I wrote an article titled “Are Derivative-Based ETFs Sowing The Seeds Of The Next Financial Crisis?” for Seeking Alpha a few months ago. I concluded that ETF’s don’t do what it says on the tin (mimic the underlying asset) and that they are slowly mutating into more complex financial instruments like collateralized debt obligations, which I drew disturbing parallels with the subprime mortgage crisis. It would be therefore foolish for any retail investors to see them as a panacea to gaining exposure to virtually any asset.
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 ...…
RATE AND REVIEW this podcast on Facebook.https://www.facebook.com/PeterSchiff/reviews/Dead Cat Bounce Flattens OutThe Dow Jones was down a little over 200 today, closing back below 26,000. NASDAQ composite down 124 - that's a bigger percentage decline, 1.7%, approximately. The Composite is being led lower by the tech stocks, particularly the FA ...…
My hope is that President Trump will read Knowledge and Power and give a copy to all cabinet members—as Ronald Reagan did with Wealth and Poverty. Maybe I’m too optimistic, but if we began basing economic and monetary policy on George’s information theory of economics, I believe there would be a complete revitalization of the American entrepreneurial spirit.
High unemployment and high inflation will have negative impact on home prices IMO – it is coming. Will the fed fight Stagflation like Paul Volker fed did with high fed fund rates? Will supply and demand market forces wrest the shadow inventory from the bankers in the next 5 years or will the supply chain remained clogged with squatters and inflated balance sheets?
So I have been rolling this whole mess around in my head: Trump wins the RNC nomination. Hillary wins the DNC nomination by cheating over Bernie via the great “Super Delegate Scandal.” DNC comes up with a plan to dig up dirt on Trump via Steele and his Russian contacts. Steele apparently fails to come up with anything substantial or is too incompetent to understand his lies will not hold water when looked at closely and so publishes the phony baloney Russian Dossier. DNC and Clinton via Steele and Fusion GPS worm their way around the FBI and FISA courts and get a FISA warrant on a low-level Trump flunky Carter Page. Page is promptly removed from the Trump campaign. Using the FISA warrant, FBI spies on Trump and apparently finds nothing. Hillary email scandal erupts. Comey states Hillary is guilty as hell but no one will prosecute so no charges are brought up. DNC calls for Comey’s head. Trump wins the election and becomes POTUS. Trump appoints Flynn, then promptly fires him when he finds out he is compromised. Comey is outed as a corrupt idiot and so Trump fires him. DNC cries foul about firing Comey, even though they were literally calling for his head 6 months previous for his coverage of Hillary email scandal. DNC screams for a special council, Sessions recuses himself for no reason (clearly making POTUS Trump angry), and so deputy AG Rosenstein (who signed off on the junk Russian Dossier FISA warrant) assigns his and Comey’s good friend Muller to lead the investigation (clear conflict of interest on multiple fronts). Muller investigates for a year and finds nothing of substance (except completely unrelated crap on Flynn and a few others). Nunes investigates and finds out everything above (it is not even hidden very well). Nunes wants to release the memo. DNC balks badly and ultimately fails. The memo is released.
Tech stocks that have been the strongest performer so far this year, in the meantime, did snap a four-day losing streak on Sep 10. But, let’s admit that such stocks are vulnerable to trade-related issues. Trump himself urged Apple Inc APPL to shift its production from China to the United States. The trillion-dollar company said that tariffs on China would hurt its revenues and impact a wide range of its products.
But this time it didn't work. The market had been retreating for days and then tumbled 724 Dow points yesterday allegedly on the Donald's $50 billion tariff assault on the China trade. Not surprisingly, the overnight follow-through in Asia was downright bloody with Shanghai down 3.4%,the Nikkei lower by 4.5% and China's NASDAQ equivalent off by more than 5%. Read More
Is the U.S. Government hiding a massive gold deposit in the Chocolate Mountains in California? Well, according to a few top-notch conspiracy theorists, the U.S. Congress passed the Desert Wilderness Protection Act that has cordoned off this vast gold discovery from the public. Unfortunately, we may never know if this mammoth gold deposit exists due to the clandestine nature of our government… or will we? Read More
Earlier this year the total U.S. stock market cap surpassed $30 trillion. It then lost more than $1 trillion in a single month. Apple might very well become the first company worth over $1 trillion in the modern era. The U.S. national debt surpassed $21 trillion, and the deficit for next year is expected to add another $1 trillion. But just how big are these numbers? Can we get some perspective? Read More
If you’re doing well right now, what else really matters? The stock market seems to be on a bizarro perpetual escalator to neverending prosperity, despite rafts of economic fundamentals that paint a portrait of debt-bloated, weak economy, oceans of free debt have been available for years on end to fund lifestyles well beyond earned means, and so long as one has sufficient exposure to risk assets, why bother worrying about big-picture insolvencies that are still years away? Read More
I am sure you remember the lead up to Q1 2016. The US economy and stock market were transitioning from a Goldilocks environment and narrowly avoiding a bear market while the rest of the world was still battling deflation. Precious metals and commodities were in the dumper and try though US and global central banks might, they seemed to fail to woo the inflation genie out of its bottle at every turn.
Looking for a home, first time buyer and loan approved but feel a bit nervous about it all. Should we wait a while knowing the market may continue to worsen? Will prices lower enough to buy us something a little better/closer to the city we currently live? Low interest rates now, will they go lower? These concerns/worries and more. Is it just first time buyer jitters? Appreciate your input.
2008 had already had more than its share of financial turmoil. In the months leading up to 9/15/2008, Bear Stearns, Fannie/Freddie, and AIG had already had major blowouts. The stock markets were very itchy and everyone was on edge. Most who worked in the industry knew it was just a matter of time until something much more systemic took place. Up until this time, the contagion had been mostly limited to the US, with some minor external collateral damage. We were both heavily involved in the financial/economic landscape at this time. Andy was running his investment advisory and economic consultancy firm and Graham was a strategy analyst for a major G7 central bank. We had already both come to independent conclusions that this was going to be a long emergency as coined by James Kunstler. This was not going to be a 3 or 6-month event and then it would be roses and cherries and cream for the whole world. Read More
@Tony – Cheers for your thoughts. As I understand it, conventional indices are constructed to take into account the compounding of their underlying holdings, so that this sort of error does not emerge. Regarding my friend, yes, the theory was (and seems quite common, from a quick Google) that the short ETF would go up in value as his portfolio fell over a few weeks. The trouble is the daily compounding means a different kind of bet is being undertaken. I agree that a plunge protection fund makes far more sense if you’re a dabbler, but most people who are draw to active strategies, even semi-responsible semi-active ones like me, find it hard to sit in cash and wait, especially at today’s rates. (Doesn’t mean it’s not right to do that, just saying I think people feel the need to ‘do something’ and feel the Short ETF is something).
This situation is the result of decades of stagnant wage growth. Since 1979, real (inflation-adjusted) hourly wages for the bottom quintile of earners fell by 1%. Worse, the inflation adjustment is based on the CPI, which as I’ve said many times, understates the real cost of living for most people. But wages haven’t stagnated for everybody. As the below chart shows, real hourly wages for the top quintile of earners have increased by over 27% in the same period.
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.
The Kavanaugh hearing underscored another eerie condition in contemporaryUSA life that offers clues about the combined social, economic, and political collapse that I call the long emergency: the destruction of all remaining categorical boundaries for understanding behavior: truth and untruth, innocent and guilty, childhood and adulthood, public and private. The absence of real monsters to slay, has become the party devoted to sowing chaos, mainly by inventing new, imaginary monsters using the machinery of politics, the way the Catholic Church manufactured monsters of heresy during the Spanish Inquisition in its attempt to regulate “belief.” Read More
While the precious metals are totally off the radar by the majority of investors, silver is setting up for one major bull market. Yes, it’s hard to believe as the gold and silver prices have been trending lower while the broader markets grind up higher, but if we look at the fundamental and technical indicators, the stock market and precious metals are now at extreme opposites.
Japanese asset price bubble 1991 Lasting approximately twenty years, through at least the end of 2011, share and property price bubble bursts and turns into a long deflationary recession. Some of the key economic events during the collapse of the Japanese asset price bubble include the 1997 Asian financial crisis and the Dot-com bubble. In addition, more recent economic events, such as the late-2000s financial crisis and August 2011 stock markets fall have prolonged this period.
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
A little more than thirty years ago Tom Clancy was a Maryland insurance broker with a passion for naval history. Years before, he had been an English major at Baltimore’s Loyola College and had always dreamed of writing a novel. His first effort, The Hunt for Red October—the first of the phenomenally successful Jack Ryan novels—sold briskly as a result of rave reviews, then catapulted onto the New York Times bestseller list after President Reagan pronounced it “the perfect yarn.” From that day forward, Clancy established himself as an undisputed master at blending exceptional realism and authenticity, intricate plotting, and razor-sharp suspense. He passed away in October 2013.
Most of us are aware of the inflationary pressures in the major economies, that so far are proving somewhat latent in the non-financial sector. But some central banks are on the alert as well, notably the Federal Reserve Board, which has taken the lead in trying to normalise interest rates. Others, such as the European Central Bank, the Bank of Japan and the Bank of England are yet to be convinced that price inflation is a potential problem.
I’m chronically, sometimes profitably, but certainly very nearly continuously, well-disposed to the legacy monetary asset. I think that so many arrows point to it in the present day. I think it will become the beneficiary of – I’m talking about gold now – gold will become the beneficiary of so many trends. From the tinkering and the unprecedented experimentation of our central bankers’ fiscal profligacy – I’m starting to sound moralistic –
The mirage that we are still in a strong bull market, and not on the brink of a bear one, has more to do with this year’s fast-rising earnings than a sharply falling stock market, which is typically what leads investors to run for safety. The classic definition of a bear market is when a stock market average such as the Dow or the S&P 500 has dropped 20 percent from its highs. But that’s probably not the best one. The more important factor to consider when gauging whether investors are feeling upbeat about stocks, and, by extension, the economy, is what they are willing to pay for the earnings that those companies generate.
In 1979, President Carter's administration ceased diplomatic recognition of the government in Taiwan as independent of mainland China, as the U.S. and China normalized relations. The Chinese government has a "One China" policy, where the role of Taiwan is concerned. As for Taiwan, the "island province" is more than autonomous, the island has its own government and its own head of state.
In the wake of declining stock prices, the bursting of the real estate bubble, and a weakening dollar, the American economy is poised for a prolonged contraction and U.S. stocks will suffer a protracted bear market, so says seasoned Wall Street prognosticator Peter Schiff. Having accurately predicted the current market turmoil in his recent bestseller Crash Proof: How to Profit from the Coming Economic Collapse, the CNBC-dubbed "Doctor Doom" has helped savvy investors protect their portfolios in some very turbulent markets—and now, he'll show you how to do the same.
The second important institutional change is the growth in the mutual fund industry since the mid-1980s, which resulted from the changes in the retirement plans as well as from the individual small investor’s demand for an inexpensive means of acquiring a diversified investment in the capital markets. Households’ investment in stock and bond mutual funds (not including those held indirectly through pension funds) grew from about 1% of total financial assets in 1984 to 9% in 2002. To be sure, with the increased prominence of pension funds and stock and bond mutual funds, direct holdings of stocks and bonds as a share of financial assets has declined from about 37% in 1960 to 22% in 2002. Nevertheless, the potential cost advantage and portfolio diversification available through financial intermediaries facilitates household investment in stocks and bonds. Therefore, the availability of pension and mutual funds should tend to work in consort with the underlying economic fundamentals affecting households’ demand for stocks going forward.
Appeal Case – “As you know I needed to appeal but was not sure of the best approach. I was surprised when you told me you only accept certain appeals because you want to make sure they are valid appeals. Now I understand your process and your appeal expertise. I am so happy my appeal was valid, your service is the best investment I have ever made.” – Sophia H. – Arizona [Appeal Award $11,000]
So when the sky really starts to fall, smart places for serious money could be a simple money market (cash equivalent). You won't make much, but at least you won't lose anything either! Think of it like a lightning storm over a football field where your investments are the players on the field. Sometimes it's best to put your team in the locker room so no one gets hit by lightning!
Market Closed Early for July 4th HolidayThe U.S. stock market closed early today, ahead of tomorrow's Fourth of July holiday when the markets are of course closed and Americans are out celebrating Independence Day, the birth of the nation, July 4, 1776. I love the Fourth of July as a holiday; it is purely American.Framers of the Constitution Ri ...…
A common refrain was a preference for non-US assets, particularly in equities given the run-up in American stocks and the earlier stage of economic recovery in Europe. The Fed could exit from its days of stimulus too fast, choking off the economic recovery and crimping profit growth. A few worried about the possibility for an inverted US yield curve when short-term rates rise above long-term levels, which sometimes are seen as a precursor to a recession.
The disability payment and stock option distribution are one-time events which unfortunately inflates the family’s actual ability to contribute to Julie’s education. The disability payment has to provide care for the rest of John’s life, he is currently 53. The stock distribution was used to purchase living quarters that included making the home handicapped ready. This was necessary since his only income is Social Security and his wife earns $14,000 per year. It would be impossible to qualify for a mortgage.
The decline of 20% by mid-2008 was in tandem with other stock markets across the globe. On September 29, 2008, the DJIA had a record-breaking drop of 777.68 with a close at 10,365.45. The DJIA hit a market low of 6,443.27 on March 6, 2009, having lost over 54% of its value since the October 9, 2007 high. The bear market reversed course on March 9, 2009, as the DJIA rebounded more than 20% from its low to 7924.56 after a mere three weeks of gains. After March 9, the S&P 500 was up 30% by mid May and over 60% by the end of the year.
Dr. D: You have to understand what exchanges are and are not. An exchange is a central point where owners post collateral and thereby join and trade on the exchange. The exchange backs the trades with their solvency and reputation, but it’s not a barter system, and it’s not free: the exchange has to make money too. Look at the Comex, which reaches back to the early history of commodities exchange which was founded to match buyers of say, wheat, like General Mills, with producers, the farmers. But why not just have the farmer drive to the local silo and sell there? Two reasons: one, unlike manufacturing, harvests are lumpy. To have everyone buy or sell at one time of the year would cripple the demand for money in that season. This may be why market crashes happen historically at harvest when the demand for money (i.e. Deflation) was highest. Secondly, however, suppose the weather turned bad: all farmers would be ruined simultaneously. Read More
4. While 5% real annual return doesn’t seem like much, it is a highly stable and secure return. How would stocks fair in that same time frame? Taking into account a 2% annual inflation rate, you would need a 7% nominal annual return on stocks to keep up with a 5% real return on a house. What if inflation goes to 4% or higher? Can you imagine a sustained nominal return on stocks of 9% or higher (to achieve a 5% real return on stocks)??
JOIN PETER at the New Orleans Investment Conferencehttps://neworleansconference.com/conference-schedule/Ominous OctoberToday was the end of the month of September; it's also the end of the third quarter we are now beginning the final quarter of the year. When we come back to trading next week, we will be in the month of October, and as I mentio ...…
The first time I watched this I thought it was a joke – product of National Lampoon. Then the reality of it hit me like a ton of bricks. Is this really a productive use of Congressional time? The entire U.S. system is hurling toward a debt-induced financial and economic apocalypse. At the same time the Deep State, using Trump as its hand-puppet, is alienating the U.S. from the EU/NATO, this country’s last remaining allies. Read More
baissier - apporter - chien jaune - donner la vie - enfanter - porter - soutenir - aimable comme une porte de prison - approcher - arborer - assimilable - attestation - avoir une dent contre - céder sous le poids de - condamné aux dépens - confirmer - descendre dans la fosse aux lions - donner - dur à encaisser - endurer - essuyer - être sans commune mesure avec - faire fructifier - faire horreur - faire jouer - faire le dos rond - faire le gros dos - faire les frais de - faire un faux témoignage - frappé au coin du bon sens - fructifier - fructueux - garder à l'esprit - garder rancune - garder une dent - Grande Ourse - grizzli - grizzly - humeur de chien - koala - marché baissier - marqué - mon lapin - montreur d'ours - n'avoir aucun rapport avec - n'avoir aucune relation avec - ne pas pouvoir blairer - ne pas pouvoir encadrer - ne pas pouvoir piffrer - ne pas pouvoir sacquer
Before we dive in, I want to make clear that the goal of this letter is not to say whether liberal internationalism is good or bad, or defend the backlash against it. My objective is to highlight the current state of the order and give insight into Niall’s argument behind why he believes it is over. As investors, it is imperative we understand this trend because it has major implications for financial markets we need to think about. With that being said, let’s dive straight in.
Misguided Tweet About PfizerAnother misguided tweet that came out today from the President had to do with drugs:Pfizer & others should be ashamed that they have raised drug prices for no reason. They are merely taking advantage of the poor & others unable to defend themselves, while at the same time giving bargain basement prices to other count ...…
Blind faith in the U.S. dollar is perhaps one of the most crippling disabilities economists have in gauging our economic future. Historically speaking, fiat currencies are essentially animals with very short lives, and world reserve currencies are even more prone to an early death. But, for some reason, the notion that the dollar is vulnerable at all to the same fate is deemed ridiculous by the mainstream.
Confidence and complacency are more acute now than any time I’ve seen before. All expressions of overvaluation are at historical extremes. Despite this, most money managers remain in the market. The thesis is “if it’s going up, regardless of anything else, I want to be in it.” Perhaps the best indicator of complacency is the VIX which at its current level of 13 tells us that investors see no reason to protect their positions. Every minor decline is seen as a buying opportunity. The rationale is that the Fed would not allow anything worse than a 10% decline. If the stock market starts sinking between now and October 1st, I will be most interested to see if the Fed eliminates QE.
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.