The Stock Bull is Dying

By David Haggith – Re-Blogged From Silver Phoenix

Oh my gosh, what a load of BULL I keep reading among the gurus who whine about negative headlines and complain that this unmerited negativity is the only thing that is killing the bull market. Bull.

The bellowing bulls cry every time someone runs a negative headline, “Stop, you’re breaking our bull market with your negativity. That is the only reason it is going down.” The real truth is that headlines have been enormously biased toward a BULLish narrative for the better part of a decade, and bearish headlines are only just beginning to seep in. But that is too much for the bulls: “All this negativity is killing us.”

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The Dumb Money is Helping the Smart Money Exit the Stock Market

By David Haggith – Re-Blogged From The Great Recession Blog

Bloomberg this week ran a story telling us how the smart money gets out of the stock market when it hits its all-time peak and how the dumb money helps the smart money out. Only they didn’t know that was what they were writing. It typically happens this way:

At the end of a deliriously euphoric market rally when the market is preparing to crash, all the Joe Six-packs, mom and pop and the family dog open trading accounts and try to chase the tail of market action. Many throw in their entire retirement funds, pawn the dog’s collar and take out loans on credit cards to buy in as much as they can. By buying in late, they help provide a smooth exit for the smart money. At least for some of it. It is the little guys, tough from hard labor, whose muscles are employed to push the money bags of the rich to the top of the mountain from which the little guys are allowed to jump off.

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The FED and the Elections

cropped-bob-shapiro.jpg   By Bob Shapiro

The Stock Markets often predict the outcome of Presidential elections. If stocks are up – or even if they just are flat – the party which holds the White House tends to win the election. If stocks are down – especially if they’re down big time – the opposite party is favored to take the day.

The Dow Jones Industrial Average has been in the 18,000 area for the last two years, and as the US Economy has stagnated, the PE Ratio has gotten up to a near bubble level over 25. This has been achieved single handedly by the FED, which except for last December’s hike, hasn’t raised rates for 10 years, keeping them near zero for several of those years.

fed-funds-85-2016

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Negative Rates Will Kill Growth

By Peter Schiff – Re-Blogged From http://www.europac.com

For years I have argued that ultra-low interest rates act more as an economic sedative than a stimulant. This idea has elicited laughter from the economic establishment. But it is becoming clearer that rates set by central banks that are far below the levels that free markets would have otherwise determined have dragged the world into the economic mud. The simple proof is currently arising in Europe where negative interest rates are now transforming companies from agents of growth, production, and employment into financial sloths that exist solely to borrow money.

In a September 7 front page article, the Wall Street Journal reported that as of September 5,  706 billion worth of investment-grade European corporate debt, or roughly 30% of the market, according to trading platform Tradeweb, was trading at negative yields, an increase from just 5% in January. These negative yields were the result of intense activism on the part of the European Central Bank (ECB).

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No Wonder the Stock Market’s So High: It’s All Corporate Buybacks

By John Del Vecchio – Re-Blogged From http://economyandmarkets.com

Not too long ago Carly Fiorina was still in the race. Everyone remembers Carly as the former CEO of Hewlett Packard who lost her job. I remember when Carly took over as the Chief Executive back in 1999. In her six-year tenure, the company bought about $14 billion of its stock, which was $2 billion more than it had made in profits.

Again, that was just in six years. Over the next six years, her first two successors bought back about $53 billion. That was as of 2011. I don’t even want to know how much the current CEO has purchased, as corporate buybacks have only grown more popular in recent years.

I was reading an article about buybacks published in Business Insider this past weekend. It said that they’ve accounted for almost all of the stock market’s gains since 2009.

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Unemployment & Civil Unrest

cropped-bob-shapiro.jpg   By Bob Shapiro

In Summer 1965, the US suffered through much turmoil, including the Watts riots.

Today in the US, we again are having civil unrest, but with a major difference. Today’s unrest appears to be more organized, with police and other authorities as specific targets.

Even the “lone wolf” attacks seem to have a common thread tying them together – Islam. Now, I’m not saying that most American born muslims are set on destroying our country, but before you dismiss me as a racist, you might want to reread the current events of the last couple of years.

Most of the press stories seem to be placing the blame squarely on the Republicans – currently in office and hopefuls on the campaign trail. While many Republicans in Congress are complicit with the policies that are hurting all Americans – including poor blacks – for the most part, they aren’t the ones coming up with these stupid policies.

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