Friday, July 21, 2017

Happy Moon Landing Day!

Thursday, July 13, 2017

Government spending goes wild



The U.S. government just spent $429 billion in June 2017.  That is the first time it has ever spent more than $400 bn in a single month.  Compare to the $323 bn in outlays in June 2016.

So, this brings up a related question - what was the deficit for June? $90 billion.  Wow.  Are we sure that the government won't run out of cash by Sept. 30 and have to shut down?

Tuesday, July 11, 2017

While you were sleeping

























Source: https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/52801-june2017outlook.pdf

The projected deficit just got a lot bigger.  I previously speculated that $800 billion was the danger point for the deficit, and it was going to exceed this in 2022.  Well that has been bumped up a year, as the deficit in 2021 is now projected to be $879 billion, up from $797 billion previously projected for 2021.   Again, this assumes no recession.

Also notice that the deficit is projected to "bottom out" at $565 billion in 2018.  Just a few months ago, the 2018 deficit was projected to be $487 billion.

Of course, these numbers will skyrocket when the recession hits in 2018.  I think the deficit will exceed $1 trillion in 2019 and then explode from there.

Monday, July 3, 2017

Market Meltdown predicted before the end of the year

Market analyst Lynette Zang has deep Wall Street experience and is starting to see a worse setup than just before the 2008 market meltdown. ....So, how long can central banks keep the debt party going? When is the next crash? Zang says, “I am worried that it will happen before the end of this year. What do you do when the computer says no? 
 There is a certain amount of cash in the ATM, maybe $60 a day, maybe $300 a day. Who knows? But it’s not going to be enough. So, that’s what it is going to look like. Most people will freak out because they have about three days of food in their house. Most grocery stores have about three days of food on their shelves. So, what happens after day six? People will be scared for sure, and they will panic.”
http://usawatchdog.com/market-crash-coming-insiders-run-lynette-zang/

I am just repeating what I am reading.  I think there will be a major crash, but next year, not this. And I don't think it will cause people to run out of food.  But who knows.

Sunday, June 25, 2017

Stock Market Crash Predicted for Valentine's Day 2018

One River Asset Management's CIO Eric Peters broke with that tradition and dared to "pin a tail on the donkey" of when the next market crash - one which he agrees with us will be driven by a collapse in the global credit impulse - will take place. His prediction: Valentine's Day 2018. “But when the global credit impulse reverses, it’ll be a cascade, an avalanche. And I pin the tail on that donkey to be Valentine’s Day 2018.”
http://www.zerohedge.com/news/2017-06-25/it%E2%80%99ll-be-avalanche-hedge-fund-cio-sets-day-when-next-crash-begins

So we have about 7 months left to party.  I think it will be a few months longer than that but I wouldn't bet on it.  So eat, drink and be merry, for next year we will die!

Thursday, June 22, 2017

Peak for the Dow

The DJIA hit 21528.99 on June 19.  I waited a couple of days to see if it would hit a new high.  At some point, it will hit a peak for this business cycle, and that might be it.

What I think will happen at some point soon is that the Dow will decline by 500 or more points over a few days, enough so that we are sure the Dow won't go even higher.  Then the real estate bubble will burst - probably this fall.  Then the unemployment rate will start rising, say about January.  It is very low now, so I think it has a ways to go to trigger a recession, but the recession should start early next year.  Then a full blown crisis will hit in September 2018, with a huge stock market crash.

Of course, I could be wrong - I am wrong more than I am right - and this boom could keep going forever.  I don't think so though.

Sunday, June 18, 2017

Valiant Thor



Valiant Thor is supposedly an alien from Venus who spoke 100 languages who has been working for the Pentagon since 1937 and hasn't aged a day since.  This is one of the more interesting conspiracy theories that I have heard.  Phil Schneider made this video shortly before his mysterious death in 1996.

Saturday, June 17, 2017

The Mother of All Debt Ceiling Crises is Coming

 The Treasury’s cash balance yesterday [June 11] stood at only $153 billion — down by $130 billion just since the tax season peak was reached on April 25th.  Uncle Sam has been burning cash at a rate of $3.2 billion per calendar day since then and has no more room to borrow. That’s because the public debt ceiling is frozen at its March 15th level ($19.808 trillion) and the mavens at the Treasury Building have run out of borrowing gimmicks. It will be impossible to pay Uncle Sam’s bills in full after Labor Day unless the debt ceiling is raised well the $20 trillion mark.  https://dailyreckoning.com/coming-mother-debt-ceiling-crises/
The "drop-dead" date appears to be Labor Day, which is on September 4 and a holiday.  So on September 5 we will be in for a world of hurt unless something big changes.  (The date could be even earlier - $153B divided by $3.2B is 47.8 days.  June 11 + 48 days is July 29).

The Democrats aren't going to support a clean debt ceiling increase because they want Trump to fail.  The Liberty/Freedom caucus wants to see more cuts.  So it is up to the moderate Republicans, the same group that couldn't pass TrumpCare.  Everyone just assumes that a deal will happen at the last minute.  But Stockman doesn't think so:  "And unlike the saves which were put together at the 11th hour in August 2011 and October 2015 by President Obama and Speaker Boehner, this time there will be absolute legislative paralysis."

And even if the debt ceiling gets raised, the government is only funded through the end of September.  So the two issues will get merged, which makes this an all-or-nothing event, without much room for compromise.  The other thing that makes this different from prior fights is that the left is totally crazy, unlike the right.  There is no equivalent of Boehner on the left who can pull them together.

So look for a mini-default on September 5.

================
Update:  Now we have until October. See http://www.zerohedge.com/news/2017-06-29/treasury-will-run-out-cash-mid-october-cbo-warns

So the issue will definitely conflate with the budget issue.  Look for a shutdown on Monday, October 2.

Wednesday, June 14, 2017

Yet another high for the Dow

The Dow reached yet another high on June 14 of 21,374.56.

Saturday, June 10, 2017

Baby Boomers are sucking the economy dry

Dow closes at all-time high of 21,271.97 on June 9

The SP 500 however, did not set a new high.  The high remains at 2439.07, which was set on June 2.

The NASDAQ Composite set a new high of 6,321.76 on June 8, and is down 1.8% since then.

For the FANG stocks, the bubble may have finally popped:

Facebook (FB) hit a high of 154.71 on June 8, and is down 3.3% since then.
Amazon (AMZN) hit a high of 1,011.34 on June 5, and is down over 3% since then.
Netflix (NFLX) hit a high of 165.88 on June 8, and is down almost 8% since then to 158.
Google/Alphabet (GOOGL) hit a hit of 1,004.28 on June 8, and is down 3.4% since then.

It is possible, but unlikely, that these stocks may keep going up.  The Fed I'm sure will just focus on the Dow, and this pretty much seals in the rate hike on June 14, and that will in turn ensure that the June 9 high is indeed the high.

So we are looking for a stock market drop this fall, to parallel the 2000 and 2007 markets, a recovery next Spring that does not break the all-time high, and then the big event in Sept 2018. 

Update:
I left out Apple (AAPL), which hit its high of 156.10 back on May 12.  It was down almost 4% yesterday, ending at 148.98.  It is not really part of the FANG gang because it left the party early.

Saturday, June 3, 2017

Classical Gas on Acid



This is very jazzed up version of Classical Gas. It's worth watching just to see how crazy it is.  But ultimately, he ruined it.  This is him just showing off.

Classical Gas on Piano


Classical Gas on Piano. This is very hard to get right on piano, and this the one I like the best so far. I Professional pianists tend to add their own trills which aren't part of it, or do it in the wrong key, or get the rhythm wrong. It should start off very simple, like this guy is doing, and then jump into a bunch of chord changes.  I also like the fact that this guy is pausing to turn the page.  But the ending doesn't sound right.

Friday, June 2, 2017

Dow closes at all-time high of 21,206.29 on June 2.

This beats the previous high of 21,115 on March 1, 2017.   The Dow tends to make a high about a year-and-a-half before a crash.  So this still points to a fall 2018 crash, not this fall.

The S&P 500 closed at 2439.07, also an all-time high.

Tuesday, May 30, 2017

Nenner, Nenner, Seven, Seven, Seven

Some guy named Charles Nenner fervently believes that there will be a stock market crash this fall. "Renowned financial and geopolitical analyst Charles Nenner is doubling down on his prediction last year that the financial markets will crash in the fall of 2017. Now, Nenner has additional research that backs up his position, and it involves the number 7."
http://usawatchdog.com/suicidal-to-stay-in-this-market-charles-nenner/

I don't think so.  I think it will happen in the fall of 2018.  Real estate hasn't crashed yet and I think that will happen prior to a stock market crash.

Secret Underground City below Central Park

This complex, known as the Manhattan Project (or MP) was housed in a series of underground caves designed to protect the Union government if the Confederacy started to win the United States Civil War (1861-1865). After the war the project was abandoned until it was later revised and expanded to 300 acres during World War One (1914-1918). Since that time it has been expanded several times to now include over 700 acres in a huge underground city within a city. It is located deep within the bedrock, over 300 feet below the park. This massive city complex is now designed to safely house up to 4,000 central Government personnel in the event of a nuclear strike. It presently houses all United States government UFO activities and was the home for Nazi Adolf Hitler until his death in 1956. This Super-secret location is the site of the main Emergency Government War Headquarters - the hub of the Country's alternative seat of power outside Washington, D.C. http://gothamist.com/2017/01/23/its_not_a_bad_idea_really.php

You had me until you said Hitler.  Good conspiracy theory though.

The Trump Budget

















Source: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pdf

This shows a surplus in 2027.  I don't believe it will pass but one can always dream.  In addition to the political problems with passing the budget, it doesn't have any room for a recession.

My forecast is still for the system to have a full-blown crisis in 2029 because of defaulting on Social Security payments.  Even the rosy Trump budget above shows a $350 billion hole in Social Security in 2027, increasing at the rate of $50 billion+ per year.

I think that there will be another 2008-style recession starting in 2018, and from 2019 on out we will have trillion dollar deficits and rapidly increasing.  I hope I am wrong.

Thursday, May 25, 2017

SELL, SELL, SELL

Sell everything, sell the kitchen sink, sell the kids, sell the dog.

Toronto Homeowners are in a Rush to Sell
“In less than one week we went from having 40 or 50 people coming to an open house to now, when you are lucky to get five people.  Everyone went into hibernation.”

Bitcoin is Crashing
What goes up exponentially, falls vertically... or something like that...
Bitcoin has plunged 13% in the last few minutes... no catalyst evident for now...

Disclaimer:  I am not a registered investment advisor, and this should not be construed as investment advice.  Do your own research.

Meltup

We are experience a meltup.

"The Nasdaq composite also notched a new record, climbing over 6,170.16, as Netflix, Alphabet, and Facebook shares all rose. Amazon also rose, nearing the $1,000 per share mark."  http://www.cnbc.com/2017/05/25/us-markets.html

Bitcoin has been rising about 10% per day and is at $2700, up from $900 just 2 months ago.

What this means is that the increasing prices of these objects has nothing to do with the fundamentals like price-earnings ratio, but they are becoming alternate currencies, to replace the US dollar.  The vast pool of dollars that have been created has destroyed the value of the dollar, but this breakdown has largely been suppressed.

That's my theory anyway.  The only flaw in it is that gold is not also experiencing a meltup.  But that may be because the price of gold is being heavily manipulated.

So as crazy as this seems, it may not be a bubble, but is instead a response to the Fed's actions.  What the Fed needs to do is to starting doing quantitative tightening to add value to the dollar.  This may then cause a crash and a recession, which will hurt people who don't benefit from the meltup.

The best response may be to just ease into QT, to try to keep the prices from crashing, and to keep a recession from occurring (which is futile because you can't stop recessions from happening, and we are overdue for one).

The Fed thinks they are clever, but the markets are cleverer.

Saturday, May 20, 2017

The internal combustion engine will be dead by 2025

The next generation of cars will be “computers on wheels”. Google, Apple, and Foxconn have the disruptive edge, and are going in for the kill. Silicon Valley is where the auto action is, not Detroit, Wolfsburg, or Toyota City. “We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history,” Prof [Tony] Seba said. “Internal combustion engine vehicles will enter a vicious cycle of increasing costs.” The “tipping point” will arrive over the next two to three years as EV battery ranges surpass 200 miles and electric car prices in the US drop to $30,000. By 2022 the low-end models will be down to $20,000. After that, the avalanche will sweep all before it. “What the cost curve says is that by 2025 all new vehicles will be electric, all new buses, all new cars, all new tractors, all new vans, anything that moves on wheels will be electric, globally,” Prof Seba said.
http://business.financialpost.com/news/transportation/fossil-fuel-vehicles-will-vanish-in-8-years-in-twin-death-spiral-for-big-oil-and-big-autos-says-study-that-shocking-the-industry

Big Oil and Big Autos (GM,Ford, Chrysler) are all finished.  Even Peak Oil is obsolete.  The future is electric.