FEB 17 17 SIT EC
y POL
ZERO HEDGE. ECONOMICS
While the myth that stock
market returns are highly correlated to a country’s GDP
growth rate has largely been debunked,
there remains a strong, and intuitive, relationship
between corporate profits and GDP.
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While
the S&P 500 closed at another new high on Thursday, the VIX also spiked, an
unusual occurrence that may have negative implications in the
intermediate-term.
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The Coming
Bear Market SEE article below
The bears are dead. Long live the bears. And that,
in a nutshell, describes every bubble and emerging bear market there ever
was...
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What's wrong with this picture?
This market reminds
us of this..."none
shall fall"
Gold remains 2017's biggest gainer, oil is down, bonds
flat and the panic bid this week dragged The Dow higher...
VIX was up and stocks were up...
But it is Notable decoupling between stocks and bonds this week..
SEE ALL GRAPHS AT: http://www.zerohedge.com/news/2017-02-17/dow-vix-gold-all-yet-another-ratio-screams-record-high
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"Better to be out of a bull market than
fully invested in a bear market..."
As discussed yesterday, the exuberance in the
markets, as witnessed by the net positioning of large speculators, has reached
records on both ends of the spectrum. Those
extremes, combined with spiking levels of “hope” in both the financial
and economic data is all too reminiscent of the past.
The problem with similarities in
market price patterns is that it fails to take into account the underlying
factors such as employment, inflation, interest rates, and economic growth.
When looking at those variables along with some technical
indicators, we find similarities to past bull market peaks. .. In both previous
bull market peaks we find, as measured as a percentage change from the previous
bottom to current level, the following: SEE GRAPH AT: http://realinvestmentadvice.com/wp-content/uploads/2017/02/SP500-vs-EconomicData-SC-021617.png
- CORE INFLATION rose 11.7% and 7.1% just prior to the recession. Currently, Core CPI is up 11.1%
- GDP GROWTH picked up by 7.5% and 5.1% just prior to the recession. Currently, GDP is up 6.8%
- EMPLOYMENT was up from lows by 9.1% and 8.6%. Currently, Employment is up 19.0%
- INTEREST RATES rose 50.8% and 51% from lows. Currently, Rates are up 87.9%
As we saw just prior to the beginning of the previous two
recessions, SUCH A BUMP is
not uncommon as the impact of rising
inflation and interest rates trip of the economy. Given the extreme speculative positioning in oil longs, short
bonds, and short VIX, as discussed yesterday, it
won’t take much to send market participants scrambling for the exits.
I am NOT suggesting that we are about to have the next great
market crash tomorrow, the
current sensation of “Deja Vu” might just be worth paying attention to.
In the meantime, here is what I am reading this weekend.
Fed/Economy
- Culture Shock by Danielle DiMartino-Booth via Money Strong
- China’s Countdown Clock by Jim Rickards via The Daily Reckoning
- No, Dodd-Frank Isn’t Killing The Economy by Rex Nutting via MarketWatch
- Are Tax Cuts A Remedy For The Economy by Joseph LaVorgna via The Hill
- In Case You Thought Trump Was Imploding by Yves Smith via Naked Capitalism
- GOP Puts WallStreet Ahead Of Safe Retirement Saving by David Dayen via The Fiscal Times
- The Fed Is Behind The Curve by Charles Lieberman via Bloomberg
- The Elite Rot In The Federal Reserve by Caroline Baum via MarketWatch
- Flying On A Wing & Tweet by David Stockman via Daily Reckoning
- Don’t Be Hasty With Rate Hikes & End The Party by Bryan Rich via Forbes
- GDP: Can Trump Deliver 4% by Anu Bararia via The Fiscal Times
- Trump Kills DOL Rule by David Bahnsen via Forbes
- Could Trump Trigger A Wave Of Bond Selling by Kayla Tausche via CNBC
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Markets
- Be Very Afraid Of The Stock Market by Linette Lopez via BI
- Rising Rates Be Damned: R/E Looks Good by Michael Kahn via Barrons
- Are We Prepared For The Next Financial Crisis by Robert Samuelson via Real Clear Markets
- Markets Are Priced For Poor Returns by Jeff Erber via Grey Owl Capital Mgmt.
- The Trump Rally Has Only Begun by Sue Chang via MarketWatch
- Top Bond Strategist Recoils From Stocks by David Ader via Bloomberg View
- Boom Bust Barometer Making All Time Highs by Eric Bush via GaveKal Research
- Market Races To Record by David Merkel via Aleph Blog
- Am I The Only One Nervous by Michael Gayed via Pension Partners
- Gold Vs S&P 500 by Jim Boswell via TalkMarkets
- Meet The Man Behind The Market’s Ramp by Tyler Durden via ZeroHedge
- This Boom Will Turn To Bust…Eventually by Larry Elliott via The Guardian
- Is Stock Market Breadth Sending A Warning by Chris Ciovacco via Ciovacco Capital
- Will Tax Cuts Be The “Magic Bullet” For Stocks by Kevin Marder via MarketWatch
- 3 Risks To The Rising Stock Market by Christian Science Monitor
- Berkshire/Buffet Stocks For 2017 by Jon C Ogg via 24/7 WallStreet
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Research /
Interesting Reads
- $1 Trillion Wealth Manager: Buy America Now by Tom Maratil via Business Insider
- Millennials May Have To Work To 75 by Zina Kumok via Investopedia
- Lies, Damn Lies & Taxes by Marc Chandler via Real Clear Markets
- US Stock Market Bubble Risk Is Elevated by James Picerno via The Capital Speculator
- The Greatest Stock In World History by Shawn Langlois via MarketWatch
- Yardeni’s Magical Stock Market Indicator by Kevin Muir via The Macro Tourist
- History Of US Bear& Bull Markets (Chart) by First Trust
- Monetary Policy, Not Fiscal Will Drive The Market by Joe Calhoun via Alhambra Partners
- Lacy Hunt: Why Bond Yields Are Going Lower by Tyler Durden via ZeroHedge
- Betting Against Correlation by Cliff Asness via AQR
- Market Euphoria Will Leave Investors Bewildered by John Hussman via Hussman Funds
- S&P 500 & VIX Both Jump: Which Blinks by Dana Lyons via Tumblr
- The Triumph Of Hope Over Experience by Jesse Felder via The Felder Report
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“Better to be out of a bull
market than fully invested in a bear market” – Bill Henry
….
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A confirmation of the previous Bill Henry statement:
Prem Watsa, the CEO of Fairfax Financial, and
largely recognized as Canada’s most famous investor, is dropping his bearish
stance on the markets. Watsa announced that he is covering his firm’s equity
hedges after suffering a $1.1 billion net loss on its investments in Q4, and an
even bigger loss for all of 2016.
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INFLATION : Every day we buy less with the same salary
When the cost of living rises faster than
paychecks do year after year, eventually that becomes a very big problem.
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As Caterpillar's stock hits multi year highs,
its operations continue to sink.
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The Catalyst forced-buying is over; President
Trump's honeymoon is nearing an end; so
what happens next?
The Catalyst forced-buying is over; President Trump's
honeymoon is nearing an end; so what happens
next?
There is an 'odd one
out' in the world...
The last few weeks
have been unprecedented...SEE GRAPH AT: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/13/20170216_cat5_0.jpg
Bottom-up, Hope is becoming 'stretched'... SEE GRAPH AT: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/17/20170217_4charts1_0.jpg
The 'Hard Data' is not backing that hope... SEE GRAPH AT: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/17/20170217_4charts2_0.jpg
And where is the growth expectation that everything is
hinging on? No here. SEE GRAPH AT: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/17/20170217_4charts3_0.jpg
Still, Buy The Fucking All-Time-High, right?
US stocks right now are selling at the HIGHEST price-to-sales ratio in at
least 15 years, and far higher than it was before the 2008 crash. SEE IMAGE AT: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/01/23/20170126_record_0.jpg
Similarly, the
cyclically-adjusted Price/Earnings ratio of the US stock market
is now at its highest level since the 2000 crash, and higher than it was before
the 2008 crash.
Looking at other
metrics like Enterprise Value
to EBITDA (a measure of a company’s core
business operating cashflow), US stocks are also at their most expensive levels
since the 2000 crash.
Certainly, US stocks could
continue to become more expensive. Perhaps they go up forever?
…
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POLITICS
"...but then even if Trump is crazy and incompetent, what’s so great
about a Deep State security matrix that refuses to be subordinate to anybody,
that can do whatever it wants to whomever it wants?"
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Like a good soldier, Flynn took the bullet. But the deep state is after larger game than General
Flynn. It is out to bring down President Trump
and abort any move to effect the sort
of rapprochement with Russia that Ronald Reagan achieved. For the
deep state is deeply committed to Cold War II.
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If you thought that yesterday's
press conference was "ranty and ravey", it appears President
Trump just turned the anti-'Fake news'-media amplifier up to '11',
declaring CNN, NBC, ABC, CBS ,
The New York Times (but not The Washington
Post?) as "enemies of
the American people"
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"I am directing the Commissioner of CBP
and the Director of ICE to immediately engage with the Governors of the States
adjacent to the land border with Mexico ... to authorize qualified members of
the state National Guard ... to perform the functions of an immigration officer
in relation to the apprehension, investigation and detention of aliens in the
United States."
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"I
think that the Flynn issue obviously is something that shows that in many
respects this administration is in disarray and they've got a lot of work to
do," said McCain who
added that "the president, I think, makes statements (and) on other
occasions contradicts himself."
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"In my 34 years of Governmental
service, I have never seen anything
like it. It’s the bifurcation of the entire intelligence
apparatus..."
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No matter what your particular political
perspective is, if there is one thing that virtually everyone in the United
States can agree upon it is the fact that America’s infrastructure is crumbling. ..
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As expected, all 4 key themes discussed on Q4 conference calls are
closely linked to Trump's policies and include tax reform, regulation, fiscal spending and
trade policy.
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WORLD ISSUES and ME
Japanese telecom giant Softbank - which owns
Sprint - is reportedly
looking at T-Mobile US for a merger. This would be
the second attempt after 2014's
approach was rebuffed by US regulators.
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S&P equity futures followed Asian and
European stocks lower, driven by weakness in Franch and Italian markets, as
French political concerns returned; the pound tumbled after UK monthly retail
sales unexpectedly dropped pushing the dollar higher and Euro lower.
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"This is clearly not a positive for French bonds... It
increases the odds of a Le Pen victory,
with French bonds already being very vulnerable to political risks."
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DEMOCRACY NOW
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GLOBAL RESEARCH
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INFORMATION CLEARING HOUSE
Blood in the Water: the Trump Revolution Ends
in a Whimper By Mike Whitney
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Fake News Or White
House Manipulation?
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COUNTER PUNCH
David Price Rogue
Elephant Rising: The CIA as Kingslayer
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Matthew Stevenson Is
Trump the Worst President Ever?
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Roger Harris Emperor
Trump Has No Clothes: Time to Organize!
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Joan Roelofs What
Else is Wrong with Globalization
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Norman Pollack Self-Devouring
Reaction: Governmental Impasse
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Robert Koehler The
Great American Awakening
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Christopher Brauchli Trump 1,
Tillerson 0
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SPUTNIK and RT SHOWS
La derecha de EC: ninguna
decencia ética ni respeto a DH.. solo servilismo al imperio
Ecuador’s Opposition Presidential Candidate Promises to Kick Out Assange https://sputniknews.com/latam/201702171050801734-ecuador-lasso-assange-embassy/
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Big Cleanup at State: Tillerson Firing Staffers in Troves https://sputniknews.com/us/201702181050806803-tillerson-mass-firing-state-department/
Related
Trump Reaffirms Plans to 'Drain the Swamp' of Ex-Officials Lobbying US Gov't https://sputniknews.com/us/201612221048890888-trump-drain-swamp/
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US Starts Deporting Cubans https://sputniknews.com/us/201702181050807234-united-states-starts-deporting-cubans/
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Pepe Escobar The Swamp Strikes Back https://sputniknews.com/columnists/201702151050696849-flynn-trump-administration-swamp/
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RT SHOWS
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NOTICIAS IN SPANISH
No por la resistencia popular, pero
por la inconsistencia del furer
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PRESS TV
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Germany
warns US over damaging Russia détente
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Trump may “use”
Taiwan for such purpose.. and China
should call N Korea
to confront NATO allies in the region
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OSCE
wants 'real' arms withdrawal in E Ukraine. What
about Kiev?
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‘Turkey seeks to seize territory in northern Syria
(poppy dreams)
Erdogan not serious
about fighting terrorism but to split Syria
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UN
backtracks on Syria 'political transition to peace
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