It was the speech that most claimed lacked substance that just did exactly what most thought it couldn’t – rally global stock markets. Yes, Japan’s Biz Cap-Ex released at 3.8% compared to the previous 1.3%; that woke markets, then Manufacturing PMI released a smidgen worse but when the JPY started to fall, everyone blamed Trump. The fact that the market has re-priced a March hike from 50% to 80% hardly made the pages. The Nikkei loved the weaker Yen especially moved were key exporters all adding to the strong 1.5% rally. Shanghai and Hang Seng were small better bid (bit disappointing as China PMI better than expected) but in late US trading the futures market have added an additional 1% across the board.
I find it quite amusing that the pages announcing in Asian time zone “no substance”, lacked detail and disappointing – suddenly claim that $1tln will help infrastructure and defence stocks. Europe benefitted both on data and action as fresh money finally found its way into the market. All core indices saw gains of around 2% whilst both the Euro and GBP traded weaker. Mixed bag of tricks on the data front but probably a tad better for Germany which did see a small sell-off in bunds but then treasuries were down nearly 2pts so probably not that exciting really!
The US market could not wait to open with a 100 point gain seen in the opening minutes. By lunchtime time we were over 300 points higher, breaking both the psychological 21k for the DOW and the 2400 level for the S+P. Data was mixed initially but finished better (ISM 56 forecast was released at 57.7) with most talking FED. Towards the close we are pricing in a 80% chance of a move in March but many may wish to wait Janet Yellen when she speaks Friday. Given the DXY recent performance (now around 101.75), the rise of the S+P (+7% YTD) and 2yr yields their highest in nearly 8yrs the chances are this could be the start of the FED back in play.
2’s closed 1.28% (+5bp), 10’s at 2.46% (+10bp), Bunds 0.0.28% (+8bp) closes US/Germany spread at +218bp. France 0.91% (+3bp), Italy 2.11% (+4bp; can you really believe Italy trades 35bp through the USA!!!), Greece 6.75% (-22bp), Turkey 10.66% (+7bp), Portugal 3.89% (+6bp) and finally Gilts 1.19% (+4bp).
Treasury Secretary Steven Mnuchin gives Fox Business News’ Neil Cavuto an interview to discuss President Trump’s timeline for the ObamaCare repeal, budget and tax reform. The interview is int…
It all made sense earlier (to those attempting to write the narrative explaining why The Dow gapped open to 21,000) but the last couple of hours have seen an odd decoupling between the USD Index and bonds (and a recoupling of the USD Index and stocks). The question is – what happens next?
Who’s right? Bonds or the dollar?
Gold is rising as the USD drops (no decoupling there)
And have stocks run their course?
Still with options buyers surging into S&P 2,600 strike calls for December, what could go wrong
Earlier this month, we all heard the news that the Oroville Dam was damaged, and that thousands of residents living in its shadow would have to be evacuated. Fortunately the dam held, and the residents of Oroville were able to return to their homes. For the most part the story has since faded from the news. However, the damage remains.
When the crisis was at its peak, you may have heard about what specifically went wrong with the dam. The main spillway was damaged when the dam operators attempted to release some water to control the depth of Lake Oroville. Essentially, a crater unexpectedly emerged in the middle of the spillway, and when the water flowed through that hole, it eroded the soil beneath. So the dam operators decided to let the water flow over an emergency spillway instead. But as the emergency spillway began to erode as well, an evacuation order was issued.
But hearing that doesn’t really do it any justice. To really appreciate the magnitude of what occurred that day, you have to see it with your own eyes. And now you can.
On Monday the California Department of Water Resources stopped the flow of water down the spillway so that they could assess the damage. Here’s what they found:
I have a feeling that this isn’t going to be fixed for a long time.
During WW II America, Brittan, Russia and the French resistance fought the Axis powers lead my Germany and totally destroyed them. What we need now is to save Western Civilization once more from the invasion of Islam which is in the process of bringing 5,000 years of progress to a screeching halt throwing us into a new Dark Age. So some strange reason the left or the progressive movement as they prefer to be called have aligned themselves with the the Medina faction of Islam (Jihadists) in there attempt to set up a one world government under the principles of Marxism. Trump had now correctly defined the obvious enemy as Radical Islamic terrorism he will now need to bring in the other half which is lead my George Soros with is Open Society movement which is Marxism; BTW Karl Marx was German.
If Le Pen can win in the French election than an alliance of America, Britain, Russia and France is possible and we could save Western Civilization once more. Russia does have clean up to do but the Russian people are good and even Putin could see the advantage of this new alliance. I hope trump can see this and put something like this together; as this not inconsistent with the MAGA movement.
French Presidential candidate, Francois Fillon, has called for a 12:00pm (local time – 6:00am U.S. Eastern Time zone) press conference. This comes a day after he cancelled a trip to the annu…
QUESTION: Marty; The Mises Institute said “Martin Armstrong is one of the most famous economic forecasters alive” and others call you the legend. I have watched your numbers and timing targets. I bought the Gold Report in 2016 and to watch gold peak exactly to the day you highlighted years ago and in so many other markets, you have proved your point. This is humanly impossible so you must have discovered a model that reveals the regularity of everything showing there is no such thing as randomness. My question is simply this. The majority of fund managers could not even beat the S&P500. Many funds had their worst year since 2009. I made more money in the account I traded using your forecast than I did in the funds I gave to managers. Would you consider publishing funds that use you so we would know who to trust since you are not interested in going back to funds management?
PG
ANSWER: We are considering that. As 2016 began, USA Today reported that 66% of fund managers could not match the S&P500. Back in 2014, 86% of investment managers lost money. Studies back in 2013 showed the same general ratio that only 24% of active mutual fund managers outperform the market index. Last year, 2016 was the WORSTyear for fund managers picking stocks. The London FT reported that active fund managers last September were lagging behind the stock market. Stockpickers in their semi-annual survey found that 90% of all managers fell short of benchmark.
This is a HUGE problem. The crisis in funds management illustrates what I have been warning about. OPINION is your worst enemy. I try on this blog to cover the world range of topics. To be a good hedge fund manager. the first thing you MUST do is be on top of everything unfolding in the world ALL the time. The tsunami waves of market corrections and breakouts ALWAYS unfold from an international perspective. Even the US media never really talked about BREXIT until about 10 days before it even took place. You cannot successfully invest or manage money and be oblivious to world trends.
We will consider licensing our model to firms for public use.
QUESTION: Mr. Armstrong; My family have been lifelong democrats and operated a small local business. We were never in the multi-million dollar class, but always found ourselves considered to the the unholy rich. I remember Joe Biden saying that 90% of small business made under $100,000. Those are most likely individuals and not small business who actually hire people. Obamacare devastated our net bottom line and I have seen the light. You wrote before that small business was the backbone of the economy. Why have the democrats always been against small business?
Curious on your take
ANSWER: The problem stems from the fact that to collect money, the top bracket for income tax has progressively been lowered. Back at the time of World War I, the definition of the rich was someone who earned $2 million. Considering a car was $300, that was a lot of money. Then for World War II, the definition was raised to $5 million. There were songs like We’re in the money, we’re in the money; from the Gold Diggers of 1933, reflecting the boom times. The government even printed $10,000 bills.
The rhetoric has been Marxist since the Great Depression, but they call it “progressive” or “liberal”. The definition has changed dramatically so $250,000 is now the equivalent of being super rich during the Great Depression earning $5 million.
Today, small businesses make up: 99.7% of U.S. employer firms, 64% of net new private-sector jobs, 49.2% of private-sector employment, 42.9% of private-sector payroll, 46% of private-sector output, 43% of high-tech employment, and 98% of firms exporting goods. Joe Biden’s justification that the Democrats do not tax small business is just not true. What he counts as small business is self-employed which can be anything from a handyman to jockey racing horses freelance. That is substantially different from small business that actually employs people.
U.S. Census information from 2008 identified a total of 27,281,452 businesses in the United States. The number of businesses operated by proprietors with no employees numbered 21,351,320, which were the self-employed individuals. The Small Business Administration defines small business as fewer than 500 employees – which to me is not small. Add to this the number of businesses having fewer than 500 employees and the number of small businesses comes to 27,262,983. Now, let’s subtract this number from the total number of businesses identified by the census. This produces the number of businesses with more than 500 employees amounts to 18,586. Small business amounts to 99.7% of businesses in the United States.
Big corporations only employ about 38% of the private sector workforce while small businesses employs 53% of the workforce. In fact, over 99% of employing organizations are small businesses and more than 95% of these businesses have fewer than 10 employees. As I stated above, small businesses accounted for 64% of net new jobs created. In fact, many of these new jobs are also new companies. The startup rate in 2010 was the highest it has been in 15 years, but that is because 60% of graduate from college cannot find employment in the field that they paid for a degree. Many are FORCED to start their own business typically one-man bands. The rise in startups is because there has been shrinking roles available in big business as many are replaced by technology.
Small business ALWAYS grow faster creating more jobs than big business with 500 employees or more. In fact, historically, small businesses grow faster at a rate of 3.4% compared to big business which grows on average only 1.3%. Over the years, I have noted why big business slowly die. The boards become dominated by lawyers and accountants and lose touch with entrepreneurship as well as creativity – i.e. Steve Jobs.
The government always focuses on big business because they have the lobbyists who fund campaigns. During the 2007-2009 Crisis, neither the Troubled Asset Relief Program (TARP) funds nor industry bailouts specifically helped small businesses. In fact, slightly more than 20% of the small businesses get loans from banks and do so only with collateral. Therefore, big bailouts and TARP never “stimulate” the economy. Democrats always hate tax cuts and call it trickle down economics. But when it comes to bailouts, they only focus on the rich because they donate to their campaigns. Democrats talk out of both sides of their mouth. If you want to “stimulate” the economy, directly address small business – NOT the big companies who will not hire anyhow.
Then there is a huge divide between big business and small business. Big corporations are able to claim health insurance policies for employees as a business expense. Employees pay for those policies with pre-tax dollars. A self-employed business owner could not deduct his health insurance. There was a one-year self-employed health insurance tax deduction in the Small Business Jobs Act, but the Democrats would not allow that to be extended.Small businesses who work from home are entitled to take a home office deduction, but some 60% never deduct it for it often results in an audit and the deduction is notoriously difficult to calculate and thus a grey area the IRS loves to attack.
The bottom line is that Democrats rant and rave about the rich, but when it comes to helping small business, they screw them all they can and help big business because they donate for their campaigns. That’s the simple truth.
The Pension Crisis on the horizon is far worse than anyone can imagine. This is the final straw that will break the back of socialism the same as communism fell. Pensions are in a state of crisis for they lost money in stock in the 2007-2009 crash and then sold the bottom shifting to government bonds and then interest rates plummeted when they needed 8% to survive. The management skills have been nonexistent for the propaganda has always been that government bonds present no risk when in fact they are UNSECURED DEBT and the riskiest of all investments long-term.
Yellow Roadway company is one example of how things have changed. The company was allowed to skip its pension contributions for 18 months. When the company restarted paying again, it was at 25% of the previous rate. The Pension Fund for local 707 began to implode, with roughly 700 workers paying into a fund supporting more than 4,000 retirees. Local 707’s fund pays out $48 million a year — and takes in $7.5 million in contributions. Those who have been contributing will get nothing at all for the contributions. The whole thing is a house of cards that caves in.
We wrote in the Pension Report: “As we approach 2017, everything you once thought was secure for your future will unravel.” Indeed, the Sovereign Debt Crisis and the Pension Crisis start to surface here in 2017.
The debt deal struck by President Barack Obama and the then House Speaker John Boehner back in October 2015, was done purposefully to ensure that the debt crisis would not unfold under Obama and the Democrats. John Boehner never saw a government role of red tape he never cherished. The debt deal was absurd that the $20 trillion mark for the US debt ceiling as of March 15, 2017 would become permanent. Sure, on the one hand this could lead to a severe budgetary crisis this summer if the Democrats try to use this to discredit Trump since the media will blame Trump and not Obama.
The March 15, 2017 (Ides of March) date will be used by the media to try to stop Trump tax cuts. As always, politicians put-off whatever they can to keep hiding the truth to create fake reality and the press chimes in. This date marks the end of the debt deferral scheme struck by Obama and Boehner. When this delay expires, the deficit limit is supposed to be frozen at $20 trillion. It then becomes a law AND SOME PEOPLE ARE ALREADY TOUTING THE END OF THE WORLD. Of course, without reform and debt restructure, this cannot become reality. A rise in interest rates alone will increase the servicing and blow-through the debt ceiling. So expect a lot of yelling and incrimination – but at the end of the day, they will still have to raise the debt ceiling – AGAIN! Welcome to 2017!
Yes, this debt crisis is right on time with our forecast made decades ago. Of course, the politicians will be faced with the collapse of socialism. Where will the money come from to keep all of these programs going? The Democrats will call for a massive tax increase as if that will produce something different than a Great Depression as Europe has inflicted upon the Greeks. Honestly, politicians should NEVER be allowed to play with spending. They cannot manage anything and their self-interest of pretending to do a job while lining their own pockets should be a criminal act.
Everything could come to a halt and the Democrats will then try to blame the Republicans. This is how government works – always create a crisis and blame the other party. Obamacare is falling apart as more and more insurers bailout, costs skyrocket, and Social Security goes off the cliff. The Democrats will try desperately to prevent tax reductions for they are closet communists because they want to control your assets with a backdoor where the multinational corps can pay for exceptions. The deficit limit must then be further increased, but oddly enough, Trump is probably the best person to deal with a debt crisis. Trump will at least understand the debt and has previous spoke about restructuring the debt.
All this chaos can reach havoc proportions in the debt markets, but the stock market can be the biggest benefactor for parking money when bonds are not a wise choice. Obama pushed the biggest tax increases for Obamacare off into 2017 to prejudice the next president. Last September I wrote: “Come 2017, we are likely to see Obamacare also collapse.” Obama has done a tremendous amount of damage as did Boehner. They created the Veteran Health Crisis not paying to take care of the troops and instead gave them a suicide crisis hotline to call rather than healthcare. The lethal combination of backroom dealing has left Trump with little room for action unless he makes a real reform. Just watch how even the press will not attribute everything to Trump.
Trump inherits a pre-programmed time-bomb and Obama has organized protests to try to make sure Trump is blamed for everything Washington created since World War II. The Democrats want to prevent Trump from lowering taxes on companies and citizens, build walls and add border guards to stop the drug trade and increase security authorities because of terrorism. Trump vowed to do more for the veterans when the Democrats cut everything they could in the VA and military. Then there is Trump’s plan to cut off funds to intervening in the world and spend that money home on an infrastructure program.
So as the National Debt is reaching $19,979 trillion, debt has more than 160% since 2000. Under Obama, there was a massive expansion of new debts on the order of nearly $10 trillion dollars taking advantage of cheap interest rates. Obama increased the debt more than the past 43 US presidents combined in nominal terms. Nevertheless, the USA has the only economy that is viable in the West. The American banking system is not shaking as is the case in Europe.
The US economy is holding up the world for about 70% of the US economic output is generated by domestic consumption. If the American consumer stops, Europe and Asia collapse in overall economic growth. So the debt crisis looming on the horizon depends entirely up how bad the Democrats and the press try to spin this to hurt Trump, but they will shoot themselves in the foot. This time, the mainstream media will more likely than not create a serious economic decline in public confidence by trying to pin all the blame on Trump. On top of all this, Moody’s downgraded 24 governments during just the first half of 2016. The rating agencies will downgrade the USA now only because Trump is in office and they do whatever the establishment tells them to do.
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