KER Politics – Sun 17 Feb, 2019

Big Al’s thoughts for an answer to Dick Tracy’s question.

  1. On February 17, 2019 at 3:20 pm,
    Dick Tracy says:

    Big Al, My take is that I think the stock market is going crazy, I wonder how long the opportunity to sell at the top will remain. DT

    • On February 17, 2019 at 5:04 pm,
      Big Al says:

      Might very well be going crazy, but I think that these levels will be here for awhile and that we will see more appreciation. As I said, I am putting my money where my mouth is.

      • On February 18, 2019 at 7:50 am,
        Silverdollar says:

        Both DT and you, Al may enjoy Eric Townsend’s guest who thinks we’re setting up for something much different than another normal correction. FWIW:

  2. On February 17, 2019 at 6:15 pm,
    OOTB Jerry says:

    8 yrs without a meaningful correction……….makes me feel like something big is about to happen……..
    Car sale off, retail in the gutter,….new tax accounting laws enacted… would worry, but, …the money machine can keep this game up for a very long time.

    • On February 17, 2019 at 6:17 pm,
      OOTB Jerry says:

      Everything is rigged , so , I would say, anything is possible……

      • On February 17, 2019 at 8:53 pm,
        Ebolan says:

        The whole thing is a house of cards…could fall over any day…this is the biggest, baddest debt bubble in history.

        • On February 18, 2019 at 6:07 am,
          OOTB Jerry says:

          I just do not think, you can out fox the crooks running the show……….
          Front running, HFT,…already proven to skin(almost) anyone day trading.(except some sharp guys here on the blog).
          How can anyone say that the stock market is a safe bet for the average investor/trader. Several corporations have been reported as having a debt problem from buying back stocks with cheap loans at cheap interest rates,… is that going to change, with some corporations experiencing slow sales…, retail, real estate, and autos/trucks not to mention, Whole foods is raising prices.(inflation)
          I do not share the same view as Owl, when considering the numbers or stats on the economy. Full employment numbers have been rigged for years…by BLS… Everyone might appear to have a job at the same salary as 10 years ago,..or working several part time jobs., but, inflation is eating them alive.
          Auto sales are down,,,,GM is closing several plants, auto prices are way out of line.,.. 7 million people behind 90 days on auto loans. Retail, is way off. Malls have not recovered from retail sales slowdown.and retail bankruptcies ..except Amazon selling used items by other vendors…joke, and the joke continues for the mall owners.. which have been going down for 10 yrs. There seems to be a new purchasing habit of generation Z, …which is savings, vs spending like x and y.(article at zerohedge). There is a slow down in housing , and sales are soft in the higher brackets.(new tax laws on deduction might be the reason here and higher interest rates. (but rates are stopped for now).
          Bright spot……stock market,….Fed has your back…..and Trump likely to fire Powell, if he does not get in line…interest rates on hold, check mate on The House of Roth.
          The 1percenters are going to have Cortez on their heals, …and I am sure the stock market will not like that.

          • On February 18, 2019 at 6:14 am,
            OOTB Jerry says:

            Btw……..I like gold a lot more than stocks……..even though the Comex is rigged , CFTC has not done it’s job, but really never intended

          • On February 18, 2019 at 6:19 am,
            OOTB Jerry says:

            Remember….as Bob says………NO BODY KNOWS ANYTHING…(including me)

          • On February 18, 2019 at 6:27 am,
            OOTB Jerry says:

            Dear readers,

            I believe in the following nine rules as fundamental truths.

            1/ Foundation of law is the Constitution of the Nation.

            2/ Law rises from the Constitution.

            3/ Rule of law is the key ingredient to National success.

            4/ Free markets are an absolute must.

            5/ Free markets must eliminate unfair computer games and manipulators, plus front runners, especially the standing government.

            6/ The Federal Reserve is the major manipulator in all things now.

            7/ Free markets are the basis of capital creation, not casino.

            8/ Without Free Markets capital creation dies.

            9/ Without capital creation the nation dies.

            I am not a capitalist. That notion eventually kills the creation of capital as above explained.

            Economics is natural law and can never be eliminated but, yes, delayed.

            Delaying the economic natural law destroys the fabricate of business.

            Destruction of the fabric ate of business results in very long term consequences.

            Democracy is a dream of the Greeks that has never happened there or anywhere else.

            This is my personal belief, and does not necessarily reflect the beliefs of my associates.


            Jim Sinclair

          • On February 18, 2019 at 7:03 am,
            OOTB Jerry says:
          • On February 18, 2019 at 7:09 am,
            OOTB Jerry says:

            The 400 richest Americans – the top 0.00025% of the population – have tripled their share of the nation’s wealth since the early 1980s. Those 400 Americans own more of the country’s riches than the 150 million adults in the bottom 60% of the wealth distribution, who saw their share of the nation’s wealth fall from 5.7% in 1987 to 2.1% in 2014.

            U.S. small business optimism tumbled last month to its lowest level since President Donald Trump’s election more than two years ago amid growing uncertainty over the economic outlook.

            The outlook for Wall Street earnings has deteriorated significantly in recent months, data shows, raising the risk that companies in the United States may slip into recession before its economy does

          • On February 18, 2019 at 8:25 am,
            Dick Tracy says:

            Jerry, some good thoughts, I would like to add demographics, lots of grey heads out there working for the government. Artificial Intelligence is destroying jobs right across the spectrum at breakneck speed. Immigration is soaking up tax payer dollars, and then their is the military and the problem of ten’s of thousand disabled vets, not to mention competition from the rest of the world that has increased after World War ll. Then American businesses sent much manufacturing overseas while selling crap to their own citizens. That should do for now. DT

          • On February 18, 2019 at 8:41 am,
            OOTB Jerry says:

            Dick…….thanks……and I agree with what you mentioned…….

          • On February 18, 2019 at 9:13 am,
            Ebolan says:

            Gunach interview…based on this his main concern is the debt.

            And Mr. Big Al Korelin and all you boys, this should be a major concern of yours, too. And I am sure for many of you it already is.

            And his other major concern is down the road…the threat of the Demorat socialism.


          • On February 18, 2019 at 11:16 am,
            Big Al says:

            I certainly agree with both of your concerns, Ed.

          • On February 18, 2019 at 9:14 am,
            Ebolan says:

            And of course he was interviewed by the pretty girls…you’d think these concerns would be obvious to them.

          • On February 18, 2019 at 9:30 am,
            OOTB Jerry says:

            Ebo………..debt should be everyone’s concern……..
            I have been preaching NO DEBT for 35 yrs.

          • On February 18, 2019 at 11:15 am,
            Big Al says:

            About as long as I have, In the Box!

          • On February 18, 2019 at 9:33 am,
            OOTB Jerry says:

            Debt Jubilee………is about the only hope for most…..When 400 people own so much, and the rest have been ripped off……DEBT JUBILEE is NO PROBLEM……..

          • On February 18, 2019 at 11:12 am,
            Big Al says:

            I personally don’t think that a debt jubilee will ever occur, Jerry. At least not in my lifetime!

          • On February 18, 2019 at 11:33 am,
            OOTB Jerry says:

            Most likely not…….Since most do not understand debt, how can we expect them to under a DEBT JUBILEE………..

          • On February 18, 2019 at 11:38 am,
            OOTB Jerry says:

            under to understand

          • On February 18, 2019 at 6:11 pm,
            Excelsior says:

            Thanks guys (OOTB, DT, Ebolan, Big Al) – Some good thoughts in this thread.

          • On February 19, 2019 at 6:40 am,
            OOTB Jerry says:

            You are welcome EX…..maybe a little more negative than you would post…. 🙂 Cheers.

    • On February 17, 2019 at 9:10 pm,
      Al Korelin says:

      Of course the money machine can keep it going for a log time In the Box. I like the status quo for the time being with some ventures into precious metals.

    • On February 18, 2019 at 11:04 am,
      Big Al says:

      Yes Jerry, the money machine can keep this one going for a very long time.

  3. On February 17, 2019 at 7:08 pm,
    Bonzo Barzini says:

    Avi G. thinks the stock market might not finally top out untill 2022.

  4. On February 17, 2019 at 9:12 pm,
    Al Korelin says:

    I have not spoken with Avi for quite some time now, but I can guarantee you that he is one smart dude and also someone who I personally trust!

  5. On February 18, 2019 at 6:22 am,
    OOTB Jerry says:

    Platinum to gold ratio ….1.65……would appear platinum is getting cheaper….

  6. On February 18, 2019 at 10:07 am,
    OOTB Jerry says:

    Just one more……..good to go………until 2020….
    In normal economic conditions, the yield curve sloped upward, with 10-year Treasury bonds paying higher interest rates than the one-year bonds. But during economic downturns, short-term debt tends to have higher rates than long-term debt due to risk aversion.

    Since 1970, each US recession has been preceded by an inversion of the curve. Its track record is quite impressive, with few fake signals (the credit crunch in the mid-1960s and the short-term inversion during the 1998 stock market crash).

    Looking at the one-year/10-year spread, the curve is not inverted yet. As of today, it stands at +6 basis points but clearly follows a downward trend. That being said, it means that the risk of recession is becoming real but, based on the previous decades, this would only happen in several quarters. Historically, the lag between the inversion of the yield curve and the recession is on average 22 months. If history repeats itself – which is not certain – the likelihood that a recession happens in 2020 is very high.

    • On February 18, 2019 at 10:08 am,
      OOTB Jerry says:

      Just in time for the election…………

      • On February 18, 2019 at 11:08 am,
        Big Al says:

        I personally would still vote for Trump because I am adamantly against the opposition party. How about you?

        • On February 18, 2019 at 11:35 am,
          OOTB Jerry says:

          At this moment…..ok, yes

  7. On February 18, 2019 at 10:14 am,
    OOTB Jerry says:

    Hey Dick…….this one is for you….just for fun….a look back…

  8. On February 18, 2019 at 11:54 am,
    OOTB Jerry says:
    • On February 18, 2019 at 11:55 am,
      OOTB Jerry says:

      The more polar opposite from bulls the bears went, the more right they were

      I’m going to make my first prediction for 2019; but, first, I’ll offer the following points as proof the bears were completely right for 2018:

      Global cooling of all economies continued all the way into 2019, with IMF and central banks writing down their future estimates. It turned out to be the year of globally synchronized slowing. This happened largely due to the unwinding of the Fed’s balance sheet, and in spite of massive US tax cuts.
      The Retail Apocalypse grew worse throughout 2018 just as bears said would be the case for the full year. Retail sales, originally reported by wishfully bulls who hoped December would finally make them right, turned out to have tanked miserably. Just like “globally synchronized growth,” holiday sales flopped on their head.
      The bears boldly claimed 2018 would be the year of Carmageddon. US auto sales fell so badly that 2018 became the absolutely historic year in which multiple lines of US cars were discontinued for good, and several US auto factories were permanently closed. The country that brought mass manufacturing of cars to the world practically went out of the car business, though SUVs, vans and trucks continue.
      The US housing market worsened one gradient at a time every single month after the first quarter of the year. Canadian, UK, and Australian housing markets have done about the same.
      Bears said (cynically to the bovine mind) nearly 100% of tax money repatriated to the US along with money from massive corporate tax breaks would go into stock buybacks, and your most polar of bears right here said, vast as those buybacks would be, they still would not save either the US economy or the US stock market from becoming a train wreck in 2018. Neither would money fleeing out of other economies into the US. Testosterone-hot Bulls thought that was ludicrous because the tax cuts were enormous. However, the Fed’s unwind was just as enormous, so Ursa Major rose in ascendancy throughout the year, and Taurus fell into an icy winter. Emerging market stocks and developed markets all fell. Even the US stock market fell to pieces right at the start of the year and looked like a mess all year.
      Nevertheless, a deafening chorus of bulls maintained through the year that the US stock market would end the year higher … even after the October surprise (for bulls, not bears) had begun. Bears, on the other hand, held their line and predicted US stocks would end lower than at the start of the year. Bears proved resoundingly correct as the dumbfounded bulls fell silent in the nights of December.
      Bears, including yours truly, had claimed throughout the decade-long recovery that the Fed would never be able to unwind its balance sheet or return to normal interest rates without crashing its “fake” recovery. Yours truly even said 2018 would be the year this claim proved true. Stepping up to that proof, Jerome Powell volunteered himself for a face-plant in late December, which he reinforced again this January. Having valiantly promised in September that Fed rate increases would continue apace and balance-sheet reduction would continue on autopilot, Powell reversed himself less than three months after his balance-sheet reduction hit full speed. China also moved back to massive easing, and the ECB just indicated it may return to more easing, having only just stopped easing at the end of 2018. The Bank of Japan has simply said it will continue with its quantitative easing program. Central banks appear to be scrambling to stop the wreckage their tightening has already caused.
      The dialogue about synchronized growth is ancient history, replaced predominantly at the end of 2018 by talk about the possibilities of global recession starting in 2019, which is where I’ve said for two years a bad 2018 will take us, and of late by talk of a “Goldilocks” economy that is just bad enough to re-engage the Fed in economic stimulus but not so bad as to kill the market. Good luck with the replacement narrative. It won’t hold any better than “globally synchronous growth” did last year.

      I predict we are caught in an economic polar vortex

      • On February 18, 2019 at 11:56 am,
        OOTB Jerry says:

        I think this guy read my earlier post and copied my ideas………..LOL

        • On February 18, 2019 at 11:58 am,
          OOTB Jerry says:

          I predict we are caught in an economic polar vortex

          This particular polar bear said for the past couple of years the Fed will continue tightening right into a recession because that is what it does. Though the Fed has stopped raising its target interest for interbank lending and has said it may stop unwinding its balance sheet and, it continues unwinding its balance sheet, apparently still believing it can.

          The yield curve has already twisted and contorted into portions that are flat or inverted. Nomura’s Charlie McElligot notes that steepening of the curve after inversion is the actual point at which we have almost always gone into recessions historically. My way of putting it is that “flattening of the yield curve cocks the gun; reducing interest rates again fires the gun.”

          My first prediction for 2019: I believe the US will go back into recession as soon as the Fed actually reverses course on interest rates. I believe things will be generally bad enough by late spring or summer (for all the reasons I laid out in my Premium Post titled “2019 Economic Headwinds Look Like Storm of the Century“) that we’ll see the Fed actually stop QT and reverse interest rates.

          However, we will already be in a recession when they do, though it will not be officially declared that the US entered recession until the end of the year or start of 2020 because recessions are only declared a month after GDP has receded for two straight quarters.

          The first quarter of receding GDP is when “the recession” officially begins. In other words, data only tells us in hindsight that the economy has been receding, and often we don’t know until GDP numbers get revised.

          • On February 18, 2019 at 12:05 pm,
            OOTB Jerry says:

            The past is prologue to the future and history rhymes

            I expect the Fed to live up to its historic reputation of declaring no recession in sight even as it is standing in the middle of one. While we won’t likely have any official delcaration until next year, the rest of us will feel the polar swamp wetting the seat of our pants before the Fed feels a thing.

            (Bear in mind, the Fed has to keep as good a face on everything as it can because if it actually said it saw a recession coming, it would crash the stock market all over again. Its words would become a self-fulfilling prophecy because investors hang on every shade of meaning of every word the Fed chair speaks. And another market crash would take a crumbling auto, retail, housing economy down with it.)

          • On February 18, 2019 at 12:10 pm,
            OOTB Jerry says:

            Mike Wilson, chief equity strategist at Morgan Stanley, on Monday downgraded S&P 500’s earnings-per-share growth target for the year to 1% from 4.3% and warned of a looming earnings recession. “Our earnings recession call is playing out even faster than we expected,” said Wilson in a report. “When we made our call for a greater than 50% chance of an earnings recession this year, we thought it might take a bit longer for the evidence to build….” For the current quarter, U.S. companies are projected to report an earnings contraction of 4.1%, based on analysts’ median estimates in January. That is significantly deeper than the average 1.7% decline over the past 15 years.

          • On February 18, 2019 at 12:12 pm,
            OOTB Jerry says:

            Many share my opinion that stock buybacks, once mostly illegal, are nothing more than obscene market manipulation:

            For much of the last decade, companies buying their own shares have accounted for all net purchases. The total amount of stock bought back by companies since the 2008 crisis even exceeds the Federal Reserve’s spending on buying bonds over the same period as part of quantitative easing. Both pushed up asset prices.”

  9. On February 18, 2019 at 12:07 pm,
    OOTB Jerry says:

    THe real ding dong thing for the last 8 yrs….
    .self-fulfilling prophecy because investors hang on every shade of meaning of every word the Fed chair speaks