Posts Tagged ‘muddle through’

WHITNEY TILSON: WELCOME TO “MUDDLE-THROUGH”

WHITNEY TILSON: WELCOME TO “MUDDLE-THROUGH”

Pencil popping balloon

Courtesy of The Pragmatic Capitalist

Whitney Tilson of T2 Partners says the global economy is set to “muddle through” as the excesses of the last few decades are worked off. Tilson detailed his macro outlook in his most recent investor letter for August.  Tilson believes the worst of the credit crisis is behind us, however, the heavy lifting is not over yet. Tilson is very concerned about the macro risks, particularly the sovereign debt crisis in Europe and US housing.  Tilson says the US housing market has already started to double dip:

“We think we have gone through the most difficult economic period in the United States and the world since the Great Depression. We think the worldwide debt bubble — this was not just a US housing crisis or bubble, but a worldwide debt bubble — was unprecedented in the degree of depravity that took place, in the amount of leverage that built up in the system all over the world, and we’re very skeptical that we have somehow successfully managed our way through the aftermath of that bubble and that everything is rosy now.

We think the aftermath of this bubble will be with us for many years and that will continue to cause disruptions and turmoil in various markets. The sovereign debt crisis in Europe is a good example of that just in the past few months; we think the US housing market is already in a double dip right now, though because there is a lag in the data, most people haven’t yet realized it. We don’t think it’s going to be anything like the first dip, which really took world economy over a cliff, but there are 7 million people not paying their mortgages right now and we have not resolved that problem and that’s going to continue to be a headwind for our financial system. There are probably six or eight major risk factors, two of which are the sovereign debt issues and the US housing market. These make us very nervous and we don’t know how it’s going to play out (and we’re skeptical that anyone knows how it’s going to play out), so in light of these major problems, we think it’s wise to be prudent.”

Tilsons’s prudent macro outlook has him relatively risk averse when it comes to…
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How We Get Through This Mess

How We Get Through This Mess

Portrait of a senior man in a tuxedo showing the thumbs up

Courtesy of John Mauldin at Thoughts From The Frontline

This week I spoke to a small group of businessmen/entrepreneurs about the current economic environment, and after my presentation one asked me whether I didn’t have any good news for them, with a kind of gallows humor laugh. And I tried. But upon reflection there is more I could have said, so this week’s letter will be what I should have said to be a little more encouraging.

The group was a Vistage group in which my daughter Tiffani participates. This is an organization of 12 businesspeople (in this case all CEOs of small businesses) who meet once a month to share and learn about better business practices, accountability, planning, and all the aspects of running a business. Every person I have ever met who has been involved in Vistage has had good things to say about it. I have watched it help Tiffani a lot. She truly runs our business now, allowing me to read and write and travel and speak. I am a very lucky man and proud Dad.

I have particularly watched my partners at Altegris really truly transform their business model through their involvement with Vistage. First the CEO, Jon Sundt, joined, and now the partners have all joined Vistage groups focusing on their roles in the business. Sundt was always a good businessman, but the level of professionalism of his whole company has gone up a notch. It is a pleasure to watch them grow, and they give Vistage a large measure of the credit for their success. In fact, when I went to the Vistage web site to get the link, I saw a brief video of Sundt talking about his experience. (http://www.vistage.com/)  I am proud to be their partner.

If you have a business and could use some help and professional mentoring, you should look into finding a Vistage group that works for you. They match businesspeople in different industries but with roughly same size businesses. In tough times you need all the help you can get.

I talked to them about the current economic environment and what I saw coming down the road. Long-time readers know that I think we are in for an extended period of slow growth, high and sticky unemployment,…
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Death of Muddle Through

Death of Muddle Through

Courtesy of Mish

The US government is on an unsustainable path. Deficits are soaring and the Obama administration is planning massive tax hikes.

Moreover, businesses have little reason to hire already because of massive overcapacity. Add increasing health care costs to the list of reasons for businesses not to hire.

killing the gooseGiven that government spending crowds out private investment, these policies all but assures that unemployment is going to remain high for a long time as noted in Structurally High Unemployment For A Decade.

Killing The Goose

Last week in Thoughts on the Economy: Problems and Solutions I listed the problems and some of the solutions facing the economy. It was a discussion between John Mauldin and I about his weekly E-Letter Killing The Goose.

John and I agreed on many, but not all solutions. I would also like to add something I have proposed before, killing the Davis-Bacon prevailing wage act.

Muddle Through Where Art Thou?

Back in 2002, the usually optimistic Mauldin proposed the economy would somehow manage to "Muddle Through".

However, because of the unsustainable path we are on. John has changed his mind. Please consider these excerpts from Muddle Through, R.I.P?

I defined a Muddle Through Economy in the past as one of slow growth (in the area of 1-2%) and a slack employment environment, such as we had in 2002 and the early part of 2003. In early 2007, I suggested we would return at some point to such an environment at the end of the recession I was predicting.

However, gentle reader, never in my wildest dreams did I think we could be looking at government deficits of $1.5 trillion dollars and actually budgeting future deficits of over $1 trillion as far as the eye can see. And there is real reason to think that under current plans, $1 trillion deficits are optimistic.

Obama Budget Agenda

Look at the graph above from the Heritage Foundation. They suggest that current policy would bring us closer to a $2 trillion deficit by 2019. And that assumes nominal growth that is north of 3% and unemployment dropping back below 5% in reasonably short order.

Japanese Disease

Some readers wrote this week telling me I am far too worried about a rising government deficit. Right now we are at roughly 42%


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Zero Hedge

What's The Oldest Business In Your State?

Courtesy of ZeroHedge. View original post here.

Is the oldest business in your state a mom-and-pop shop, or a famous megabrand?

Today’s infographic from Busy Beaver Button Co. maps the diverse range of companies that claim to be the oldest in their respective states. While many of them exist today as modest family-owned businesses such as pizzerias or taverns, Visual Capitalist's Jeff Desjardins notes that some have also grown into respected brands known around the country, like Jim Beam or Imperial...



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ValueWalk

Brian Rogers, T Rowe Price: Doubt Everything, Believe Nothing - Be Wary Of "It Stocks"

By The Acquirer's Multiple. Originally published at ValueWalk.

One of the funds that we watch closely here at The Acquirer’s Multiple – Stock Screener, is T Rowe Price.

T Rowe Price recently announced that its Chairman and CIO Brian Rogers would retire in March 2017, but would continue on the Board as a non-executive chair. Rogers joined T. Rowe Price as a portfolio manager in 1982. Previously, he served as portfolio manager of the U.S. Large-Cap Equity Income Strategy and the Equity Income Fund for 30 years, beginning with their inception in 1985. From 1994 to 2003 he was the first manager of the U.S. Value Equity Strategy and the Value Fund, and he was a founding member of the team managing the U.S. Large-Cap Value Equity Strategy from 2000 to 2015. He was elected to the firm’s Bo...



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Phil's Favorites

An End to Credit and Debit Cards Starting in India?

Courtesy of Mish.

India’s crackdown on cash caused chaos as 86% of the money in circulation vanished overnight. Banks could not cope with the increase in demand. Consumers did not turn to credit cards or debit cards as expected.  Instead, consumers turned to mobile apps.

Massive Growth of Mobile vs Dying Cards

A number of mobile payments are still small but growth is such that the Wall Street Journal asks Could India’s Cash Blitz Kill Off Cards, ATMs?

The value of mobile money transactions has more than do...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

How North Korea gets its oil from China: lifeline in question at U.N. meeting (Reuters)

As the United Nations Security Council decides whether to tighten the sanctions screws on North Korea, the country's increasingly isolated government could lose a lifeline provided by state-owned China National Petroleum Corp (CNPC).

Anything-But-Soft Earnings Data Starting to Smack of Rally Years (Bloomberg)

Among the spate of bullish trends visible after three weeks of earnings reports: analysts, who almost always cut full-year estimates in April, are now raising them, pu...



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Digital Currencies

Is The Blockchain About To Disrupt This $7 Trillion Industry?

By Teeka Tiwari, International Man

[Posted at Zero Hedge]

Recently, I wrote about a small $100,000 trade of cheese and butter.

Why?

This one trade changed 400 years of history in just four hours.

How so? Normally, it would take 10 days to handle the paperwork. But this trade concluded in less than fou...



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Kimble Charting Solutions

Gold Miners; Largest outflows in history could be bullish, says Joe Friday

Courtesy of Chris Kimble.

Could historical outflows present an opportunity? Yesterday Sentimentrader.com reported that outflows from Gold Miners ETF’s GDX and GDXJ topped $800 million on 4/26, the largest single day outflows in history. 

Below looks at Gold Miners ETF GDX, reflecting where these large outflows took place.

CLICK ON CHART TO ENLARGE

The long-term trend since...



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Chart School

Semiconductors Tick Along

Courtesy of Declan.

It was another quiet day for indices but the Semiconductor index was able to add over 1% on the day. This also helped post gains to the Nasdaq 100, although there was a relative gain for the Semiconductor Index against the latter index.


The Nasdaq 100 registered an accumulation day despite its underperformance against Small Caps. The index remains well placed to make a move to upper channel resistance.

...

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OpTrader

Swing trading portfolio - week of April 24th, 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 ...



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Members' Corner

Should I buy that stock?

Courtesy of Phil Stasukaitis (pstas)

I was asked by my local investment club to do a presentation on "how to buy a stock?" As I pondered the question, I began by noting all the elements that I monitor regularly and which come in to play as part of my decision process. As the group is comprised novices to experts, I tried to gear my discussion to cover both basics and more advanced concepts.

Four Part Discussion

  1. Macro Economic Indicators
  2. Market Indexes
  3. Fundamental Analysis
  4. Technical Analysis

1. Macro Economic Indicators

We'll start with reviewing some basic concepts and measurements that have direct effects on the stock market. 

A. Gross Domestic Product (GDP)

...

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Mapping The Market

Bombing - Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democr...



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Biotech

CAR-T & CRISPR - the Future is Now

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

PSW Members....it has been a while since my last post, but since many have all been on the board following the chat, it is time for a scientific lesson in a few of the companies we are long.  In addition, another revolution is coming in the medical field, and it will be touched upon as well.

CAR-T - stands for Chimeric antigen receptors (CARs) and the T is for T-cell.  

From the picture above, T-cells are one cell type of our immune system that fight off infection as well as they are one player at keeping rogue cells from becoming cancerous. Unfortunately, cancer somehow evades the immune system and so it begins.

CAR-T came along in the late1980s via a brilliant scientist, Zelig Eshhar...



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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

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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...

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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...

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