Summary: Every tax cut is temporary. Ryan's premise that we can't get the stimulus we need without a permanent tax cut is complete nonsense. Congress has no idea what the budget's going to be next year, let alone 10 years from now. The only budget that really counts, and even then they can't get it that accurate, is the current year. When the government cuts taxes it doesn't come with a guarantee that the rates are never going to go up. * We had a bit of a turnaround Tuesday today; all of the ma...
Jun 21, 2017•33 min
Summary: Amazon Buys Whole Foods The Dow was up today; mainly on the surprise announcement that Amazon, the king of on-line retailing, is buying Whole Foods. In a labor market significantly altered by ObamaCare-style government intervention, this news could signal further changes to the labor market. Retail has experienced a steady decline, and this move could usher in a new wave of Amazon Go-style services . Economic Surprise Index Headed For 2009 Territory According to an article in Zero Hedge...
Jun 17, 2017•34 min
Summary Quantitative Tightening Ahead: The Federal Reserve came out with a surprisingly hawkish rate hike today, announcing plans to shrink the balance sheet by $50 billion per month. This would mean an annualized rate of $600 billion per year in new treasuries to hit the market. This does not take into consideration existing budget deficits or future spending. The Fed's policy reversal, in the face of no corroborating positive economic data, is still "data dependent". No Good News: Meanwhile, t...
Jun 15, 2017•25 min
Summary: In Puerto Rico's recently held non-binding referendum on statehood, just 23% of the eligible voters who actually voted overwhelmingly chose statehood. This would mean that Puerto Rico would keep its current debt and take on the $20 trillion U.S. national debt. This would offer the moral hazard of offering Puerto Ricans additional welfare benefits. The last thing Puerto Ricans need is to be in a situation where it is more attractive not to work. * A lot of people are asking me abo0ut the...
Jun 14, 2017•28 min
Summary: Friday's Tech Wreck continued today, some stocks making key technical reversals. The crypto currencies, also experienced volatility as Bitcoin seems to be losing some of its market share to other competing crypto currencies, but volatility remains a key component of the market. Volatility may be exacerbated by Wednesday's anticipated Federal Reserve rate hike. * Friday's Tech Wreck continued today; the NASDAQ composite led lower by the same momentum stocks that got clobbered on Friday *...
Jun 12, 2017•30 min
Summary: As an unexpected pro-labor vote in the U.K. weakened the pound and strengthened the dollar, the market reacted more to political news, abroad and at home. The uncertain results of Comey's testimony dampened concerns about the Trump Presidency. Prior to Comey's testimony someone sold a huge amount of gold, causing gold to drop, although it finally closed only down about $7, with another selloff this morning. Gold stocks, though continue to trade much better. NASDAQ got clobbered, Meanwhi...
Jun 10, 2017•31 min
Summary: Gold and gold stocks are moving to new highs as the dollar index continues its slide. Although some connect this move to market jitters over the outcome of the upcoming James Comey testimony, economic factors are a more likely the force behind the move. Moves in gold stocks have been telegraphing gold prices more often than not, and gold stocks have a plenty of room to move to even reach its highs of earlier this year. * Many of you probably expected me to do a podcast yesterday as a re...
Jun 07, 2017•21 min
Summary: Today's big miss in the Nonfarm Payroll report indicates further proof for the Fed that the Q1 weak economic data was not transitory. Coupled with disappointing Labor Force Participation declines and increasing Trade Deficit numbers, the Fed will have no good news to justify a rate hike. All this news does not bode well for the U.S. dollar index, which closed at a new low for the year today. The next crisis is the dollar. * Following yesterday's much stronger than expected May ADP Jobs ...
Jun 03, 2017•31 min
Summary: Box office revenues for this holiday weekend were the weakest since 1999. Why is that? Some say the movies were not very good, but I think it's more likely that this is just another piece of evidence that supports the fact that the consumer is in much worse shape than is generally perceived. * Hopefully everybody had a happy Memorial Day weekend; I spent my holiday weekend up in Vancouver at the International Metal Writers Conference * And when I came home, I came back to my home in Con...
Jun 01, 2017•24 min
Summary: The Fed is now indicating it needs evidence that the Q1 weak economic data is transitory and not a trend. This is interesting for 2 reasons. The Fed's narrative has always been to tout economic growth even in the face of flimsy or no supporting data. Now the Fed is actually admitting there is weakness. The other interesting thing is that, although the Fed continues to claim it is "data dependent", it has been ignoring the economic data ever since the first rate hike. The market puts cha...
May 27, 2017•26 min
Summary: The dollar's decline really started with the Fed's too-little-too late rate hikes. The rally of 2014 - 2015 was fueled by expectations of more aggressive Fed monetary policy that did not materialize. We've been trending sideways since then with the exception of an upward spike after the Trump victory. Now, as much of the hype surrounding Trump's election is losing its momentum, support for the dollar is waning. This is not a case of "buy the rumor, sell the fact". This is going to be a ...
May 23, 2017•34 min
Summary: Republicans face chaos around Trump's political difficulties, causing some to consider potential advantages of a President Pence. Market volatility has not yet brought the DJIA below pre-Trump numbers while the dollar index slides and gold moves up. Meanwhile, household debt is higher than 2008 levels even as fewer Americans own homes. * It looks like I picked a very volatile week to go out to Las Vegas, although I didn't pick this week; the week picked me * I have two conferences that ...
May 18, 2017•29 min
Summary: The retail sector is in worse shape today than it was in 2008 during and immediately following the financial crisis. Retailing has been responsible for 10% of the jobs gained during this so-called recovery. Clearly part of the problem is the increase in minimum wage. Why are retailers adding so many jobs when their business is declining? * A quick little announcement at the beginning of this podcast; I'm going to try to keep the length of these podcasts down to 20 minutes in the future ...
May 13, 2017•25 min
Summary: Trump fantasy persists in the face of weakening economic data, health care and tax reform uncertainty. The reality is that the damage done to the economy will not right itself just because Trump has been elected and we are in for a wild ride whether or not President Trump decides to do the right thing for the American economy. * It didn't take long for the Atlanta Fed to already reduce its inflated Q2 GDP forecast * Remember, they initially came out with their first estimate of 4.3% gro...
May 11, 2017•43 min
SchiffReport recorded Saturday, May 6 * On Wednesday of this week, the Federal Reserve against a rate hike in May * But based on their official statement, the market assigned a much higher probability * To a rate hike coming in June * In fact, following Friday's slightly better-than-expected Non-Farm Payroll report, the probability of a June rate hike is not near 100% * In other words, the markets are certain that a quart-point hike is coming next month * If the Federal Reserve does raise its ra...
May 07, 2017•36 min
Summary: Last quarter the Atlanta Fed's Q1 GDP forecast was 3.4% in February. The most recent number was actually .7%. After all the negative economic data that came out today suggesting that Q1 could be revised lower, the Atlanta Fed came out with their forecast for Q2 GDP at 4.3%. How is this possible, with no economic data to support this projection? Either they believe their policies are still valid in the face of data on a downward trajectory, or they are simply acting as salesmen, promotin...
May 02, 2017•34 min
Summary: The Europeans released their inflation numbers today. Year over year, inflation in the Eurozone are increasing at an average of 1.9%, which is Mario Draghi's objective. This is a 4-year high in CPI increase. How does Draghi justify more stimulus? In the U.S. growth is lower than forecast, while inflation is higher than forecast. That trend should be disturbing and it will continue. * Today we got the government's first estimate of GDP growth for the first quarter of 2017 * If you rememb...
Apr 29, 2017•38 min
Summary: President Trump actually delivered on his promise of the largest tax cut in American history, and he delivered it on time. Trump may have presented a plan with built-in bargaining positions, or he might even intend to pass a tax bill that will "starve the beast". The interesting thing is that the President is applying this 15% tax rate to pass-through entities, such as LLC's, which will encourage most businesses to shift into a different business model to take advantage of the low tax r...
Apr 27, 2017•35 min
Summary: Government spending creates the greatest drag on the U.S. economy. Cutting taxes, even the "biggest tax cut ever" cannot stimulate the economy alone. So if you're fed up with paying taxes, if you think you are over-taxed, and you are, it's because the government is spending too much money. The only real way to get relief is to dramatically cut government spending. No one want's to do that, however, because the people who benefit from government spending, vote, and none of the politician...
Apr 22, 2017•41 min
Summary: Goldman Sachs is no longer recommending a long trade on the dollar. The dollar was previously regarded as a conviction trade, first over speculation over Fed rate hikes and then over Trump exuberance with the expectation of tax cuts, infrastructure spending and other moves that would continue to inflate the dollar bubble. The dollar was the most crowded trade out there. I believe, however that as we get close enough to the next recession, that we are going to get another big Keynesian s...
Apr 19, 2017•32 min
Summary: Donald Trump's promises on healthcare and smaller government appear to be fading behind news of increased military spending, infrastructure spending and compromises on health care and tax reform. This scenario looks far more like Jimmy Carter than Ronald Regan. We continue to get bad economic data, telegraphing that the air is already leaking out of the economic bubbles created over the last 8 years. This bad news may encourage the Fed to walk back their current interest rate hike sched...
Apr 14, 2017•40 min
Summary: President Trump's campaign promises are falling by the wayside one by one. First the backfire on the replacement for Obamacare, and then, just as talk of tax reform heats up, the administration seems to be gazing toward the Democrats for a bi-partisan solution to tax reform. No good can come from bi-partisanship. When the Republicans and the Democrats are working together, that's when you really have to watch your pocketbook. That's when the most damage gets done. The stock market initi...
Apr 11, 2017•32 min
Summary: President Trump needs to lead, not oppose. He is opposing the very forces who put him in office. By aligning with the mainstream Republican Party, he vacates the opportunity to lead the economy successfully through the inevitable consequences of the Obama Administration's failed economic policies. Investors are jumping on the bandwagon of hype surrounding the Trump Presidency. Abandoning safe havens and emerging markets, they are buying into the American stock market at high valuations,...
Mar 31, 2017•43 min
* On Monday the market got its first opportunity to react to President Trump and the Republican Congress' failure to repeal and replace Obamacare * With something more palatable * And as a result, the market declined * At the lows, the Dow was down approximately 200 points * Although the "Buy the Dippers" came out, and by the end of the day, the Dow was UP about 150 points * But it was the 8th consecutive down day for the Dow * Which I think was a tie for the longest losing streak since 2011 * H...
Mar 29, 2017•31 min
* Earlier I talked about the Trump honeymoon, and my belief that it wouldn't last long, in fact I thought it might have ended before the marriage began with the inauguration * It did carry on a bit after that, but it seems to me that the honeymoon is ending now * Today, the attempt to repeal and replace ObamaCare went down in flames * That's something I had predicted a while ago; I said that I doubted that they would be able to repeal Obamacare and it turns out that I was right * They didn't do ...
Mar 25, 2017•31 min
* U.S. stocks ended the week with marginal gains * In fact, the Dow Jones was up only about 12 points on the week * The real action happened overseas * Foreign markets were strong, particularly emerging markets * They continue to smoke the performance of the U.S. stock market, confounding the experts * The experts thought making America Great Again would be great for U.S. stocks, but it would be a problem for emerging markets * And thus far, emerging markets have been the beneficiaries of the ra...
Mar 18, 2017•38 min
* Today the Federal Reserve raised interest rates for the third time in 10 years * Of course, the tightening cycle began with the first rate hike in December of 2015 * Followed by the second rate hike in December of last year * And now, breaking from tradition, rather than waiting an entire year for the third hike * We got the hike in March * Of course the Fed had allowed market expectations to rise to 100% in anticipation of this rate hike * When the Fed raised rates for the first time they tal...
Mar 15, 2017•33 min
* I guess you could say a good jobs report is all in the eye of the beholder * And when it comes to President Trump's eyes, he is now beholding an excellent jobs report * Whereas a candidate, similar reports were described by Trump as phony, a hoax * I have a lot more sympathy for Candidate Trump than I do for President Trump * Now President Trump is trying to pretend that the jobs numbers that he used to be so critical of * Are now reflecting what a great job he is doing as President * When the...
Mar 11, 2017•39 min
* It looks like the Republicans on Capitol Hill, with the blessing of Donald Trump, are trying to repeal one big healthcare program and replace it with another big government entitlement * They're calling it TrumpCare * First they were calling it ObamaCare Lght, but now they're embracing the term, "TrumpCare" * Whatever it is, it is not going to work * It's just going to be another disaster wrapped up in a different package * But before I get into explaining this, I want to talk a little bit abo...
Mar 08, 2017•32 min
* According to Goldman Sachs, the odds of a Fed rate hike coming up at the March meeting, which is less than 2 weeks away is now 95% * It was 90% before Yellen spoke , that was looking at the Fed Fund futures, in fact the probability of a rate hike had been rising all week based on speeches of a number of Fed officials * Everyone indicating that a rate hike was coming soon * Nobody actually said how soon * But they kept talking about why raising interest rates would be appropriate * Why they did...
Mar 04, 2017•44 min
