I'll write a one sentence take and I encourage you to read by clicking the hyperlink text. This will give you a flavor of my reading.
The bailout will bail out the must reckless in financial industry, and give pennies to tax payers.
This will of course, set us up for the next crisis as I previously covered in Market - Whats Next?
Once America can manage to have a 15 minute test like the UK will have shortly,I predict USA will peak within two weeks of shipment. Until this or a vaccine is available, we will keep accelerating.
As it stands, we will keep spiking, as I posted a week ago, 18,000 cases in a day!
Click to read a GREAT article laying out the case follow the data, rather than the denier repeating its hyped by the media.
Fitch warns of US AAA rating at risk (who is big enough to be the defacto AAA replacement?)
The Market is surging for its best day ever since 1932. (Its a snap back on emotion!)
The cruise ship industry has been extremely profitable, in part by dodging taxes for decades as a 'boat' in international waters. NOW they want a bail out. I say, let them stand on their own two feet! NO HANDOUTS to 'illegals' who don't pay taxes. (to borrow from the right)
Friday, March 27, 2020
Thursday, March 26, 2020
Going Long ZOOM today
I'll write more later, buying Stock ticker, ZM. ZOOM, an app that has gained HUGE usage recently
Wednesday, March 25, 2020
What will the market do now?
With the government passing the budget, some may think the market will roar back to new highs.
Actually, all it guards against is record lows. Meaning with the support it is now extremely unlikely we can hit 2008 low of SPX 666 (recent low was 2009). I think the very bottom with support is around 1600. Doesn't mean the market will go that low, but that is the effect of economic support.
To get to new highs, we need an economy as profitable as it was before. Further, we need corporations to not save, and take all savings to buy back stock as they did the last two years. I think both of these items are off the table for 2020. Therefore unless the government just buys up stock until we hit new highs, the market will not get there.
In the weeks ahead, if SPX hits 3090, consider to start to selling. To me a 50% retrace back to old highs will be a gift, and purely a result of temporary optimism and goosing the economy with free money.
For Wednesday I doubt we will see a rally that compares to yesterday, best we can hope for is a gain of 1-5%, but time will tell. We could easily see a decline , as the bill being passed doesnt equal the money is being spent today. The money will take time to push into the market place.
I sold my 3x longs, lightened up a little on other longs, but I am net long, with heavy emphasis on GDX, GXJ, and GOLD.
Good luck!
Actually, all it guards against is record lows. Meaning with the support it is now extremely unlikely we can hit 2008 low of SPX 666 (recent low was 2009). I think the very bottom with support is around 1600. Doesn't mean the market will go that low, but that is the effect of economic support.
To get to new highs, we need an economy as profitable as it was before. Further, we need corporations to not save, and take all savings to buy back stock as they did the last two years. I think both of these items are off the table for 2020. Therefore unless the government just buys up stock until we hit new highs, the market will not get there.
In the weeks ahead, if SPX hits 3090, consider to start to selling. To me a 50% retrace back to old highs will be a gift, and purely a result of temporary optimism and goosing the economy with free money.
For Wednesday I doubt we will see a rally that compares to yesterday, best we can hope for is a gain of 1-5%, but time will tell. We could easily see a decline , as the bill being passed doesnt equal the money is being spent today. The money will take time to push into the market place.
I sold my 3x longs, lightened up a little on other longs, but I am net long, with heavy emphasis on GDX, GXJ, and GOLD.
Good luck!
Tuesday, March 24, 2020
And there she blows
UPDATE: I dumped almost all of my 3x longs. That was a big jump for a night, and some of the non 3x.
UPDATE 12:40: Purchased NUGT 3x miners at $8.25 in anticipation of market going up overall.
Sunday I posted Market - What's Next? about positioning for the next wave, the consequences of free money.
Apparently, I am not the only person in the world thinking this way.
Monday Gold exploded higher, as well as Bitcoin started to move.
All this free money will have consequence, unless you bought into these sectors yesterday it will be hard to commit to stay in. Nothing goes in a straight line, so I expect a news noteworthy advance today that gets some of the public to take notice.
It should pop higher, but then I expect the big boys start pushing it down to shake out weak hands before advancing again. Churn creates profit for day-traders but not for nervous long term holders.
For the record items I purchased yesterday and prices.
GOLD - $17.25 - A well run gold company, told to me by a friend who is NOT a gold bug.
GDX - $22 - Gold miner ETF
GDXJ - $26.5 - Small Gold miner ETF
GLD - $143.5 - Mirrors price of Gold
UGLD - $136 - 3x of price of gold change
SLV - 12 - Mirrors price of Silver
USLV - $29 - 3x long silver
I am sure there are other ETF's in this sector worth looking at, but these are the ones I bought into.
As of this morning UGLD is already at 170, up 16% from yesterdays price.
Remember, as the market rises, EVERYTHING rises.
A quick hit on long market is
SPXL - 17.55 as of yesterday
Good luck!
In honor of 2008, at that bottom I went long gold miners through bottom of 2009. In honor of the 2009 Man of the Year, who enables free money for this new debacle, Ben Bernanke.
UPDATE 12:40: Purchased NUGT 3x miners at $8.25 in anticipation of market going up overall.
Sunday I posted Market - What's Next? about positioning for the next wave, the consequences of free money.
Apparently, I am not the only person in the world thinking this way.
Monday Gold exploded higher, as well as Bitcoin started to move.
All this free money will have consequence, unless you bought into these sectors yesterday it will be hard to commit to stay in. Nothing goes in a straight line, so I expect a news noteworthy advance today that gets some of the public to take notice.
It should pop higher, but then I expect the big boys start pushing it down to shake out weak hands before advancing again. Churn creates profit for day-traders but not for nervous long term holders.
For the record items I purchased yesterday and prices.
GOLD - $17.25 - A well run gold company, told to me by a friend who is NOT a gold bug.
GDX - $22 - Gold miner ETF
GDXJ - $26.5 - Small Gold miner ETF
GLD - $143.5 - Mirrors price of Gold
UGLD - $136 - 3x of price of gold change
SLV - 12 - Mirrors price of Silver
USLV - $29 - 3x long silver
I am sure there are other ETF's in this sector worth looking at, but these are the ones I bought into.
As of this morning UGLD is already at 170, up 16% from yesterdays price.
Remember, as the market rises, EVERYTHING rises.
A quick hit on long market is
SPXL - 17.55 as of yesterday
Good luck!
In honor of 2008, at that bottom I went long gold miners through bottom of 2009. In honor of the 2009 Man of the Year, who enables free money for this new debacle, Ben Bernanke.
Sunday, March 22, 2020
Market - Whats Next?
Wow, that has been some crazy last 4 weeks! I had *hoped* to find a short term bottom around SPX 2450-2600, and we did stay there for a bit, but we blew through it. I dumped my speculative longs.
Next stop is SPX 1800-2200 range. I am guessing if we get footing it will be around 1900. I'll try again to go long then. But tomorrow could be the short term bottom as we break through 2200.
Short Take Summary
Guess is 10-15 trillion dollars injected into the public sector from the government/Fed in very short period of time over-reacting to the pandemic. (50 trillion global?)When the worst is over, there will be the largest movement of money from bonds to risk-on stocks and/or commodities. Stocks will be embolden that the government won't let anything bad happen, so full risk train is on! Problem will be governments will enter into crisis to roll over debt, and interest rates rise. Rather than see governments fail, the federal reserve will up its game by buying debt in "Quantitative Easing" making the Fed the largest asset owner in the world by far. At some point, we will have a global currency crisis.
I put a list together of stock names and price points I think are good, just put buy orders in at that price. Of course feel free to wait and buy when you think a bottom is in.
GDX - Gold Miners ETF - NOW and anything below $17
- This thing should hit its all time high $65 in the next 2 years.
- In March 2009, $35 vs $17 bottom of 2008.
GOLD - A well run gold company - NOW or as low as $10
IXN - World Technology ETF - 120
Amazon - $1,500, and a steal at $1,000
Microsoft - $100
Facebook - NOW @ $149 (but stock is too new for other levels), $80 a good price.
QQQ - Nasdaq (tech) ETF - $135
IBB - Biotech ETF - $75
APPL - I am concerned over their supply lines - $145, steal at $95
Gld - etn of gold price , buy at anytime
Slv - etn of silver price, buy at anytime
The idea is not to go 100% in at levels above, but gain confidence to START to go in, and scale in based on the environment. Consider putting in bids on these very good long term bets at sale prices. No matter what happens, they should have value in the long run.
Below are four bonus 'speculation' higher risk, but higher reward.
MJ - Marijuana ETF - Now ($9) If skeptical a steal at $5
USO - Oil , it is risky, but at all time lows - $4 is good price (normally >10).
We are going to run into new market risks that may distort the market. The stock market could close. Yes you read that right. It should never close beyond 1 day, but at the stage of panic it could close for weeks. If it does, make sure your positions are something you want for a few weeks, for you can't sell it until the market reopens.
Further, we could get direct buying of the market by the fed. If this happens prior to falling to SPX 1500, as a country, we have lost our mind. Capitalism is king, we HATE socialism, for the rich or the poor. Once we cross this line, the government will be expected to buy directly into the market at any correction until the currency system collapses.
At SPX 1500 if this happens and there is direct purchasing, I still think we lost our minds, but I can understand, we'll be in 2008 collapse territory.
I do also think sometime in a week or three, we will have cases slowing since we are FINALLY taking the proper precautions in the USA. My hope is by week of April 6th we will see 'good news' for our actions. Maybe this bottom isn't a number but a change in the news that is needed.
At the bottom is a graph showing our current position, we have lost only 3 years of gains, not too bad out of an 11 year bull run. Heck if we go up from here, the worst world disaster in our lifetime would cost us only 1-2 years of market losses! Somehow I am uneasy claiming this is what to expect.
For those who did listen to my post "ACT NOW! Sell the market!", I'd like to propose some next steps.
What the biggest challenge now ISN'T the financial system risk, but what governments will do. Meaning, they are likely to shift the risk from the public sector to the government. The Federal Reserve had 4.5 Trillion in bad debt, up from zero in 2008. At the PEAK of the US economy we had a run rate of 1 TRILLION new debt per year, and that's at the very best economy of all times?
So lets get to it, what is likely to happen.
I believe the US government is going to over react, as will the fed and world banks, AND too soon. What may happen then is while free money starts to flow, we may not see a stock market recovery, but a free-fall stop, potentially a short term bounce.
At some point, we will see infection rates drop, because of keeping everyone home. Then we may start to lighten restrictions. Eventually go too far in giving people confidence. Then we'll have more infections, and this winter should be quite bad. If medical treatments come to the forefront, then the winter wont be bad. So lets look at both shall we?
BAD winter
A bad winter means we can NOT inoculate or cure people, so draconian efforts must be in place during flu season. Therefore the economy cannot recover during peak shopping 'year over year', but may do better than expected using home shopping. By March 2021 things may look up, as we have had enough time to find better treatments, staff up, deploy treatments, and a percent of society has had it. Basically we are past the 60% mark in infections and we are seeing the end.
See section market rebound below.
Good winter
A good winter means we can inoculate or cure people, so draconian efforts do NOT have to be in place. In effect we enter flu season with optimism, and the infection rate and death rate is lower than projected. We are seeing the end of this. See section Market Rebound below.
Market Rebound
Assuming we get the government to over-react, as well as the fed, and world banks, trillions of money will be injected into the system in a VERY short time with 'low cost' of debt. The governments stop companies who did very bad things (like have no savings, counting on a bail out, and it was delivered!) The message to the world is the companies that where doing good things, like being able to weather a financial disaster should not be positioned to take over bad companies. Bad companies make more money for investors and executives, and the risk train is back on full steam, all aboard!!
With risk ON, we will have US Treasury rates at near zero rates to start to go up. People will move away for no-interest bonds to the high potential of the market, all aboard!
With such large amount of money in government debt, the migration will be MORE distorting than the money into government debt. When money moved into 'safe debt' vs 'risk' of the market, the market deleveraged and tanked hard core. This "justified' the transfer of risk to government debt.
Once government debt falls out of favor, and the exodus has begun, who will save our government debt machine? After all in January 2020 in the state of the union speech , the USA was declared at its peak financially even though to operate at such an awesome economy needs 1 trillion of new debt per year on top of the existing 23 trillion of debt.
With an economy routed in 2020 due to the pandemic, fantastical debt run up, and money injected everywhere to reward companies not prepared and punish those who where, what will be the choices?
Can the government THEN increase taxes , jeopardizing the companies it just bailed out? How about only tax the good companies, and don't tax the weak ones? Government cut spending across the board, like social security, medicaid? Or defense with a really unstable and pissed off China?
If people in power buckled to save weak companies and new debt is the answer, why would the answer change in the next crisis? Assuming USA spends 4 trillion as being discussed, and we have net 5 trillion of government NEW debt in 2020, and the fed pumps another 10 trillion, thats 15 trillion new debt in 2020 for USA alone! There are 130 million people working, so that's 115K new debt for every working person, on top of the existing 176K per working person, for 200K per person debt!
This may bring on new challenges, how to float this debt instead of paying it. This has worked since interest rates have declined since 1982. You can kick the can with lower rates. But finally, FINALLY, the debt monster will awaken, and we'll have the final bubble popping start.
To prepare for the NEXT bubble is the key to navigating the next few years, and time to get items on sale for that long term. Back to the top of this post for some ideas, and good luck!
Next stop is SPX 1800-2200 range. I am guessing if we get footing it will be around 1900. I'll try again to go long then. But tomorrow could be the short term bottom as we break through 2200.
Short Take Summary
Guess is 10-15 trillion dollars injected into the public sector from the government/Fed in very short period of time over-reacting to the pandemic. (50 trillion global?)When the worst is over, there will be the largest movement of money from bonds to risk-on stocks and/or commodities. Stocks will be embolden that the government won't let anything bad happen, so full risk train is on! Problem will be governments will enter into crisis to roll over debt, and interest rates rise. Rather than see governments fail, the federal reserve will up its game by buying debt in "Quantitative Easing" making the Fed the largest asset owner in the world by far. At some point, we will have a global currency crisis.
I put a list together of stock names and price points I think are good, just put buy orders in at that price. Of course feel free to wait and buy when you think a bottom is in.
GDX - Gold Miners ETF - NOW and anything below $17
- This thing should hit its all time high $65 in the next 2 years.
- In March 2009, $35 vs $17 bottom of 2008.
GOLD - A well run gold company - NOW or as low as $10
IXN - World Technology ETF - 120
Amazon - $1,500, and a steal at $1,000
Microsoft - $100
Facebook - NOW @ $149 (but stock is too new for other levels), $80 a good price.
QQQ - Nasdaq (tech) ETF - $135
IBB - Biotech ETF - $75
APPL - I am concerned over their supply lines - $145, steal at $95
Gld - etn of gold price , buy at anytime
Slv - etn of silver price, buy at anytime
The idea is not to go 100% in at levels above, but gain confidence to START to go in, and scale in based on the environment. Consider putting in bids on these very good long term bets at sale prices. No matter what happens, they should have value in the long run.
Below are four bonus 'speculation' higher risk, but higher reward.
MJ - Marijuana ETF - Now ($9) If skeptical a steal at $5
USO - Oil , it is risky, but at all time lows - $4 is good price (normally >10).
BitCoin - Buy cryptos at CoinBase to diversify.
Get an account at InteractiveBrokers , able to shoot money to any currency, stock, bond, or futures around the world instantly.
A professional that is worth reading, is fund manager, Hussman.
Get an account at InteractiveBrokers , able to shoot money to any currency, stock, bond, or futures around the world instantly.
A professional that is worth reading, is fund manager, Hussman.
I ranted below as to why, read on if you want
We are going to run into new market risks that may distort the market. The stock market could close. Yes you read that right. It should never close beyond 1 day, but at the stage of panic it could close for weeks. If it does, make sure your positions are something you want for a few weeks, for you can't sell it until the market reopens.
Further, we could get direct buying of the market by the fed. If this happens prior to falling to SPX 1500, as a country, we have lost our mind. Capitalism is king, we HATE socialism, for the rich or the poor. Once we cross this line, the government will be expected to buy directly into the market at any correction until the currency system collapses.
At SPX 1500 if this happens and there is direct purchasing, I still think we lost our minds, but I can understand, we'll be in 2008 collapse territory.
I do also think sometime in a week or three, we will have cases slowing since we are FINALLY taking the proper precautions in the USA. My hope is by week of April 6th we will see 'good news' for our actions. Maybe this bottom isn't a number but a change in the news that is needed.
At the bottom is a graph showing our current position, we have lost only 3 years of gains, not too bad out of an 11 year bull run. Heck if we go up from here, the worst world disaster in our lifetime would cost us only 1-2 years of market losses! Somehow I am uneasy claiming this is what to expect.
For those who did listen to my post "ACT NOW! Sell the market!", I'd like to propose some next steps.
What the biggest challenge now ISN'T the financial system risk, but what governments will do. Meaning, they are likely to shift the risk from the public sector to the government. The Federal Reserve had 4.5 Trillion in bad debt, up from zero in 2008. At the PEAK of the US economy we had a run rate of 1 TRILLION new debt per year, and that's at the very best economy of all times?
So lets get to it, what is likely to happen.
I believe the US government is going to over react, as will the fed and world banks, AND too soon. What may happen then is while free money starts to flow, we may not see a stock market recovery, but a free-fall stop, potentially a short term bounce.
At some point, we will see infection rates drop, because of keeping everyone home. Then we may start to lighten restrictions. Eventually go too far in giving people confidence. Then we'll have more infections, and this winter should be quite bad. If medical treatments come to the forefront, then the winter wont be bad. So lets look at both shall we?
BAD winter
A bad winter means we can NOT inoculate or cure people, so draconian efforts must be in place during flu season. Therefore the economy cannot recover during peak shopping 'year over year', but may do better than expected using home shopping. By March 2021 things may look up, as we have had enough time to find better treatments, staff up, deploy treatments, and a percent of society has had it. Basically we are past the 60% mark in infections and we are seeing the end.
See section market rebound below.
Good winter
A good winter means we can inoculate or cure people, so draconian efforts do NOT have to be in place. In effect we enter flu season with optimism, and the infection rate and death rate is lower than projected. We are seeing the end of this. See section Market Rebound below.
Market Rebound
Assuming we get the government to over-react, as well as the fed, and world banks, trillions of money will be injected into the system in a VERY short time with 'low cost' of debt. The governments stop companies who did very bad things (like have no savings, counting on a bail out, and it was delivered!) The message to the world is the companies that where doing good things, like being able to weather a financial disaster should not be positioned to take over bad companies. Bad companies make more money for investors and executives, and the risk train is back on full steam, all aboard!!
With risk ON, we will have US Treasury rates at near zero rates to start to go up. People will move away for no-interest bonds to the high potential of the market, all aboard!
With such large amount of money in government debt, the migration will be MORE distorting than the money into government debt. When money moved into 'safe debt' vs 'risk' of the market, the market deleveraged and tanked hard core. This "justified' the transfer of risk to government debt.
Once government debt falls out of favor, and the exodus has begun, who will save our government debt machine? After all in January 2020 in the state of the union speech , the USA was declared at its peak financially even though to operate at such an awesome economy needs 1 trillion of new debt per year on top of the existing 23 trillion of debt.
With an economy routed in 2020 due to the pandemic, fantastical debt run up, and money injected everywhere to reward companies not prepared and punish those who where, what will be the choices?
Can the government THEN increase taxes , jeopardizing the companies it just bailed out? How about only tax the good companies, and don't tax the weak ones? Government cut spending across the board, like social security, medicaid? Or defense with a really unstable and pissed off China?
If people in power buckled to save weak companies and new debt is the answer, why would the answer change in the next crisis? Assuming USA spends 4 trillion as being discussed, and we have net 5 trillion of government NEW debt in 2020, and the fed pumps another 10 trillion, thats 15 trillion new debt in 2020 for USA alone! There are 130 million people working, so that's 115K new debt for every working person, on top of the existing 176K per working person, for 200K per person debt!
This may bring on new challenges, how to float this debt instead of paying it. This has worked since interest rates have declined since 1982. You can kick the can with lower rates. But finally, FINALLY, the debt monster will awaken, and we'll have the final bubble popping start.
To prepare for the NEXT bubble is the key to navigating the next few years, and time to get items on sale for that long term. Back to the top of this post for some ideas, and good luck!
Thursday, March 19, 2020
COVID-19 updated statistics
I looked at latest COVID-19 statistics to understand our current trends.
The good news is, USA to Death ratio is currently lower than the world.
The bad news is, the number of infected has accelerated dramatically.
But this is to be expected. In January when President Trump was very gracious in supporting China's efforts, we in the USA didn't act quickly. Now with tests finally deploying late in the game, we are seeing numbers rise.
I adjusted the death rate to match the stats, but I think this rate is very optimistic.
I also think the infection rate will slow down dramatically in three weeks, when USA 'stay at home' efforts help and large scale testing identifies the sick.
The new expected death rate this season is extremely rosy optimistic at 100,000 cases
What I am expecting now is 1-3 million in 2020. If the death rate hits 3.4%, we are targeting upwards of 8 million.
If we hit 3 million, 1 out of every 100 people you know will pass. If 8 million 1 out of 38. Staggering.
I am getting pessimistic on the market.
Good video
https://www.youtube.com/watch?time_continue=791&v=On1hWBn3Ofg&feature=emb_logo
The good news is, USA to Death ratio is currently lower than the world.
The bad news is, the number of infected has accelerated dramatically.
But this is to be expected. In January when President Trump was very gracious in supporting China's efforts, we in the USA didn't act quickly. Now with tests finally deploying late in the game, we are seeing numbers rise.
I adjusted the death rate to match the stats, but I think this rate is very optimistic.
I also think the infection rate will slow down dramatically in three weeks, when USA 'stay at home' efforts help and large scale testing identifies the sick.
The new expected death rate this season is extremely rosy optimistic at 100,000 cases
What I am expecting now is 1-3 million in 2020. If the death rate hits 3.4%, we are targeting upwards of 8 million.
If we hit 3 million, 1 out of every 100 people you know will pass. If 8 million 1 out of 38. Staggering.
I am getting pessimistic on the market.
Good video
https://www.youtube.com/watch?time_continue=791&v=On1hWBn3Ofg&feature=emb_logo
Wednesday, March 18, 2020
Play of the decade missed
On Monday GDX hit about 16 dollars, that would have a been the best buy ever for the next crisis. I expect the market to be all over, potentially closing the market, or some other crazy action. Banning shorts is any day now.
What I am now focused on is the crisis that may happen as soon as 2021. With the world issuing free money, and trillions driven into fixed funds (bonds), then this unwinds, you better be ready.
What I expect is interest rates will be near zero for 1, 5, and 10 year bonds. When money moves out, we will have record debt in companies and countries that need to be rolled over. To attract funds, rates will rise. With so much debt, any rising of rates will trigger a new crisis.
This may be mitigated by the FED who will likely have 10 trillion or more debt 'monetized' to add another 10 trillion to their balance sheet. Then, as we abandon all capitalism for socialism economics at the government and company level, is when it will get very interesting.
What will remain to be seen is will the system destabilize again, but at a currency level. If the USD ever comes into question, ANY appeasement by the FED or the US Government would jeopardize the entire fiat currency system. That is when the debt will be paid for all the free money from 2008 to then.
I don't have any answers for you on what to do. I do think buying cheaply into solid companies, perhaps some fear plays (bitcoin, gold) will ensure you do fine through the final crisis.
What I do truely believe on the other side of the US Dollar crisis and global fiat currency crisis will be a rebirth that will benefit the young, and punish the old.
Unfortunately, I am not old enough to be near the end and not care, and not young enough to get the big benefit. I am part of the pinched generation. Best I can do is come out OK.
For now, I need to pull back from playing the markets and position for 2021. The crazy is so insane anything I do is wrong.
Stocks to consider, GDX, MJ, SLV, and watch for deals on Amazon, Microsoft, Biotech ETFs, and funds that invest at a global level. I expect Tesla to have its doomsday, if it survives a great buy at the crisis point. If it fails, a great company that should survive is Volkswagen. They are positioning to be ready if Tesla should fail.
What I am now focused on is the crisis that may happen as soon as 2021. With the world issuing free money, and trillions driven into fixed funds (bonds), then this unwinds, you better be ready.
What I expect is interest rates will be near zero for 1, 5, and 10 year bonds. When money moves out, we will have record debt in companies and countries that need to be rolled over. To attract funds, rates will rise. With so much debt, any rising of rates will trigger a new crisis.
This may be mitigated by the FED who will likely have 10 trillion or more debt 'monetized' to add another 10 trillion to their balance sheet. Then, as we abandon all capitalism for socialism economics at the government and company level, is when it will get very interesting.
What will remain to be seen is will the system destabilize again, but at a currency level. If the USD ever comes into question, ANY appeasement by the FED or the US Government would jeopardize the entire fiat currency system. That is when the debt will be paid for all the free money from 2008 to then.
I don't have any answers for you on what to do. I do think buying cheaply into solid companies, perhaps some fear plays (bitcoin, gold) will ensure you do fine through the final crisis.
What I do truely believe on the other side of the US Dollar crisis and global fiat currency crisis will be a rebirth that will benefit the young, and punish the old.
Unfortunately, I am not old enough to be near the end and not care, and not young enough to get the big benefit. I am part of the pinched generation. Best I can do is come out OK.
For now, I need to pull back from playing the markets and position for 2021. The crazy is so insane anything I do is wrong.
Stocks to consider, GDX, MJ, SLV, and watch for deals on Amazon, Microsoft, Biotech ETFs, and funds that invest at a global level. I expect Tesla to have its doomsday, if it survives a great buy at the crisis point. If it fails, a great company that should survive is Volkswagen. They are positioning to be ready if Tesla should fail.
Tuesday, March 17, 2020
Short selling
Spain just made short selling illegal. There is no WAY Trump can resist then following suite.
Short selling is quite misunderstood, it enables everyone to bet in either direction up or down.
If you ban short selling, the money 'lost' is a pure gain for the market makers. Meaning wallstreet and banks get all the profits of the stock loss.
All you will do is prevent any citizen to profit from a fall in the markets. The net will continue to push wealth to the top 0.01% as the rest lose.
China has never allowed short selling, yet their market has quite dramatic drops. Without short selling bullish hype goes less unchecked, and could even be encouraged as the market makers will win big on a drop.
Back in 2008 they banned shorting, but only if your not a bank or market maker. I had shorts, and held on as I lost 6 digits in a second. Then what happened? Market fell worse, and even more to March 2009. All the way down the market makers profited, and if you didnt have a position, all you could do is watch.
So looking ahead, plan for shorts to be banned, and we'll be going much lower. Not immediately but eventually, since the 'easy money' will be on the downside for the insiders.
Good luck, and see you at the bottom.
Short selling is quite misunderstood, it enables everyone to bet in either direction up or down.
If you ban short selling, the money 'lost' is a pure gain for the market makers. Meaning wallstreet and banks get all the profits of the stock loss.
All you will do is prevent any citizen to profit from a fall in the markets. The net will continue to push wealth to the top 0.01% as the rest lose.
China has never allowed short selling, yet their market has quite dramatic drops. Without short selling bullish hype goes less unchecked, and could even be encouraged as the market makers will win big on a drop.
Back in 2008 they banned shorting, but only if your not a bank or market maker. I had shorts, and held on as I lost 6 digits in a second. Then what happened? Market fell worse, and even more to March 2009. All the way down the market makers profited, and if you didnt have a position, all you could do is watch.
So looking ahead, plan for shorts to be banned, and we'll be going much lower. Not immediately but eventually, since the 'easy money' will be on the downside for the insiders.
Good luck, and see you at the bottom.
Monday, March 16, 2020
America lacking stable leadership is going to fail
UPDATE: 12 noon Monday: Funny how emotions drive the market. I ended up adding MORE to my longs this morning. lol I still am jittery on multi-month recovery. TBD.
This article is NOT NOT NOT about bashing Trump, it is bashing where we are in the American government system.
The Federal Reserve Bank is an institution that has been treated with 'authority' to give confidence to the world it is not a puppet of the politicians. This is critical, governments that have complete unchecked authority over it's own currency always end in failure. Simply read up on any failed currency, such as Zimbabwe, once the politicians have direct control, the currency eventually fails.
The monetary system is also a confidence game, meaning everyone knows there is nothing backing currency but faith. It has been a critical mission to try to keep balance between investments of bonds, stocks, and cash. The issue is when too much money runs for one or two of them, the imbalance distorts the market.
The combination of co-ordinated messaging between the Federal Reserve Bank, the world bank, other countries national banking system, world leaders, and the President of the USA helps 'nudge' the world opinion to shift running away or two an asset can be mitigated.
We find ourselves in a political environment that USA prides itself on not co-ordinating with anyone, or even within itself. In effect everyone is on their own.......until that isn't liked. Over the weekend President Trump threatened to remove the FED chairman. The stock market on Friday EOD was valued as of JUNE 2019! OMG the crisis?!? This has thrown the entire western model of separation from currency into question instantly. Immediately I thought how will Fed Chairman respond? There is no right answer, the only answer was to NOT create this scenario, but here it is.
If the Fed snubbed the president, and the market tanked Monday, the President may follow through on the threat thinking that the entire market rests on the Fed pressing the easy button to resume the glorious 10 year bull run. But do you the reader believe the Fed truly has the power to push the economy to another 10 year bull run, or new highs, with a policy change?
I do not, and if you agree this is the quandary, the reputation of the Fed would be plunged into the spotlight, like a child pushed into the center of a courtyard being mocked by a bully and the masses loving a show. The damage to the child's reputation would be fatal.
So the Fed decided to unleash maximum response, as a child doesn't want to endure that ridicule. Drop interest rates to zero for lending (to banks, not you!) and unleash 700 billion dollars in direct propping up of assets. (good old TARP circa 2008).
Now that they have, all fixed right? Time to party like we did in January? The president should be pleased, he demanded and got what he wanted, I am sure he will thank the Fed for acting so well and give them full credit for the glorious return to the market. But I think things won't go this way.
The best analogy I can give you what REALLY just happened is an angry parent stormed into the school and demanded the school district principle about his kids grade. The parent or teacher didn't engage to ensure the child's learning is maximized, the shortcut is give the child an A and all will be well. A STRONG district principle with strong support from his/her superiors would rebuke such a request. A weak one issues an edict and the grade is changed. All solved. Does this lead to good things?
What the real message was to the world is the President, and the government apparatus will not act or lead in this time of crisis, or address through leadership. It will scream to the Fed to make it all go away, which it can't. All it can do is destroy its reputation that it has any independence, and the markets cannot count on even a weekend for stability. The president through the bully pulpit can at anytime throw a bomb into the room, and destroy any confidence building in a second.
I am hoping the markets recover today, but my thoughts of a multi-week or month recovery I think are gone. We are going down, hard to SPX 1900, and depending on ACTIONS or INACTION to SPX 1600 for the final 'judgement'. We may get a week here, or two of upside starting today, but I question months.
I may bail on longs and stay out for a week or until the elections. This isn't trading or investment, its rolling dice.
This article is NOT NOT NOT about bashing Trump, it is bashing where we are in the American government system.
The Federal Reserve Bank is an institution that has been treated with 'authority' to give confidence to the world it is not a puppet of the politicians. This is critical, governments that have complete unchecked authority over it's own currency always end in failure. Simply read up on any failed currency, such as Zimbabwe, once the politicians have direct control, the currency eventually fails.
The monetary system is also a confidence game, meaning everyone knows there is nothing backing currency but faith. It has been a critical mission to try to keep balance between investments of bonds, stocks, and cash. The issue is when too much money runs for one or two of them, the imbalance distorts the market.
The combination of co-ordinated messaging between the Federal Reserve Bank, the world bank, other countries national banking system, world leaders, and the President of the USA helps 'nudge' the world opinion to shift running away or two an asset can be mitigated.
We find ourselves in a political environment that USA prides itself on not co-ordinating with anyone, or even within itself. In effect everyone is on their own.......until that isn't liked. Over the weekend President Trump threatened to remove the FED chairman. The stock market on Friday EOD was valued as of JUNE 2019! OMG the crisis?!? This has thrown the entire western model of separation from currency into question instantly. Immediately I thought how will Fed Chairman respond? There is no right answer, the only answer was to NOT create this scenario, but here it is.
If the Fed snubbed the president, and the market tanked Monday, the President may follow through on the threat thinking that the entire market rests on the Fed pressing the easy button to resume the glorious 10 year bull run. But do you the reader believe the Fed truly has the power to push the economy to another 10 year bull run, or new highs, with a policy change?
I do not, and if you agree this is the quandary, the reputation of the Fed would be plunged into the spotlight, like a child pushed into the center of a courtyard being mocked by a bully and the masses loving a show. The damage to the child's reputation would be fatal.
So the Fed decided to unleash maximum response, as a child doesn't want to endure that ridicule. Drop interest rates to zero for lending (to banks, not you!) and unleash 700 billion dollars in direct propping up of assets. (good old TARP circa 2008).
Now that they have, all fixed right? Time to party like we did in January? The president should be pleased, he demanded and got what he wanted, I am sure he will thank the Fed for acting so well and give them full credit for the glorious return to the market. But I think things won't go this way.
The best analogy I can give you what REALLY just happened is an angry parent stormed into the school and demanded the school district principle about his kids grade. The parent or teacher didn't engage to ensure the child's learning is maximized, the shortcut is give the child an A and all will be well. A STRONG district principle with strong support from his/her superiors would rebuke such a request. A weak one issues an edict and the grade is changed. All solved. Does this lead to good things?
What the real message was to the world is the President, and the government apparatus will not act or lead in this time of crisis, or address through leadership. It will scream to the Fed to make it all go away, which it can't. All it can do is destroy its reputation that it has any independence, and the markets cannot count on even a weekend for stability. The president through the bully pulpit can at anytime throw a bomb into the room, and destroy any confidence building in a second.
I am hoping the markets recover today, but my thoughts of a multi-week or month recovery I think are gone. We are going down, hard to SPX 1900, and depending on ACTIONS or INACTION to SPX 1600 for the final 'judgement'. We may get a week here, or two of upside starting today, but I question months.
I may bail on longs and stay out for a week or until the elections. This isn't trading or investment, its rolling dice.
Thursday, March 12, 2020
On the cusp of a break down to another 20 percent
Isn't this exciting?!? Unless the market holds the line by close of business tomorrow, we are going lower. The critical levels are NOW, 2480, 2250-1900, then 1600.
We close materially through 1600, you better be prepared for some crazy we never could have imagined even in 2008.
But to keep perspective, we aren't as low as the end of 2018. So we lost only about 15 months of gains. Still, it seems much worse even to me.
Picture for your consumption. Look at earlier post today for views of 2250-1900 and 1600 why so critical.
Update 3/13/20 - Futures are positive, I am almost 100% long (got stopped out partially on one position). Target over next few weeks is 50% retrace, which will be near SPX 3,000.
Targeting SPX 3,000 before going lower, target 2,250-1,900.
We close materially through 1600, you better be prepared for some crazy we never could have imagined even in 2008.
But to keep perspective, we aren't as low as the end of 2018. So we lost only about 15 months of gains. Still, it seems much worse even to me.
Picture for your consumption. Look at earlier post today for views of 2250-1900 and 1600 why so critical.
Update 3/13/20 - Futures are positive, I am almost 100% long (got stopped out partially on one position). Target over next few weeks is 50% retrace, which will be near SPX 3,000.
Targeting SPX 3,000 before going lower, target 2,250-1,900.
Short term bottom targets
UPDATE: Covered shorts, going long
Back on March 1st, in post "Whats next in the markets" I asserted we have a target of SPX 2590-2500 range as shown on the graph below. The futures show SPX 2600. We may be finally near a short term bottom. The bounce once started and will be broken (week, month, quarter?) I expect the market to cut through the downtrend and find stronger footing XPS 2250-1900 range. Timelines are subject to FED, government, and bank actions. A TERMINATING bottom, meaning if we hit this, I'll start to freak out, is materially through SPX 1600. If that breaks in the next year materially, I will need to reassess. I do think the 'absolute bottom' is now SPX 1600, as posted in 'how do you know there is a trend change?'
Good luck!
Back on March 1st, in post "Whats next in the markets" I asserted we have a target of SPX 2590-2500 range as shown on the graph below. The futures show SPX 2600. We may be finally near a short term bottom. The bounce once started and will be broken (week, month, quarter?) I expect the market to cut through the downtrend and find stronger footing XPS 2250-1900 range. Timelines are subject to FED, government, and bank actions. A TERMINATING bottom, meaning if we hit this, I'll start to freak out, is materially through SPX 1600. If that breaks in the next year materially, I will need to reassess. I do think the 'absolute bottom' is now SPX 1600, as posted in 'how do you know there is a trend change?'
Good luck!
Wednesday, March 11, 2020
Next Phase of Covid-19, what about mosquitoes?
I expect cases in USA going from 1,000 to 20,000 in next two weeks.
Not because it is spreading that fast, its because USA wasn't testing 2 weeks ago.
The CDC stopped reporting on number tested in USA, because it was embarrassing, under 500 out of 300,000,000 Americans. The testing is ramping up, so will the number of infected.
I still am hoping with warmer weather this slows and in 4-6 weeks we return to semi-normal. I say semi-normal since this thing is here to stay, with outbursts in pockets in America through the summer.
Then in late fall, early winter will be the time of real concern, unless we have vaccinations or treatment by then.
Looking ahead, I decided today to purchase mosquito repellent.
I could not find any proof this is transmittable via mosquitoes, but I also could not find anything stating it is not. If you can find credible material stating mosquitoes are not an issue with COVID-10, please put in comments!
Just like toilet paper, masks, etc, I think maybe the next firestorm leaving store shelves.
Get yours now.
For me, I am not screwing around, DEET for me!
I am buying what my family needs, I am NOT stocking up or hording.
Just pre-buying, some suggestions;
Repel Insect Repellent Sportsmen Max Formula Spray Pump 40% DEET
OFF! Deep Woods Insect Repellent VIII Dry, 4 oz. (2 ct)
Summit Mosquito Dunks, 20 Dunks
I'd like a very good electric one, put in comment if you can recommend.
Not because it is spreading that fast, its because USA wasn't testing 2 weeks ago.
The CDC stopped reporting on number tested in USA, because it was embarrassing, under 500 out of 300,000,000 Americans. The testing is ramping up, so will the number of infected.
I still am hoping with warmer weather this slows and in 4-6 weeks we return to semi-normal. I say semi-normal since this thing is here to stay, with outbursts in pockets in America through the summer.
Then in late fall, early winter will be the time of real concern, unless we have vaccinations or treatment by then.
Looking ahead, I decided today to purchase mosquito repellent.
I could not find any proof this is transmittable via mosquitoes, but I also could not find anything stating it is not. If you can find credible material stating mosquitoes are not an issue with COVID-10, please put in comments!
Just like toilet paper, masks, etc, I think maybe the next firestorm leaving store shelves.
Get yours now.
For me, I am not screwing around, DEET for me!
I am buying what my family needs, I am NOT stocking up or hording.
Just pre-buying, some suggestions;
Repel Insect Repellent Sportsmen Max Formula Spray Pump 40% DEET
OFF! Deep Woods Insect Repellent VIII Dry, 4 oz. (2 ct)
Summit Mosquito Dunks, 20 Dunks
I'd like a very good electric one, put in comment if you can recommend.
Tuesday, March 10, 2020
It’s only when the tide goes out that you learn who’s been swimming naked.
It’s only when the tide goes out that you learn who’s been swimming naked. - Warren Buffett
The concerns I have since 2006 have changed over the years, but the underlying root cause is the same. The US Financial system morphed into a 'report card' on the economic health and corporate prosperity to a 'thing' that must be managed. In effect, the underlying health of our society isn't the goal, getting grade A is everything.
This started back under Reagan, with choosing China over democratic values and the US middle class. The greed is good era. President Clinton in his final year signed into law the safeguards in our financial system that would lead to our 2008 crash. President George W Bush de-funded the FBI when it started to look at subprime fraudulent loans all the way back into 2003. The Fed in 2009 decided it was OK to start buying 'stressed' assets. Since then the Fed has gone from zero to owning 4.5 trillion in assets, effectively erasing those assets as a negative on anyone's balance sheets.
The corporate debt monster has never been bigger. Quality of loans are back to 2007 standards. Pension funds for baby boomers that have ZERO chance of paying what they are promised are poised for failure.
The US Government has decided that debt has no consequence and is offering to spend and not collect taxes. The Federal Reserve bank may increase spending on buying assets another 2, 5, or 20 trillion dollars, and lower cost to borrow to zero, or even negative.
Do you notice a pattern? US has structural financial issues and the solution is the same, easier credit, bury bad loans, transfer risk from private to the public debt, repeat.
I think it will take years, but the debt machine is starting to show strains, each time kicking the can. I question how effective the can kicking will be once the zombie companies kept alive on low cost debt fail.
As Warren Buffett says, as the tide goes out, we will see who is swimming naked.
I really hope I am dead wrong for the next 40 years.
Monday, March 9, 2020
Too much, too fast
The drop speed in the market the last 4 weeks was too fast, I think we are about to hit a short term bottom, as early as tomorrow.
The bounce the first day maybe decent, but then some wiggle. I do think before March 17th, the market will be lower than it is today, around SPX 2450-2650 range. Then the FED will launch another volley. This will dovetail nicely into the ridiculous number of COVID-19 infections will be found in the next two weeks. The number will be high, not that it exploded recently, simply because testing will be moved from 400 to 2 million.
I covered most of my shorts, and started going long today. GUSH, bitcoin miners, some really beaten up gold miners, are all benefactors of my donation to their stock price today. GUSH will be a short term trade, it sits at .95 cents, I hope to get 5 bucks before the week is out for it. small numbers placed on that bet. Its tough to catch falling knives. We are close to the bottom I called on March 1st, so I don't want to get too greedy and get out of the shorting game for now.
You want to see who did great? Anyone who owned DRIP, wow. Gains of almost 500% in 13 days.
I think Russia is figuring out how to extract money from America's 401k's, by spiking the news at a weak moment. I am sure they profited nicely today. If I am right, we will never know since our President has stated Russia can be trusted and this wouldn't fit that narrative. Check back on this post in a decade.
In any event, I am hoping GUSH benefits as DRIP falls.
good luck!
The bounce the first day maybe decent, but then some wiggle. I do think before March 17th, the market will be lower than it is today, around SPX 2450-2650 range. Then the FED will launch another volley. This will dovetail nicely into the ridiculous number of COVID-19 infections will be found in the next two weeks. The number will be high, not that it exploded recently, simply because testing will be moved from 400 to 2 million.
I covered most of my shorts, and started going long today. GUSH, bitcoin miners, some really beaten up gold miners, are all benefactors of my donation to their stock price today. GUSH will be a short term trade, it sits at .95 cents, I hope to get 5 bucks before the week is out for it. small numbers placed on that bet. Its tough to catch falling knives. We are close to the bottom I called on March 1st, so I don't want to get too greedy and get out of the shorting game for now.
You want to see who did great? Anyone who owned DRIP, wow. Gains of almost 500% in 13 days.
I think Russia is figuring out how to extract money from America's 401k's, by spiking the news at a weak moment. I am sure they profited nicely today. If I am right, we will never know since our President has stated Russia can be trusted and this wouldn't fit that narrative. Check back on this post in a decade.
In any event, I am hoping GUSH benefits as DRIP falls.
good luck!
Sunday, March 8, 2020
Who is to judge Covid-19 Risk?
I encourage you to watch both of these videos, decide who you believe. The president of the US comparing COVID-19 to the flu or a life long specialist in the industry of infectious disease. Once you choose today who to believe, and please follow through to April 2021. I choose people with depth of knowledge in the field.
Trump claims "natural ability" when it comes to the coronavirus. He also says he could be a research scientist. He also says anyone who wants a test can get a test. a week ago less than 500 people in the USA have been tested. What is odd is CDC stopped reporting the total of who was tested a week ago also. I welcome public totals of tested being communicated in full transparency so we can give full credit to the great efforts of the administration. Without transparency we must have faith everyone is getting tested who asks. That is impressive to go to under 500 to million plus in a week! Congrats! I just would like to see reported number, I look forward to the transparency!
Good luck!
Trump claims "natural ability" when it comes to the coronavirus. He also says he could be a research scientist. He also says anyone who wants a test can get a test. a week ago less than 500 people in the USA have been tested. What is odd is CDC stopped reporting the total of who was tested a week ago also. I welcome public totals of tested being communicated in full transparency so we can give full credit to the great efforts of the administration. Without transparency we must have faith everyone is getting tested who asks. That is impressive to go to under 500 to million plus in a week! Congrats! I just would like to see reported number, I look forward to the transparency!
Good luck!
Thursday, March 5, 2020
How to know if this is a trend change?
I trade actively, too actively for my own good.
It is also not good to never trading in and out of the market is to secure returns that are purely subject to when you need to cash out.
The best is to trade in on a trend change up, and to trade out when the trend changes to down.
The problem is, how to know? There are many different potential indicators, one I really like is 20 and 50 weekly simple moving averages. When the 20 is above the 50, we are in an upswing. When it changes, we are in a downswing. Often the direction is for years, so this can be material.
Watch this video to get a walk through of time how this worked before 2008. Below that is a recent chart, and pontifications of possible bottoms if we do trend down.
Good Luck!
For latest chart, click here!
It is also not good to never trading in and out of the market is to secure returns that are purely subject to when you need to cash out.
The best is to trade in on a trend change up, and to trade out when the trend changes to down.
The problem is, how to know? There are many different potential indicators, one I really like is 20 and 50 weekly simple moving averages. When the 20 is above the 50, we are in an upswing. When it changes, we are in a downswing. Often the direction is for years, so this can be material.
Watch this video to get a walk through of time how this worked before 2008. Below that is a recent chart, and pontifications of possible bottoms if we do trend down.
Good Luck!
For latest chart, click here!
Humans don't know exponentials Covid-19
In my blog post "Covid-19 What is next?" I posted that I don't think the worst of this pandemic will be first half of 2020, but the second half. It doesn't mean that it won't get worse in the near term.
Using latest statistics, I compiled what this may potentially play out if environment or action doesn't change the trajectory.
The key take away is people can't appreciate exponential numbers. Look how quickly things can get out of control. I still hope the curve goes down materially in APRIL, and if it does the worst case count depicted below on May 4th may be by end of June as the infection rate slows.
Keep in mind, there are less than 1 million hospital beds in USA, and a fraction of that is available, and a fraction of them have devices to help keep you breathing.
Not advocating panic, but do recommend reading "Covid-19 What is next?". Also I can't imagine this is good for the stock market. Good luck!
Using latest statistics, I compiled what this may potentially play out if environment or action doesn't change the trajectory.
The key take away is people can't appreciate exponential numbers. Look how quickly things can get out of control. I still hope the curve goes down materially in APRIL, and if it does the worst case count depicted below on May 4th may be by end of June as the infection rate slows.
Keep in mind, there are less than 1 million hospital beds in USA, and a fraction of that is available, and a fraction of them have devices to help keep you breathing.
Not advocating panic, but do recommend reading "Covid-19 What is next?". Also I can't imagine this is good for the stock market. Good luck!
Sunday, March 1, 2020
Whats next in the market
NOTE: Also READ COVID-19 thoughts.
Today I am just going to post my thoughts, I won't spend the extra time to put in links.
I really like to put links, to enable you the reader to read my source and help you challenge me or yourself on conclusions.
The market fell HARD this past week, who could have possibly seen it was time to sell the market? (Click)
Back in 2008, who could have seen that coming? If you pay attention, its possible to see.
So here we are, whats next?
Anything is possible, the run up for the last 3 years was built on 'free money' through tax breaks, very low interest rates, and a Federal Reserve Bank that has purchased 4.5 Trillion dollars in debt to basically make it 'go away'.
Now that we are seeing a crack in the market, slashing 1% really is not that much, with rates so low. More tax breaks? We could make it free for anyone with over 100 million dollars, but I doubt that is enough. Cut all taxes for the country to zero? There is the problem of who then finances USA lifestyle.
So only thing left is for the Fed to just buy buy buy. The Japanese banks now own 80% of their equities. So why not have the USA take our capitalist society and instead of giving services to the poor, just spend capital buying securities for the top percentages of society?
So the fed can announce anything, at anytime to help get a shock to stop the drop.
This WILL happen. Only if you are in the top 0.01% will you know when. Rest of us is waiting to hear.
My bet is the FED will launch when the SPX passes below 2600, but before cutting through 2490. See graph below.
We may counter rally this week without the FED doing a major offense. I just don't think it will last if it does counter rally. Because of the 10 year run up, there is very low number of shorts out there to buy to take profits to help sustain a buy back.
Then once the Fed launches, we counter rally (again?), we'll get to about 3,000, probably crack it above it a little.
Then some zig-zag, then we go down again, terminating at SPX 1600-ish. I think then the final missile fires from the FED and the US government, and we'll bottom out.
This will take year or two to play out. Once the bottom hits with FED and US government launching something extreme, then we are onto the next phase.
All of this will be blamed on COVID-19 and "Feel the Burn" sanders. But these are just scapegoats for fiscal insanity since 2009. Granted, COVID-19 has real economic impact, but this event is an accelerator for a fragile global economy build on free money.
The gyrations will continue for years with the central bank giving up all sense of fiscal sanity, with a termination of a global currency crisis. Gold will be the rocket of all rockets and then I have no idea whats next. Probably making gold illegal to own, or some other restriction, then turning the reigns over to Bitcoin or other crypto currencies. Maybe Facebook, USA, Google, Amazon, or bitcoin with the decentralized currency play.
Anyway you slice this, not a great place for a 401k. Good luck!
Update 3/2/20
Global Recession now baked in the cake
Today I am just going to post my thoughts, I won't spend the extra time to put in links.
I really like to put links, to enable you the reader to read my source and help you challenge me or yourself on conclusions.
The market fell HARD this past week, who could have possibly seen it was time to sell the market? (Click)
Back in 2008, who could have seen that coming? If you pay attention, its possible to see.
So here we are, whats next?
Anything is possible, the run up for the last 3 years was built on 'free money' through tax breaks, very low interest rates, and a Federal Reserve Bank that has purchased 4.5 Trillion dollars in debt to basically make it 'go away'.
Now that we are seeing a crack in the market, slashing 1% really is not that much, with rates so low. More tax breaks? We could make it free for anyone with over 100 million dollars, but I doubt that is enough. Cut all taxes for the country to zero? There is the problem of who then finances USA lifestyle.
So only thing left is for the Fed to just buy buy buy. The Japanese banks now own 80% of their equities. So why not have the USA take our capitalist society and instead of giving services to the poor, just spend capital buying securities for the top percentages of society?
So the fed can announce anything, at anytime to help get a shock to stop the drop.
This WILL happen. Only if you are in the top 0.01% will you know when. Rest of us is waiting to hear.
My bet is the FED will launch when the SPX passes below 2600, but before cutting through 2490. See graph below.
We may counter rally this week without the FED doing a major offense. I just don't think it will last if it does counter rally. Because of the 10 year run up, there is very low number of shorts out there to buy to take profits to help sustain a buy back.
Then once the Fed launches, we counter rally (again?), we'll get to about 3,000, probably crack it above it a little.
Then some zig-zag, then we go down again, terminating at SPX 1600-ish. I think then the final missile fires from the FED and the US government, and we'll bottom out.
This will take year or two to play out. Once the bottom hits with FED and US government launching something extreme, then we are onto the next phase.
All of this will be blamed on COVID-19 and "Feel the Burn" sanders. But these are just scapegoats for fiscal insanity since 2009. Granted, COVID-19 has real economic impact, but this event is an accelerator for a fragile global economy build on free money.
The gyrations will continue for years with the central bank giving up all sense of fiscal sanity, with a termination of a global currency crisis. Gold will be the rocket of all rockets and then I have no idea whats next. Probably making gold illegal to own, or some other restriction, then turning the reigns over to Bitcoin or other crypto currencies. Maybe Facebook, USA, Google, Amazon, or bitcoin with the decentralized currency play.
Anyway you slice this, not a great place for a 401k. Good luck!
Update 3/2/20
Global Recession now baked in the cake
Covid-19 What is next?
I tend to obsess and go over the top reading/learning on topics that interest me.
On the plus side, I feel confident to speak reasonably on topics, like Covid-19 now.
This post if for me, not you, to ensure I did what I can to help the people help themselves.
This will be my LAST post on this topic, until a full blown pandemic breaks out.
This post if for me, not you, to ensure I did what I can to help the people help themselves.
This will be my LAST post on this topic, until a full blown pandemic breaks out.
Whats Next?
I am starting to believe Covid-19 will NOT hit pandemic levels until winter of 2020-21 in mainland USA. It's and educated guess, but this isn't the end of this story!
The Spanish Flu in 1918 evolved the same way, smaller outbreak in early 1918, and full pandemic in winter of 1918-1919. I am believe this is the route the world will take.
There are two events that can change this outcome. If we develop a vaccine that is proven safe and effective for US citizens to take in the 200 million+ volume, before the winter.
Second, if we develop a drug that is mass manufactured, safe, to curb the people who get hit hard. This would turn the mass sickness into a scary, but treatable disease.
I really doubt the vaccine route, and hope for the miracle drug route. But keep in mind, historically science hasn't produced volumes of medicines for existing viruses in short periods of time.
I put links that helped me shape my reasoning, feel free to provided your own to me in the comments! Cite your source that you base your opinion please!
The next 6 months
We will continue to have huge fear due to the explosive nature of the virus. While hospitals in USA are not saturated, the death rate maybe lower than 2.5% expectation. In China, the whisper number for untreated is 18% mortality rate.
What is important is if this does fizzle out to NOT get complacent! This winter I expect the worst case scenario to be on the table. That gives you time to get ready.
Just like in early January how every pundit said the market is going up 20-30% this year, so will pundits say it Covid-19 was overblown by June. Don't get fooled.
I have had some friends say that suggesting preparation is equivalent to selling your house, moving to the woods, and getting guns. Far from it! All I am suggesting is you take moderate steps to be prepared for whatever the next 12 months brings. If we do lock-down in the USA, supplies and safety will change. Think of your family. What will you say to loved ones? You are hoping for the best? My question is, why not prepare? What is there to lose? My suggestions are minimal additional cost to your normal spend.
Alton's Antibiotics and Infectious Disease: The Layman's Guide to Available Antibacterials in Austere Settings
The Survival Medicine Handbook: A Guide for When Help is Not on the Way
AudioBook - The Prepper's Guide
Podcast links below are specific episodes that I found good. Browse for new material on these channels.
The Coronavirus goes Global (NYT) (2/27/20)
COVID Super-Spreader Stealth Pandemic? (2/24/20)
Economic Outlook (Covid-19 is just accelerating)
All-Stars #94 Jeff Snider: The slowdown started before the Coronavirus hit the tape! (2/25/20)
What they are doing is not investment (Written before market crash 2/20)
Quote: Expect the S&P 500 to lose about two-thirds of its value over the coming years
Supplies
Simply buy non-perishable food you will use over the year ahead. Some ideas are wide variety of canned items, pasta, flour, sugar, condensed milk, condiments, spices, rice, beans, cereals, bottled water, and fill your freezer with protein. (chicken/pork/meat). Don't forget your animals!
Closing
By no means do I think above is complete and/or accurate. Purpose is to simply consider trying to be prepared. When China locked down 780 million people it was sudden and enforced by military. Other countries like Italy are following suite. There will not be a window to act, you have to be prepared ahead of time.
What is important is if this does fizzle out to NOT get complacent! This winter I expect the worst case scenario to be on the table. That gives you time to get ready.
Just like in early January how every pundit said the market is going up 20-30% this year, so will pundits say it Covid-19 was overblown by June. Don't get fooled.
Why Prepare?
COVID-19 if it becomes a pandemic in the next 12 months will take out 3 million people in the USA, and that stat could go much higher. This isn't fantasy, its based on all the facts known today about the mortality rate and infection rate. As I stated, I think this is more likely in winter 2020 than now. But no one really knows. The only good news is kids under age 17 seem to have a higher resistance and are not catching it .I have had some friends say that suggesting preparation is equivalent to selling your house, moving to the woods, and getting guns. Far from it! All I am suggesting is you take moderate steps to be prepared for whatever the next 12 months brings. If we do lock-down in the USA, supplies and safety will change. Think of your family. What will you say to loved ones? You are hoping for the best? My question is, why not prepare? What is there to lose? My suggestions are minimal additional cost to your normal spend.
Preparation outline.
Preparation is pretty simple really. Breaks down to these four high level topics.- Learn preparedness, listen to events, take ownership.
- Cleanliness - Start today and keep up a habit of cleanliness. Keep hands away from your face, wash hands and use 70%+ Alcohol to sterilize your hands.
- Supplies - Buy food, medicine, and supplies that you will consume over the next 6-12 months anyway.
- Extra precautions - Buy a few items you typically don't need, NIOSH rated protective gear, and plan to treat a sick family member.
Learn
Books recommended in a podcast, I ordered but haven't read yet.Alton's Antibiotics and Infectious Disease: The Layman's Guide to Available Antibacterials in Austere Settings
The Survival Medicine Handbook: A Guide for When Help is Not on the Way
AudioBook - The Prepper's Guide
Podcast links below are specific episodes that I found good. Browse for new material on these channels.
The Coronavirus goes Global (NYT) (2/27/20)
COVID Super-Spreader Stealth Pandemic? (2/24/20)
Economic Outlook (Covid-19 is just accelerating)
All-Stars #94 Jeff Snider: The slowdown started before the Coronavirus hit the tape! (2/25/20)
What they are doing is not investment (Written before market crash 2/20)
Quote: Expect the S&P 500 to lose about two-thirds of its value over the coming years
Cleanliness
After MUCH reading, the best protection is keeping your hands away from your eyes/nose/mouth, and sterilizing your hands frequently. If you are not around someone you know has a virus, any mask is good. The purpose of the mask isn't to clean the air, but to stop YOU from touching your eyes/nose/mouth. So anything is good, such as a disposable surgical mask. Buy base on looks, convenience, but no need to ensure it is NIOSH certified N95 or N100.
Good hand cleaners: Portable and refill/home
Simply buy non-perishable food you will use over the year ahead. Some ideas are wide variety of canned items, pasta, flour, sugar, condensed milk, condiments, spices, rice, beans, cereals, bottled water, and fill your freezer with protein. (chicken/pork/meat). Don't forget your animals!
Only thing to consider buying you may not eat is plant protein (beans) and fruit in a can, if you don't normally eat them.
Same with medicine, vitamins, Elderberry, and if you need medication try to have 3 month supply.
Basically pre-buy all supplies to last a few months, and buy what you normally use.
Extra precautions
If any Pandemic hits the USA in the decade ahead, chances are the treatment needed will not scale to treat everyone. For the unlucky persons who catch Covid-19 and it turns int pneumonia , it requires ventilators that need 2-3 people staffed on the machine around the clock to keep the person alive. It is quite possible that if someone catches it your family and is not 'critical condition' the hospital won't take them.
So having masks, gloves, plastic, duct tape, etc does help.
For close contact, N95, R95, P95, N100, R100, or P100 masks would help.
The 100 rating are more effective than 95 rating.
Disposable masks are not available anymore, as the total supply has been consumed in the USA and the world. Disposable masks cannot be effected for weeks or months. (hence disposable).
So if you want to be extra cautious, you can buy more expensive masks that provide longer protection.
So if you want to be extra cautious, you can buy more expensive masks that provide longer protection.
One example is this mask:
And you can get N100 cartridges:
Other options here
Also consider getting bleach, painters plastic, duct tape, eye coverage, etc. This will give you options to create a treatment rook and/or safe spaces.
Closing
By no means do I think above is complete and/or accurate. Purpose is to simply consider trying to be prepared. When China locked down 780 million people it was sudden and enforced by military. Other countries like Italy are following suite. There will not be a window to act, you have to be prepared ahead of time.
No need to freak out, or stop living life, just take reasonable low-cost and effective preparedness measures.
Good luck!
Wednesday, February 26, 2020
Articles and more!
To say my reading of articles is up in putting it mildly. I will post many here, so check back.
Great article about tipping point for market plunge. Losing gains back to December is nothing.
https://www.zerohedge.com/markets/60-billion-puke-here-comes-systematic-selling-and-watch-russell-2000
New orders collapse
https://www.zerohedge.com/economics/richmond-fed-business-survey-crashes-february-new-orders-collapse
Subprime credit card delinquincies pass 2008 crisis. (And we are at all time high employment.)
https://www.zerohedge.com/personal-finance/subprime-credit-card-delinquencies-spike-record-high-surpass-financial-crisis-peak
CDC warns US outbreak imminent.
https://www.nytimes.com/2020/02/25/health/coronavirus-us.html
If CDC believes outbreak imminent, why have only 400 people been tested?
https://www.zerohedge.com/geopolitical/expert-warns-dysfunctional-us-health-care-system-faces-critical-shortage-coronavirus
Why fed won't save the market (opinion peace, not facts)
https://www.zerohedge.com/markets/no-fed-wont-save-market-heres-why
Harvard professor claims 40-70% of world will be infected
https://www.zerohedge.com/geopolitical/harvard-professor-says-40-70-people-worldwide-will-be-infected-covid-19
Only 13 countries prepared (not USA). How to prepare.
https://www.zerohedge.com/geopolitical/grim-reality-about-pandemics-they-dont-want-you-know-no-country-prepared
Great article about tipping point for market plunge. Losing gains back to December is nothing.
https://www.zerohedge.com/markets/60-billion-puke-here-comes-systematic-selling-and-watch-russell-2000
New orders collapse
https://www.zerohedge.com/economics/richmond-fed-business-survey-crashes-february-new-orders-collapse
Subprime credit card delinquincies pass 2008 crisis. (And we are at all time high employment.)
https://www.zerohedge.com/personal-finance/subprime-credit-card-delinquencies-spike-record-high-surpass-financial-crisis-peak
CDC warns US outbreak imminent.
https://www.nytimes.com/2020/02/25/health/coronavirus-us.html
If CDC believes outbreak imminent, why have only 400 people been tested?
https://www.zerohedge.com/geopolitical/expert-warns-dysfunctional-us-health-care-system-faces-critical-shortage-coronavirus
Why fed won't save the market (opinion peace, not facts)
https://www.zerohedge.com/markets/no-fed-wont-save-market-heres-why
Harvard professor claims 40-70% of world will be infected
https://www.zerohedge.com/geopolitical/harvard-professor-says-40-70-people-worldwide-will-be-infected-covid-19
Only 13 countries prepared (not USA). How to prepare.
https://www.zerohedge.com/geopolitical/grim-reality-about-pandemics-they-dont-want-you-know-no-country-prepared
Sunday, February 23, 2020
Where is the Pandemic or Market decline?
I posted a couple of panic posts back on January 26th and 31st, titled "Potential Pandemic Precautions" and "Act now and sell the market!".
You may be thinking that I was over-reacting, here it is Feb 23rd and all is well in the USA, with market near all time highs. What I keep forgetting in life is the market and public opinion is like changing direction of the worlds largest ship, it takes time.
The main issue with the evolving Novel Coronavirus is the infection rate and death rate is not clear. This is because China hides, imprisons, and lies about what is happening. China's main concern is maintaining the government stability, not helping the world understand better about the virus.
The stock market has been on an epic high, pretending that the second largest economy in the world, China, ordering 780 million citizens to not leave their house, will not impact USA economy negatively. Further, as it spreads other cities and countries shutting down won't hurt the USA economy either.
This is a combination of public euphoria, the media feeding frenzy of 'everything will be fine', and big money needing more time to re-position. Since January 30th Gold/Bitcoin moving higher and US treasury rates hitting all time lows. My assumption is this is diversification of big money out of the market letting reality to hit the US consumer. The Federal Reserve bank has been reacting by directly monetizing debt to prop up values. The US is following in Japan, spending trillions on market welfare to prop up market values, owning 80% of the entire market float. If you aren't rich enough to own a bunch, you not part of the party. So much for capitalism.
The question is will USA Federal Reserve Bank just buy buy buy, and interfere with capital markets. I think before the year is out, resounding yes. I think before the free money machine is turned onto full throttle, we will need a market 'scare' to justify this action. Federal Reserve injected 90 billion dollars this past Tuesday to prop up the markets. Also injected about 75 and 128 Billion in September. Federal Reserve now owns approaching 4.5 Trillion in debt, basically bailing out capital markets for bad loans. ( To give you an idea of what that is, if you earned 250,000 dollars a second since Jesus birth, you still wouldn't have 4.5 Trillion dollars. )
If the printing presses are NOT opened wide by the Fed, the market is looking on shaky ground.
So much so, the Federal Reserve stated Friday "Now is the time to prepare for a recession". That is laughable, the time was the last 5 years. Instead we cut taxes and accelerated debt. There is nothing to prepare with! Obama dug in by adding 66% more debt in a 'recovery', and Trump is on target to hit 20% in his term, with the 'strongest economy ever'.
Some news titles to understand the basis for my view, and good luck!.
The coronavirus could cause supply chain disruptions that are unlike anything we have seen in the past 70 years.
Some of the world's biggest economies are on the brink of recession
Warren Buffett Torches Corporate America, Spells Doom for Stock Market
China Car Sales Plunge 92%
Covid-19 (Novel coronavirus) Triggers Global Luxury Bust
China Faces Financial Armageddon With 85% Of Businesses Set To Run Out Of Cash In 3 Months
Apple warns revenue will be lower than expected because of coronavirus impact
Research from Wuhan hospital concludes 61% of Coronavirus patients with Severe Pneumonia won't survive. (need peer review for accuracy)
You may be thinking that I was over-reacting, here it is Feb 23rd and all is well in the USA, with market near all time highs. What I keep forgetting in life is the market and public opinion is like changing direction of the worlds largest ship, it takes time.
The main issue with the evolving Novel Coronavirus is the infection rate and death rate is not clear. This is because China hides, imprisons, and lies about what is happening. China's main concern is maintaining the government stability, not helping the world understand better about the virus.
The stock market has been on an epic high, pretending that the second largest economy in the world, China, ordering 780 million citizens to not leave their house, will not impact USA economy negatively. Further, as it spreads other cities and countries shutting down won't hurt the USA economy either.
This is a combination of public euphoria, the media feeding frenzy of 'everything will be fine', and big money needing more time to re-position. Since January 30th Gold/Bitcoin moving higher and US treasury rates hitting all time lows. My assumption is this is diversification of big money out of the market letting reality to hit the US consumer. The Federal Reserve bank has been reacting by directly monetizing debt to prop up values. The US is following in Japan, spending trillions on market welfare to prop up market values, owning 80% of the entire market float. If you aren't rich enough to own a bunch, you not part of the party. So much for capitalism.
The question is will USA Federal Reserve Bank just buy buy buy, and interfere with capital markets. I think before the year is out, resounding yes. I think before the free money machine is turned onto full throttle, we will need a market 'scare' to justify this action. Federal Reserve injected 90 billion dollars this past Tuesday to prop up the markets. Also injected about 75 and 128 Billion in September. Federal Reserve now owns approaching 4.5 Trillion in debt, basically bailing out capital markets for bad loans. ( To give you an idea of what that is, if you earned 250,000 dollars a second since Jesus birth, you still wouldn't have 4.5 Trillion dollars. )
If the printing presses are NOT opened wide by the Fed, the market is looking on shaky ground.
So much so, the Federal Reserve stated Friday "Now is the time to prepare for a recession". That is laughable, the time was the last 5 years. Instead we cut taxes and accelerated debt. There is nothing to prepare with! Obama dug in by adding 66% more debt in a 'recovery', and Trump is on target to hit 20% in his term, with the 'strongest economy ever'.
Some news titles to understand the basis for my view, and good luck!.
The coronavirus could cause supply chain disruptions that are unlike anything we have seen in the past 70 years.
Some of the world's biggest economies are on the brink of recession
Warren Buffett Torches Corporate America, Spells Doom for Stock Market
China Car Sales Plunge 92%
Covid-19 (Novel coronavirus) Triggers Global Luxury Bust
China Faces Financial Armageddon With 85% Of Businesses Set To Run Out Of Cash In 3 Months
Apple warns revenue will be lower than expected because of coronavirus impact
Research from Wuhan hospital concludes 61% of Coronavirus patients with Severe Pneumonia won't survive. (need peer review for accuracy)
Thursday, January 30, 2020
ACT NOW, Sell the market!
I am posting this, not for you, but for me.
Have you ever believed you knew something so true, that you want to share with others to understand?
Some its God, others its their living values, others is activities benefits like exercise, and still some others is facts that seem to not be recognized by others.
Today is some FACTS I want you to really absorb.
The potential downside is substantial. The market reversion WILL be 10% to 50%. My suggestion is if you are over age of 50, I am not a market professional, make your own decisions. Sell today, re-evaluate March 1st. If selling after 400%+ move up since 2008, after 29% gain in 2019, and 3% up in January (which is 50% of typical annual move up) during a pandemic which WILL trigger emotional negative views.
I believe this so firmly I am placing very high risk trades on the market in anticipation of a market decline. Last time I did this was in August 2008. So I am acting on this view, not just spewing it. And if I am wrong, I will lose much more than if I played it safe in fixed funds for February.
Chances are if you are reading this, my will is to clear MY conscience that I did my best as a friend to try to help you. Good luck!
UPDATE: 2/2/2020
from Hussman Funds, worth a read:
https://www.hussmanfunds.com/comment/mc200130/
Update 2/8/20
State street asserts 70% chance of recession in next 6 months
China is starting to impact world trade, iPhone delays is one example
Update: 2/18/2020
Dow Futures Slide as Morgan Stanley Warns ‘Downturn’ Has Begun
Apple warns it will miss quarterly revenue target due to effects of coronavirus
Largest Shipping Decline Since 2009 and That's Before Coronavirus
HSBC To Cut 35,000 Jobs, Shed $100 Billion In Assets As Profits Plunge
Dramatic Coronavirus Timelapse Reveals an Economical Wrecking Ball in China
China Shutdown To Crush India’s Already-Crumbling Economy
Have you ever believed you knew something so true, that you want to share with others to understand?
Some its God, others its their living values, others is activities benefits like exercise, and still some others is facts that seem to not be recognized by others.
Today is some FACTS I want you to really absorb.
- The stock market is a value based on emotion. If it was based on pure fact, company values could be computed by accounting and price fixed. Stocks enable speculation to be captured into a dollar value. Speculation is emotion.
- There is a pandemic of lifetime proportions building. Even if as humans we curb the pending disaster, between now and then there will be emotional negative views thrown into the world.
- The general view of the market has been herd mentality positive since 2010, and since 2008 from low to high the market has risen every year on average almost 13%, the average the market has risen since 2001 is 6%.
- Reversion to the mean is due, to help reduce the 13% annual average since 2008, a year after a 29% gain increases likelihood of a reversion to the mean.
- There is a discipline called "Chart analysis" which looks at market charts to identify patterns and use them to help predict next events. Monday we had a market gap down, Tuesday into Wednesday we had a gap fill. Wednesday was FOMC meeting and the market melted into close. This reads bad after a series of other events in charts to the downside.
- If the market moves down, your emotions will trap you making personal bets with yourself "I'll sell at new market highs". Think back to the tipping point in 2008 that you refused to sell, sell near the decade high while its easy decision. How do I know that what happened to you? We are all trapped by emotions to make decisions.
- UPDATE 2/18/2020 - Or with new highs dismiss fears as nothing can stop the market, once again trapping you into buy and hold after 400%+ run up in the market.
- Read my posts for more Year of an explosive market and Choose your expected returns
The potential downside is substantial. The market reversion WILL be 10% to 50%. My suggestion is if you are over age of 50, I am not a market professional, make your own decisions. Sell today, re-evaluate March 1st. If selling after 400%+ move up since 2008, after 29% gain in 2019, and 3% up in January (which is 50% of typical annual move up) during a pandemic which WILL trigger emotional negative views.
I believe this so firmly I am placing very high risk trades on the market in anticipation of a market decline. Last time I did this was in August 2008. So I am acting on this view, not just spewing it. And if I am wrong, I will lose much more than if I played it safe in fixed funds for February.
Chances are if you are reading this, my will is to clear MY conscience that I did my best as a friend to try to help you. Good luck!
UPDATE: 2/2/2020
from Hussman Funds, worth a read:
https://www.hussmanfunds.com/comment/mc200130/
Update 2/8/20
State street asserts 70% chance of recession in next 6 months
China is starting to impact world trade, iPhone delays is one example
Update: 2/18/2020
Dow Futures Slide as Morgan Stanley Warns ‘Downturn’ Has Begun
Apple warns it will miss quarterly revenue target due to effects of coronavirus
Largest Shipping Decline Since 2009 and That's Before Coronavirus
HSBC To Cut 35,000 Jobs, Shed $100 Billion In Assets As Profits Plunge
Dramatic Coronavirus Timelapse Reveals an Economical Wrecking Ball in China
China Shutdown To Crush India’s Already-Crumbling Economy
Sunday, January 26, 2020
Potential Pandemic Precautions
Updated 3-1/2020
Updated 1-27-2020
Please consider spending $100-200 now to stock up on precautions for you and your family as the Novel Coronavirus unfolds. Items I recommended are below, worse case you buy and hopefully avoid a common flu this season. What does it cost, $100-200 bucks?! I spend more on a single dinner with my family, don't be cheap.If you're convinced, read Items to order and skip the second part of this post. If you won't take precautions, skip to bottom and read "Why the concern about Novel Coronavirus". I created hyper-links for you to read the what I did, to see what influenced my decisions.
Items to order
Vitamins
Consider a daily vitamin high in Vitamin C: Airborne 1000mg Vitamin CScience has shown elderberry prevents catching the flu:
Elderberry daily dose, 100mg to keep your defenses up
ElderBerry daily dose, 150 mg to keep your defenses up
Elderberry liquid, to pack a punch when you need it.
Sanitizers
To prevent transmission, go over-the-top with hand sanitizers with 70% alcohol content.Economical bottle, keep one at home and at work:
https://www.amazon.com/dp/B0013CNOMU/ref=psdc_2265897011_t2_B00J4EXQPY
Travel packs
https://www.amazon.com/gp/product/B00DDZMLLK/ref=ox_sc_act_title_3?smid=A2A3AJ6U4IV7UO&psc=1
Gloves/Masks
I can't see this as being needed or used. But if you want to order 'while supplies last", get a mask of N99 or N100 rating. These things have almost no backlog supply so most are already sold out.For gloves, ignoring this crazy post, I love these gloves ! (click) I use it to clean up disgusting messes at home.
What the CDC recommends.
What I recommend above, and wash your hands constantly, 20 seconds+ each time. For more click below.https://www.cdc.gov/coronavirus/2019-ncov/about/prevention-treatment.html
Over-the-Top options.
Buy food, don't eat out, or have others prepare your food and stock up.Avoid planes, trains, etc. Work at home if possible. At this time I plan to continue normal life, but will curb eating out.
One of the medicines that in theory will help is https://www.kaletra.com/ . Its impossible to get at a reasonable price.
Why the concern on Novel Coronavirus
The last successful pandemic was the Spanish flu , killing about 75 million people back in 1918.We have better medicine, more knowledge, but we do travel much more than back then making spreading much faster. Latest news as of this post predicts doubling of cases every 6 days. If this is true in the USA alone assuming 100 people are infected now, we can expect 1 in 3 catching this virus in 4 months. The medical system isn't able to cope with exponential contagions and will become over-whelmed.
So what if we catch it? What makes this virus different is carriers take up to 14 days to show symptoms. The infection rate is 2.6, meaning if you get infected you will on average infect 2.6 people. This is why there is an exponential component. China has been playing down this disease, but if we are to believe their under-reported numbers, the death rate is 2.65%. Since they may have lower medical treatment, and they are likely under-reporting, we can go with this death rate for outside China as a guess.
At this contagion rate in 4 months if 1 out of 3 people do catch the virus, we can expect 2.7 million to die in USA. Yes this is fantastical, and yes I hope its under 10,000 and this post will be a joke in June. But the point is, the best knowledge today says this is what is possible. The question really is what will be the death rate in the USA once we hit 1 million infected. By then the medical facilities will be fully utilized.
To read more about coronavirus click here, or watch here.
Still not convinced? Again, whats the big deal to buy vitamins, and sanitizers that will be good for next winter also. If someone you love has frail health, there is no better reason to act.
Best I can do, good luck.
Update 2/8/2020
China has been hiding numbers and not even counting infected. Neil Ferguson estimates 50K new cases a day as of Feb 5th, doubling every 5 days, with extreme infection in 4 weeks in China
Super Spreaders proven, one patient infects 57 people in a hospital
Update 2/18/2020
Coronavirus is 20x Deadlier than the Flu
Half the Population of China, 760 Million, Now Locked Down
Saturday, January 18, 2020
Choose your expected 2020 return
The market is up 3% in the first two weeks of 2020!
The average return in the market since 2001 is 6%, we have achieved 50% of the annual return in 2 weeks, quite impressive! This is on track for up 50% in 2020 at this pace.
Please read my thoughts on 2020 in post "The Year of an Explosive Market" from January 1st.
With 3% up in first two weeks, 50% of total gains on average over the last 19 years in the market, I urge considering taking some risk off the table if you are over 50 years old.
At a minimum take a look at the chart below and you evaluate what you think is a "good return" in 2020 with your expectations.
I compiled quite a bit of data to give you information 'at a glance' to decide if the risk vs rewards is worth it. For 2020, I assumed all percentages from close of Friday 1/17, and not from 1/1/2020. We are already up 3%, so if the targets I call out are hit, we will in fact have even greater returns.
The average return in the market since 2001 is 6%, we have achieved 50% of the annual return in 2 weeks, quite impressive! This is on track for up 50% in 2020 at this pace.
Please read my thoughts on 2020 in post "The Year of an Explosive Market" from January 1st.
With 3% up in first two weeks, 50% of total gains on average over the last 19 years in the market, I urge considering taking some risk off the table if you are over 50 years old.
At a minimum take a look at the chart below and you evaluate what you think is a "good return" in 2020 with your expectations.
I compiled quite a bit of data to give you information 'at a glance' to decide if the risk vs rewards is worth it. For 2020, I assumed all percentages from close of Friday 1/17, and not from 1/1/2020. We are already up 3%, so if the targets I call out are hit, we will in fact have even greater returns.
Wednesday, January 1, 2020
The year of an explosive market
The Shorter Take
The markets in 2019 did very well, up about 35%! BUT if you look at August 2018 until today, its up about 12%. Remember, back in 2018 the market took a hard turn for the last half of that year.
Looking ahead we have two paths ahead, a banner year of gains, perhaps +50% or more, or a market correction. I am truly torn which one we will see. The president of the US will press against any fiscal responsibility to keep the market roaring, as he has shown by pressuring the private group, the Federal Reserve Bank. President Trump stated publicly that we should join in on the reducing of interest rates to negative, to be competitive to the world. Austria has issued 100 year bonds with NEGATIVE interest rates. Germany currently pays a negative rate for 1 to 15 year bonds! Compare that to the USA paying 2.4% for a 30 year bond.
If the USA tries to join in on unconstrained 'free debt', and the world can sustain it, I really do think the market up 50% in 2020 is possible. S&P 500 from 3250 to 4,875!
Before I go into greater detail about the economic health, I do what to call out one thing for you to seriously consider. If you are over the age of 55, and therefore may not have 10-15 years for your savings to return with a market correction-recovery, what is your strategy in investing? The market has recovered about 480% since 2008, that is very good growth! That took 10 years to do, but if you where in the market in 2007, you took ~6 years just to stay even assuming you never sold.
PLEASE take serious consideration of your strategy to withstand a market correction that takes typically 10 years to recover. RISK only what you can afford to wait even longer to grow your savings. I drew S&P 500 from 1991 to today to illustrate how amazing the market has been, and yes, can be in 2020. My opinion is 50% into cash/conservative investments in 2020 is wise after 480% gains if you are 55 or older. See your professional adviser for whats right for you.
One cautionary factor is to the USA has advanced its debt spending substantially since 2016 with tax cuts. Our deficit is now at over 1 trillion a year at the HEIGHT of the US economy. To put that into perspective, if you where paid at 2.7 million an hour 24x7 since the birth of Jesus (year 0) you still wouldn't have enough money to pay 1 year of USA's debt spending!
If we assume the USA and the world will not enter into the one way abyss of racing to the bottom of free debt, lets look at other economic factors that may affect the market.
The question is , if we needed massive tax cuts, QE easing by the banks to get here, what is the government willing to do to keep this party ontrack for the year ahead?
The question is , if we needed massive tax cuts, QE easing by the banks to get here, what is the government willing to do to keep this party ontrack for the year ahead?
NOTE: I am long the market in the under-valued precious metal sector and Marijuana stocks.
ETF's are GDX, GDXJ, and MJ.
The details
I advise you stop reading here unless you want to understand where I get my view from.
I have gathered items I have found interesting across a variety of sources. My own thoughts of peak valuation was done in August 2019 post Decade old topping pattern completing. Although the graphs have advanced, my opinion is the same.
Below is a quote from Hussman Funds, you can read their full post The Meaning of Valuation .
Yes, interest rates are low, but with them, so are the discount rates and long-term returns that are embedded into current prices. Indeed, the most reliable valuation measures suggest that stock prices are presently about three times the level that would imply future long-term returns close to the historical norm. That may sound like a preposterous assertion, but we’ve seen such extremes before, and they’ve ended quite badly.
Worse, there is a great deal of evidence to support the assertion that interest rates are low because structural economic growth rates are also low. In that kind of environment, a proper discounted cash flow analysis would show that no valuation premium is “justified” by the low interest rates at all. Hiking valuation multiples in response to this situation only adds insult to injury.
Last week, our estimate of prospective 12-year nominal annual total returns on a conventional portfolio mix (invested 60% in the S&P 500, 30% in Treasury bonds, and 10% in Treasury bills) fell to the lowest level in U.S. history, plunging below the level previously set at the peak of the 1929 market bubble. The chart below shows these estimates (blue), along with the actual subsequent 12-year total returns that have followed (red).
Another Hussman post, you can read full here: One Tier and Rubble Down Below
The next chart shows the percentage change in median price/revenue ratios since January 2018. Notice the striking loss of uniformity here. What we see here is essentially a “Nifty Fifty” type of environment, where the most richly valued deciles have accounted for a disproportionate share of the gains while more value-oriented sectors have stagnated or even lost value. This is the hallmark of a market that is losing its engines, yet at the same time maintaining the face of speculation.
We’ve observed precisely the same pattern in the late stages of previous bubbles. Indeed, during much of the tech bubble and the mortgage bubble, value-oriented stocks outperformed other deciles through the bulk of the advance. However, that pattern shifted profoundly as the market approached its peak, with investors increasingly chasing high-valuation “glamour” stocks while the broader market gradually lost its sponsorship.
MISH post: Jim Bianco says this is QE, Like Y2K
We are in QE, free money for the financial system! this goes back to my point, if we continue to support the system with free money, S&P 500 up 50% in 2020 is possible!
Smaller articles, the titles sum up the gist, click through to learn more.
Consumer confidence down 4th time out of 5 months.
Nine States Projected to Contract in 2020: More on the Way
Cass Year-Over-Year Freight Index Sinks to a 12-Year Low
Manufacturing Has Peaked This Economic Cycle
No improvement in corporate profits since 2012
China Posts Slowest Growth in 29 Years But Still Overstated
Ticking Time bomb of record high corporate debt
Cass Year-Over-Year Freight Index Sinks to a 12-Year Low
Manufacturing Has Peaked This Economic Cycle
No improvement in corporate profits since 2012
China Posts Slowest Growth in 29 Years But Still Overstated
Ticking Time bomb of record high corporate debt
Bills due on vacant chines properties - ( China is significantly financially worse than USA )
Capital flight: Money leaving China at record rate - (If China has its crisis, the world will go with it )
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