If you prefer fake news, fake data, and a fake narrative about an improving economy and stock market headed to 30,000, don’t read this fact based, reality check article. The level of stupidity engulfing the country has reached epic proportions, as the mainstream fake news networks flog bullshit Russian conspiracy stories, knowing at least 50% of the non-thinking iGadget distracted public believes anything they hear on the boob tube.
This stupendous degree of utter stupidity goes to a new level of idiocy when it comes to the stock market. The rigged fleecing machine known as Wall Street has gone into hyper-drive since futures dropped by 700 points on the night of Trump’s election. An already extremely overvalued market, as measured by every historically accurate valuation metric, soared by 4,000 points from that futures low – over 20% – to an all-time high. Despite dozens of warning signs and the experience of two 40% to 50% crashes in the last fifteen years, lemming like investors are confident the future is so bright they gotta wear shades.
The current bull market is the 2nd longest in history at 8 years. In March of 2009, the S&P 500 bottomed at a fitting level for Wall Street of 666. In a shocking coincidence, it bottomed on the same day Bernanke & Geithner forced the FASB to rollover like mangy dogs and stop enforcing mark to market accounting. Amazingly, when Wall Street banks, along with Fannie and Freddie, could value their toxic assets at whatever they chose, profits surged. The market is now 240% higher.
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal
-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)
You have the second longest bull market in history, while stock market valuations, as measured by the Shiller PE ratio and every other historically accurate valuation method, are higher than 1929 and 2007, but the Wall Street hype machine and the business network shills adamantly declare this bull has years to go and thousands of points of upside. Greybeards who haven’t been captured by the Wall Street machine honestly point out the market will deliver 0% returns over the next ten years at these valuations. Eric Peters’ words of wisdom will fall on deaf ears:
“The longer a market trends lower, or higher, the more confident people become that tomorrow will look like today. And what they forget is that the single most important consideration in investing is your starting point.”
You would think the PE ratio of the market rising to historic highs must be due to corporate profits continuing to rise and making investors confident about the future. The narrative being flogged by the fake news networks is a strong economy and surging corporate profits are the reason for all-time high stock prices. The narrative is fake news, as corporate profits have been stagnant for the last five years, as the market has advanced by 70%.
In March of 2009, at the height of the financial crisis, Fed overnight interest rates were at an emergency level of .25%. Eight years later after a “tremendous” economic recovery, Fed overnight interest rates are still at an emergency level of .75%. Ten year Treasuries were 2.9% in March 2009 and are currently 2.3%. If this was a true economic recovery, would rates be at these levels?
The truth is, this entire bull market has been generated through financial engineering. A critical thinking individual, which eliminates all CNBC bimbos/talking heads and Ivy League educated Federal Reserve schmucks, might ask how reported corporate earnings per share since 2009 have risen by 221% when corporate revenues have only risen by 28%. That’s quite a feat – creating fake earnings without increasing revenue. It’s easy when you implement a three pronged scheme to manufacture a phony economic and stock market recovery.
The following chart sheds some light on this “fundamentally” driven bull market.
The stupid, it burns. This ridiculous miss-allocation of corporate funds was enabled by the Fed keeping interest rates so low for so long. The Fed is always the culprit in the boom and bust cycles that plague our rigged economic system. The big banks and corporations always get bailed out when their reckless financial schemes blow up, while the average American gets screwed by inflation, stagnant wages, and higher taxes. Retail CEO’s were buying back their stock over the last eight years and are now declaring bankruptcy and closing stores at a record pace. Maybe they could have used the cash used on buybacks to sustain their businesses.
Corporate debt levels are at all-time highs despite a supposed eight year economic recovery. The debt was used to buyback stock rather than invest in the business. Revenues have been stagnant and earnings are now falling. Interest rates are being ratcheted up by the Fed, and the economy is falling into recession. With debt levels already high and interest rates rising, the buyback machine is going to shut off. Without corporate buybacks what will sustain the stock market rise?
The trillion dollars of stock bought at record high prices with debt will be vaporized in the next inevitable stock market crash. But the debt will remain. And the CEOs will plead ignorance and say who could have known as they cash their multi-million dollar paychecks. The Wall Street shysters know their only hope now is to lure the stupid money into the market as they head for the exits. That’s why their hype machine has been in overdrive with the Snapchat IPO and gushing articles about Tesla’s Model 3 revolutionizing the auto industry. It’s enough to make a sane person gag.
And it’s working. The little guy has been hesitant to dip their toe back in the water after seeing 50% of their net worth obliterated in 2000/2001 and then again in 2008/2009. It seems the election of Donald trump and his promises of tax cuts, walls, infrastructure and fixing healthcare have enthused the masses into investing in the stock market at its all-time high. I guess they forgot how much it hurt when they were clubbed over the head eight years ago. Well, they are going to relearn that lesson again.
As the stupid money goes in, the smart money heads for the exits. The perfect example of how American corporations are led by greedy, short-term oriented, unprincipled, dishonest, corrupt egomaniacs can be seen in their personal actions versus the their corporate mandates. As Wall Street touts stocks to the little guy and corporate executives commit billions of shareholder dollars towards buying back their stock, corporate executives are cashing in their stock options and selling like there is no tomorrow. What a despicable display of self-interest.
If all is well and the market is headed higher then why are corporate executives buying their own firms’ shares at the slowest pace in at least 29 years. According to the Washington Service, there were a total of 279 insider buyers in January, the lowest since 1988. Moreover, the number of sellers has also grown in recent months, pushing the ratio of buyers to sellers in February to its lowest since 1988 as well. If the market isn’t overvalued, then why are corporate executives, who know their business’ prospects better than anyone, selling their stocks at a far greater rate than buying? It’s because they are going to let the ignorant investing masses be left holding the bag when the shit hits the fan.
Human beings are so predictable en mass that it’s almost humorous to watch them get it good and hard once again. They are like Wile Coyote thinking they will surely catch the Road Runner this time by using the same old methods that have failed a thousand times before. Their confidence rises just before they go over the cliff once again. We’ve reached that point again for the third time in the last seventeen years. Consumer confidence is at a sixteen year high (seems odd considering retailers are closing 3,500 stores in the next few months). The previous peaks were in May 2000 and July 2007. We all know what happened next. But it will surely be different this time. Jim Cramer tells me so.
So all the pieces are in place for an epic stock market crash, along with a real estate and debt market crash as an added kicker. The arrogant, over-confident thirty year old MBA investment geniuses and their super computer algorithms are sure they are smarter than the next guy and will get out before it’s too late. They think there will be a clear event which will signal it’s time to go. The markets are so overvalued, so dependent on the Fed, and so propped up by massive amounts of leverage, they will topple under their own weight at any moment. Central bankers, Wall Street bankers, politicians, pundits, experts, and the stupid lemmings will be shocked by this truly unexpected development.
Data reported in the last week will be the gasoline thrown on the fire when this market starts to burn, turning it into a towering inferno. Margin debt has reached an all-time high, as supremely confident investors (aka speculators) know the trend is their friend. They have borrowed over $500 billion against their stock portfolios to buy some more Snapchat, Tesla, Amazon, Facebook, Google and Apple. The previous peaks of $400 billion to $425 billion in 2000 and 2007 have been far surpassed. What happened after those previous peaks? I forget. I’m sure this time will be different. A CNBC bimbo spokesmodel told me so.
Lance Roberts, an honest, analytical, critical thinking investment manager describes what will happen, because it always does:
“Investors can leverage their existing portfolios and increase buying power to participate in rising markets. While “this time could certainly be different,” the reality is that leverage of this magnitude is “gasoline waiting on a match.”
When an event eventually occurs, it creates a rush to liquidate holdings. The subsequent decline in prices eventually reaches a point which triggers an initial round of margin calls. Since margin debt is a function of the value of the underlying “collateral,” the forced sale of assets will reduce the value of the collateral further triggering further margin calls. Those margin calls will trigger more selling forcing more margin calls, so forth and so on.”
I watched The Big Short a couple weeks ago for the second time. The lessons from that movie will never grow old. Greed drives human beings to do reckless things in the pursuit of riches. Men think in a herd like manner and go mad in pursuit of their delusional aspirations of wealth and power. Those who see the irrationality and stupidity of the herd are scorned and ridiculed until they are ultimately proven right. Delusions die hard, but they do die as reality always wins.
“We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.” – Charles Mackay, Extraordinary Popular Delusions & the Madness of Crowds
In para below the 1st chart: “…the Federal Reserve to buy $3 billion of toxic worthless assets from the…”
Shouldn’t it be 3 Trillion?
__________________________
Also: Corp. executives are doing the same thing Enron exec’s did; they are selling a partial amount each week/month so as not to heavily influence the share price lower by selling a lot all at once.
Note: Enron exec’s even kept telling their employees to keep buying to maintain the share price to benefit the selling by exec’s.
Good catch. I changed it to trillion.
Sounds bad. Real bad. Like the love of money is the root of all evil, bad.
When you say:
In reminded me of that old proverb:
A bald eagle maybe. Probably, not a gold eagle though.
Uncola, I suppose this song could be dedicated to the devil, “he lied to me”
I miss Maggie, don’t you?
Admin,
We still can’t fully integrate that billions changed
to trillions during the course of less than a decade.
I really appreciate your work, to say the least.
Suzanna
Where on the Fed’s balance sheet is the 3 trillion dollar’s worth of “toxic assets” listed? The three plus trillion balance sheet expansion since 2008 that is reported weekly consisted mostly of treasuries and government backed mortgage bonds. I suppose in the greater scheme of things they may be worthless but hardly illiquid or in the same class as the notes of a bankrupt enterprise.
“government backed mortgage bonds” – What do you think these are worth without true Mark to Market Accounting and if you open them up and pull them apart…What is actually in there? “treasuries” – Foreign Countries are Selling these as fast as they can while the FED buys them up thus Monetizing the Debt – they will have to pay 30% to get anybody to buy them and even at that rate……not sure there will be takers, other then to load the Social Security Trust Fund up with them even more
Excellent article Admin !! No fake news in your account of market health.
“Stupid is as stupid does” describes what will happen to the suckers who have pumped their money into what can only become a bloodbath of epic proportion. Why do they never learn?
You are correct. I would like to add that this is why it’s dangerous to assume that when the “bloodbath” occurs, the “suckers” will hail us as prescient seers, and congratulate us for our caution, and envy us for our bold, independent thinking. No. The politicians and Wall St. will need a scapegoat and websites like this one (and its adherents) will be blamed for the ensuing pain and suffering: Because WE pulled our money from the system, thereby “causing” the panic(s) in markets. WE are the financial terrorists that bought the precious metals that “caused” the collapse of the dollar. WE spread our message of “gloom and doom” so often that it became a self-fulfilling prophecy. We will be convicted by the elites that brought about the carnage, and punished by the same mindless fools who trust them to the end of time. If the herd doesn’t see it now, they surely won’t see it when their bank accounts are frozen, and their cupboards are bare.
accept my apologies for butting in again,
but in response to madras, I have a link.
Matt Bracken is interviewed on his adaptation
of his essay, (‘Talking Heads), Burning Down the House’
that expounds on our status after the Susan Rice flap.
It is quite the listen/read.
https://westernrifleshooters.wordpress.com/2016/02/22/bracken-burning-down-the-house-in-2016/
the interview is fresh on WRSA.
Thank you Suzanna. Listened to it last night. WRSA is a site for serious patriots.
Suggest all check it out. If you aren’t into Matt Bracken (Former Navy Seal) you need to be.
Wall Street is the Pig Slop Market: Throw some rotten crap in a pig trough and all the pigs run to get it. The fat greedy ZOG pigs have access to way to much easy money from their crooked Federal Reserve.
“An enthusiastic philosopher, of whose name we are not informed, had constructed a very satisfactory theory on some subject or other, and was not a little proud of it. “But the facts, my dear fellow,” said his friend, “the facts do not agree with your theory.”—”Don’t they?” replied the philosopher, shrugging his shoulders, “then, tant pis pour les faits;”—so much the worse for the facts! (or in popular vernacular – fuck the facts)”
― Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds
“Men, it has been well said, think in herds. It will be seen that they go mad in herds, while they only recover their senses slowly, and one by one (or in popular vernacular, go full retard).”
― Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds
“When the world has gone mad, occasionally it pays to imitate them in some small fashion (or in popular vernacular, buy the fucking dip).”
– Charles Kindleburger’s, Manias, Panics, and Crashes
My favorite take away from Mackay’s “Extraordinary Popular Delusions……….” was a note that occurred during the South Sea’s Bubble. Kiosks were rising all over the streets of London selling stock in various enterprises. My favorite was advertised as………………………………..
“A Most Marvelous And Profitable Undertaking. No One To Know What It Is”.
BTW, that “Undertaking” was selling opium to the Chinese.
I’ve bought Gold at $300 an ounce. I’ve bought Gold at $1,300 an ounce.
I’ve bought Silver at $5 an ounce. I’ve bought Silver at $35 an ounce.
And you know what? I sleep just fine.
Good article. I posted it on SLL.
Buy the VXX (volatility index). Right now it’s around $16 dollars per share and will go absolutely crazy if the market crashes. I’m talking about orders of magnitude crazy. A couple of hundred shares might create generational wealth.
The gold etfs GDX and GDXJ are also poised for good returns, but not like the VXX or VIX.
Michael is the VXX an ETF? I agree on putting a portion of one’s fiat into an inverse investment. And which do you prefer the VXX or VIX? Thanks in advance.
Well lets hope that Barclays Bank can pay you those wind fall profits when the time comes to cash out.
From IPath Product Summary;
The iPath® S&P 500 VIX Short-Term FuturesTM ETNs (the “ETNs”) are designed to provide exposure to the S&P 500 VIX Short-Term FuturesTM Index Total Return (the “Index”). The ETNs are riskier than ordinary unsecured debt securities and have no principal protection. The ETNs are unsecured debt obligations of the issuer, Barclays Bank PLC, and are not, either directly or indirectly, an obligation of or guaranteed by any third party. Any payment to be made on the ETNs, including any payment at maturity or upon redemption, depends on the ability of Barclays Bank PLC to satisfy its obligations as they come due. An investment in the ETNs involves significant risks, including possible loss of principal and may not be suitable for all investors.
VXX is a short term trading security. It will lose money over the long term even if the market declines. You cannot short the market using an ETF without placing a timer on your money. Holding any inverse ETF will result in almost guaranteed losses. You have to use some sort of market timing model, even if its just DOW theory. I recommend
http://stockcharts.com/public/3828047/tenpp/3
DK Report, see #22-#24 very good timing indicators. Not as good as mine hehe but good.
I’ve lost a small fortune trying to short the market at one time or another using a leveraged system (Rydex funds 17 years ago, QID at time since then.)
You are right. Betting against the market is almost always a losing bet. The market can theoretically rise forever, but it can only fall 100% (and of course it won’t do that…probably.) The mathematics favor long positions, and stocks spend more time rising than falling so timing is difficult.
I’ve paid a high price to learn not to short.
Terrible idea. Terrible Reasoning. NOT going to make generational wealth buying this losing product. The whole article sounds like its written by a bitter short. It’s one thing to be a bear and constantly lose, its another to be bitter about it.
I’ve traded volatility (from a speculative standpoint, successfully for 17 years). Without question my best years were during rising volatility. So I was not perpetual short vol (long stock equivalent) profiting off the trend of lower vol. I often still get caught in the bear trap with a short futures position.
but let me remind you
The VXX is $16. They have had to split it countless times.
The UVXY is $16 which tries to replicated 200% daily returns of the VXX.
The VXX split adjusted price when listed in 2009 was $26,000.
The UVXY split adjusted price when listed in 2009 was $12,000,000.
View these as insurance policies that expire every year. assume what ever you pay for one of these will be worth zero in 1 years time if you dont get a material sell off. a 10% equity sell off gets you a 100% return in the VXX and about 200% in the UVXY. And that payoff ratio will diminish the higher either of those goes. Once the vix hits 60-80. That’s gonna be the cap. It can stay there. but it’s not going to rally 100s of % from there. At that point the fast money in VXX will be made and there will be a slow grind of winning that occurs. Instead of the VXX drifting lower as it does now, it will drift higher, so long as the Vix futures curve is inverted. So the highest you could dream to see VXX is maybe $250-$500 on a fast 40% drop in S&Ps. So risking 3k on a couple hundred shares of VXX now to make 50k-75K sounds great. But you are shooting at a moving target that will cost you 3,000 a year to take aim. AND I PROMISE you will exit early on your winner but hold your loser too long.
If you are reading this article looking at those charts trying to predict the top in the market. I can promise you that is a fools errand. I’ve spent years trying to find forecasting signals that predict when the market is about to turn, is exhausted, or is about to crash. There are very very very few reliable sell signals for equities. It’s just a fact. There are so many tailwinds that the market has going for it that just makes it virtually impossible to consistently maintain a short. Ask Jim Chanos how easy it is being a perma short.
People show up to work every day to do a good job and help their company (not to do a bad job). Those same workers plow money into the market every two weeks via 401k plans or pension allocations. Investment Managers of that money have no choice but to buy equities or treasuries. Most of them buy 60-80% equity and 20-40% treasuries.
Also it is NOT the wall street HFTs who are rigging the system. HFT = high frequency trading. HFT traders hold for less than a second. Typical “algos” hold for 5 hours. Anything longer than that is not a true “ALGO”.
Wall Street doesnt rig the system. Wall Street isn’t even an entity. Central Banks are entities who rig the system. The Federal Government is an entity who rigs the system.
I totally agree.
Markets are simply measures of mass psychology. Anyone who tells you they can PREDICT the actions of the hivemind in advance, in a material way, is full of S H I T. Anyone who could reliably do so would own the entire planet within a couple years. That’s no an exaggeration, given the amount of leverage now allowed.
I wish I had understood this 20 years ago.
I still think the SHTF eventually. I think mass psychology pushed this mania in money, assets and debt to levels frankly unimaginable before. But I said the same thing 20 years ago. It was just as true then as now.
Could the DJIA hit 36,000? W(ho)TF knows? I can’t be long this market at this point because it’s grossly overbought on what looks like a coalescing non-confirmation. But if I had bought 8 years ago when my charts said BUY, I’d hold now until signals unequivocally turned down. That’s far, far, far from the case.
I lack the courage of my convictions. So I sit in safety while everyone else apparently gets rich(er). Good for them. Maybe I’ll continue to be wrong. But if my “stopped clock” act is ever right, most of those people will be unable to exit, and their paper gains will evaporate.
I guess I will know in a few years. I won’t miss a meal in the meantime.
OFF TOPIC: I need the help of the TBP community. I’m old and I need to reconcile with my younger brother. He turns 65 this month. I wish to send him a you tube video titled “A River Runs Through It: Final Speech”. I’m techno-illiterate and don’t know how to send it. I’d be grateful for any help.
Go to the YouTube video you wish to send.
In the lower left of the video pane, click “Share” (there’s a little curved arrow next to it).
You can copy (CTRL+C) the link in the box and paste (CTRL+V) in an email, or click on “Email” directly from YouTube and enter in the desired recipient’s email address.
Are you dying, Flashy? I haven’t talked to my brothers in years. I doubt they would require a reconciliation. A beer maybe.
What can I say to my brother? He’s a hardcore Sheriff Arpaio fanatic.
If you want to fight and argue like you did when you were kids, this is the place. Don’t send him a video, if you sent me a video instead of calling me, I’d be pissed. Like, what the fuck, am I supposed to have a change of heart with a video? Send me some beer money.
https://youtu.be/VpyduY49CE0
Arpaio got defeated and is no longer the Sheriff.
totally agreed on that EC…don’t send a video,
pick up the phone and call, then go out for the beer.
Who needs more proof of the overt, naked and unabashed corruption that is modern day America than what we’re seeing before our eyes? Listen to the democrats on the Gorsuch debate calling the ‘nuclear option’ a moral travesty when they were the ones who invented it a few years earlier. Listen to that shameless snake Shumer talk about “changing the candidate rather than changing the law”, as if he gives a shit about either. Not to be out done in the scumbag stakes the republicans whined about Obama Care and tried for 7 years to have it overthrown knowing full well that was politically impossible. When they finally get a real shot they throw up a turd of a bill so lame and senseless that it was laughed off the the starting blocks with Shumer’s soul mate Paul Ryan leading the charge over the cliff. That bastard never had any intention of repealing it-only running against it. We get offered as ‘evidence’ word from people like the rank partisan hack Michael Hayden and James Clapper who’s own mother would have to call him a liar. There is not a shred of decency left in the process. Its a race to the bottom at mach speed. And I say let it crater. There’s nothing left worth saving.
flashman, copy or type in the following link for your video minus the quotes
“https://www.youtube.com/watch?v=f3yZEqITfDw”
I’m all in tulip bulbs. At least they will never lose their value.
BTW I have been getting a lot of emails from Sears lately, but they all start out like this
“Greetings Dear Friend! Most Honorable Sir, we have an offering of which we would be pleased that you take our valuable stock as a gift (20.2 millions US) for you are told to us from a trusted friend. If you would only wire us your banking information so as for Sears to make depositations into your account if most agreeable.”
Does that sound like a good deal?
Sounds like a sure thing has finally found you HSF. It’s probably safe to give them your banking details……..just don’t bet the farm!
Stand back and grab your balls/tits.
THIS is how the Big Boys write:
“The perfect example of how American corporations are led by greedy, short-term oriented, unprincipled, dishonest, corrupt egomaniacs”
and
“Delusions die hard, but they do die as reality always wins.”
Poetry. Mr. Mencken would buy YOU a drink. For Me, I humbly salute you. Fuck them if they can’t handle The Truth. Get into a vagina costume and Have at It. . .
Res Ipsa Loquitur. You done good.
“They think there will be a clear event which will signal it’s time to go.”
There is a clear event………..this article. Unfortunately the MBA investment geniuses and their algos aren’t trained or programmed to see the writing on the wall.
“Central bankers, Wall Street bankers, politicians, pundits, experts, and the stupid lemmings will be shocked by this truly unexpected development.”
The central bankers, wall street bankers and politicians won’t be shocked when it happens because they engineered it but everyone else will be beside themselves.
This toilet is going to get flushed and it’s all going down the drain even if a plunger is required to make it happen. Everything they’ve done during the last two bubble bursting events has guaranteed it.
I’m fully invested – in plenty of silver and gold bullion coins and bars not located in a supposed “safe” deposit box in some…wobbly bank either. My stacking ratio is about 80% silver and the remainder in gold. With zero debt on my ledger too. I know, I know. The Govt hates me. But I do sleep very well these days. You should try it sometime…soon.
Articles like this.. the reason why TBP is one of the best sites on the net!
Especially like the snapchat/tesla mention! Nothing like kicking the retards in the ballz!
“Maybe they could have used the cash used on buybacks to sustain their businesses.” Or used it to pay their people.
Well written overview of the insanity passing for knowledge. Only area you didn’t mention are the bubbles about to pop, car sales/loans for example.
“Central bankers, Wall Street bankers, politicians, pundits, experts, and the stupid lemmings will be shocked by this truly unexpected development.”
Partly correct. The devious planning, the talking — it is everywhere. The Central Bankers, top managers on Wall Street, and upper-level politickers are getting the leaked-intel needed to drive this bull to the razor-thin edge. Every.Conversation.Is.Recorded. Pay-to-play top-down biz.
When the bull goes off the cliff, the well-informed will be in position. Everyone else will run for cover — they’ll miss the bull, but not the shit.
Seriously, the bull IS the market. You’ve just got to stay clear and leave it behind. It’s a con-game. A racket.
God knows when but they’re doing it again , watch out kid they keep it all hide… Funny how sounds to good to be true only benefits those select few telling the tale of what you should do in the markets as they do the complete opposite !
Back to reality : if the powers that be in government and industry tell me it’s good for you and the country or it should be bained . I know it’s bad and I need to stock up
I agree 100% with this article but it still remains that after almost 10 years of insanity we are still rocking along. I know one day the dominos will fall but it sure is impossible to forecast this kind of event when the Fed has the printing press. We will keep putting truth out there but before anything drops I think we will be paying $100 for a gallon of milk.
To me the first best indicator of impending collapse (tomorrow) will be when the CEO,s all decide at the same time or thereabouts to retire. Private or Government.
Admin, there is news today that Trump has added 263,000 jobs. In what sectors do these jobs fall? Thought you would know as you keep up with that info quarterly.
Trump didn’t add shit. The economy adds jobs every freaking month. Millions were added under Obama. Most are shit service jobs with low pay and no benefits. Just propaganda about a fake economic recovery.
“In addition to the big gain on the headline number, the month also continued a trend away from services-oriented positions dominating job creation. Goods-producing firms contributed 82,000 to the total, as construction led the way with 49,000 new jobs.
Professional and business services was the leading sector, with 57,000, while leisure and hospitality added 55,000 and health care was up 46,000. Manufacturing payrolls grew by 30,000 and trade, transportation and utilities rose by 34,000.
In terms of company size, fewer than 50 employees was the biggest growth area, with 118,000. Firms that employ 50 to 499 workers added 100,000.”
So says CNBC…growth in companies with fewer than 50 employees is a good sign, no? We need small business growth.
http://www.cnbc.com/2017/04/05/private-payrolls-grew-263k-in-march-vs–185k-est-:-adp.html
Admin-Yeah, I figured that would be your reply, but will we have a revision in 60 days like we had throughout Oreo’s 8 years?
Of course we will. Do you think different bureaucrats are at the DoL now?
“Trump added”? LOL. How did he do that?
I for one will enjoy the bloodbath and the misery and the suffering.
Screw ’em all. Stupid is as stupid does, as you say in your lead.
People learned after the 1929 bloodbath to shun the Wall Street carnival/casino. And that lesson held for a generation, maybe two. Current generation will learn that lesson fast and hard and also for good.
Separating stupid people from their money is the natural order of things. And I’ll be fine, thank you for your concern !
SnowieGeorgie
Nice article, but the following is a little over the top:
“A critical thinking individual, which eliminates all CNBC bimbos/talking heads and Ivy League educated Federal Reserve schmucks, might ask how reported corporate earnings per share since 2009 have risen by 221% when corporate revenues have only risen by 28%. That’s quite a feat – creating fake earnings without increasing revenue.”
Here’s per share SP500 Sales and EPS since 1/1/2001. Comparing growth since 1/1/2009 in EPS and Sales is disingenuous and distorts the true trend.
[img
[/img]
The stock market is nothing but a computer assisted circle jerk.
There was plenty of warning last time, and in fact, I bailed a bit early on my real estate holdings. But I made the mistake of openly and persistently warning my friends and family that they should bail, too. None of them did, of course. Now they are in two camps: those that quit speaking (or quit speaking civilly) to me, and those that (in order to preserve visitation privileges) won’t admit that I ‘foretold’ events, or that their losses were due to their failure to heed the warning. Their denial continues, and they will be among those saying, “Well, NO ONE could have FORETOLD that THIS would happen!” If they’re happy in Denial-land, I’m going to leave them there this time. No point in needlessly upsetting them. But you have written an excellent article sir; though you are as the voice of one crying in the wilderness. They will not ‘repent’, and will be judged for their ‘sins’.
Did your ‘Friends and family’ lose money on stock market ‘investing’ / speculating (self inflicted or through a ‘broker’ ) or on real estate speculating ?
Why.
With that ‘plenty of warning’ – What did you do with your personal real estate and Why ?
Trade/exchange – UP or DOWN
Sell for cash / pay taxes or ?
Thanks for your input.
Admin,
Great article (again), I am with you 100%.
I got hammered in 2000 again in 2008, and now not in the market, missing the huge run from 666 on the S&P. Retirement is a little more frugal, oh well……
One question; what do you think about Martin Armstrong, who I follow and admire as a brilliant forecaster? I know you follow and post some of his blog items. He seems to be in the ‘much further to run’ camp, based on global money flows and capital flooding into U.S. equities as the world offshore collapses. Also the failure of gubmint and flow into private meme.
Like you, I follow Hussman and also think he is correct, much like you.
Thanks for keeping TBP the most relevant blog anywhere!
I think Armstrong is a smart guy, but he is selling his system. He changes his forecasts all the time. I’m not selling anything to anyone. I just try to interpret the facts and see where it takes me. The market can certainly get more irrational. It is doing so today based on some bullshit data from ADP that will be revised dramatically lower in three months.
They all sell their systems. No one has a crystal ball, yet all want you to buy theirs.
Been there, done that several times since 1993. I still respect the insights of some of those people (Doug Casey, Bob Prechter) but they’re selling stuff that doesn’t exist. For that, I do not respect them.
“I got hammered in 2000 again in 2008, and now not in the market, missing the huge run from 666 on the S&P. Retirement is a little more frugal, oh well……”
Did you have any cash flow rental real estate in your portfolio ? How did you do with them ?
Alter Boyz,
Unfortunately no rental cash flow real estate. I have mortgage-free personal real estate that has appreciated well, but the property taxes go up, up, up! Kinda like renting!
I like your moniker, learned the mass in Latin in the early 60’s. Kyrie Eleison
Thank you for your response. My situation is basically opposite yours as I do not participate in the rigged stock or bond markets but own + cash-flowing professionally manged rentals in their place (so I participate with the rigged Federal Reserve instead). I am very small-time, but active. They are my retirement ‘annuities’ for later.
The tenants are happy (not) to swallow rent increases for the stupid, assisnine Transit and never-ending School / Police / Fire programs & increased taxes they voted for without regard to their cost, thinking that they were getting something for nothing.
Life doesn’t work that way in My World.
Again, thanks ! Valuable info.
NtroP, in regards to Martin, “He seems to be in the ‘much further to run’ camp, based on global money flows and capital flooding into U.S. equities as the world offshore collapses.” I think you’ve picked up a good point here. The world is awash in liquidity. Lack of liquidity was the big problem in 2008. All that liquidity has been running wild looking for return. What if all that liquidity concentrates on safety instead of yield? It has to go somewhere. America is the place to be, and should become even more so as Trump grinds on. Good post. Time will tell.
I had better fix this before the boss wakes up and shreds me. Solvency was the big problem in 2008. Liquidity was the Band-Aid that they used, and have used ever since to keep the ponzi running.
The stock market is nothing but a computer assisted circle jerk. Yep! Good one Diogenes.
Would it be possible for an Analyst to use the FASB Rule 157 in place prior to March 20o9 to get an idea of soundness of a company’s balance sheet. Is there any way to get a sample of listed assets to see if they are marked to reality. I don’t managed a hedge fund but wouldn’t it make sense to see the impaired book instead of the one Joe Six-Pack sees. Maybe they do and like Diogenes said they just don’t give a shit. As long as stock goes up nobody cares. Yeah till the crack up boom happens. Then the circle jerk will meet the fan.
Reading this article it isn’t hard to figure that the ticking time bomb is the amount of debt taken on to buy back stock at inflated prices. This leverage is going to result in a bloodbath worse than 1929.
The math makes it inevitable.
It doesn’t take a market genius to figure out that market valuations are crazy. Remember when it was news that Apple overtook Exxon to become the “most valuable company.” Just checked and now Facefart is valued more than Exxon. At least Apple builds something that has intrinsic value. Facebook is just a data mining operation. Latest is that Tesla is valued more than Ford and about the same as GM. So the market actually thinks that 100+ year old companies that design and build millions of vehicles is worth less than a startup that makes a couple vehicles that make up less than 1% of the total market – all because of what? A famous CEO that wants to fly rocket ships into space?!?
I’ve always been a conservative investor because I can’t get past the bullshit of how some companies make their money. That’s why I owned utility stocks. I pay a gas bill each month, makes sense that profits go into dividends and I get a check back each quarter. Problem is those stocks didn’t go to the moon but when margin calls come they go down like all the rest. Fuck it, I’m out.
Borrowing created wealth (in bonds) and GDP from the spending. This makes no sense, but that’s what happened.
This created the largest asset mania in history.
No conventional analysis can capture what this means.
It won’t end until it ends. People have gone bankrupt multiple times over thinking they could beat this system.
In hindsight, it would have been easy to trade all this.
Every time monthly MACD got oversold and turned up, take a long position in the market. Sell when MACD got overbought, turned down AND the market in question, using a 13 and 26 period exponential moving average, breaks below the 26, and re-buy immediately if price moves back to break above the 13 ema. Rinse and repeat. It would have timed the market’s moves perfectly.
Doing this, if someone had simply traded a few e-mini S&P500 futures, he could have turned a few grand into probably several million during the last 17 years.
The funny part? Now that I worked that out, I know that it only worked because bond prices were in a bull market. If interest rates are now in a rising trend that has a long way to go, this system won’t work any more.
The key was ALWAYS interest rates (bond prices). I wish I had known that in 1995.
Before 1981 (the peak of interest rates, and the beginning of the 35 year bull market for debt), total worldwide debt was probably less than $20 trillion. If interest rates went up or down, it only affected that much wealth.
Now, worldwide debt is upwards of $200 trillion, and perhaps is more like five times that high. Even small changes in interest rates ripple through ALL that debt value.
It’s like a pond vs an ocean. If you think of rising rates evaporating the top layer of “water” (wealth value), rising rates when there’s only a pond of existing debt is no big deal.
As rates fell, people borrowed more and more and more (because the carrying costs–interest payments–stayed the same as more total debt was carried.
Now that an OCEAN of debt exists, even a little evaporation across that entire surface is catastrophic.
THIS is why this long process cannot continue much longer, and why it is so sad that it didn’t reverse on its own, before the hole in which the world dug itself was this deep.
As always, a very well written and informed article. I don’t always understand all the economic lingo and the way it all works but get a lot out of these great articles.
One thing I don’t quite understand is why buying back their own stock is a good thing for a company. Don’t they only have so many shares available? So how can it help the big picture of things if they are just moving it from one owner to another?
The GreatER Depression, since 2007/08/09 cuz . . . like almost everything else, it’s a P-R-O-C-E-S-S.
“…corporate executives are cashing in their stock options and selling like there is no tomorrow. What a despicable display of self-interest”.
I’d be selling like there is no tomorrow too, if I had some left to sell. The world works on self-interest, and to expect anything different is foolish. There is still such a thing as “fiduciary responsibility” however, and that was once enforced with jail and confiscation. Lately it’s been the beneficiary of bail-out money. The next go-round may find it enforced with rope and lamp posts.
Greetings,
As an atheist, I view the belief that people have in our current monetary system to the belief found in religion. As an outsider, the view looks the same to me.
All of this money is pure fiction as it only has value so long as we “believe” that it does. It has been worthless since 1913. Now, one way to maintain these beliefs is to be entirely ignorant of what it is they happen to believe. After all, 80% of “Christians” in the United States haven’t so much as read a single page of the Bible that they happen to believe is the road map to eternal life in paradise. Why bother?
People choose to be willfully ignorant of these matters. Because of this, perhaps, we’ll have a recession. Frankly, I’m in no hurry for anything bigger as that may create a paradigm shift and every day with electricity and running water is another day that can was kicked yet again down the road.
Most “Christians” are actually heretics following the Gnostic Heresy (the attempt to create the Kingdom of Heaven on Earth.) This is the essence of Progressivism, which ostensibly discarded its overt roots in Post-Millennial Christian Piety around 1943 and has since been a religion in every way possible, albeit without a supreme being (God.)
https://thosewhocansee.blogspot.com/2016/07/why-do-progressives-get-religion_40.html
Progressives and most self-described Christians today share a common belief system. It is MANIFESTLY leftist (i.e., the urge to use the FIST of politics to “make men better.”) This is the scourge of our Age.
Greetings,
I agree with you which is why I suspect that Christian leaders do not ever encourage anyone to actually read what it is they supposedly believe in. Theology is a hobby of mine and the Christianity we have today would be unrecognizable to someone living in the 2nd Century. Creating that 1000 years Reich here on Earth is what Jesus does after the big reveal but you are correct in stating that the progressives wanna beat him to it though their attempts create nothing but misery.
Speaking of LIES we’re told, I just came across a race-related one.
We’re constantly told that blacks and whites use drugs about the same rate, but blacks are more likely to be jailed (hence….RACISM!)
This is based on an NIH study, in turn based on CENSUS data, which is a result of SELF-REPORTING. When you ask blacks and whites if they use drugs, they self-report at the same rate.
If you actually TEST people’s urine, however, several studies have shown that blacks lie on self-reports to the tune of 600%.
That’s right. Blacks are 6 times more likely to test positive for drugs than are whites. Blacks lie on self-reports.
This is just ONE MORE BIG LIE we’re told, over and over again, in order to control what we believe so that we’ll support public policies favored by LEFTISTS who are hell-bent on “making us better” (in this case, FORCING us to believe that whites and blacks and browns are ALL THE SAME, except that white people are BAD because….racism.)
And once again my previous comments did not show up….and I checked 2x daily for 3 days……either this site is 1) truly Russian fake news 2)commenters are paid shills with an agenda 3) site limits comments to those run thru an “approval filter” 4) site is really an alphabet agency collecting data on commenters and want more evidence from those few 5)you just don’t like my blunt hard truths…….bet this comment sticks as then it will prove the shills let it pass and there is no commenting problems snicker snicker
Or you’re just a fucking dumbass. I’d bet on that you fucking douchebag.
There is something wrong with comments being posted, regardless of whether Urashill is a douchebag or not. I think it has something to do with Cloudflare, although the error messages (according to Cloudflare) are issues related to the web server serving up the pages. It could also have something to do with the web browser we are using. Not all that important anyway, I just like reading your articles.
Hmm.. That one worked. Obviously it is an intermittent issue. What do others do when you are presented with the Cloudflare banner? Sometimes I get into the TBP homepage fine, but am thrown the banner when I go to a specific topic.
Greetings,
I’ve been posting here for years now and though I hold rather radical beliefs, I’ve never had anything I’ve written not posted in the comments section.
i have heard “‘crash since max keiser stated in 2013 that the markets were going to crash in april of 13 .well need i say more?? eat crow. it will crash when they decide it will. and for now its all trump and go as high as we can drive it.after all jim did not mention the nano computer algorithm 24/7 trading.which some critics claim is the real reason.no one seems to know who owns these computers .”””gee i wonder who?””””.the trades originate on lasalle street in chicago and go out through fiber optic s to aurora il and via satellite to nyc. there is a huge building about 1000ft by 1000ft holding these servers.
I don’t believe the algorithms being used are of issue. The nano algorithm is a feature extraction algorithm that tries to reduce the number of numeric inputs so it can learn faster and functionally execute faster. Anyone, and there are a lot of them, can deploy these types of algorithms. The issues are the big banks are playing games on getting stocks to trend up or down and then betting on what they totally expect to happen.
Oh, and Dick, try writing in english!
Really solid work. The changing of the gaurd presented an excellent opportunity for a SITREP. The honeymoon is over.
This piece not so subtely reminded me to get busy, complacency is very dangerous, as always, thank you.
Wow… what a GREAT article on the market’s insanity. So informative. I would have loved to share it with my followers on Twitter and other social media… but unfortunately, I’m not comfortable sharing it because your webpage is FLOODED with so many vulgar, semi-pornographic, very sexually explicit “Native Ads” as click-bait leading to slide-shows pumped by online traffic arbitrage dealers. Please clean up your webpage’s advertising, so that your articles can be shared in a professional environment via social media. Every other image on your article’s borders are women falling out of bikini tops, or women in super-tight yoga pants bending over, or women spreading their legs wide. How can I share your great article on the economy when they are defaced with such vulgarity?