Posts Tagged ‘Reagan’

Sarah Speaks!

I’m deeply concerned about the Federal Reserve’s plans to buy up anywhere from $600 billion to as much as $1 trillion of government securities. The technical term for it is “quantitative easing.” It means our government is pumping money into the banking system by buying up treasury bonds. And where, you may ask, are we getting the money to pay for all this? We’re printing it out of thin air.

The Fed hopes doing this may buy us a little temporary economic growth by supplying banks with extra cash which they could then lend out to businesses. But it’s far from certain this will even work. After all, the problem isn’t that banks don’t have enough cash on hand – it’s that they don’t want to lend it out, because they don’t trust the current economic climate.

And if it doesn’t work, what do we do then? Print even more money? What’s the end game here? Where will all this money printing on an unprecedented scale take us? Do we have any guarantees that QE2 won’t be followed by QE3, 4, and 5, until eventually – inevitably – no one will want to buy our debt anymore? What happens if the Fed becomes not just the buyer of last resort, but the buyer of only resort?

All this pump priming will come at a serious price. And I mean that literally: everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher. And it’s not just groceries.

Oil recently hit a six month high, at more than $87 a barrel. The weak dollar – a direct result of the Fed’s decision to dump more dollars onto the market – is pushing oil prices upwards. That’s like an extra tax on earnings. And the worst part of it: because the Obama White House refuses to open up our offshore and onshore oil reserves for exploration, most of that money will go directly to foreign regimes who don’t have America’s best interests at heart.

We shouldn’t be playing around with inflation. It’s not for nothing Reagan called it “as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.” The Fed’s pump priming addiction has got our small businesses running scared, and our allies worried. The German finance minister
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Four Deformations of the Apocalypse

Here’s an interesting article in the NY Times that has been making the internet rounds.  David Stockman writes about how the Republican party destroyed the American economy. – Ilene 

Barry Ritholtz made this comment in summarizing the article: 

In short, the party became more focused on Politics than Policy.

I bring this up as an intro to David Stockman’s brutal critique of Republican fiscal policy. Stockman was the director of the Office of Management and Budget under President Ronald Reagan. His NYT OpEd — subhed: How the GOP Destroyed the US economy — perfectly summarizes the most legitimate critiques of decades of GOP economic policy.

I can sum it up thusly: Whereas the Democrats have no economic policy, the Republicans have a very bad one.

Four Deformations of the Apocalypse

money printing By DAVID STOCKMAN, NY Times 

Excerpts: 

This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy. More specifically, the new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one.

The first of these started when the Nixon administration defaulted on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world. Now, since we have lived beyond our means as a nation for nearly 40 years, our cumulative current-account deficit — the combined shortfall on our trade in goods, services and income — has reached nearly $8 trillion. That’s borrowed prosperity on an epic scale.

[...]

The second unhappy change in the American economy has been the extraordinary growth of our public debt. 

[...]

The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector. Here, Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation. As a result, the combined assets of conventional banks and the so-called shadow banking system (including investment banks and finance companies) grew from a mere $500 billion in 1970 to $30 trillion by September 2008.

But the trillion-dollar conglomerates that inhabit this new financial world are not free enterprises. They are rather wards of the state, extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives. They could
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It’s the End of the World As We Know It

What are 308,367,109 Americans supposed to do?

First of all, despite clamping down on immigration, our population grew by 2.6M people last year.  Unfortunately, not only did we not create jobs for those 2.6M new people but we lost about 4M jobs so what are these new people going to do?  Not only that, but nobody is talking about the another major job issue: People aren't retiring!  They can't afford to because the economy is bad – that means there are even less job openings…   The pimply-faced kid can't get a job delivering pizza because his grandpa's doing it

There are some brilliant pundits who believe cutting retirement benefits will fix our economy.  How will that work exactly?  Pay old people less money, don't cover their medical care and what happens?  Then they need money.  If they need money, they need to work and if they need to work they increase the supply of labor, which reduces wages and leaves all 308,367,109 of us with less money.  Oh sorry, not ALL 308,367,109 – just 308,337,109 – the top 30,000 (0.01%) own the business the other 308,337,109 work at and they will be raking it in because labor is roughly 1/3 of the cost of doing business in America and our great and powerful capitalists have already cut their manufacturing costs by shipping all those jobs overseas, where they pay as little as $1 a day for a human life so now, in order to increase their profits (because profits MUST be increased) they have now turned inward to see what they can shave off in America.

How does one decrease the cost of labor in America?  Well first, you have to bust the unions.  Check.  Then you have to create a pressing need for people to work – perhaps give them easy access to credit and then get them to go so deeply into debt that they will have to work until they die to pay them off.  Check.  It also helps if you push up the cost of living by manipulating commodity prices.  Check.  Then, take away people's retirement savings.  Check.  Lower interest rates to make savings futile and interest income inadequate.  Check.  And finally, threaten to take away the 12% a year that people have been saving for retirement by labeling Social Security an "entitlement" program – as if it wasn't
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TWO DECADES OF GREED – THE UNRAVELING

TWO DECADES OF GREED – THE UNRAVELING 

Courtesy of Jim Quinn at The Burning Platform 

We are currently in the midst of a Fourth Turning. This twenty year Crisis began during the 2005 – 2008 timeframe with the collapse of the housing bubble and subsequent repercussions on the worldwide financial system. It is progressing as expected, with the financial crisis deepening and leading to tensions across the world. It will eventually morph into military conflict, as all prior Fourth Turnings have. The progression from High to Awakening through the Unraveling took from 1946 until 2006. The most treacherous period of the Saeculm is upon us. The intensity of a Crisis is very much dependent upon how a country and its citizens prepare for the Crisis during the final years of the Unraveling. The last Unraveling period in U.S. history from 1984 through 2005 was symbolized by Boomer greed, materialism, debt and selfishness. When Michael Lewis graduated from Princeton University in 1985 and joined Salomon Brothers, I’m sure he didn’t realize that he would end up book-ending the Unraveling period in his two best-selling books about Wall Street.

In his latest book, The Big Short: Inside the Doomsday Machine, Lewis seems bewildered by the fact that his first book Liar’s Poker, written in 1989,  didn’t dissuade college students from pursuing careers on Wall Street. If Lewis had read The Fourth Turning by Strauss & Howe when it was published in 1997, he would have understood why the people on Wall Street couldn’t change. The generations were just acting out their part in a grand never ending cycle. Lewis explains what he thought would happen:

“I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.”

Michael…
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Phil's Favorites

Ransomware can interfere with elections and fuel disinformation - basic cybersecurity precautions are key to minimizing the damage

 

Ransomware can interfere with elections and fuel disinformation – basic cybersecurity precautions are key to minimizing the damage

Ransomware attacks often strike local government computer systems, which poses a challenge for protecting elections. PRImageFactory/iStock via Getty Images

Courtesy of Richard Forno, University of Maryland, Baltimore County

Government computer systems in Hall County, Georgia, including a voter signature database, were ...



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Zero Hedge

In Unprecedented Cost-Cutting, Exxon Is Firing 15% Of Its Workers To Keep Dividend

Courtesy of ZeroHedge View original post here.

It may sound unbelievable that just seven years ago Exxon was the world's largest company.

Of course, all that changed with the advent of the FAAMGs and the Fed blowing the biggest tech bubble in history which together with the plunge in the price of oil, meant the market cap of Exxon has tumbled to just $136BN, below that of Zoom. Yes, we have gotten to the point in the bubble where a video chat with no barriers to entry, zero infrastructure and barely any profit is more val...



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ValueWalk

Donald Trump Is Headed For Another Shocking Victory: How To Position Your Portfolio For This "Obvious" Outcome

By David Pinsen. Originally published at ValueWalk.

I predict President Trump will win re-election with 312 electoral votes. Here I’ll show how I came up with that prediction, and how you can bet on it (or against it). I’ll also show how you can protect your portfolio against the risk of a disputed election.

Electoral Vote Prediction: 312-226 Obvious In Hindsight

The author’s election prediction. 

The winner of the 2016 Presidential election will seem obvious in hindsight. If former Vice President Joe Biden wins, that will be consistent with the polls.

The RealClearPolitics National Polling Average

However, pollster Robert Cahaly of the Trafalgar Group argues that many ...



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Kimble Charting Solutions

Is the Nasdaq About To Fall 25 Percent?

Courtesy of Chris Kimble

Technology is the lifeblood of our current economy and dictates future innovation. The sector has also taken a primary leadership role in the 11-year bull market.

But, as most of you are aware, that doesn’t mean that tech stocks are always smooth sailing. In fact, the Nasdaq and tech stocks can be a bumpy ride! Just check out today’s chart!

Displayed here is a “monthly” chart of the Nasdaq Composite (IXIC) which highlights some a handful of large bearish reversal patterns.

The month of...



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Biotech/COVID-19

Achieving COVID-19 herd immunity through infection is dangerous, deadly and might not even work

 

Achieving COVID-19 herd immunity through infection is dangerous, deadly and might not even work

Under relaxed public health restrictions, deaths will spike far before herd immunity is achieved. AP Photo/Mark Lennihan

Courtesy of Steven Albert, University of Pittsburgh

White House advisers have made the case recently for a “natural” approach to herd immunity as a way to reduce the need for ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Monday, 18 May 2020, 03:35:21 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Ooh so pretty, so pretty, ooh so!



Date Found: Thursday, 21 May 2020, 01:03:17 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Charlie Lee: All Things Litecoin (#MimbleWimble, ...



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Politics

How to track your mail-in ballot

 

How to track your mail-in ballot

Make sure you know when your ballot is arriving, and whether it’s been accepted for counting back at your election office. erhui1979/DigitalVision Vectors via Getty Images

Courtesy of Steven Mulroy, University of Memphis

Many voters who want to participate in the election by mail are concerned about when they’ll receive their ballot – and whether it will get back in time to be counted.

The pandemic has caused interest in ...



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Digital Currencies

Bitcoin: the UK and US are clamping down on crypto trading - here's why it's not yet a big deal

 

Bitcoin: the UK and US are clamping down on crypto trading – here's why it's not yet a big deal

Where there’s a bit there’s a writ. Novikov Aleksey

Courtesy of Gavin Brown, University of Liverpool

The sale and promotion of derivatives of bitcoin and other cryptocurrencies to amateur investors is being banned in the UK by the financial regulator, the Financial Conduct Authority (FCA). It is a...



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Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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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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Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

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

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

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

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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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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.