One thing that turns a correction into a bear market can be investor psychology. Since much of investing, especially in the short term, is about trying to guess what other investors may be thinking and react accordingly, selling can breed more selling. That is, people who think other people are selling may try to get out of positions before they lose more value, depressing stock prices in the short term.
As the stock markets continue setting records day after day, many investors are becoming more and more concerned about the potential over-valuation and a possible market correction. The widely-followed cyclically-adjusted price-earnings ratio (Shiller PE) reached 31.2, almost twice as much as the historical average of 16.8. While market valuation may not be a good timing indicator (see If Jeremy Grantham Has a Changing Heart on Value Investing, Should You?), does it have any impact on the severity of a bear market when it happens?
I have had a request from Mrs Macleod to write down in simple terms what on earth is going on in the world, and why is it that I think gold is so important in this context. She-who-must-be-obeyed does not fully share my interest in the subject. An explanation of the big picture is also likely to be useful to many of my readers and their spouses, who do not share an enduring interest in geopolitics either.
In essence, if you are going to war, make sure the costs of war is borne by the enemy, not your own people. Instead of saying, “trade wars are good and easy to win”, Mr. Trump would be wise to follow the ancient general’s advice. Winning a trade war is not so easy, history shows that tariffs which are like taxes will hurt his own people in many ways. Read More
“This may seem old-fashioned, but there are skills to be learned when kids aren’t told what to do,” said Dr. Michael Yogman, a Harvard Medical School pediatrician who led the drafting of the call to arms. Whether it’s rough-and-tumble physical play, outdoor play or social or pretend play, kids derive important lessons from the chance to make things up as they go, he said. Read More
"Naturally, the smooth termination of the gold-exchange standard, the restoration of the gold standard, and supplemental and interim measures that might be called for, in particular with a view to organizing international credit on this new basis, will have to be deliberately agreed upon between countries, in particular those on which there devolves special responsibility by virtue of their economic and financial capabilities." - General Charles de Gaulle
“Furthermore, in the main, historians educated as Keynesians and monetarists do not understand the economic history of money, let alone the difference between a gold standard and a gold-exchange standard. These similar sounding monetary systems must be defined and the differences between them noted, for anyone to have the slimmest chance of understanding this vital subject, and its relevance to the situation today…
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.
Just like a secular bull market, a secular bear market is one that lasts between five and 25 years. And while the average length of a secular bear market is about 17 years, there may be smaller bull or bear markets within it. Still, the average bear market is much shorter -- usually under a year -- and so definitions of what constitutes a secular bear market vary.
RATE AND REVIEW this podcast wherever you listen.https://itunes.apple.com/us/podcast/the-peter-schiff-show-podcast/id404963432?mt=2&ls=1Turkey's Current Account DeficitThe "Turkey baste" continued on Monday, although Tuesday we did have a bit of a reversal, Tuesday bounce in the lira, rising about 7 percent or so, in today's trading. But still, ...…
One famed investor who has explored this question is “Bond King” Jeffrey Gundlach. The man needs no introduction, but I’ll give him one anyway. Jeffrey is the CEO of DoubleLine Capital, where he manages $116 billion—and has a stellar track record. Jeffrey has outperformed 92% of his peers over the last five years. His flagship DoubleLine Total Return Bond Fund (DBLTX) has also outperformed its benchmark by a wide margin over the same period.
Same thing with the hiring of Bolton, a bellicose fire-brand who never met a war he did not want to enjoin, even though (or because) he himself never served in combat. He replaces a combat veteran, McMaster, who was expected to restrain Trump. Will Trump, who also never served in combat, might just want to start a quick little war some place to shore up his low approval ratings? This, too, worries Wall Street, which likes military preparedness a lot more than the uncertainties of actual war.
If the market keeps marching higher, despite all of these warnings signs that valuations are stretched and market sentiment is too bullish, what’s in it for the short seller? In the short term, it’s painful to have hedges on, as they detract from performance. We very much live in a “show me now” world where very few think and plan for the long term.
Mr. Grant, a former Navy gunner’s mate, is a Phi Beta Kappa alumnus of Indiana University. He earned a master’s degree in international relations from Columbia University and began his career in journalism in 1972, at the Baltimore Sun. He joined the staff of Barron’s in 1975 where he originated the “Current Yield” column. He is a trustee of the New York Historical Society. He and his wife, Patricia Kavanagh M.D., live in Brooklyn. They are the parents of four grown children.
Phil Town is an investment advisor, hedge fund manager, 3x NY Times best-selling author, ex-Grand Canyon river guide and a former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo, and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence. You can follow him on google+, facebook, and twitter.
Developed by Eduardo Mirahyes, founder of Exceptional Bear, over 28 years of hands-on experience, post completion of the Elliott Wave Advanced Tutorial. History repeats itself nowhere more often than in the Market. The essence of "Elliott" is pattern recognition, to understand the underlying herding psychology, to enable forecasting with a high degree of certainty, rather than herding madness of crowds, to minimize emotion and fear.
Investing in stock drives the production of better goods and services, but currency isn’t a commodity which will depreciate due to the nature of its own decay. It’s not a service which could lose its public appeal in a few years. Intellectual property is a closer metaphor, but a dollar will still never hold intrinsic value, ironically, unless it is one day viewed as an antique. Read More
ANSWER: The entire world has NEVER been on the gold standard simultaneously. Asia was on a silver standard while the West was on a gold standard. Above is the first coin struck in Hong Kong in 1866 which was the Hong Kong Dollar. The West struck Trade Dollars during the 19th century to pay for goods from Asia and they were silver – never gold. Here is an example of both the British and American trade dollars used in payments particularly with China. The Spanish 8 reals Americans called Pillar Dollars and slicing this up into pieces like a pie gave rise to the term for a Piece of Eight – 2 bits, 4 bits, 8 bits a dollar. Read More
The reason there are no prescription medications available today where the side effects aren’t worse than the ailment being treated is because Big Pharma will not treat or heal anything without creating several new issues that keep their “customers for life” coming back for more. Most Americans do not want to stop eating junk food, fast food, corporate franchise restaurant food, microwaveable food, prepared food bar “stuff,” and “diet” food that’s mostly chock full of synthetic sweeteners, GMOs and MSG. Read More
Check which signs of Imperial decline you see around you: The hubris of an increasingly incestuous and out-of-touch leadership; dismaying extremes of wealth inequality; self-serving, avaricious Elites; rising dependency of the lower classes on free Bread and Circuses provided by a government careening toward insolvency due to stagnating tax revenues and vast over-reach--let's stop there to catch our breath. Check, check, check and check.
I forget now exactly what the size of the interest expense of the public debt is, about $400 billion. The government is paying 2.2 or something on its debt. Doubling of yields to 4-something and doubling of gross interest expense to $800 billion or so would certainly be an inconvenience. It would require very painful political choices. But, no, it is not impossible.
On the anniversary of finding Smokey Bear in the Capitan Gap fire, Marianne Gould from the Smokey Bear Ranger District, Eddie Tudor from the Smokey Bear Museum and Neal Jones from the local Ruidoso, New Mexico radio station created "Smokey Bear Days" starting in 2004. The event celebrates the fire prevention message from the Smokey Bear campaign as well as wilderness environment conservation with music concerts, chainsaw carving contests, a firefighter's "muster" competition, food, vendors and a parade. The "Smokey Bear Days" celebration is held in Smokey's hometown of Capitan, New Mexico the first weekend of May every year.
As Niall pointed out: “Things are becoming quite disorderly for the liberal order.” Before we go on, I want to make a critical point. Whether you support military intervention, or not, isn’t the issue here. The issue is that without the US playing the role of guarantor, we are likely to see a rise in conflicts. That is going to affect financial markets and your portfolio.
Appeal Case – “Given my status at the time, I felt completely lost and was afraid to make the wrong move given the risks. I wanted guidance and wasn’t completely sure who to turn to. I exchanged emails with Mr Kuhner then moved forward with his coaching service. My entire situation was nerve-wracking, and I did not feel I was prepared to handle it on my own. Now, I feel great that my problem is resolved. And even better that I have gained knowledge, I did not previously know or fully understand. It was also a pleasure working with Mr Kuhner (Coach-for-College), who was nothing but professional in assisting me.” – Dorothy D. – New Jersey [Appeal Award $3,000]
There is considerable confusion between the verbs bear and bare. It may help to remember that the verb bare has only one meaning: "to uncover," as in "bare your shoulders" and "a dog baring its teeth." All other uses of the verb are for bear: "bearing children," "the right to bear arms," "bearing up under the stress/weight," "can't bear the thought," "bear south," "it bears repeating."
On Tuesday night all of the speculation about the midterm elections will mercifully be over, and there is one potential outcome that is being called a “disaster” for the financial markets. Over the past couple of years, stock prices have soared to unprecedented levels, and Wall Street has seemed to greatly appreciate the pro-business environment that President Trump has attempted to cultivate. Regulations have been rolled back, corporate taxes have been reduced significantly, and many corporate executives no longer fear that the federal government is out to get them. But after Tuesday, everything could be different. Read More
The first chart comes from my friend, John Hussman, and shows his margin-adjusted version of the cyclically-adjusted price-to-earnings ratio. This improved version of the CAPE ratio (improved because it has a greater negative correlation with future 12-year returns) shows equity valuations have now surpassed both the dotcom mania peak in 2000 and the 1929 mania peak. Read More
So listening to Prager and he’s interviewing Kimberly Strassel. It’s amazing the pretzels people twist themselves into to avoid believing the most obvious motive behind all this. She actually still thinks it’s possible that the FBI and the DOJ legitimately thought Cater Page was a foreign agent and that the FBI justified using the fake dossier to save America. I mean c’mon where do they get these people, comic books? This was a complete waste of time and why Prager had her on is beyond me. She’s also is reserving judgement on motive.
That definition does not appear in any media outlet before the 1990s, and there has been no indication of who established it. It may be rooted in the experience of October 19, 1987, when the stock market dropped by just over 20% in a single day. Attempts to tie the term to the “Black Monday” story may have resulted in the 20% definition, which journalists and editors probably simply copied from one another.
As this stock market correction progresses, it is natural to consider what levels may be effectivein halting the decline. We have recently taken a stab at a couple potential “support” levels in the U.S. market with excellent success, so far. Those posts include Monday’s The Mother Of All Support Levels on the broad Value Line Geometric Composite which held precisely, as well as a few Premium Posts at The Lyons Share covering key sectors, which also held on cue: Market Leaders At Must-Hold Levels and Finally Some Support To Bank On (if you’d like to see these posts, shoot us an email at [email protected] and we’d be happy to share). Read More
SmokeyBear.com’s current site has a section on “Benefits of Fire” that includes this information: “Fire managers can reintroduce fire into fire-dependent ecosystems with prescribed fire. Under specific, controlled conditions, the beneficial effects of natural fire can be recreated, fuel buildup can be reduced, and we can prevent the catastrophic losses of uncontrolled, unwanted wildfire.” Prescribed or controlled fire is an important resource management tool. It is a way to efficiently and safely provide for fire’s natural role in the ecosystem. However, the goal of Smokey Bear will always be to reduce the number of human-caused wildfires and reduce the loss of resources, homes and lives.
By the end of the bear market, households’ financial asset holdings as a percentage of their total assets fell from 68% to 62%, while monetary assets as a percentage of total financial assets rose from 19% to 26%. On balance, households sought the greater security from tangible real assets, primarily housing, while adjusting their financial asset holdings principally away from stocks and toward the safety and liquidity of monetary assets.
In short, don’t imagine that the era of managing interest rates is over. It isn’t, not by a long chalk. And in fact, I suspect that if anything could give us the “melt-up” outcome, it’s central banks making it clear that they are going to ignore above-target inflation. The idea that they’re not only not taking the punchbowl away, but spiking it with rocket fuel, would be just the ticket for a final blowout.
I’m in the inflation camp. I think it’s coming. I have thought this for a while. People have looked all over for it as if looking for a lost sock or a hairpin: Where did it go? Where is that thing? But I do believe that the central bankers who have been kind of begging for inflation will be surprised at the generosity of the inflation gods over what they will ultimately be handed.