January 16, 2018 Buying Stocks with Both Hands When I recorded my podcast on Friday, just looking at the technical action in the dollar and I was getting nervous that maybe we could have been setting ourselves up for some kind of holiday surprise; a big drop over the 3-day weekend that could have led to some real fireworks on Tuesday; and when the market started, everybody ignored the new low in the dollar and they were buying stocks with both hands, out of the gate. The Market Could Not Hold th...
Jan 17, 2018•28 min
January 12, 2018 Obvious Negative Factors Hiding in Plain Sight This Friday ahead of the three-day holiday weekend, all three markets are ignoring the ominous warning signs that are building by the day. They're registering new highs, the Dow up better than 200 points, 228, closing over 25,800; S&P, NASDAQ both hitting record highs today. To me, this is very reminiscent of 1987, in that the stock market is rising despite the fact that there are very obvious negative factors that are building ...
Jan 13, 2018•38 min
January 10, 2018 Bells are Ringing but Nobody is Listening They always say that nobody rings a bell at the top. And that saying relates to the stock market, investors; there's never a clear warning sign, supposedly, of when to get out. My experience is actually the opposite. I think many bells ring, not necessarily at the very top, but certainly close to it, it's just that they're ignored; or if they are heard, they are rationalized away. China says No to More U.S. Treasuries Another such bell w...
Jan 11, 2018•33 min
January 8, 2017 Atlanta Fed's Q4 2017 GDP Estimate at Record Low The Atlanta Fed did downwardly revise its estimate of Q4 GDP as a result of the numbers that were released on Friday. The downward revision took their estimate from 3.2% down to 2.7%. 2.7% is the lowest the estimate has been since they began estimating 2017 Q4. In fact, earlier on, in October or November the Atlanta Fed was up to 4.5% for their 2017 GDP. So as the U.S. stock market was rising to an all-time record high the Atlanta ...
Jan 09, 2018•38 min
Schiffreport: January 5, 2018 Trump: We Will Win on Trade Earlier this morning the government released the December Nonfarm payrolls report, AKA the Jobs Number. But rather than start with that, I want to talk about another number that was released at the exact same time. It unfortunately gets very little attention in the media, in fact nobody has really paid attention to this number since the late 1980's - early 1990's. Of course, I am talking about the trade deficit. In fact when Donald Trump ...
Jan 06, 2018•26 min
Market Ignoring Economic Realities All three of three of the U.S. stock market indexes are ringing in the New Year with new record highs. The market was up on the first trading day of the year; up again today. NASDAQ composite is the star, 7065 today up another .84% - a new record high. The same thing with the S&P and the Dow. The Dow is now almost at 25,000; it closed at 24,922. Of course, everybody is ignoring, though, the economic reality. What Do Oil Price Increases Imply for the Economy...
Jan 04, 2018•35 min
2017 Optimism This is my final podcast for 2017. I just watched the U.S. Stock Market ring the closing bell for the final time in 2017. Everybody is excited; everybody is optimistic. I spent most of the day watching the financial coverage, mostly on CNBC to see the attitude and the types of coverage the market has received. The Dow Gained 5,000 Points in a Single Year Of course this is a record year in the stock market; an all-time record high in the Dow. I think this is the first year that the ...
Dec 30, 2017•35 min
Trump's Economy Today President Trump signed into law the Tax Cuts and Jobs Act. The biggest problem that the President will have with these tax cuts is that he now owns the economy. That is going to be a big problem, because this is now Trump's economy. This is now the Republican economy. It's All Bullish Now, Trump now already owns the stock market, and that has served him well so far this year. But you know what? The stock market could be getting ready to enter a big bear market. I've never s...
Dec 23, 2017•38 min
Calling Tax Cuts Reform is Fake News Earlier today the House of Representatives passed the Tax Cut Bill. Of course, the Media keeps referring to it as "Tax Reform". That's fake news, for you, calling these tax cuts reform is a perfect example of fake news. Donald Trump is not going to complain about this fake news. When the fake news works in his favor, when he prefers the fake news to the real news, he's going to be quiet about it. It's only when he doesn't like the fake news that he calls the ...
Dec 20, 2017•30 min
Everybody Joins the Party All 3 of the major U.S stock indexes closed out the week at new record highs as it became apparent that the new tax cut deal was pretty much done. Marco Rubio, who had been a hold-out, caved and even Corker, the one Republican who was going to vote against the bill becase it was going to increase the deficit, decided to join the party as well. He's now a yes, so the bill is going to pass. Plan Riddled with Loopholes We didn't get the compromise details until later Frida...
Dec 16, 2017•36 min
Expected Rate Hike Today the Federal Reserve did exactly what everybody expected them to do, they once again raised interest rates by just one quarter of one percent. This is the third rate hike of the year; this is the fourth rate hike since Donald Trump was elected President and the fifth time the Fed has raised rates since the 2008 financial crisis. The Fed raised rates only once from Obama's election to Trump's election eight years later. Extraordinary Amount of Excess Stimulus We now are at...
Dec 14, 2017•37 min
Bitcoin Week I'm going to devote today's podcast to bitcoin; I might as well just talk about bitcoin because that's all anybody else is talking about. On CNBC that's pretty much all they are talking about; they said it is "BitCoin Week". It sure sounds like it. I think they should just rename the network: Crypto News BitCoin Network. I would be a good guest on that network because I know either side. Swallowing Hype Hook, Line and Sinker But just like in the dot com bubble in the 1990's and the ...
Dec 12, 2017•34 min
A Nonfarm Payroll Beat Today the labor department released the November jobs report - Nonfarm Payroll - of course Wall Street always highly anticipates this number; all the politicians, Donald Trump was ready to tweet as soon as the data was released. The expectation was for 190,000 jobs and we beat, with 228,000 jobs. An Even Bigger Hoax The unemployment rate held steady at 4.1%, which prompted President Trump to tweet, "The unemployment rate remains at a 17-year low of 4.1%. Now remember, when...
Dec 09, 2017•40 min
Trade Deficit Moving Higher as Economy Slows Down Yesterday we got the release of the October monthly Trade Deficit and we got a trade deficit of $48.7 billion dollars. That was a little bit North of the $47.4 billion expected in the consensus forecast. In fact, the prior month, which was $43.5 billion was revised upwards to $44.9 billion. The larger number did cause the Atlanta Fed to shave down its estimates for Q4 GDP from 3.5% to 3.2%; my guess is that they will be revising it lower. Most of...
Dec 07, 2017•28 min
Market Rallies on News of Passing Tax Cuts Act Late Friday night, or I guess early Saturday morning, the Senate passed its version of the Tax Cuts and Jobs Act. Last week the market, as it became more apparent that the Senate was in fact going to pass the bill, the market was rallying, and continued to rally and, in fact rallied again today. This was the first chance the market had to react to the Senate actually passing their version of the bill. DJIA Up, NASDAQ Down At one point today: the DJI...
Dec 05, 2017•52 min
Buy the Rumor Sell the Fact One of the things that could de-rail Wall Street enthusiasm is if Republicans are not able to deliver on the promised tax cuts. Of course, even if they are able to deliver, it will be a, "buy the rumor, sell the fact". Especially since the fact is not going to deliver the promises of the rumor, which is more economic growth. These tax cuts are not going to grow the economy because they do not shrink the size of government. When the Fed Loses Control of the Bond Market...
Nov 27, 2017•37 min
Fed Fears Inflation Is Not High Enough Fed statements drove the markets today; particularly the foreign exchange markets and the precious metals markets. First we got a quote from Janet Yellen early this morning in which she was talking about inflation. Her concern is that inflation isn't high enough. Here's and exact quote from Janet Yellen: “It can be quite dangerous to allow inflation to drift down and not to achieve over time a central bank’s inflation target,” Dangerous? Dangerous to whom? ...
Nov 23, 2017•41 min
Financial Conditions Are Loosest Since 1994 I was reading an article today that the Chicago Fed released their National Financial Conditions Index (NFCI) and according to their research, financial conditions in the United States are the loosest since January of 1994. Of course, that was early on in the dot com bubble, before it even "bubbled up", it was just at the beginning of that bull market, yet the Federal Reserve has been tightening; raising interest rates for a couple of years. They've be...
Nov 18, 2017•34 min
Faltering Expectations The U.S. dollar and the stock market continued to be a little bit under pressure this week as anxieties are rising over the fate of the tax cuts with so many investors are putting so much expectation into the proposed tax cuts. Tax Cuts Do Not Reflect Smaller Government I have gone over many times on this podcast why I do not believe the tax cuts are going to help the economy. Tax cuts are good for the economy to the extent that they reflect smaller government. If you are ...
Nov 16, 2017•42 min
No Real Tax Relief Yesterday the Senate released their version of the Tax Cut and Jobs Act, and it is not that different from the House version. There are some differences, some of which I will get into, but the main problem is not the difference, but the similarity. The plans don't deliver any kind of substantial tax relief, in the manner that President Trump refers to as, "the biggest tax cuts ever". It's not even close. For most people, there will be minor tax cuts and for other people there ...
Nov 11, 2017•58 min
Conventional Media Was Surprised It's hard to believe has been a year since Donald Trump shocked everybody, at least everybody in the conventional media, Wall Street, all the pundits, professional politicians, anybody who has anything to do with Saturday Night Live... Nobody believed that Trump a snowball's chance in Hell of winning the White House. Hillary Clinton had already picked out her china patterns, she had this big glass ceiling that she was going to shatter in her victory party. So eve...
Nov 09, 2017•34 min
High Expectations for Jobs Numbers This morning we got the release of the October jobs report, and it followed the hurricane-related very weak report that we got in September. This time, the reason actually was weather-related. Remember, they originally reported a decline of 33,000 in September. No one cared, though, because it was all about the hurricane. This month everybody was very optimistic; the consensus for October was 325,000 jobs. Numbers Fell Flat I was watching CNBC this morning and ...
Nov 04, 2017•32 min
No Change in the Fed Swamp The announcement of the new Fed Chair, Jerome Powell, represents a commitment to the status quo at the Fed. President Trump has nominated the person most likely to do exactly what Janet Yellen did for President Obama. Powell has voted in lock step with Janet Yellen for the entire time she has chaired the Fed. The only real difference between the two is that Yellen is a Democrat and Powell is a Republican, even though he was nominated to be on the Fed by President Obama...
Nov 03, 2017•46 min
Trial Balloon #1: Backpedaling on State and Local Tax Deductions All this talk about tax cuts is all a fraud, because government is getting more expensive and the taxpayers are going to be stuck paying the bill one way or another. They keep on launching these "trial balloons. I was reading over the weekend that they are backpedaling, talking about the idea of eliminating the deduction for state and local taxes, but not for property taxes. So everybody can deduct their property taxes because ever...
Oct 31, 2017•34 min
We're getting a tax cut! There is one thing now that that has the potential to cause a short-term decline of more than 3% in the stock market, and that would be: no tax cut. If the Republicans announce that they're at a deadlock, and we're not going to have any tax reform or tax cuts, it seems to me the stock market will get hit. Washington and Wall Street both agree that if we don't get this tax cut, the market's going down. So what does that mean? We're getting a tax cut! Making the Stock Mark...
Oct 24, 2017•41 min
Black Monday 1987 Today marks the 30th anniversary of the 1987 stock market crash. It's hard to believe that it's been 30 years. I still remember where I was when the crash happened and my reaction to it. It happened just after I had graduated from the University of California at Berkeley. By the time the crash happened, I had already accepted a job in Newport Beach, California. I was going to be working in the commodity options market, but I hadn't started yet. Lesson: The Market Goes Up The cr...
Oct 20, 2017•39 min
Inflation Higher Than Expected Today we got the hotter than expected news on prices - on inflation. We got the import/export prices. Import prices were supposed to be up 0.5%, which in and of itself is a pretty big jump, but they were up 0.7. Export were also up; (we would want export prices to go up, because that means we are getting more for what we export) they were expected to rise 0,4%, and instead they rose by 0.8. Double the expectation. Import/Export Index Methodology More Accurate Year ...
Oct 18, 2017•42 min
Optimism Rules the Day Friday the 13th was not an unlucky day for the U.S. stock market; all three of the major stock market averages closing at all time record highs. Optimism is ruling the day. In fact, there was a consumer confidence number that came out today revealing confidence in the economy - the University of Michigan Consumer Confidence - and this is a measure of the belief that the U.S stock market will be higher 12 months from now than it is today. By that measure, consumers have mor...
Oct 14, 2017•34 min
Congress May Not Deliver Promised Economic Growth I think part of the renewed weakness in the dollar may be due to the feeling that all the tax cuts are not going to pass. The Trump/Republican plan outlined some days ago will be difficult to to get through Congress. Even if it does get through Congress it is not going to deliver the economic growth that is being advertised. Tax Cuts Masquerading as Reform Go back to the origins to the Republican dialogue about tax reform. They actually wanted to...
Oct 11, 2017•32 min
Government Is Not Measured by What It Taxes, It Is Measured by What It Spends Democrats promise free stuff; Republicans promise free tax cuts. What's a free tax cut? That's a tax cut that happens even though you don't reduce government spending. In a recent panel discussion with Steve Forbes, I made the point that government is not measured by what it taxes, it is measured by what it spends. So, if the government is spending money, there is a cost associated with that, whether or not we pay for ...
Oct 07, 2017•38 min
