Jim: The depression of 1920–21 was a brutal one. Macroeconomic data were not so available then, so we can’t exactly measure it as we do measure things now. But unemployment was certainly in the teens. There was a vicious liquidation of stocks and bonds. Bond prices fell as stock prices fell. The real rate of interest on money markets was certainly in the teens.
Yet, Karen is only one of the brilliant minds that you’ll get exposed to and have the chance to meet at the SIC. It’s going to be an intellectually thrilling event, and I hope you can be there with me to experience it firsthand. To learn more about attending the SIC 2018, and about the other speakers who will be there, I encourage you to click here.
Rate and Review This Podcast on iTunesThanks to Listeners for 400 Episodes of The Peter Schiff Show PodcastFor those of you who say that Peter Schiff does Podcasts when the Dow is down, Dow Jones was up 547 points today. This is my 400th episode of the Peter Schiff Show Podcast. I want to take a moment to thank my audience - everybody who has b ...…
“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…
*** The markets…presumably reacting to a calculated recall of the 30-year T-bill…leapt. The Dow gained 188 to close at 9263. The Nasdaq climbed 56 points to 1424. (By the way, the Daily Reckoning scorekeepers, Eric Fry and Bill Bonner, have both jetted off for Vegas where the Agora Wealth Symposium is in full swing. Here in Paris, we’re carrying on as usual, though our breaks down at Le Paradis seemed to have grown in length a bit…)
I have tried to explain this concept many times before but never had a chart to do it with. Please note the start date of the chart is 1971, this is not by any coincidence as that was the year the U.S. dollar became fully fiat and backed by nothing but “faith”. Before getting started, it is important to understand what August 15, 1971 really meant and why Nixon took us off the gold standard. The obvious is because with France and other nations demanding conversion of dollars into our gold, it would have only been a few short years before our stockpile was completely depleted. Read More
Publisher’s Note: If you’re not averaging double-digit percentage gains on your investments, it’s worth your time to check out Nicholas Vardy’s portfolio strategy. You can learn about his two most recent recommendations — both up over 50% in just the last few months — along with his favorite “wealth-compounding machine” — here in his updated research report. Click here to keep reading.
Wouldn’t the monitoring of others only be allowed when they were interacting with Carter Page? Great question. Any individual Page was communicating with, ANY, would then be caught up in the analysts mapping of said associates of the target, in this case Carter Page. Once the mapping is complete, I’m thinking, whomever the intel agent in charge of the operation would then narrow the surveillance down to something more manageable.
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.
Identifying and measuring bear markets is both art and science. One common measure says that a bear market exists when at least 80% of all stock prices fall over an extended period. Another measure says that a bear market exists if certain market indexes -- such as the Dow Jones Industrial Average and the S&P 500 -- fall at least -15%. Of course, different market sectors may experience bear markets at different times. The bear market that occurred in the U.S. equity markets from 1929 to 1933 is one of the most famous bear markets in history.
Here is a question for any and all of you that have ever purchased a lottery ticket or played the slots or bet on a horse: If you had proof that the outcomes were all rigged, would you still play? If someone showed you a video of pit bosses stacking decks or tampering with dice, would you ever enter that establishment again? If your wife or mother or employer knew that you would constantly blow your paychecks in a rigged casino, would you ever be able to face them? The answer to all of the above-mentioned scenarios is a resounding "NO!" Yet millions of people (albeit that figure is rapidly shrinking) are still committing many hundreds of millions of dollars every week to the Crimex Casino, which has now proven that every single input into determining prices for gold and silver (Bitcoin, too) is completely controlled by the bullion banks, the Crimex bosses and the regulators. Read More
Some may argue that a healthy labor market in the past couple of years in contrast to the dark days of the Great Recession will certainly help the broader market gain traction. After all, the unemployment rate remains below the 4% mark for the past several months, weekly jobless claims touch a 49-year low and wage growth hits the fastest pace since 2009.
Myriad changes to the financial structure have seemingly safeguarded the financial system from another 2008-style crisis. The big Wall Street financial institutions are these days better capitalized than a decade ago. There are "living wills," along with various regulatory constraints that have limited the most egregious lending and leveraging mistakes that brought down Bear Stearns, Lehman and others. There are central bank swap lines and such, the type of financial structures that breed optimism. Read More
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!
3. The demographics are turning against the probability of sustaining the bull market rise in consumption. As people age and retire we tend to spend less on consumer products and more on health care and insurance. Average spending per household fall precipitously after age 65 and the baby boomer generation is crossing this milestone in record numbers.
After nearly a decade of endless market boosting, manipulation and regulatory neglect, all of the trading professionals I personally know are watching with held breath at this stage. The central banks have distorted the processes of price discovery and market structure for so many years now, that it’s difficult to know yet whether their grip on the markets has indeed failed. Read More
It was a "binary" stock market for 5 years, and as the monster rally went on, it became even more so as more and more equity sub-sectors and asset classes faded away, with "the market" powered by fewer and fewer large-cap growth stocks. Investors either won big investing in large-cap Tech and growth, or you went nowhere with value funds, emerging markets, and small and mid-cap investing styles.
After a little bit of a lull, the international currency crisis is back with a vengeance. Currencies are collapsing in Argentina, Brazil, India, Turkey and other emerging markets, and central banks are springing into action. It is being hoped that the financial chaos can be confined to emerging markets so that it will not spread to the United States and Europe. But of course the global financial system is more interconnected today than ever before, and a massive wave of debt defaults in emerging markets would inevitably have extremely serious consequences all over the planet. Read More
Bill Pawelec taught me the meaning and importance of predictive programming. As a result, I am going to reveal a partially redacted, but very relevant email from a member of my audience about the extreme relevance of predictive programming. And then I am going to allow the predictive words of my late friend, CIA contract agent and former Air Force Intel operative, Bill Pawelec, who revealed what is coming and I fear we will not have to wait very long this to happen.
A while ago, I asked a regular commenter at the Automatic Earth, who goes by the moniker Dr. D, to try and write an article for us. Not long after, I received no less than 31 pages, and an even 12345 words. Way too long for today’s digital attention spans. We decided to split it into 5 chapters. After we work through those 5, we’ll post it as one piece as well. Dr. D, who insists on sticking with his nom de plume, picked his own topic, and it’s -fittingly- bitcoin. A topic about which one can cover a lot of ground in 12345 words.
Stock market downturn of 2002 9 Oct 2002 Downturn in stock prices during 2002 in stock exchanges across the United States, Canada, Asia, and Europe. After recovering from lows reached following the September 11 attacks, indices slid steadily starting in March 2002, with dramatic declines in July and September leading to lows last reached in 1997 and 1998. See stock market downturn of 2002.
Wild rumors spread of bear raids, of fabulous profits made by short-sellers, and of political conspiracies hatched by foreigners interested in bringing down the market, the dollar and the U.S. economy. In early 1932, the Philadelphia Public Ledger maintained that “European capitalists had supplied much of the cash needed to engineer the greatest bear raid in history. These proverbially open-handed and trusting gentleman had accepted the leadership of New York’s adroit Democratic financier, Bernard Baruch.” Baruch, the best known short-seller in the country, shrugged off the charge.
Upon his death on November 9, 1976, Smokey's remains were returned by the government to Capitan, New Mexico, and buried at what is now the Smokey Bear Historical Park, operated by New Mexico State Forestry. This facility is now a wildfire and Smokey interpretive center. In the garden adjacent to the interpretive center is the bear's grave. The plaque at his grave reads, "This is the resting place of the first living Smokey Bear ... the living symbol of wildfire prevention and wildlife conservation."
Velocity can also tell us about the long-term direction of bond yields. As velocity is a main determinate of nominal GDP, and yields track nominal GDP, Lacy believes that the secular low for interest rates are not in hand: “In my view, we will not see the secular low in interest rates until the velocity of money reaches its secular trough, and that is not something that’s going to happen soon.”
Two weeks after we reported that GE had found itself locked out of the commercial paper market following downgrades that made it ineligible for most money market investors, the pain has continued, and yesterday General Electric lost just over $5bn in market capitalization. While far less than the $49bn wiped out from AAPL the same day, it was arguably the bigger headline grabber.
The world of finance and investment, as always, faces many uncertainties. The US economy is booming, say some, and others warn that money supply growth has slowed, raising fears of impending deflation. We fret about the banks, with a well-known systemically-important European name in difficulties. We worry about the disintegration of the Eurozone, with record imbalances and a significant member, Italy, digging in its heels. China’s stock market, we are told, is now officially in bear market territory. Will others follow? But there is one thing that’s so far been widely ignored and that’s inflation. Read More
Needless to say, we have reached the mane. What drove the US economy for the past three decades was debt expansion----private and public--- at rates far faster than GDP growth. But that entailed a steady ratcheting up of the national leverage ratio until we hit what amounts to the top of the tiger's back---that is, Peak Debt at 3.5X national income. Read More
Extreme valuations in equity markets look less of an issue than they were a few months ago. The S&P 500 still looks over-stretched, with a P/E of 24.3x earnings – well above its 30-year average. The Shiller P/E, which adjusts for the cyclicality of earnings looks even worse. However, these figures are still not wildly excessive and earnings have kept pace so far. The upcoming earnings season will be an important indicator of whether there is good support for prices at these levels.
"A downtick in bonds is not same as a downtick in equities," said Mike Loewengart, vice president of investment strategy at E-Trade Financial. He said even in previous rate increase environments, when bond income is received and reinvested, that can keep returns in positive territory and help investors get through fixed-income volatility. "Maybe it is the end of a 30-year bull run in bonds, but I still think if rates rise gradually, most diversified fixed income portfolios should fair OK."
The Market is a Fractal - the word coined by Benoit Mandelbrot who discoverd the structures in which the whole is echoed in its parts and sub-parts, yet remaining the same no matter how much they are blown up or shrunk down...Fractals used in motion picture animation to created the surface of the moon from a repeating pattern, just as Armies of Thousands can be simulated from a group of 12 men repeated over and over on the battlefield...the lower degree fractals are previews of the whole, they are often echoed inversely as shown above in green...as Mandelbrot stated all charts scale the same, without the legend you dont know if you are looking at a Daily or Monthly chart as above & below