Posts Tagged ‘Gordon T. Long’

Preserve and Protect: The Jaws Of Death

Courtesy of Gordon T. Long of Tipping Points

Preserve and Protect: The Jaws Of Death

The United States is facing both a structural and demand problem – it is not the cyclical recessionary business cycle or the fallout of a credit supply crisis which the Washington spin would have you believe.

It is my opinion that the Washington political machine is being forced to take this position, because it simply does not know what to do about the real dilemma associated with the implications of the massive structural debt and deficits facing the US.  This is a politically dangerous predicament because the reality is we are on the cusp of an imminent and significant collapse in the standard of living for most Americans.

The politicos’ proven tool of stimulus spending, which has been the silver bullet solution for decades to everything that has even hinted of being a problem, is clearly no longer working. Monetary and Fiscal policy are presently no match for the collapse of the Shadow Banking System. A $2.1 Trillion YTD drop in Shadow Banking Liabilities has become an insurmountable problem for the Federal Reserve without a further and dramatic increase in Quantitative Easing. The fallout from this action will be an intractable problem which we will face for the next five to eight years, resulting in the ‘Jaws of Death’ for the American public.

The ‘Jaws of Death’ is the crushing squeeze of a shrinking gap between incomes and a rising burden of the real cost of debt burdens. Many may say there is nothing new in this, but I would respectfully disagree. There is a widespread misperception of what is actually evolving that stops voters from forcing politicians to address America’s substantial underlying dilemma.  It also stops investors from positioning themselves correctly.

Any solutions of real substance are presently considered political suicide. It is wiser to wait for a crisis event to unfold. As White House Chief of Staff and a primary Obama political strategist, Rahm Emanuel has said on numerous occasions: “You never want a serious crisis to go to waste”. It doesn’t take much intelligence to understand this also implies looking for a crisis as a political shield, for example from an almost insurmountable political problem such as a generational reduction in the US standard of living.

Before I delve into misperceptions of…
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INNOVATION: America has a Structural Problem

This is a terrific article (yellow highlighting mine), courtesy of Gordon T. Long, The Tipping Point  - Ilene 

INNOVATION

America has a Structural Problem 

It’s a STRUCTURAL problem not a CYCLICAL problem! 

It’s a DEMAND problem not a SUPPLY problem! 

 

 

I gave President Barrack Obama six months to roll-out his doomed Keynesian policies, twelve months to discover they were flawed and eighteen months to realize that the solution to America’s problems must lie within a different economic framework. I had hoped by the end of twenty-four months to see new policies closer to an Austrian economic philosophy emerge. I was wrong.

 

Though, even the Wall Street Journal recently featured an article on the re-emergence of the Austrian School of Economic philosophy, it would appear that President Obama’s administration still neither gets it, nor I am afraid ever will. Key defections by his leading economic advisors, talk of the need for QE II and a Stimulus II, and a political collapse in public confidence suggests a growing awareness that Keynesian policies are not working, as many predicted they wouldn’t. Obama’s exciting rhetoric of Hope and Change has left myself and the majority of recent polled Americans disillusioned and disappointed. What I see the administration failing to grasp is twofold:

 

I-America has a Structural problem, not a cyclical business cycle problem. Though the cyclical business cycle was greatly worsened by the financial crisis, I would argue that the structural problem facing the US is actually a contributor to what caused the financial crisis.


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Preserve and Protect: Mapping The Tipping Points

Preserve and Protect: Mapping The Tipping Points

Courtesy of Gordon T Long of Tipping Points

The economic news has turned decidedly negative globally and a sense of ‘quiet before the storm’ permeates the financial headlines. Arcane subjects such as a Hindenburg Omen now make mainline news. The retail investor continues to flee the equity markets and in concert with the institutional players relentlessly pile into the perceived safety of yield instruments, though they are outrageously expensive by any proven measure. Like trying to buy a pump during a storm flood, people are apparently willing to pay any price.  As a sailor, it feels like the ominous period where the crew is fastening down the hatches and preparing for the squall that is clearly on the horizon. Few crew mates are talgking as everyone is checking preparations for any eventuality. Are you prepared?

What if this is not a squall but a tropical storm, or even a hurricane? Unlike sailors, the financial markets do not have the forecasting technology for protection against such a possibility. Good sailors before today’s technology advancements avoided this possibility through the use of almanacs, shrewd observation of the climate and common sense. It appears to this old salt that all three are missing in today’s financial community.

Looking through the misty haze though, I can see the following clearly looming on the horizon.

Since President Nixon took the US off the Gold standard in 1971, the increase in global fiat currency has been nothing short of breath taking. It has grown unchecked and inevitably has become unhinged from world industrial production and the historical creators of real tangible wealth.

Do you believe trees grow to the sky?
Or, is it you believe you are smart enough to get out before this graph crashes?

Apparent synthetic wealth has artificially and temporarily been created through the production of paper. Whether Federal Reserve IOU notes (the dollar) or guaranteed certificates of confiscation (treasury notes & bonds), it needs to never be forgotten that these are paper. It is not wealth. It is someone else’s obligation to deliver that wealth to the holder of the paper based on what that paper is felt to be worth when the obligation is required to be surrendered. It must never be forgotten that fiat paper is only a counter party obligation to deliver. Will they?…
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INNOVATION: What made America great is now Killing her!

INNOVATION: What made America great is now Killing her! 

"Creative Destruction is Secular not Cyclical"

Courtesy of Gordon T. Long   

What made America great was her unsurpassed ability to innovate.  Equally important was also her ability to rapidly adapt to the change that this innovation fostered. For decades the combination has been a self reinforcing growth dynamic with innovation offering a continuously improving standard of living and higher corporate productivity levels, which the US quickly embraced and adapted to.

This in turn financed further innovation. No country in the world could match the American culture that flourished on technology advancements in all areas of human endeavor. However, something serious and major has changed across America.  Daily, more and more are becoming acutely aware of this, but few grasp exactly what it is.  It is called Creative Destruction. 

It turns out that what made America great is now killing her!

Our political leaders are presently addressing what they perceive as an intractable cyclical recovery problem when in fact it is a structural problem that is secular in nature. Like generals fighting the last war with outdated perceptions, we face a new and daunting challenge. A challenge that needs to be addressed with the urgency and scope of a Marshall plan that saved Europe from the ravages of a different type of destruction. We need a modern US centric Marshall plan focused on growth, but orders of magnitude larger than the one in the 1940’s. A plan even more brash than Kennedy’s plan in the 60’s to put a man of the moon by the end of the decade. America needs to again think and act boldly. First however, we need to see the enemy. As the great philosopher Pogo said: “I saw the enemy and it was I”.

THE  PROBLEM IS NOT CYCLICAL, IT IS SECULAR.

The dotcom bubble ushered in a change in America that is still reverberating through the nation and around the globe. The Internet unleashed productivity opportunities of unprecedented proportions in addition to new business models, new ways of doing business and completely new and never before realized markets.  Ten years ago there was no such position as a Web Master; having a home PC was primarily for doing word processing and creating spreadsheets; Apple made MACs; and ordering on-line was a quaint experiment for…
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EXTEND & PRETEND: Stage I Comes to an End!

EXTEND & PRETEND: Stage I Comes to an End!

The Dog Ate my Report Card

Courtesy of Gordon T. Long 

Both came to an end at the same time: the administration’s policy to Extend & Pretend has run out of time as has the patience of the US electorate with the government’s Keynesian economic policy responses. Desperate last gasp attempts are to be fully expected, but any chance of success is rapidly diminishing.

Whether an unimpressed and insufficiently loyal army general, a fleeing cabinet budget chief or G20 peers going the austerity route, all are non-confidence votes for the Obama administration’s present policies. A day after the courts slapped down President Obama’s six month gulf drilling moratorium, the markets were unpatriotically signaling a classic head and shoulders topping pattern. With an employment rebound still a non-starter, President Obama as expected was found to be asking for yet another $50B in unemployment extensions and state budget assistance to avoid teacher layoffs. However, the gig is up: the policy of Extend and Pretend has no time left on the shot clock nor for another round of unemployment benefit extensions. A congress that is now clearly frightened of what it sees looming in the fall midterm elections is running for cover on any further spending initiatives. The US electorate has been sending an unmistakable message in all elections nationwide.

The housing market is rolling over as fully expected and predicted by almost everyone except the White House and its lap-dog press corp. Noted analyst Meredith Whitney says a double dip in housing is a ‘no brainer’ with the government’s HAMP program clearly a bust as one third of participants are now dropping out. The leading economic indicator (ECRI) has abruptly turned lower, signaling the economy is slowing rapidly without the $1T per month stimulus addiction, which has kept the extend and pretend economy on life support.

The gulf oil spill that was initially stated as 1000 barrels per day has been revised upwards faster than the oil can reach the surface. It now appears to be north of 100,000 barrels per day. A 100 percent miss is about in line with the miss on how many jobs the American Recovery and Reinvestment Act of 2009 (ARRA) was going to create.  Also, it appears the administration can’t even get its hands around the basics of administration management during any crisis event.  Teleprompter politics…
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Zero Hedge

A Defiant Mark Zuckerberg Says "We're Not Gonna Change Our Policies" As Advertisers Will Be "Back Soon"

Courtesy of ZeroHedge View original post here.

As the advertiser boycott of Facebook grows, CEO Mark Zuckerberg advised his employees that he intends to defy the crackdown, and expects companies that pulled advertisements off the social media platform to be back "soon enough."

As The Information reports, Zuckerberg gave his thoughts on the boycott, which now includes large brands like Starbucks and Coca-Cola, during a video town ...



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Phil's Favorites

Which drugs and therapies are proven to work, and which ones don't, for COVID-19?

 

Which drugs and therapies are proven to work, and which ones don't, for COVID-19?

We are slowly figuring out which drugs and therapies are effective against the new coronavirus. Anton Petrus / Getty Images

Courtesy of William Petri, University of Virginia

I am a physician and a scientist at the University of Virginia. I care for patients and conduct research to find better ways to diagnose and treat infectious ...



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Biotech/COVID-19

Which drugs and therapies are proven to work, and which ones don't, for COVID-19?

 

Which drugs and therapies are proven to work, and which ones don't, for COVID-19?

We are slowly figuring out which drugs and therapies are effective against the new coronavirus. Anton Petrus / Getty Images

Courtesy of William Petri, University of Virginia

I am a physician and a scientist at the University of Virginia. I care for patients and conduct research to find better ways to diagnose and treat infectious ...



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ValueWalk

FedEx Corp.: Fundamentals Support the Price Increase

By F.A.S.T. Graphs. Originally published at ValueWalk.

Introduction

After reporting better than 4th quarter results on Tuesday, the stock price of FedEx Corporation (NYSE:FDX) has been on a tear. With this article, I plan to demonstrate that the fundamentals support the current price rise. Moreover, the fundamentals also suggest that it is not too late to take a long-term position in this leading air freight and logistics company.

Q1 2020 hedge fund letters, conferences and more

Yesterday, FedEx reported a surge in quarterly adjusted earnings of $2.53 per share compared to expectations of $1.52 per s...



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Kimble Charting Solutions

Gold / Dollar Ratio Sending Bullish Message To Gold Bugs!

Courtesy of Chris Kimble

It’s been a good year for gold bugs!

Gold has outperformed several asset classes as volatility and general economic uncertainty have come back to the forefront.

In today’s chart, we look at the ratio of Gold to the U.S. Dollar on a “monthly” basis. Gold bulls want to see this ratio trending higher… and it is.

In fact, the rise has taken the Gold ratio to an important juncture. It is working on a dual breakout at point (2).

Thus far, price is well above horizontal resistance marked by (1), and just above trend resistance at (2). Should the breakout hold, it would be historically bullish for Gold (and precious metals). Stay tuned!

This ar...



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The Technical Traders

Long-Term Consumer Discretionary Winners

Courtesy of Technical Traders

I was live on TD Ameritrade TV talking about consumer discretionary, staples, and utility sectors. Explained is a unique crossover on how some discretionary stocks are also becoming a consumer staple.

Get My ETF Trade Signals, Entry, Targets, and Stop Levels – CLICK HERE ...

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Chart School

US Dollar with Ney and Gann Angles

Courtesy of Read the Ticker

Where is price going, is there strength or weakness in the chart?


Previous Post on the US Dollar : Where is the US Dollar trend headed ?


The question is always what will the future price action look like ?


This post will highlight the use of lines generated by angles. Not trend lines, as trend lines require two known points on a chart, where as angles require only one known point and a angle degree to draw a line. The question then becomes how is the angle degree determined.



There are two theories: ...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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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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