by ilene - May 17th, 2016 10:50 pm
The artifice of corporate totalitarianism has been exposed. The citizens, disgusted by the lies and manipulation, have turned on the political establishment. But the game is not over. Corporate power has within its arsenal potent forms of control. It will use them. As the pretense of democracy is unmasked, the naked fist of state repression takes its place. America is about—unless we act quickly—to get ugly.
“Our political system is decaying,” said Ralph Nader when I reached him by phone in Washington, D.C. “It’s on the way to gangrene. It’s reaching a critical mass of citizen revolt.”
This moment in American history is what Antonio Gramsci called the “interregnum”—the period when a discredited regime is collapsing but a new one has yet to take its place. There is no guarantee that what comes next will be better. But this space, which will close soon, offers citizens the final chance to embrace a new vision and a new direction.
This vision will only be obtained through mass acts of civic mobilization and civil disobedience across the country. Nader, who sees this period in American history as crucial, perhaps the last opportunity to save us from tyranny, is planning to rally the left for three days, from May 23 to May 26 at Constitution Hall in Washington, D.C., in what he is calling “Breaking Through Power” or “Citizen’s Revolutionary Week.” He is bringing to the capital scores of activists and community leaders to speak, organize and attempt to mobilize to halt our slide into despotism.
“The two parties can implode politically,” Nader said. “They can be divided by different candidates and super PACs. But this doesn’t implode their paymasters.”
“Elections have become off-limits to democracy,” he went on. “They have become off-limits to democracy’s fundamental civil community or civil society. When that happens, the very roots shrivel and dry up. Politics is now a sideshow. Politics does not bother corporate power. Whoever wins, they win. Both parties represent Wall Street over Main Street. Wall Street is embedded in the federal government.”
by ilene - May 16th, 2016 5:06 pm
Courtesy of The Banker
One of The Donald’s great strengths is that he latches onto a partial truth – or an unspoken but widely held belief – and then expands upon it for his own purposes. Obviously this can veer into disgusting territory, when it comes to expressing sexually insecure men’s feelings about women, or insecure workers’ feelings about economic threats from China or Mexico. As Matt Taibbi eloquently expressed, he effectively uses this same talent of partial truth-telling to bash government and media elites who do, in fact, disdain, misunderstand, or ignore ‘regular Americans.’ Trump scores these points against Establishment elites because really, we sense some truth in what he says, that others before him won’t say.
Earlier in the week Trump stepped in a pile of it when he expressed truths about US sovereign debt which political leaders cannot openly discuss. Unconstrained by good taste, judicious character, or political consistency – he can pop off in any direction, occasionally hitting on an important point that more people should understand. The Donald said:
“I’ve borrowed knowing that you can pay back with discounts. I’d borrow [as President, on behalf of the US] knowing that if the economy crashed, you could made a deal.”
This is so crazy that he said it – as a person running for President – that you kind of have to laugh at his gall. On the other hand, he’s right. This is what happens when countries borrow too much. And also, we don’t really know – or have any kind of open discussion in this country – about what constitutes too much national borrowing.
Those fingers tho…
When I worked as an emerging market bond salesman in the late 1990s – slinging bonds from places like Pakistan, Ukraine, Ecuador, Argentina, Russia, and Ivory Coast – we used to put out economic research for our clients that pointed out that a 70% Debt/GDP ratio marked a kind of scary ‘Do Not Cross’ line. If the total amount of sovereign debt exceeded 70% of the economic output of country, you might have to start worrying about whether that country could reliably pay back its bonds. Once you hit 100% Debt/GDP,
by ilene - May 15th, 2016 3:03 pm
“Where justice is denied, where poverty is enforced, where ignorance prevails, and where any one class is made to feel that society is an organized conspiracy to oppress, rob and degrade them, neither persons nor property will be safe.”
– Frederick Douglass
“I am for doing good to the poor, but I differ in opinion about the means. I think the best way of doing good to the poor is not making them easy in poverty, but leading or driving them out of it.”
– Benjamin Franklin
Like many of you, I’m trying to understand an economic landscape that’s changing by the day – and rarely for the better, at least from the standpoint of the middle and lower classes. I am also trying to understand how in the world the two great US political parties have conspired to give us a choice, as Peggy Noonan has said, of “Crazy Man vs. Criminal.”
I think these two questions are related, and not just in the United States. Populist angst is taking hold around the world. Like all anger, it isn’t necessarily rational and may not bring the desired changes, but the anger and frustration are real. People have real problems, and increasingly they don’t trust traditional leaders to solve them.
Last week I had the privilege of meeting first privately and then publicly with Peggy Noonan. For those who don’t know, she was President Reagan’s speech writer and is now aWall Street Journal columnist and celebrated author. As a writer, she is one of my heroes, perhaps the greatest essayist of my generation – a true wordsmith.
Back in February, with the presidential campaign in full force, Peggy wrote a column that has been on my mind ever since. She titled it “Trump and the Rise of the Unprotected.” Everyone should read it, preferably several times. It is that good.
by ilene - May 13th, 2016 4:30 pm
Courtesy of Lance Roberts of Real Investment Advice
Another week of choppy market action and the end result was a move to “nowhere.” As I stated previously, the current action is either a consolidation process or a topping process:
“First of all, it is worth noting that despite all of the recent excitement of the markets advance, it remains extremely confined in a sideways trading range. This can either be good or bad news.
The Good: Sideways consolidations during bullishly biased markets provides the ability to work off excesses built up during the previous advance to provide the “fuel” necessary for the next leg higher.
The Bad: However, sideways consolidations can also mark the end of the previous bullish advance and the beginning of a bearish decline.
How do we know the difference? Normally, fundamentals tell the story. When earnings are still rising, market consolidations tend to resume to the upside. However, declining earnings have historically marked market topping processes much as we see today.”
While this time could certainly be different, historically such has not been the case. At this juncture, the market has yet to confirm whether the recent price action is just part of a broader topping process or if the now somewhat well-aged bull market is setting up for a final advance. The most interesting aspect is the similarity between the current market action and that seen prior to the beginning of this year.
With summer fast approaching, the markets still appear to be very fragile exposing investors to a similar “swoon” in the months ahead. This is particularly the case with both the economic and fundamental underpinnings still showing signs of deterioration.
The inherent problem of “eternal bullishness” is the “willful blindness” to the underlying data in an effort to chase short-term returns. This leads to the unfortunate problem of being “all-in” on every hand which has a devastating consequence when a mean reverting event occurs.
In the end, it does not matter IF you are “bullish” or “bearish.” The reality is that both “bulls” and “bears” are owned by the “broken clock” syndrome during the full-market cycle. However, what is grossly important in achieving long-term investment success is not necessarily being…
by ilene - May 12th, 2016 10:29 pm
00:01:48 Checking on the Markets: CL, NASDAQ, DX, RUSSEL, NKD, NG
00:11:13 Natural Gas: Futures, Trade Idea
00:19:10 Seeking Alpha News: Amazon, Nikkei, Retail Sales, Apple, Fed Hike, Boeing’s Buybacks, Disney, Grubhub
00:31:57 Checking on the Markets: CL, NKD
00:32:40 AAL: PE, Puts and Calls, Trade Idea
00:41:16 COGO: Puts, Trade Idea
00:46:25 Disney: Bull Calls Spread, Trade Idea
00:56:10 “Retail is Dead”
01:06:17 Petroleum Status Report
01:10:28 Checking on the Markets: CL, RB, DOW
01:15:10 Goldman: No Fed Hike Until December
01:16:42 Checking on the Markets
01:20:14 Trade Idea
01:21:54 RB: Shorts
01:24:26 Options Opportunity Portfolio
01:25:54 Butterfly Portfolio
01:26:15 Short-Term Portfolio
01:26:36 Long Term Portfolio
01:27:37 Checking on the Markets
01:30:50 More Trade Ideas…
Don't miss next week's webinar in real-time. Get LIVE access to Phil's Weekly Webinars by joining us at Phil's Stock World — click here!)
by ilene - May 12th, 2016 4:28 pm
Phil was interviewed by Robert on Trader TV earlier today. Watch below:
(Cross-posted at YouTube here.)
by ilene - May 11th, 2016 9:59 pm
Courtesy of Richard Metzger at Dangerous Minds
In his latest book, Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity (Portfolio/Penguin), media/technology theorist and PBS documentarian, Douglas Rushkoff asks “Why doesn’t the explosive growth of companies like Facebook and Uber deliver more prosperity for everyone? What is the systemic problem that sets the rich against the poor and the technologists against everybody else?”
Rapid technological improvements have created unforeseen societal chaos and this change is just starting to pick up speed. Our economic operating system—the “program” at the heart of Capitalism itself—is deliriously out of control. The economy no longer serves the human race, just a tiny elite sliver of it. The rest of us, whether we realize it or not, to a certain extent toil on their behalf. Think about it: How did the Waltons become the richest family in America, amassing a collective fortune of around $150 billion, if not by siphoning off a micropayment from every single gallon of milk, bottle of shampoo or box of Hostess Ding Dongs sold there? Bud and Sam Walton might have started Walmart, but all their offspring did was win the lottery at birth.
If you think that sounds predatory—and it should—just wait until you get a load of what the big technology firms have in mind for us…
I asked my friend of some twenty years some questions over email.
Richard Metzger: You write how the operating system of capitalism is obsolete, creating vast spoils for a select group of lucky human beings who are more or less basically leeching off the rest of mankind’s activities, and in a world of increasing automation to make things even worse. What’s the new book’s diagnosis of the modern economy?
Douglas Rushkoff: That sounds like a pretty good diagnosis to me. Or I suppose those are the symptoms? The underlying problem is not a disease, however. It’s not that corporate capitalism has been corrupted by greed or even by the startup economy of digital businesses. The system is working precisely as it was designed to.
by ilene - May 10th, 2016 6:42 pm
Courtesy of Joshua Brown, The Reformed Broker
I’ve read many books on the history of financial markets (like more than four dozen) over the last 20 years. I eat, sleep and breathe this stuff. One of the common threads of every financial or asset bubble throughout human history is that they all have a repudiation phase – a moment where all the lies that had been built up alongside the excess are aired out in public. Even reputable companies and players get caught up in it.
As Jeff Lebowski said, “New shit has come to light, man.” In the repudiation phase, belief is nowhere to be found. Skepticism becomes the order of the day.
We’re there now. New shit is coming to light every five minutes. Every reputation you thought was untouchable and every omission you’d accepted because it was already accepted by the crowd – all back on the table for discussion (dissection?).
Witness the brick-by-brick dismantling of the Theranos mythology – the latest chunk of debris chipped from the edifice here:
…or the outing of Zenefits, would-be destroyer of the health insurance underwriting biz, as a rogue entity cheating on licensing exams:
…and the magnifying glass now being taken to startup valuations; the way in which public investors are inventing their own prices:
There will be more of this sort of forced unveiling. The grand facade, so soon will burn. It was fun for awhile, though.
I’d argue this is healthy for the startups that were actually built for a purpose other than selling stock. There are many of them. Their ownership will revert to professionals and employees. Neophyte interest is declining for just about anything that isn’t called Uber (and stay tuned on that one). Real VCs ought to be glad, even if 2016 is a bust.
Skepticism is a force for good, not evil. Incredulousness is even better.
by ilene - May 10th, 2016 1:50 am
Courtesy of John Rubino of Dollar Collapse
Something interesting has happened. China earlier this year responded to falling stock prices by borrowing a trillion dollars and spending it on commodities, boosting the prices of iron ore, oil, copper, etc., and giving the global economy a patina of recovery.
Nothing unusual so far. China did the same thing in response to 2008’s Great Recession, and the world breathed an appreciative sigh of relief, ignoring the massive new leverage that the policy required.
Which is why the past month has been so interesting. Instead of just accepting China’s largess and blithely assuming that all was once again well, the global financial media have chosen (for perhaps the first time ever outside of a full-on crisis) to focus on the negative aspects of rising leverage. They’re now anticipating trouble for China, with titles like:
To call this unusual is a huge understatement. And it seems to have made a difference. Yesterday China announced a fairly radical course change:
(Bloomberg) – China’s leading Communist Party mouthpiece acknowledged the risks of a build-up of debt that is worrying the world and said the nation needed to face up to its nonperforming loans.
High leverage is the “original sin” that leads to risks in the foreign-exchange market, stocks, bonds, real estate and bank credit, the People’s Daily said in a full-page interview with an unnamed “authoritative person” starting on page one and filling the second page on Monday.
China should put deleveraging ahead of short-term growth and drop the “fantasy” of stimulating the economy through monetary easing, the person was cited as saying. The nation needs to be proactive in dealing with rising bad loans, rather than delaying or hiding them, the report said.
by Pharmboy - May 7th, 2016 1:40 pm
Reminder: Pharmboy and Ilene are available to chat with Members.
Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.
By Amy Reeves
After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
The group was up by even more before taking some hits over the past two weeks on negative earnings news from several industry players. But fund managers tell IBD the rebound is here.
Why? For one, they say, the spate of bad news has already been factored into stock prices. But more than that, they see a climate favoring rejuvenated M&A, hot drugs in the new-product pipeline and pricing power for innovate products.
Bottom line: The positive factors that drove the runup never went away, they say. They just got drowned out by the noise.
“A very key point is that this group is a very high-beta group — particularly the small- to midcap stocks. Since they don’t have sales, they don’t have earnings,” said Tom Vandeventer, portfolio manager at Tocqueville Asset Management.
“The history of this group is that elevated macro uncertainty definitely hits (it),” Vandeventer said. “My own opinion is this group trades more on sentiment than on fundamentals during those time periods.”