Posts Tagged ‘Michael Pento’

Michael Pento Asks If The Fed Ultimately Controls Interest Rates

Michael Pento Asks If The Fed Ultimately Controls Interest Rates

Courtesy of Tyler Durden

NEW YORK - APRIL 28: A trader on the New York Stock Exchange walks by a monitor displaying the federal funds rate made at an afternoon announcement by the Federal Reserve on April 28, 2010 in New York, New York. Following a two day meeting, Fed Chairman Ben Bernanke held the fed funds rate at historic lows near zero in order to keep the economy growing. (Photo by Spencer Platt/Getty Images)

By Michael Pento of Euro Pacific Capital

Does the Fed Ultimately Control Interest Rates?

In forecasting the consequences of current economic policy, many pundits are downplaying the risks associated with the surging national debt and the rapid expansion of marketable Treasury securities. Their comfort stems from the belief that a staggering debt burden will be manageable as long as interest rates remain extremely low; and, as they believe the Fed is in complete control of setting rates across the yield curve, they see no danger of rates ever rising past the point of comfort. Those who subscribe to this fairy tale forget that, in real life, there are many more hands on the interest rate steering wheel.

The Congressional Budget Office estimates that the 2010 deficit will exceed $1.3 trillion and total US debt now stands at $13.4 trillion (92% of GDP). That’s a lot of debt that needs floating. Yet, the 10-year note is yielding 2.8%-- which is 4.5 points below its 40-year average of 7.3%! Experience teaches that even moderately long-term investors should be expecting rising rates. Regardless of the extreme and obvious misalignment of fundamentals and bond prices, the mantra from the dollar shills remains firm: “The US dollar will always be the world’s reserve currency, and the US bond market will always be regarded as the safe-haven depository for global savings.”

With interest rates having been so low for so long, it’s understandable that many people have forgotten that central banks are not ultimately in control of interest rates. It is true that the Fed can be highly influential across the yield curve and can be especially effective in controlling the short end. But, in the end, the free market has the last word on the cost of money.

Although the Fed has certainly created enough new dollars to send prices higher, recessionary forces are, for now, disguising the evidence of runaway inflation. But when inflation finally erupts into the daylight, it will be impossible for borrowing costs to stay low. No one can realistically be expected to loan money below the rate of inflation. To attract buyers, the Treasury will have to offer a real rate of return.

Since our publicly traded debt level is increasing while our personal saving rate is not, we must inevitably…
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CNBC Host Accuses Guest Of Just Trying To Scare The Crap Out Of Everyone

CNBC Host Accuses Guest Of Just Trying To Scare The Crap Out Of Everyone

Courtesy of Gregory White at Clusterstock 

CNBC’s Simon Hobbs fought it out with Michael Pento today about the reality of the current economic situation in the U.S.

The fireworks start around 3:25, when Hobbs starts questioning the current generation of CEO’s for misunderstanding our post crisis world. Pento argues that right now people aren’t spending. Hobbs says that in Latin America and Asia, they are. 

Pento then argues that consumers are going to be paying down debt for several years, and that the U.S. will be weak through that time period. The two then fight it out over the U.S. AAA rating and taxes.

At 6:00 minutes in, Hobbs says, "You’re just peddling the power of nightmares," and "Wars are fought because of that sort of attitude."

Pento goes on to make points about how people need to take the threat of U.S. sovereign debt seriously.

 


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23 Doomsayers Who Say We’re Heading Toward Depression In 2011

23 Doomsayers Who Say We’re Heading Toward Depression In 2011

Paul Krugman Leonard Lopate

By Michael Snyder writing at The Business Insider/Clusterstock 

Micheal Snyder is editor of "The Economic Collapse Blog"

Could the world economy be headed for a depression in 2011?

As inconceivable as that may seem to a lot of people, the truth is that top economists and governmental authorities all over the globe say that the economic warning signs are there and that we need to start paying attention to them.  The two primary ingredients for a depression are debt and fear, and the reality is that we have both of them in abundance in the financial world today.

Meet The New Doomsayers >

In response to the global financial meltdown of 2007 and 2008, governments around the world spent unprecedented amounts of money and got into a ton of debt.  All of that spending did help bail out the global banking system, but now that an increasing number of governments around the world are in need of bailouts themselves, what is going to happen?  We have already seen the fear that is generated when one small little nation like Greece even hints at defaulting.  When it becomes apparent that quite a few governments around the globe cannot handle their debt burdens, what kind of shockwave is that going to send through financial markets? 

The truth is that we are facing the greatest sovereign debt crisis in modern history.  There is no way out of this financial mess that does not include a significant amount of economic pain. 

When you add mountains of debt to paralyzing fear to strict austerity measures, what do you get?


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Disaster, By the Numbers

Disaster, By the Numbers

Courtesy of Michael Panzner at Financial Armageddon 

Bomb with a Lit Fuse

I’ve leveled many criticisms at the so-called experts in the financial community. Apart from being blatantly conflicted, many wouldn’t know how to analyze their way out of a paper bag even if their lives depended on it. Generally speaking, they are good communicators but lousy thinkers.

But as with most generalizations, there are exceptions to the rule. Some eloquent experts do know what they are talking about, including David Rosenberg of Gluskin Sheff, Albert Edwards and Dylan Grice of Societe General, Paul Kasriel of Northern Trust, and John Hussman of Hussman Funds.

Based on what he has to say, another person who should probably be added to that very short list is the individual interviewed in the following Yahoo! Finance Tech Ticker report, "America’s Ticking Debt Bomb: Like Greece, ‘Only Worse,’ Pento Says":

America’s debt bomb is ticking and is likely to detonate in five years or less, says Michael Pento, senior market strategist at Delta Global Advisors.

"It could be much sooner when we hit the debt wall," Pento says. "My opinion doesn’t matter: Math tells me we’re in a serious problem."

The math Pento refers to is the Treasury Department’s recent estimate that total U.S. debt will top $13.6 trillion this year and rise to 102% of GDP by 2015. Moreover, the publicly traded debt (debt excluding intra-governmental obligations) will rise to $14 trillion by 2015, up from "just" $7.5 trillion in 2009.

At $14 trillion, the interest payments on the public debt will total about $1 trillion in 2015, he continues; even assuming solid growth and low inflation, that would equal about 30% of total government revenue. "What do you think that does to our bond market?," Pento wonders. "It leads to a dollar crisis and a bond market crisis. That’s why gold refuses to go down. "

Demand for U.S. Treasuries and the dollar currently remain high, especially in the wake of the euro’s slow-motion implosion. Pento admits timing this debt crisis is difficult but predicts we’ll be "like Greece, but worse," in four years or less, unless we make a sudden turn toward austerity.


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Zero Hedge

No, Robots Cannot Replace Us

Courtesy of ZeroHedge. View original post here.

Authored by Per Bylund via The Mises Institute,

Automation seems to be a never-ending source of fear-mongering. Judging from the commentary, robots will “replace us” and cause large-scale unemployment. With the entry of artificial intelligence (AI), and robots that make robots, the value of human beings as productive forces in the economy is simply zero. People then become value-less consumers, only “mouths to feed” while production is carried out by machines.

...



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Phil's Favorites

Breakout

 

Breakout

Courtesy of 

There’s a new kid on the block. Innovator’s IBD® Breakout Opportunities ETF, ticker BOUT.

The goal of this fund is to identify stocks before they break out. Basically, they’re delivering on a style of technical analysis via machine, which I find intriguing.

When I was trading stocks, I would often buy on the breakout and then sell on the retest. Over and over I would let my emotions get the best of me. Needless to say, it was not a profitable strategy.

Theoretically, an algorithm will eliminate some of these biases that all traders have to overcome. Below is ...



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ValueWalk

Ray Dalio On The Basics Of Debt Crises

By Sweeny Kumar. Originally published at ValueWalk.

The 2008 financial crisis resulted in enormous failures for both individual and institutional investors. There were not many investors who were able to navigate through the crisis calmly and without great losses. Those who did knew the fundamental basics about how debt crises work.

Q2 hedge fund letters, conference, scoops etc

Therefore, learning how to maneuver future debt crises is extremely critical for all investors, no matter how b...



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Kimble Charting Solutions

Connect Series Webinar September 2018

Courtesy of Chris Kimble.

We cover dominating patterns in major global Indices, sectors, commodities and the metals markets.  We produce chart pattern analysis and empower people to improve entry and exit points.

To become a member of Kimble Charting Solutions, click here.

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Insider Scoop

Discovery Communications' 20% Gain Difficult To Justify, Pivotal Says In Downgrade

Courtesy of Benzinga.

Related DISCA Benzinga's Top Upgrades, Downgrades For September 18, 2018 A Peek Into The Markets: US Stock Futur...

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Members' Corner

Nike, Colin Kaepernick and the pitfalls of 'woke' corporate branding

 

Adding this article to Members Corner, in case anyone wants to share their opinions on Nike and Kaep, or on divisiveness in general. Also see the article I mentioned in the comments section, "A Warning From Europe: The Worst Is Yet to Come" and What’s behind the current wave of ‘corporate activism’? ~ Ilene

Nike, Colin Kaepernick and the pitfalls of 'woke' corporate branding

Courtesy of Simon Chadwick, University of Salford...



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Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

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

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



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Chart School

Gold stocks, Elliot Wave and Volume

Courtesy of Read the Ticker.

Whom ever paints the chart with Elliot wave always has to try and sideline their bias. Elliot wave can work when it applied correctly and the chart is friendly to receive its application.

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Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of ...

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Digital Currencies

A history of Bitcoin - told through the five different groups who bought it

 

A history of Bitcoin – told through the five different groups who bought it

GeniusKp/Shutterstock.com

Courtesy of Dave Elder-Vass, Loughborough University

The recent fluctuations in Bitcoin’s value are just the latest in a series of spectacular peaks and troughs since it was created in 2009. (Though its price has been falling recently, it remains five times higher than last April, before the l...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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OpTrader

Swing trading portfolio - week of September 11th, 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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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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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.

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