Posts Tagged ‘Main St.’

Wall Street’s “Recovery” Leaves Main Street Mugged in the Gutter

Wall Street’s "Recovery" Leaves Main Street Mugged in the Gutter

Courtesy of Charles Hugh Smith, Of Two Minds 

31st March 1951:  A sandwichman, who carries an advertising board on his shoulders, standing in the gutter on a London street. He is not allowed on the pavement.  (Photo by Charles Hewitt/Picture Post/Getty Images)

Rising costs and taxes and declining income have mugged Main Street while Wall Street revels in the Fed-engineered "recovery"--in the stock market.

The Fed would have us believe that the stock market is the leading indicator of the economy: if stocks are rising, then that is strong evidence the economy is improving.

This is the bogus "wealth effect" I have taken pains to discredit:

Why the Fed’s ‘Trickle-Down Economics’ Is Failing

Are the Fed’s Honchos Simpletons, Or Are They Just Taking Orders? (Nov. 1, 2010)

Fraud and Complicity Are Now the Lifeblood of the Status Quo (Nov. 12, 2010)

Fed’s QE2 Misadventure Costs U.S. Households $4.6 trillion (Nov. 10, 2010)

Main Street didn’t buy "the stock market is rising, so you must be richer" either, for the simple reason that Main Street’s wallet is now much thinner. Even as the S&P 500 has soared 80% from its March 2009 lows, 70% of Americans don’t believe the recession is over.

That must really hurt the apparatchiks in the Ministry of Propaganda and the Fed. Here they go to all this trouble to orchestrate a bogus stock market rally and Mainstream Media propaganda campaign hyping "the recovery," and Main Street America refused to buy it. How irksome.

It seems Main Street’s grasp on reality is firmer than that of either the Fed or its partner, Wall Street.

Let’s consider income.

The stock market rally off the March 2009 lows was by some measures the sharpest such advance in the past 100 years. Yet as stocks went on a tear,household income actually declined. According to the Census Bureau, the median household income fell 0.7% to $49,777 in 2009, down 4.2% since pre-recession 2007.

The Federal Reserve’s stated policy objective is to boost the stock market to trigger a "wealth effect" which will then lead consumers to open their wallets.

As noted here before, the Fed failed to notice that only the top 10% of households hold enough stocks to see much benefit from a rising market. Household income actually fell, despite the huge run-up in stocks.

In other words, a rising stock market did not increase household incomes. The Fed is gambling on an effect with no evidence to support it.

How about jobs?

While the Bureau of Labor Statistics reported that…
continue reading


Tags: , , , , , , , , , , , , , , , , , ,




BERNANKE’S GREAT MONETARIST GAFFE

BERNANKE’S GREAT MONETARIST GAFFE

Courtesy of The Pragmatic Capitalist 

I had to chuckle at the headline on Yahoo Finance throughout much of Monday’s trading session:

rateshead BERNANKES GREAT MONETARIST GAFFE

It’s an accurate headline.  Mortgage rates have declined in recent weeks as U.S. government bonds have surged.  But the actual article was filled with very dramatic certainties (most of which were inaccurate and/or misleading).  For instance, the excellent Mark Zandi of Moody’s was quoted saying that we are seeing a once in a generation buying opportunity in real estate:

“It’s the best time in our generation to buy.  It may be the best time in any generation. Mortgage rates are so low and with homes prices down and lots of inventory, you couldn’t pick a better time to buy or re-finance.”

Wow, sounds like we should all go out and buy houses, right?  It gets rosier though.  The article details why we should all run out and buy houses immediately:

But the decline in rates probably won’t last long, analysts say. So homeowners need to move fast.

“I think they won’t last much longer than a month or two at the best,” says Lawrence Yun, chief economist at the National Association of Realtors. “I can see them going up to 5.5 percent by the end of June if not sooner.”

Move fast, huh?  Prices are low.  Rates are going back up.  That sounds pretty convincing.  If interest rates (and home prices) are only going to be low for a brief period then we should capitalize on that opportunity.  Right?   But then the article takes a dramatic turn for the worst when they try to explain the actual fundamentals behind the rising interest rate argument:

“The US is fortunate now that there’s no pressure on interest rates,” Yun goes on to say. “But going forward, higher rates will be needed for financing the debt.”

(Screeching sound).   Uh oh.  Here we go again with the hyperinflation, the USA is dying, the dollar is finished, higher interest rates will be needed to “finance our debt”, argument.  The dots are easy to connect in this article.  In essence, the article implies that interest rates are at record lows because investors have sought the safety of government bonds and mortgage rates have subsequently declined.  What they fail to expand on is why interest rates have been declining in recent weeks when, according to…
continue reading


Tags: , , , , , , , , , ,




Merkley for Main Street

Merkley for Main Street

By Bryce Cover, courtesy of New Deal 2.0

Senator Jeff Merkley took to the Senate floor on Tuesday, complete with fist pounding, to air his frustration over the blockage of the Merkley-Levin amendment that would fortify the Volcker Rule. The rule restricts banks that have access to FDIC insurance from speculative trading. What he wanted to know: “Why is Wall Street winning and Main Street losing tonight in the US senate?” Watch his passionate speech:

 

See also: Merkley-Levin Amendment Can’t Get a Vote 


Tags: , , , , ,




 
 
 

ValueWalk

Build A Sandcastle, Get Fined $500, And Maybe Go To Jail

By The Foundation for Economic Education. Originally published at ValueWalk.

Bryant Rylee lives a seemingly simple life. Before the state intervened in his life, his Facebook page—which has a modest 591 friends—was relatively quiet. However, that was before a sandcastle built by his son caused the city of Panama, Florida, to threaten him with a $500 fine and up to 60 days in jail, a threat that caused his Facebook page to get its “fifteen minutes of fame.”

carolbifulcovasques / PixabaySandcastle

Sandcastles are the epitome of childhood innocence and the manifestatio...



more from ValueWalk

Zero Hedge

St. Louis Just Hiked Minimum Wage By 43%; Guess What Happens Next

Courtesy of ZeroHedge. View original post here.

Seemingly no amount of empirical evidence will ever convince progressives that raising minimum wages to artificially elevated levels is a bad idea.  Somehow the basic idea that raising the cost of a good ultimately results in lower consumption of that good just doesn't compute. 

And while roughly 50% of the country will promptly ignore it, below is yet another study, from Dr. David Macpherson of Trinity University and Dr. William Even or Miami...



more from Tyler

Kimble Charting Solutions

Strong markets struggling at breakout levels of late

Courtesy of Chris Kimble.

The S&P 500, Banks, Small Caps and Transportation indices continue to climb higher, as the long-term trend remains up. The two charts below, look at performance over the past month and how each index is testing long-term breakout levels.

The chart below looks at how the above mentioned indices have performed over the past 30-days.

CLICK ON CHART TO ENLARGE

These key markets are a little soft the past 30-days. The Power of the Pattern below looks at where this softness is taking pl...



more from Kimble C.S.

Phil's Favorites

Warmest February in Decades Spikes Pending Home Sales

Courtesy of Mish.

Economists are crowing over a huge and unexpected spike in pending home sales. The Econoday consensus estimate was a rebound of 2.4% following the 2.8% decline in January. Instead, the index spiked 5.5%.

Major improvement can be expected for existing home sales in the March to April period based on February’s pending home sales index which jumped 5.5 percent to 112.3. This is well beyond the Econoday consensus which was already calling for a sizable 2.4 percent gain. This index tracks initial contract signings and though winter months are always volatile due to seasonality and...



more from Ilene

Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Pound Pares Decline as U.K. Officially Starts Brexit Process (Bloomberg)

The pound touched a one-week low against the dollar as the U.K. prepared to start the process by which it will leave the European Union.

Double-Edged Sword: Home Prices Keep Rising, Home Inventory Keeps Falling (Forbes)

You are thinking about selling your home. A similar place nearby sells for more than you thought it would. You list your home. This is how the housing market is supposed to work. As a result, over time, pric...



more from Paul

Chart School

Rallies Come Through

Courtesy of Declan.

Bulls were able to deliver across the board gains, helping to position yesterday's action as a swing low. Weakness at this point would offer itself as a buying opportunity, but markets wouldn't tolerate more than a couple of days of losses if they were to go down this route.

The S&P is at resistance of the prior swing low and the 20-day MA, but today's action is looking good for an upside break tomorrow? Technicals are firmly in the red and need more than today's gain to fix them.



The Nasdaq did today...

more from Chart School

OpTrader

Swing trading portfolio - week of March 27th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

Members' Corner

More Natterings

Courtesy of The Nattering Naybob

[Click on the titles for the full articles.]

A Quick $20 Trick?

Summary

Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:

  • Last time out, Sinbad The Sailor, QuickLogic.
  • GlobalFoundries, Jha, Smartron and cricket.
  • Quick money, fungible, demographics, QUIK focus.

Last Time Out

Monetary policy is just one form of policy that effects capital,...



more from Our Members

Digital Currencies

Bitcoin Tumbles Below Gold As China Tightens Regulations

Courtesy of Zero Hedge

Having rebounded rapidly from the ETF-decision disappointment, Bitcoin suffered another major setback overnight as Chinese regulators are circulating new guidelines that, if enacted, would require exchanges to verify the identity of clients and adhere to banking regulations.

A New York startup called Chainalysis estimated that roughly $2 billion of bitcoin moved out of China in 2016.

As The Wall Street Journal reports, the move to regulate bitcoin exchanges brings assurance that Chinese authorities will tolerate some level of trading, after months of uncertainty. A draft of the guidelines also indicates th...



more from Bitcoin

Mapping The Market

Congress begins rolling back Obama's broadband privacy rules

Courtesy of Jean Luc

I am trying to remember who on this board said that people wanted to Trump because they want their freedom back. Well….

Congress begins rolling back Obama's broadband privacy rules

By Daniel Cooper, Endgadget

ISPs will soon be able to sell your most private data without your consent.

As expected, Republicans in Congress have begun the process of rolling back the FCC's broadband privacy rules which prevent excessive surveillance. Arizona Republican Jeff Flake introduced a resolution to scrub the rules, using Congress' powers to invalidate recently-approved federal regulations. Reuters reports that the move has broad support, with 34 other names throwing their weight behind the res...



more from M.T.M.

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions

Biotech

The Medicines Company: Insider Buying

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

more from Biotech

All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David



FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>