-term returns.
Americans are now so polarized that they “no longer share basic sympathies and trust, because they no longer regard each other as worthy of equal consideration.” Codevilla blames the progressives and their attitude of moral superiority, but his explanation is independent of who is to blame. I blame both sides. The Constitution and our civil liberties took a major hit from the “conservative” Republican regime of George W. Bush. Read More
I feel that the market is at it’s worst as far as the quailty of available homes at “Fair” prices – we realize that we will lose money, that’s a fact! Also, the sale will unfortunatly bolster the false values of the market. As the Doc’s readers know far too well, the stars have aligned and the wave is comming soon, prices will move further downward to a point of equalibrium with incomes, inventory, supply and demand. It looks like the banks will fight the whole way down delaying a natural correction. Folks have far too much debt into thier properties to make Short sales, preforclosers, forclosures sales work and finding folks who’ve lived many years in the same home with a good amount of equity to negociate with are very rare and thier homes are seldom Gems.
In the 9th largest economy in the world, the financial markets are crashing, and in the 21st largest economy in the world the central bank just raised interest rates to 65 percent to support a currency that is completely imploding. Whilethe mainstream media in the United States continues to be obsessed with all things Kavanaugh, an international financial crisis threatens to spiral out of control. Stock prices are falling and currencies are collapsing all over the planet, but because the U.S. has been largely unaffected so far the mainstream media is mostly choosing to ignore what is happening. But the truth is that this is serious. The financial crisis in Italy threatens to literally tear the EU apart, and South America has become an economic horror show. Read More
7. The low interest rates that I can actually obtain right now will not be around much longer. With inflation and growing lack of confidence in US, interest rates will rise. This assumes the 80% scenario of inflation. It is possible Gary is right and we stay in low interest environment for a couple more years, but it is still likely to go up, along with inflation, at some point in the not too distant future.
The issuer of a municipal bond receives a cash purchase price at the time of issuance in exchange for a promise to repay the purchasing investors, or their transferees, (the bond holder) over time. Repayment periods can be as short as a few months (although this is very rare) to 20, 30, or 40 years, or even longer. The issuer typically uses proceeds from a bond sale to pay for capital projects or for other purposes it cannot or does not desire to pay for immediately with funds on hand. Tax regulations governing municipal bonds generally require all money raised by a bond sale to be spent on capital projects within three to five years of issuance. Certain exceptions permit the issuance of bonds to fund other items, including ongoing operations and maintenance expenses in certain cases, the purchase of single-family and multi-family mortgages, and the funding of student loans, among many other things.
RATE AND REVIEW this podcast on Facebook.https://www.facebook.com/PeterSchiff/reviews/Surrendered Rest of Post-Election Gains in One DayAs I thought, it didn't take long for the markets to surrender all of the post-election gains. The Dow Jones today was down 602 points, so we've already lost it. It took one day. On my podcast on Friday I said ...…
I don't believe the developing bear market is an "end of the financial world event." We already had that in 2008. There is a difference between bears and collapses. Bear markets are normal, healthy corrections that refresh the markets and economy with creative destruction. There is almost no reason to believe that an economic collapse is imminent even if financial fleas are apparent. I will talk about that in a series of columns in coming weeks.
“Back in the heyday of the old Soviet Union, a phrase evolved to describe gullible western intellectuals who came to visit Russia and failed to notice the human and other costs of building a communist utopia. The phrase was “useful idiots” and it applied to a good many people who should have known better. I now propose a new, analogous term more appropriate for the age in which we live: useful hypocrites. That’s you and me, folks, and it’s how the masters of the digital universe see us. And they have pretty good reasons for seeing us that way. They hear us whingeing about privacy, security, surveillance, etc., but notice that despite our complaints and suspicions, we appear to do nothing about it. In other words, we say one thing and do another, which is as good a working definition of hypocrisy as one could hope for.”—John Naughton, The Guardian Read More
Because of the special status of most municipal bonds granted under Section 103 of the Internal Revenue Code, which provides that the interest on such bonds is exempt from gross income, investors usually accept lower interest payments than on other types of borrowing (assuming comparable risk). This makes the issuance of bonds an attractive source of financing to many municipal entities, as the borrowing rate available to them in the municipal, or public finance, market is frequently lower than what is available through other borrowing channels.
The stock market has stayed strong for close to a decade now, and along the way, it's produced impressive returns for stock investors. Yet this far into a bull market, the biggest fear for many people who are considering putting money into stocks is that they could end up investing at exactly the wrong time: right before a bear market hits and devastates their portfolios.
Basically, the strategy is to go long unless the unemployment rate is rising and the price trend is falling. Unemployment is rising if the reported rate is above its trailing twelve-month moving average and price trend is falling if the S&P 500 is below its trailing ten-month moving average. “Livermore” found that this indicator beats all others over the period from 1930 to 2016.
Food programs are widely considered welfare to the people using them. In fact they are welfare to the food industry: it is a direct transfer of government (tax) bling to the pockets of General Mills, General Foods, Cargill, ADM, Monsanto, and the other Big Food/Big Pharma companies. It is tax bling to the grocers as well. These companies can keep marking up food for profit, squeezing those who pay money for it AND pay taxes so those who can’t afford the food can give Munchy Bucks to their local food vendor, and those dollars are credited to the food industry.
With the FANG stocks faltering lately investors are starting to become concerned about their impact on the broader market. And there is certainly something to this. Statistically speaking, these market generals have become increasingly important to the broad market indexes recently so it only stands to reason that an important reversal here could make for a more difficult equity environment in general. Read More
Rate and Review This Podcast on iTunesOverwhelming Evidence of a Weakening EconomyThe Dow Jones was the only one of the major indexes to close the day higher. The S&P was down slightly, we had larger declines in the Nasdaq and the Russell 2000. More importantly than the movements that we've just seen on the day, or even the week, look at what's ...…
A new survey of 375 US chief financial officers, which is in the latest Financial Analysts Journal, found earnings’ “misrepresentation” tended to be large, approximating to 10 per cent of reported earnings. Usually, companies exaggerate earnings, although profits are deliberately lowballed in a third of cases; by establishing “cookie jar reserves” that reduce current profits, firms can later boost earnings by releasing reserves.
Municipal bonds may be general obligations of the issuer or secured by specified revenues. In the United States, interest income received by holders of municipal bonds is often excludable from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code, and may be exempt from state income tax as well, depending on the applicable state income tax laws. The state and local exemption was the subject of recent litigation in Department of Revenue of Kentucky v. Davis, 553 U.S. 328 (2008).
"The most remarkable flows are into bonds," said David Santschi, CEO of Trimtabs, which provided CNBC with the preliminary fund flow data, which also show strong flows into U.S. equity and international equity portfolios this month. "Bond funds are down in the past four months," he said. "The biggest mispricings in the world today are in bonds, not stocks."
The bear market of the 1970s, like the current bear market, was preceded by a long period of economic expansion. From the economy’s trough in 1961:Q1 to the peak in 1969:Q4, productivity growth averaged a strong 3.4% per year and inflation remained low—in the 2% to 3% range. As Figure 1 shows, the stock market anticipated this expansion, coming off a low in 1960:Q4 and reaching a peak in 1968:Q4. Over that period, the inflation-adjusted value of the S&P 500 increased by 7.8% per year; however, households’ inflation-adjusted net worth (total assets minus total liabilities) lagged behind somewhat, growing at an average annual rate of 6.1%.
JOIN PETER at the New Orleans Investment Conferencehttps://neworleansconference.com/conference-schedule/A Very Volatile and Technically Weak Trading Day for the DowHere I am for the third day in a row doing a podcast. It's market volatility that has brought me to the mic yet again. The Dow Jones down 525 points; a very volatile and technically ...…
Consumer Financial Protection Bureau Federal Deposit Insurance Corporation Federal Home Loan Banks Federal Housing Administration Federal Housing Finance Agency Federal Housing Finance Board Federal Reserve System Government National Mortgage Association Irish Bank Resolution Corporation National Asset Management Agency Office of Federal Housing Enterprise Oversight Office of Financial Stability UK Financial Investments
Dick Meyer of NPR believes that "the idea of blaming one person for the downfall of the economy with a gross domestic product of about $14 trillion, powered by 300 million people and engaged in complex global commerce is nuts — whether that person is Bush, Obama, Alan Greenspan, Bernard Madoff, Osama bin Laden or the editors of opinions at The Wall Street Journal."
Usage Note: Thanks to the vagaries of English spelling, bear has two past participles: born and borne. Traditionally, born is used only in passive constructions referring to birth: I was born in Chicago. For all other uses, including active constructions referring to birth, borne is the standard form: She has borne both her children at home. I have borne his insolence with the patience of a saint.
In years of peace, Diocletian, with his aides, faced the problems of economic decay. To overcome depression and prevent revolution, he substituted a managed economy for the law of supply and demand. He established a sound currency by guaranteeing to the gold coinage a fixed weight and purity which it retained in the Eastern Empire till 1453. He distributed food to the poor at half the market price or free, and undertook extensive public works to appease the unemployed. To ensure the supply of necessaries for the cities and the armies, he brought many branches of industry under complete state control, beginning with the import of grain; he persuaded the shipowners, merchants, and crews engaged in this trade to accept such control in return for governmental guarantee of security in employment and returns. Read More
A bond is a promise to pay money, right? And what is money? What is money? Years ago when QE just started, there was a letter to the editor of The Financial Times. And the author of this letter said: At long last I have now understood the meaning of the term “quantitative easing.” I now understand that. What I no longer understand is the meaning of the word “money.”