COMMENT: OK Mr. Armstrong. Looks like the government was right. You come out and said the Dow reached a turning point and it crashes. You posted: “In the US Share Market, this is now a turning point we have reached. I have warned for months that exceeding the November high would lead to a January high.” You are too influential.
REPLY: Or perhaps our models are correct. This nonsense that people can move the market is absurd. Governments have spent trillions and failed. Why is it I am the only person who can move the world? Does a tree make a sound when it falls in a forest even when nobody is there to listen? They tried to silence me yet it still did not matter. Here is the internal 37.33-week cycle within the Economic Confidence Model. The target date 2007.86 was November 9th/10th. It was November 9th, 2007 that all four Daily Bearish Reversals were elected from the major high. Why do things take place precisely to the day even when I do not announce them?
So far, we have elected the first Daily Bearish Reversal. There are three more to go before we can say we are headed into a March low. Time will tell. It should be choppy for the next couple of weeks. When you gap lower like this, you normally will bounce and eventually fill that gap. So caution is always advisable.
The first high was the precise day that the Real Estate market peaked in 2007. They called that Armstrong’s Revenge on the trading floor that day since it was again to the day. That was precisely to the day of which the same calculation produced the very day of the low during the 1987 Crash. Markets peak and bottom in sync with our models around the world even when I do not mention them. Even Greece petitioned the IMF for help precisely on the turning point. Then on the very day, Russia entered Syria on 2015.75. These events are all the same model and the calculations are cast in stone.
Sorry – there is just something beyond the surface that warrants our attention. These dates are not random. They cannot be fudged. You can blame me, but they have existed before my time and will continue beyond my lifetime.
The Commodity Futures Trading Commission announced that it has brought a case in conjunction with the Department of Justice and Federal Bureau of Investigation’s Criminal Investigative Division, charging criminal and civil enforcement actions against three banks and six individuals involved in commodities fraud and spoofing schemes, which they define as bidding or offering with the intent to cancel before execution. The problem with now claiming to spoof is a crime, they are dangerously destroying how markets have traded from the beginning and this is only reducing the liquidity. That means in the years ahead, during a crisis, there will be fewer and fewer big players left in the markets and that will become dangerous. The government tries to spoof itself during a panic and always comes out and says the market is fundamentally sound to try to stop a panic. They simply write a rule and it becomes a crime that is contrary to a Democratic form of government. Any crime should ONLY be authored by Congress – not agencies.
We use to call that “flash” bids or offers. It was simply a way of trading that was often mandatory. Of course, there was the risk that you could be tagged. I was short one time in gold about 5,000 lots and it was a turning point so I wanted to cover and flip to a long position. There was a large local trader in the pit. His style was to do these flash offers or bids to try to push the market to the next level. I instructed my guy on the floor to just wait for him and as soon as he would flash offer a thousand lots, buy them. He flashed 1,000 and I said done. He then flashed 1,000 again and I said done. He tried a third time 1,000 and I said done. Gold then rallied. It is one thing to bid or offer and you are not willing to take that position. I seriously doubt that anyone in their right mind would do that. If you are going to flash bids or offers, you can also be tagged and you have to be good for the trade.
The CFTC is totally destroying the market and liquidity. They filed charges and settled charges against Deutsche Bank AG (DB AG) and Deutsche Bank Securities Inc. (DBSI) (collectively, DB), requiring DB to pay a $30 million civil monetary penalty and to undertake remedial relief. The trades were between February 2008 and continuing through at least September 2014, in precious metals. They call this a scheme to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques with respect to precious metals futures contracts traded on COMEX, and by trading in a manner to trigger customer stop-loss orders. This is how the markets have traded since inception.
The CFTC also charged and settled against UBS AG(UBS), requiring UBS to pay a $15 million civil monetary penalty and to undertake remedial relief. Again, this was concerning precious metals futures contracts traded on COMEX.
The third charge was an Order filing and settling charges against HSBC Securities (USA) Inc. (HSBC) for engaging in numerous acts of spoofing with respect to certain futures products in gold and other precious metals traded on COMEX. HSBC was ordered to pay a civil monetary penalty of $1.6 million.
The CFTC Division of Enforcement Director James McDonald said:
“Spoofing is a particularly pernicious example of bad actors seeking to manipulate the market through the abuse of technology. The technological developments that enabled electronic and algorithmic trading have created new opportunities in our markets. At the CFTC, we are committed to facilitating these market-enhancing developments. But at the same time, we recognize that these new developments also present new opportunities for bad actors. We are equally committed to identifying and punishing these bad actors. The CFTC’s enforcement program is built around the twin goals of holding wrongdoers accountable and deterring future misconduct. We believe these goals are best achieved when we hold accountable not just companies, but also the individuals involved. As these cases show, we will work hard to identify and prosecute the individual traders who engage in spoofing, but we will also seek to find and hold accountable those who teach others how to spoof, who build the tools designed to spoof, or who otherwise aid and abet the wrongdoing. These cases should send a strong signal that we at the CFTC are committed to identifying individuals responsible for unlawful activity and holding them accountable.”
President Trump delivered a conventional State of the Union address and moved to turn the successes of his first year in office, tax cuts, deregulation and an offensive against the Islamic State, into a second-year agenda that he said will bring about a “new American moment.” Given all the hatred that has been poured out against this president, it is amazing he managed to get a lot done. However, he also said he was signing an order to keep Guantanamo Bay open because terrorists are criminals. What he obviously fails to understand is if they were really terrorists, then put them on trial. They not been given trials because they are casualties of a war on terror that went too far. The one terrorist they did put on trial who was their best case, the jury acquitted of 223 counts finding him guilty of only a conspiracy. After that stunning defeat, that was the end of trials.
The government tried to release some, but they were killed back home assuming they had become CIA spies. That was the end of that programs. Then they gave 5 terrorists for one American soldier to try to get rid of some that way. Trump seems to be completely in the dark on this issue.
Tonight President Donald J Trump delivers one of the most widely covered speeches of the presidential year when he addresses a full congress during the State of The Union address.
The start time is 9:00pm, with speech remarks scheduled for 9:10pm EST. Every broadcast station and cable news outlet will be covering the speech. There are multiple livestream options available.
NAFTA renegotiation round six ended yesterday in Canada will no substantive progress on the most contentious trade issues. One negotiation chapter on corruption was closed, but there was little to no agreement on much else.
Each of the primary Trade Representatives gave a closing statement at the conclusion of Round #6. U.S.T.R. Lighthizer blasted Canada for attempting to inject schemes, fraud and deceptive dealing within the negotiations. Princess Rainbow Sparkles from Canada tried to pretend the Canadian proposal was realistic. It was all awkward. Hopefully President Trump will soon get us out of this nonsense. Lighthizer Transcript below video:
Ambassador Lighthizer: It is a pleasure to be here in Quebec. Montreal is one of the great cities of the world, and I have not been back in many years, and I’ve missed it. I used to come here in the 70s and 80s with my wife and children to go to Mont-Tremblant and learn how to ski. We loved the French culture, we loved the excellent food, the wonderful skiing and as I recall, it was cold all the time. That hasn’t changed at least.
I always thought that Quebec has the greatest motto anywhere: “Je me souviens.” It is a perfect comment on history, culture, and even the future. I think it is a perceptive motto for a trade negotiator. Maybe we’ll put it up at USTR – “Je me souviens.” You can see it when you walk in.
Since we are in Canada, let me talk a bit about our bilateral trade relationship. I think there is some misunderstanding here that the United States is somehow being unfair in these negotiations and that is not the case.
Free trade agreements are essentially grants of preferential treatment to other countries in exchange for an approximately equal grant of preferential treatment in their economy. Thus, it is reasonable from time to time to assess whether the bargain has turned out to be equitable.
Using Canadian statistics, Canada sold the United States $298 billion U.S. dollars in goods in 2016, the last numbers that we have. We sold Canada $210 billion dollars in goods. Now that’s a lot of two-way trade, but it also means that Canada has an over $87 billion U.S. dollar surplus with the United States. To put this in perspective, that figure is equal to approximately 5.7 percent of Canada’s GDP. When energy is removed, and in some people’s opinion that’s a fair thing to do, the number is still $46 billion dollars. The projected figures for 2017 show that the surplus will be even larger when those numbers are in.
Now I ask Canadians because we’re in Canada, is it not fair for us to wonder whether this imbalance could in part be caused by the rules of NAFTA? Would Canada not ask this same question if the situation were reversed? So we need to modernize and we need to rebalance.
Now let me turn to the Sixth Negotiating Round and the status of our talks. We believe that some progress was made. We closed one chapter, as Ildefonso [Guajardo] said it was the chapter on corruption, which is a very important chapter, and we made some progress on a few others. More importantly though, we finally began to discuss some of the core issues. So this round was a step forward, but we are progressing very slowly.
We owe it to our citizens, who are operating in a state of uncertainty, to move much faster. Of course, negotiating as a group of three is more difficult than bilateral talks. Often, issues become more complicated and contentious when there are three parties.
I would like to comment on two proposals by the Canadians, one of which has been in the press quite a bit, and that is a presumed compromise on rules of origin.
We find that the automobile rules of origin idea that was presented, when analyzed, may actually lead to less regional content than we have now and fewer jobs in the United States, Canada, and likely Mexico. So this is the opposite of what we are trying to do.
In another proposal, Canada reserved the right to treat the United States and Mexico even worse than other countries if they enter into future agreements. Those other countries may, in fact, even include China, if there is an agreement between China and [Canada]. This proposal, I think if the United States had made it, would be dubbed a “poison pill.” We did not make it, though. Obviously, this is unacceptable to us, and my guess is it is to the Mexican side also.
Finally, I would like to refer, because I think it fits into this context to an unprecedented trade action that Canada brought against the United States very recently. It constitutes a massive attack on all of our trade laws. If it were successful, it would lead to more Chinese imports into the United States and likely fewer Canadian goods being sold in our market.
Now we understand that countries often challenge specific actions taken by another country in the context of trade laws. This is normal and what we expect. But this litigation essentially claims that 24 years ago, the United States effectively gave away its entire trade regime in the Uruguay Round. Of course, we view this case as frivolous, but it does make one wonder if all parties are truly committed to mutually beneficial trade. It also underscores why so many of us are concerned about binding dispute arbitration. What sovereign nation would trust to arbitrators or the flip of a coin their entire defense against unfair trade?
To conclude, some real headway was made here today. The United States views NAFTA as a very important agreement. We are committed to moving forward. I am hopeful progress will accelerate soon. We will work very hard between now and the beginning of the next round, and we hope for major breakthroughs during that period.
We will engage with both Mexico and Canada urgently, and we will go where these negotiations take us. Thank you very much.
At last, we have entered the middle-ground of analytical thought. Between 2009 and 2017, the majority were bearish calling for the inevitable crash any day now. So after 8,6 years, they have now crossed the Rubicon and we now see there is a general expectation that stocks will keep rising, albeit at a slower pace. The reasons they now have adopted a focus on the Trump Tax Cuts and the odds seem low for a recession this year. They are also touting that economies around the world are finally in sync and starting to grow together, yet that seems to be delusional at best.
Then we have the typical fundamental arguing that should keep profits on the upswing for companies, and stock prices tend to follow the direction of profits. That too is a myth for even Shillerhas admitted that since 1881, the correlation of the past decade’s real earnings growth with the price-earnings ratio is a positive 0.32. But there is zero correlation between his CAPE ratio and the next 10 years’ real earnings growth. He has even stated that real earnings growth per share for the S&P Composite Stock Price Index over the previous 10 years was negatively correlated (-17% since 1881) with real earnings growth over the subsequent 10 years. So the whole earning issue really cannot explain market performance no matter how logical it may sound. Shiller has even conceded that bond markets also fail to correlate to inflation. It is the past the rules the future. He has stated that long-term interest rates tend to be high when the last decade’s inflation was high. He has pointed out that the US long-term 10-year bond yields are highly positively correlated (70% since 1913) with the previous 10 years’ inflation. However, he notes that any correlation between the Treasury yield and the inflation rate over the next 10 years is only 28%.
Shiller has concluded that he cannot figure the market out: “The truth is that it is impossible to pin down the full cause of the high price of the US stock market. The lack of any clear justification for its high CAPE ratio should remind all investors of the importance of diversification, and that the overall US stock market should not be given too much weight in a portfolio.”
Of course, diversification is the uneducated way to invest. It is admitting you cannot forecast so the best way is to spread out your bets. You can see the results of diversification strategies at any casino’s roulette wheel. People will bet on many numbers staggering their wagers between them hoping to catch the number with the biggest bet and hedging it with smaller bets on a variety of numbers. Investment diversification is the same. They do not know which market will perform best so they spread their bets around hoping for the best. They guarantee to take some losses in hopes of a reasonable win.
Yet, there is a growing consensus that the market is going up and they really do not know why so they are punting out theories. They still are touting risks that they see lying ahead. One concern centers on just how long and strong this bull market has been. Since the rally began from the 2009 low, they say that stocks have become more expensive than they’ve historically been, relative to corporate profits. Yet Shiller has conceded that does not produce a winning correlation. We passed the entire length of the bull market during the Roaring ’20s, which was 97 months last April 2017. This scares many as they keep talking about value.
Many warn that an unexpected spike in inflation can kill the bull market, although I totally miss this logic. They obviously do not understand the three different types of inflation. They look at the past deflation and low-interest rates and then assume the market has risen with low-interest rates and low inflation. Others attribute the rise to the central banks around the world massive stimulus programs to avoid a downward spiral.
Inflation is still relatively modest, but the job market is at its healthiest in years, and the unemployment rate is at a 17-year low. All of this baffles the analysts. They think this should lead to higher wages for workers, which could push inflation higher across the economy, but then there is the technology boom replacing workers. Banks have been letting go their older more expensive staff replacing them with junior people to save money. This too is creating confusion in the analytical world.
Others fear that if inflation picks up faster than the Federal Reserve is expecting, that it will force them to raise rates more quickly than it has prepped markets for. Then they calim a crash is still possible as if then people will sell private shares and run into government bonds once again.
Then there is the growing potential for a trade war. They argue that companies in the Standard & Poor’s 500 index got 43% of their sales from outside the country in 2016, Therefore, they see a trade war will kill earning and cause the crash. On the one hand, they admit Trump’s policy is a winner, but then again, it can backfire.
Then we have those who say Trump will create a real war with Korea. That they see as a geopolitical risk that can kill the bull market. Yet stocks have tended to rally during war periods.
They some say that the expectations have become just too high. Among the analysts at least, there is more recent optimism and more complacency after being wrong for the first 8 years.
Of course, our correlation models are completely different and proprietary so we do come up with different results
COMMENT: Marty; I was just surfing and discovered that CNN did quote you back in 1998. They said you beat Soros since he lost $2 billion and you correctly called the Russian collapse and the Long-Term Capital Management collapse. Maybe they will wake up and quote you again being the only one to get the Dow right since 2010.
Pete
REPLY: Interesting. I forgot about that interview. It is the computer that is tracking the world. It is impossible for one person to monitor every market around the globe constantly. I do remember some others back then saying similar things. That was when I was named Hedge Fund Manager of the year.
All the Hedge Fund punters were colluding together on Russia. They were all expecting guaranteed trades. As I have said before, Edmond Safra invited me to the IMF dinner where he rented out the entire National Gallery of Art in Washington. They were trying to get me to join them on Russia and bluntly said the IMF was in their pocket and would keep the loans going so they could get tens of percentage points in interest from Russian bonds. I told them my model said it would collapse. They disagreed because they paid off the IMF and had the “perfect trade” in play.
After the London FT put our forecast on the front page of the second section, that started the blame game where I became the target since they all lost. As I said many times, the majority must be wrong even when they have billions and the IMF in their pocket.
Since socialists are unwilling or unable to look at what their philosophy does to people, Firewall host Bill Whittle shows us what it is doing to the animals, and asks how the richest person in Venezuela just happens to be the daughter of the socialist former President of that starving country.
In September of 2015 we shared one of the overarching reasons why CTH would support Donald Trump for President. – SEE HERE – This week, the sentiment behind that reasoning showed up in Davos, Switzerland for the World Economic Forum; we could not be more proud.
Commerce Secretary Wilbur Ross (Wednesday), Treasury Secretary Steven Mnuchin (Thursday) and U.S. President Donald Trump (Friday), collectively outlined how our new U.S. trade and economic policy would engage with the world.
Many media voices (narrative engineers) will, and have, continue to obfuscate, spin, and make predictive declarations about U.S. economic policies based on their ideological views of what President Trump could do, should do, or will do. They will try to convince the American electorate of POTUS Trump’s forward plans. Most of what they declare is false.
In case you missed it, and if you want to know what the accurate compass heading is, skip the media and allow yourselves to rely on the direct message as delivered. You’ll avoid a great deal of heartburn.
The MAGA economic policy explanation begins with trade, Wilbur Ross:
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The MAGA economic policy explanation is enhanced by finance, Steven Mnuchin:
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The America-First economic policy is wrapped up by President Trump (transcript here):
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[…] America is roaring back, and now is the time to invest in the future of America. We have dramatically cut taxes to make America competitive. We are eliminating burdensome regulations at a record pace. We are reforming the bureaucracy to make it lean, responsive, and accountable. And we are ensuring our laws are enforced fairly.
We have the best colleges and universities in the world, and we have the best workers in the world. Energy is abundant and affordable. There has never been a better time to come to America.
[…] In rebuilding America, we are also fully committed to developing our workforce. We are lifting people from dependence to independence, because we know the single best anti-poverty program is a very simple and very beautiful paycheck.
To be successful, it is not enough to invest in our economy. We must invest in our people. When people are forgotten, the world becomes fractured. Only by hearing and responding to the voices of the forgotten can we create a bright future that is truly shared by all.
The nation’s greatness is more than the sum of its production. A nation’s greatness is the sum of its citizens: the values, pride, love, devotion, and character of the people who call that nation home.
[…] Each of you has the power to change hearts, transform lives, and shape your countries’ destinies. With this power comes an obligation, however — a duty of loyalty to the people, workers, and customers who have made you who you are.
So together, let us resolve to use our power, our resources, and our voices, not just for ourselves, but for our people — to lift their burdens, to raise their hopes, and to empower their dreams; to protect their families, their communities, their histories, and their futures.
That’s what we’re doing in America, and the results are totally unmistakable. It’s why new businesses and investment are flooding in. It’s why our unemployment rate is the lowest it’s been in so many decades. It’s why America’s future has never been brighter.
Today, I am inviting all of you to become part of this incredible future we are building together.
Thank you to our hosts, thank you to the leaders and innovators in the audience. But most importantly, thank you to all of the hardworking men and women who do their duty each and every day, making this a better world for everyone.
Together, let us send our love and our gratitude to make them, because they really make our countries run. They make our countries great.
Thank you, and God bless you all. Thank you very much. (Applause.) Thank you very much. (link)
… because he says: “Make America Great Again”! And when Trump says that I hear:
Someone who gives a damn about America, without apology; which is more valuable to me than a perfected highly-rehearsed skill set of 30 second sound bites and white paper policy instructions.
From my perspective any average hard-working American could eat every one of these pinky ring candidates’ lunches, all of them; and if they want to go down the intellectual superiority path… well, that stuff is useless.
Florida Power and Light won the prestigious International Edward Demming award for excellence in multi-platform engineering and efficiency superiority. They didn’t blow every PhD intellectual out of the water with slide rules, CAD programs and engineering acumen. They did it with hard hats and dirty fingernails.
Because they lost the award, the Japanese spent 6 months studying FPL and later published a 1,000 page dissertation essentially saying FPL “wasn’t really good, they were just lucky”….. FPL field leadership laughed, took out markers and wrote on the back of their hard hats: “WE’RE NOT GOOD, WE’RE RUCKY”….
When every single Kuwaiti oil field was blown up by Saddam Hussein, they said it would take 5 years to cap them all off and restart their oil pumping industry. The Kuwaiti’s and Saudi’s called Texans, who had them all capped and back in working order in 10 months.
We are a nation that knows how to get shit done.
When the Northern Chile mine workers were trapped two miles underground, they said no-one could save them. Who did they call for help? A bunch of hick miners from USA coal country who went down there, worked on the fly, engineered the rescue equipment on site, and saved everyone of them….
That’s our America.
When a half-breed Islamic whack job, armed with an AK-47 and a goal to meet his seven virgins, began opening fire on a train in France, the Americans on board didn’t run to the nearest safe room and hide themselves amid baguettes and brie. They said “let’s go”, and beat the stuffing out of that little nut with a death wish.
Legion d’Honneur or not, that’s us. That’s just how we roll.
Lady Liberty can stroll along the Champs-Elysées with a swagger befitting Mae West because without her arrival they’d be speaking German in the Louvre. Yet for the better part of the past decade a group of intellectual something-or-others have been teaching an insufferable storyline that it’s better to be sitting around a campfire eating sustainable algae cakes and picking parasites off each other.
Enough.
When I hear Donald Trump say “Let’s Make America Great Again”, I also hear the familiar echo “cowboy up” people.
It’s high time we stop being embarrassed about our exceptional nature, and start being proud of it again. Because when it matters most, when it really counts, when it’s really needed, there’s a whole bunch of people all around this world of ours that are mighty happy when swagger walks in to solve their problems.
Yeah, “let’s make America great again”. Swagger on !
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
