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Old 11-28-18, 08:09 PM
  #51
 
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Temp pop up because the fed backed down from Trump. There is a reason rates need to be increased. Nothing has changed.

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I hope they stay close to where they are at for about 6 more months so I can get a decent rate on my mortgage next year.
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Old 11-29-18, 12:07 AM
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Bouncer if you are so smart tell us what to invest in
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Old 11-29-18, 02:43 AM
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Bouncer if you are so smart tell us what to invest in
I have been. Read 3-4 posts up asswipe.

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Old 11-29-18, 11:16 AM
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Deutsche Bank Is Losing Control

A police raid adds to the sense that nobody appears to be in charge.

To say that Deutsche Bank AG is a basket case is obvious. The once-mighty German investment bank has racked up three straight years of losses, bled market share and destroyed 19 billion euros ($21.6 billion) of shareholder value in five years. Its inability to adapt to a post-crisis world has been astonishing.

But the latest events at the bank – Thursday's raid by German authorities in a money-laundering probe and reports of an imminent destabilizing management reshuffle by CEO Christian Sewing – suggest that we have sunk to new low in terms of institutional and operational stability.

Whoever is nominally in charge – and surely the chain of accountability reaches well beyond Sewing and into the boardroom where Chairman Paul Achleitner sits – appears to have lost control.

A bank lives or dies by its risk management, and there's little evidence that Deutsche has a sufficiently tight leash on it. The latest raid is a red flag, but only one of many. Deutsche has been linked to a probe into Denmark's Danske Bank A/S, through which $230 billion in suspect funds were funneled. Separately, the German lender was fined almost $700 million last year for helping wealthy Russians move money out of the country. It is scrambling to improve its compliance controls.

Deutsche Bank's traders appear prone to eye-popping missteps, too. Last week, Bloomberg reported that the bank had lost $60 million this year on a bet that was supposed to both avert losses and make money. It's reminiscent of a similar loss linked to bets on U.S. inflation Bloomberg reported on back in 2017, when John Cryan was still CEO. And the less said about the lender's incredible, accidental, $35 billion flub in April – hastily reversed – the better.

Instead of trying to impose order and stability, the board and executives somehow keep doing the opposite. Cryan's efforts in trying to keep the Deutsche ship afloat were rewarded with a messy and hasty expulsion by the board. Now it seems the same thing is happening to senior executives: Chief Regulatory Officer Sylvie Matherat and U.S. chief Tom Patrick are said to be on the way out. Investment-bank head Garth Ritchie's job is also at risk amid concerns about his performance, according to the Financial Times.

All of this is obviously damaging for Deutsche's shares, which have plumbed new record lows, as well as its bonds. It's not hard to understand why: ever-changing management and faulty risk controls don't help to win more business.

If Chairman Achleitner and the supervisory board want to stop the rot, let alone return to growth, there needs to be a semblance of institutional control. A serious halt to risk-management blow-ups, however costly, would be worth it, as would a calmer approach to pushing out executives trying to implement an already difficult strategy. The more heads change at the management level, the more investors will wonder if they should change at board level.

https://www.bloomberg.com/opinion/ar...n?srnd=premium
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Old 11-29-18, 12:18 PM
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I hope they stay close to where they are at for about 6 more months so I can get a decent rate on my mortgage next year.

you think Trump and Ping will come to some sort of agreement on Sat? if no deal we will see a pretty big market slump starting on Monday IMO.
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Old 11-30-18, 11:06 AM
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I doubt it. Trump is too hard headed to give any concession on trade deals. I bet the next president will have to deal with it. Only way is if the other guy bends over and takes it.
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Old 11-30-18, 11:21 AM
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I doubt it. Trump is too hard headed to give any concession on trade deals. I bet the next president will have to deal with it. Only way is if the other guy bends over and takes it.
add to that a guy that will be at the table on the American side is one of china's biggest critics and has written a few books just ripping china apart. so that doesn't exactly help. lol

but trump also knows that further escalation of a trade war will hurt the economy and that is obviously bad for him.

i think they are going to come out with some vague statement about "moving forward" and "positive talks" but nothing on china's end will really change.
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Old 11-30-18, 11:19 PM
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Investors on Edge After Rocky Month for Markets

Stocks remain well below highs from earlier this year, and crude oil takes hit from slowing global growth

Investors are heading into the final month of 2018 apprehensively, as shaky trading in everything from stocks to bonds to oil to bitcoin has tempered expectations for gains in the months to come.

U.S. stocks stabilized in November after a punishing autumn rout but remain well below the highs they hit earlier in the year. Crude oil briefly slid below $50 a barrel for the first time in more than a year, hurt by worries about a potential supply glut as well as slowing global growth. And the 10-year Treasury yield—a barometer for global finance—is on the verge of falling below 3% again after comments from the Federal Reserve’s chairman triggered bets on the central bank raising rates more gradually than expected.

To many, the twists and turns across markets reflect the increasingly cloudy outlook facing investors.

Much remains up in the air. The U.S. and China, set to meet at the Group of 20 leaders summit in Buenos Aires this weekend, are still mired in a trade fight. The Fed is expected to raise interest rates in December but looks more uncertain about its pace of rate increases next year. And the outlook for global growth appears uneven after a synchronized expansion around the world helped lift stocks from New York to Japan and Hong Kong to multiyear highs in 2017.

“It’s been certainly a roller-coaster year,” said Andrew Braun, portfolio manager for large cap funds at investment firm Pax World Funds. “Investors are starting to focus on just how difficult the next quarter, and then the following three or four quarters, will be relative to how good we’ve had it.”

Major indexes initially drifted between small gains and losses Friday before rallying into the close.

One factor driving the rebound was a rally in so-called defensive sectors, whose relatively hefty dividend payouts tend to draw investors during volatile trading stretches. Shares of real-estate companies in the S&P 500 finished up 5.3% on the month, nearly tripling the broader index’s gains. That is despite a fresh streak of data in November showing new-home sales posting their steepest decline since 2017 and the pace of home-price gains slowing.

Few predict a recession is on the horizon. The Commerce Department said this week that it estimated the U.S. economy grew at a 3.5% seasonally adjusted annual rate in the third quarter, moderating from the second quarter but extending what has been the second-longest economic expansion in U.S. history.

Yet increasingly tepid reports on the housing sector—alongside data showing domestic auto sales sputtering—are adding to many investors’ sense that, beneath a strong U.S. economy, fault lines are growing.

Another worry for investors: the extended slump in technology shares, which found little reprieve in November while many other sectors rallied.

Apple Inc. shed 18%, posting its worst month in more than a decade, as investors grew skittish about signs of softening demand for the firm’s iPhone. The declines helped Microsoft on Friday unseat Apple as the largest U.S. company by market capitalization, according to Dow Jones Market Data.

The slide in technology shares, which analysts say has been fueled by nervousness about slowing sales, as well as valuations, is troubling investors; some question how much further stocks can climb in the absence of the sector’s leadership. It also removes a major source of support for U.S. stocks, which have managed to hang onto their gains for the year despite fading enthusiasm for risk-taking among investors across a variety of markets.

Bitcoin has tumbled below $5,000 after surging at the start of the year. Emerging markets from Turkey to Argentina to China remain in a slump, hurt by the strengthening dollar, as well as signs of slowing growth.

Investors spot at least one silver lining. After Mr. Powell’s November remarks, many believe the Fed will raise rates more gradually than they had earlier expected, potentially easing pressure on markets that have struggled as monetary policy has tightened. Bets on a more dovish Fed helped send the Dow up more than 600 points Wednesday, wiping out the blue-chip index’s losses for the month.

Yet the momentum behind that rally proved to be short-lived, with stocks drifting between gains and losses by the end of the week. And many caution that the Fed’s rate path remains up for debate.

Some Fed officials have indicated they would want to see evidence that the labor market is stalling before deciding to pause rate increases. Investors may get more clarity on the central bank’s rate plans in the coming weeks, when Mr. Powell testifies before the U.S. Senate and the Federal Open Market Committee holds its final policy meeting of the year.

“We have a higher level of uncertainty” when it comes to trade, the path of interest rates and global growth, said Ken Monaghan, co-head of high yield at Amundi Pioneer. Tumbling oil prices and fractious politics, like Brexit negotiations between the U.K. and European Union, add to the murky outlook for global markets, he said.

“When uncertainty goes up, investors require a higher return,” Mr. Monaghan said.

https://www.wsj.com/articles/global-...d=hp_lead_pos1
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Old 12-02-18, 03:46 PM
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Investors are staring at the bleakest future since the Great Depression

There's never been a worse time to be a conventional portfolio manager.

Well, maybe back in the deepest, darkest throes of the Great Depression that crushed the US economy way back in 1929. But not for the past 90-or-so years.

At least that's what John Hussman thinks. The former economics professor and current president of the Hussman Investment Trust has crunched the numbers and found that the future looks historically bleak for investors who aim for a traditionally diversified mix of holdings.

His methodology looks at a portfolio with 60% invested in the S&P 500, 30% in Treasury bonds, and 10% in Treasury bills — and it's designed to assess the expected total return over a forward 12-year horizon.

Hussman finds that at the stock market's all-time peak in September, this mix of investments was set to produce total returns of just 0.48% over that 12-year period. As you can see below — as signified by the blue line — that's the lowest since the Great Depression era of 1929.

Even though bond yields recently climbed and US stocks took a 10% hit, Hussman notes that the expected return climbed to just 1.29%, still Great Depression lows. This fact shows just how far stretched the market is right now — and reinforces the degree to which it must drop to make future returns more appealing.

To that end, Hussman calculates that, in order to achieve a 10% expected return with that portfolio mix, the S&P 500 would have to plummet by roughly 60%. That would be a brutal reckoning that would rank among the biggest and most catastrophic in history.

"Notice that the completion of every market cycle has served to restore normal prospective market returns, which is routinely accomplished by sharp losses in security prices," Hussman wrote in a recent blog post.

One element of that collapse would be a possible crisis in pension funds, which are notable for their low risk thresholds and long-term scope. Hussman notes that they usually assume future returns of 7%, which is far above his current forecasts. If they're making just a fraction of that, it could spur panic.

The Fed's role in creating this mess
So how did the market end up in this situation? Hussman places a lot of blame on the Federal Reserve, whose monetary easing practices he says have produced unsustainable conditions.

But his issue with the Fed stems far beyond current chair Jerome Powell, who has been stuck with the unenviable task of normalizing interest rates back to historical levels. He thinks previous Fed chairs Ben Bernanke and Janet Yellen are more culpable, having created what he calls a "yield-seeking carnival of speculation."

By lowering interest rates to near zero, the Fed made it so companies — even those with highly questionable credit profiles — could have easy access to debt financing, says Hussman. Those firms then used that money to make splashy acquisitions, reinvest, and buy back shares. In the end, it helped push stocks to new all-time highs.

But Hussman prefers to look at it differently. He says those records were accompanied by valuations reaching their "most offensive extremes in history." He's no fan of the short-sighted policy decisions that create this situation, and he expects the fallout to be sharp and brutal.

"In the Federal Reserve's attempt to bring the US out of the crisis of its own making, the Fed has produced conditions that make another collapse inevitable," said Hussman. "Unfortunately, the scale of the present bubble is far grander, and the consequences are likely to be more severe."

He continued: "By the completion of this cycle, I continue to expect the S&P 500 to lose roughly two-thirds of the market capitalization it reached at its Sept. 20 peak."

Hussman's track record

For the uninitiated, Hussman has repeatedly made headlines by predicting a stock-market decline exceeding 60% and forecasting a full decade of negative equity returns. And as the stock market has continued to grind mostly higher, he's persisted with his calls, undeterred.

But before you dismiss Hussman as a wonky perma-bear, consider his track record, which he breaks down in his latest blog post. Here are the arguments he lays out:

*Predicted in March 2000 that tech stocks would plunge 83%, then the tech-heavy Nasdaq 100 index lost an "improbably precise" 83% during a period from 2000 to 2002

*Predicted in 2000 that the S&P 500 would likely see negative total returns over the following decade, which it did

*Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009

In the end, the more evidence Hussman unearths around the stock market's unsustainable conditions, the more worried investors should get. Sure, there may still be returns to be realized in this market cycle, but at what point does the mounting risk of a crash become too unbearable?

https://www.businessinsider.com/next...ussman-2018-11
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Old 12-02-18, 11:39 PM
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Has it crashed yet?
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Old 12-03-18, 02:12 AM
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Has it crashed yet?
its started yes. 2 steps down 1 step up. won't be a continuous waterfall pattern but it's coming down make no mistake.

tomorrow will be a green day (200+ point gain due to G20 meeting with china) but it will end the week in the red.
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Old 12-03-18, 04:09 PM
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pay attention people. the smartest people in the room are sounding the alarms. price action alone is not an indicator of good things to come..

The Treasury yield curve just inverted, sounding the alarm for recession

The bond market is beginning to sound the alarm of a recession, with an inversion in U.S. Treasury yields occurring on Monday for the first time since 2007.

The yield on the 5-year Treasury note fell below the yield on the 3-year note, meaning that investors were being paid more to hold U.S. government debt maturing in three years than comparable bonds maturing in five years. It’s not the major curve inversion that investors watch for — the 2-year note holding a higher yield than the 10-year note, which has preceded every U.S. recession since World War II — but it portends that the market is headed in that direction, analysts told Yahoo Finance.

Ian Lyngen, head of united rates strategy at BMO Capital Markets, said the inversion of 3- and 5-year yields has strengthened his belief that an inversion of the 2-year and 10-year yield will happen in late 2018 or early 2019.

“This solidifies not only my flattening bias but I think it will lead many players in the market who [expected the yield curve to steepen] to capitulate on that,” Lyngen said.

U.S. Treasury yields rose early on Monday after a deal between the U.S. and China to hold off on new tariffs. Shorter-dated yields rose faster than longer-dated yields, pushing the curve to invert between the 3- and 5-year yield.

The yield curve inverted between the 2- and 10-year yield before the recessions of 1981, 1991, 2000 and 2008. It has preceded all nine U.S. recessions since 1955, with a lag time ranging from six months to two years.

Analysts have pointed out that although many associate a yield curve inversion with recession, the phenomenon is a reflection of the kind of economic conditions that predict a market bust rather than being the cause of them.

An inverted yield curve is a sign investors think the government is less likely to pay back debt it owes in two years than what it owes in a decade — or in this case, the government is less likely to pay in three years than it is in five. Market analysts have pointed to everything from the increase in U.S. debt to cyclical factors like the market running out of steam as reasons for a downturn.

The combination of higher bond yields and the looming threat of recession is adding to fears about slowing global growth, investors said. It could also have implications for the Federal Reserve’s interest rate policy.

Fed Chair Jerome Powell said in a speech last week that U.S. interest rates were now “just below” the level that could be considered neutral and signaled that the Fed would stop raising rates. Investors viewed that as a stark turnaround from his remarks in October that the central bank was “a long way from neutral.”

Cameron Crise, macro strategist at Bloomberg LP, called the inversion “potentially the first shoe to drop in the end of the rate cycle.”

“Mind you, there can be a long delay between the first inversion of the curve and subsequent rate cuts, as the last cycle showed,” Crise said in a report for Bloomberg. “Still, it’s more evidence that we’re in the ‘late 2005’ analogue of the current Fed campaign.”

Fed officials have not spoken much about the possibility of a yield curve inversion, but earlier this year a number of members of the Fed’s rate-setting committee said it was a development they were watching.

“One of the most pervasive relationships in macroeconomics is that between the term spread — the difference between long-term and short-term interest rates — and future economic activity,” the San Francisco Fed’s Michael D. Bauer and Thomas M. Mertens wrote in March.

Atlanta Fed President Raphael Bostic even said in May that it was his job to prevent the curve from inverting, joining a number of other U.S. central bank bosses who had openly voiced concern about inversion.

https://finance.yahoo.com/news/treas...194921816.html
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Old 12-04-18, 04:01 PM
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just the start folks. the end of a 10 year bull market. hold on tight.



https://www.bloomberg.com/news/artic...s?srnd=premium
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Old 12-05-18, 11:57 AM
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"I don't look at recessions as a bad thing. I mean, it's bad for America. It's bad for the people that are unemployed. It's usually an opportunity for J.P. Morgan." - Jamie Dimon

What a charmer.

https://www.cnbc.com/video/2018/12/0...mie-dimon.html
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Old 12-07-18, 09:34 AM
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Job growth falls short of expectations

https://www.cnbc.com/2018/12/07/us-c...-expected.html
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Old 12-14-18, 12:55 PM
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U.S. Stock Market Exodus Is Second-Biggest Ever

Investors rushed out of U.S. equity funds in the second-biggest weekly exit on record, according to Bank of America Merrill Lynch, as the market sell-off pushed traders to seek safe havens.

U.S. stock funds bled $27.6 billion in the days through Dec. 12, which includes last Friday’s plunge in the S&P 500 Index that capped the worst week for the gauge since March, according to BofA’s note, which cited EPFR Global data. This is the second-biggest redemption since February’s spike in the VIX volatility measure, according to Jefferies Financial Group Inc.

The turmoil in stocks, which has erased as much as $4 trillion in U.S. equities since the end of September, continued this month as traders feared that a global economic slowdown will curb earnings growth and end the equity bull run. Investors enter 2019 searching for assets that would bring returns after 2018 saw both fixed income and stocks disappoint.

Instead of U.S. equities, market players flocked to Japanese and emerging-market equity funds, in addition to government bonds as global equity funds saw a record weekly outflow of $39 billion, according to BofA. Investment-grade bond funds also set a historical precedent with an $8.4 billion redemption, the data show.

U.S. equities have fallen so much that the S&P 500 Index is now trading near the lowest valuation since early 2016. That’s quite a contrast compared to a year ago, when the gauge was at the highest forward price-to-earnings ratio since 2002.

The negative sentiment surrounding U.S. stocks showed no signs of dissipating on Friday as S&P 500 futures fell. Trade concerns were fueled by Apple Inc. saying a Chinese ban on sales of the iPhone will force it to settle a licensing battle with Qualcomm Inc., an outcome that may end up harming the country’s smartphone industry.

https://www.bloomberg.com/news/artic...s?srnd=premium
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Old 12-14-18, 04:09 PM
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Down another 500 points on the DJI today.

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Old 12-17-18, 04:05 PM
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annnnd down another 500 points again today...

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Old 12-20-18, 12:54 PM
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LOL CNBC is full of people attacking short sellers and the algos. none of these fuckers were complaining about algos when they were helping to pump the market. now they are all surprised that an over extended market is now crashing hard. now they are talking about "doing something about these short sellers and algos" because they were too stupid to see the crash coming and they are losing their shirts.

i told you guys weeks ago about SQQQ. hint for peeps that don't understand.. it's a 3x leverage inverse ETF that bets against the Nasdaq. so if the nasdaq is down 30% SQQQ is up 90%.

the stock market is no longer being supported by free money aka near zero interest rates therefor profits are being taken and they are leaving the market.
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Old 12-23-18, 08:39 AM
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trump keeps talking about potentially firing the chairmen of the fed. i love it, trump is making everything worse. the fed is not there to prop up the stock market. their job is to keep the economy healthy. the market is not the economy. people seem to get that confused. if the fed had kept interest rates next to nothing the crash that comes will be even harder then it is now. borrowing and credit would continue to explode giving the impression that everything is fine when in reality the bubble is getting bigger and bigger. increasing interest rates is the only thing that can save this massive bubble. the fed is absolutely doing the right thing.

chuck you talk about the bitcoin bubble and you were correct. but the current market bubble propped up by low interest rates for the past 10 years is pretty god damn bad as well. i think we are going to see the DJI in the 18k range by the time this market dump is over. that's almost a 20% further drop from here...

just to give you an idea of how much further that is to fall I marked it on the chart in the link below. we will probably have a few bounces up before getting there but ultimately i think it will fall to the 18k level of support before the bear market is over.

https://www.tradingview.com/x/Ix3Sd7vk/
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Old 12-24-18, 11:48 AM
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LMAO @ the trump admin. they keep trying to "calm the market". they don't seem to understand that everytime they try to "calm the market" it sends out a single loud and clear that the trump admin is very concerned behind the scenes. it's hilarious watching these dipshits stumble over themselves only making the panic in the markets worse and worse. LMFAO. they could not handle this any worse.

--------------

The Treasury secretary put out an alarming—and confusing—press release on Sunday evening

Imagine having a runny nose, itchy eyes, congestion, and a sore throat, and your doctor telling you that you shouldn’t worry about cancer—she consulted her colleagues and they’re certain it is not cancer, and if it were, they could fight it.

This is roughly what happened on Sunday evening, when Treasury Secretary Steven Mnuchin put out a press release on calls he held with executives from the country’s largest banks. Mnuchin’s statement assured the public that they had not been having liquidity problems or “clearance or margin” issues—the sorts of things you would worry about if the country were on the brink of a financial crisis.

The markets have been suffering from something like a nasty cold of late, with a major correction in stock prices due to rising interest rates, trade tensions, the government shutdown, and slowing global growth. But the surprise holiday readout, which came with a heads-up that Mnuchin would be holding a call with some of the country’s top financial regulators as well, unnerved and puzzled investors, bank executives, politicians, and economists. What was the Treasury secretary thinking? Who thought we were tipping into a financial panic? None of the possible explanations are very reassuring, though it seems that Mnuchin was trying to be.

Option one: The Treasury secretary was speaking to an audience of one. Mnuchin is under enormous pressure from President Donald Trump, who is upset about the market sell-off and mad at the current Federal Reserve chairman, Jay Powell. The press release was perhaps an attempt to show Trump that Mnuchin was doing something, anything, to talk the markets back into stability.

It makes some kind of squint-and-see-it sense. Mnuchin used Twitter earlier in the weekend to reassure the markets that Trump was not going to fire Powell, who has continued to tap up interest rates as the economy continues to grow at a decent pace. Mnuchin wrote that Trump told him he “totally” disagrees with Fed policy, calling it “an absolute terrible thing to do at this time.” But he said that Trump had informed him, “I never suggested firing Chairman Jay Powell, nor do I believe I have the right to do so.” The readout might be a further effort to keep Trump calm by showing him that everything is fine and his Treasury is taking action.

The problem with this explanation is that it means Mnuchin risked roiling financial markets to placate his boss (which of course would only further anger his boss).

Option two: The Treasury secretary believes that the market correction is due in part to animal spirits—animal spirits he could quiet by reminding everyone that the financial system is in fine shape. Perhaps he anticipated further declines in stock prices due to the government shutdown, and wanted to calm the markets.

And it is true that the sell-off remains nothing more than a sell-off, at least in most economists’ and corporate executives’ eyes—a correction, not a crisis; a cold, not a cancer. Even if the bear market were a precursor to an economy-wide slowdown, that would not necessarily result in bank runs and liquidity panics and cratering financial firms.

But, again, nobody was worried about a banking panic before Mnuchin brought it up. “Can someone who understands markets please explain what Secretary Mnuchin did and why?” Brian Schatz, a Hawaii senator who sits on the banking committee, wrote on Twitter. “Because it seems like a bad look at minimum, and maybe more concerning than that but I honestly don’t know.”

Option three: Mnuchin has some troubling insider knowledge, and he wanted to broadcast to the markets that he is aware and in charge. Maybe some financial firms are teetering? Maybe rising interest rates and falling asset prices are straining some important market participants, and it just has not yet become evident in public reports?

Whatever Mnuchin was trying to do, he did not succeed in it, instead stoking market fears and sowing confusion. Perhaps the clearest takeaway is that Mnuchin and Trump’s Treasury lacks the expertise to communicate clearly and forcefully with the markets—no surprise, given how few experienced financial operatives Trump has hired and how many experienced non-political civil servants have fled Treasury during this administration.

If they’re communicating this poorly in the absence of a crisis, just imagine how disastrously they might perform in the presence of one.

https://www.theatlantic.com/ideas/ar...elease/578968/
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Old 12-24-18, 12:44 PM
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Worst Christmas Eve in stock market history.



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Old 12-24-18, 01:24 PM
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down 650 points today..

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Old 12-25-18, 12:02 PM
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The President is both setting in motion a crisis while undermining the institution that needs to respond to that crisis.


Dec 25th - Bloomberg

President Donald Trump’s Christmas Eve tweet reiterated that he considers Federal Reserve Chairman Jerome Powell a thorn in his side, one I think Trump believes he needs to pull even if Treasury Secretary Steven Mnuchin claims otherwise. We need to start thinking about what happens if Trump tries to fire Powell. Short version: It would likely be an absolute mess.

The legal framework for firing a Fed chair remains subject to debate. Fed scholar Peter Conti-Brown argues that the President could try to demote Powell from Fed Chairman back to a governor, but that would potentially still leave Powell as Chairman of the interest-rate setting Federal Reserve Open Market Committee. How the Fed might react to such a situation is unclear.

From my perspective, the best case scenario for market participants is this: Powell steps down as chair and governor and is replaced by Fed Vice Chairman Richard Clarida. Equities tumble – maybe even go into free fall – while Treasuries surge. Clarida and his remaining Fed colleagues react by slashing rates at the January 2019 FOMC meeting, and maybe even sooner in an emergency meeting. The markets rebound, and the transition happens quickly enough that Main Street remains untouched by the gyrations on Wall Street.

The worst case scenario is that the Fed digs in its heels and chooses to challenge Powell’s firing in the courts as a way to preserve the independence of the central bank. That process could drag on indefinitely, creating a sustained “risk off” scenario in financial markets that would eventually create sufficient damage to the broader economy that hurts Main Street.

Even in the best case scenario, the Fed becomes another damaged institution. Arguably, it already is. There is a risk that at this point any action taken by the Fed to cushion markets or the economy will look as if policy makers are simply yielding to Trump’s demands. In other words, the appearance of independence may disappear if Trump’s antics create the uncertainty that necessitates a Fed response.

Hence, regardless of what happens, we are now well into uncharted and dangerous territory. It is not obvious that the government has the capacity to respond effectively to a financial crisis. That means that the Fed would have to shoulder an even greater role than in the last crisis. But now, the Fed may be less effective because of the damage inflicted by Trump.

Indeed, Trump appears to be both setting in motion a crisis while undermining the institution that responds to that crisis. Don’t underestimate how tense the situation has become. The risk that this downturn in stocks and other risk assets bear turns into something worse rises with each angry Trump tweet.
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Old 12-30-18, 06:31 PM
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one of the smartest minds in the market. give it a listen. even if you understand 25% of it you will be that much better off.

Druckenmiller on Economy, Stocks, Bonds, Trump, Fed: Full Interview

https://www.youtube.com/watch?v=HFAzZttioEk
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Old 12-31-18, 04:50 PM
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Dow Industrials Suffer Worst Annual Decline Since 2008

U.S. stocks rose on the final trading day of 2018, although punishing losses from recent months kept major indexes on course for their steepest one-year decline since 2008.

Major indexes got a lift Monday as investors eyed signs of progress in trade negotiations between the U.S. and China. President Trump tweeted over the weekend that he and Chinese President Xi Jinping had made “big progress” in trade talks that are due to wrap up in March.

“As long as they keep talking, that is positive for the market,” said Geoffrey Yu, head of the London investment office at UBS Wealth Management. “After a few tumultuous weeks, the market is welcoming some stability.”

Still, with trading desks lightly staffed heading into the New Year’s Day holiday, few were willing to call Monday’s gains a decisive turnaround for the market. Stocks suffered a bruising stretch of selling in the final months of 2018 as investors grew increasingly pessimistic about the global economy and grappled with anxieties about the unwinding of central banks’ easy-money policies.

More recently, sparring between lawmakers led to a government shutdown that looks likely to stretch on into the new year.

The litany of issues has led to dizzying moves across the market. Last week, U.S. stocks posted their worst-ever Christmas Eve selloff, then logged their biggest one-day point gain on record. In another sign of market turbulence, the Cboe Volatility Index—a barometer of investors’ expectations for stock swings—headed for its steepest one-year advance ever.

The swings buffeting stocks left major indexes firmly in the red for 2018, even with their New Year’s Eve rally. The Dow Jones Industrial Average climbed 265 points, or 1.2%, to 23327 on Monday. The S&P 500 added 0.9% and the Nasdaq Composite rose 0.8%.

For the year, the Dow industrials were down 5.6%, the S&P 500 off 6.2% and the Nasdaq down 3.9%.

Stock markets elsewhere around the world fared even worse. The Stoxx Europe 600 shed 13% in 2018, while the U.K.’s FTSE 100 declined 13% and Japan’s Nikkei Stock Average fell 12%.

The volatility spared few asset classes. Oil prices hit multiyear highs in October, only to tumble in the fourth quarter as investors grew increasingly worried about a potential supply glut.

U.S. crude oil fell 0.1% on Monday, deepening losses that have taken it down around 25% for the year.

With losses hitting markets from stocks to commodities to bonds, many investors say they have reined in their optimism heading into the new year.

“It will be another volatile year,” said UBS’ Mr. Yu.

That is especially true with data suggesting that growth around the world is starting to falter.

A report Monday showed China’s manufacturing sector contracted in December, with a gauge of factory activity hitting its lowest level in nearly three years. The official manufacturing purchasing managers index declined to 49.4 in December from 50.0 in November, data from the National Bureau of Statistics showed, falling short of the forecasts of many economists.

“The broad-based PMI decline implies higher economic downward pressure” in China, economists at Citigroup said in a note to clients.

The reading was the latest to show that economies in Europe and China are slowing, something that has sparked worries that the malaise could ultimately spread to the U.S.

The Shanghai Composite, which was closed Monday for the holidays, finished 2018 down 25%—marking its steepest one-year loss since 2008. Hong Kong’s Hang Seng, which fell 14%, posted its worst one-year decline since 2011.

https://www.wsj.com/articles/global-...d=hp_lead_pos1
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Old 01-03-19, 12:23 PM
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First it was apple that decided to stop reporting apple iphone sales a few months ago after a sales decline. Now ford is taking a page out of the same play book... Anyone expecting the market to bounce back from here isn't paying attention. We are going much lower..

__________

Capping what has been an abysmal year for the global automobile market and starting off what Morgan Stanley predicts to be another coming awful year for the industry, Ford reported that its sales for December were down 9%. Ford's fleet sales and car sales both cratered, falling well into the double digits, or -19.5% and -27.8%, respectively.

And it looks as though Tim Cook isn’t the only one not especially excited about giving up on transparency heading into the back end of a decade-long artificial bull market. Taking a page out of General Motors' book, Ford announced that they were no longer going to report monthly sales data and will be moving to reporting sales data on a quarterly basis instead.

As a reminder, when General Motors changed its reporting of sales, it hilariously stated that reducing its disclosures would "give a more accurate view of its business operations".

"Thirty days is not enough time to separate real sales trends from short-term fluctuations in a very dynamic, highly competitive market," Kurt McNeil, GM's U.S. VP of sales operations, said at the time.

Right.

Along those same delusional lines, Ford's management called the month the end to "another strong year for Ford and the industry". So strong, in fact, that they want to report sales only 33% as often as they used to. Here is a more detailed look of how Ford brands fared across the company's entire portfolio of vehicles:

https://www.zerohedge.com/news/2019-...sales-plunge-9
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Old 01-09-19, 10:33 AM
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Gold doesn't spike like this unless banks see strong declines ahead. All the warning signs are here... These are massive buy orders for gold. These aren't average people buys. This is institutional buying.

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Old 01-11-19, 10:56 AM
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U.S. Recession Risk Hits Six-Year High

Economists put the risk of a U.S. recession at the highest in more than six years amid mounting dangers from financial markets, a trade war with China and the federal-government shutdown.

Analysts surveyed by Bloomberg over the past week see a median 25 percent chance of a slump in the next 12 months, up from 20 percent in the December survey. The Federal Reserve is now projected to keep interest rates steady in the first quarter, instead of raising them, before two increases total this year -- down from four moves in 2018.

The median projection for 2019 economic growth edged down to 2.5 percent following 2.9 percent in 2018 as the boost from fiscal stimulus fades. Growth is still expected to be buoyed by a strong jobs market, rising wages and some lingering effects of tax cuts. If the expansion that began in 2009 lasts until July, it would mark 10 years and become the country’s longest on record.


“It’s not our call that there’s a recession coming soon by any means, but financial conditions have tightened materially over the past two months, you have ongoing trade issues that are weighing on global growth, and you’re seeing business confidence waning a bit,” said Brett Ryan, a U.S. economist at Deutsche Bank AG. “The government shutdown weighs on business confidence and could weigh on consumer confidence.”

Ryan gave a 20 percent chance of recession, up from 12 percent in the December survey.

Analysts generally expect the partial government shutdown -- which President Donald Trump said could last for months if not years, and is now in its third week -- to weaken quarterly economic growth by 0.1 to 0.2 percentage points every one to two weeks it drags on.

It’s already affecting projections. On Thursday, JPMorgan Chase & Co. chief U.S. economist Michael Feroli cut his first-quarter growth forecast to a 2 percent annualized pace from 2.25 percent, citing the shutdown.

The shutdown has also delayed government data releases, such as retail sales and inventories, that investors and analysts use to assess the state of the economy. That puts more focus on companies such as retailers Macy’s Inc. and Kohl’s Corp., who gave disappointing reports on Thursday. Other figures from Johnson Redbook Research showed retail sales rising in recent weeks.

Less optimism among consumers would build on financial-market concern about a broader slowdown. Sectors where interest rates have been rising, such as the auto industry, will likely take a hit, according to Barclays Plc chief U.S. economist Michael Gapen.

He said the trade war with China, which is contributing to overall slowing global trade and has raised prices for some U.S. companies, also is weighing on growth and increasing the risk of a downturn.

https://www.bloomberg.com/news/artic...n?srnd=premium
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Old 01-12-19, 03:48 PM
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Gundlach Warns U.S. Economy Is Floating on ‘an Ocean of Debt’

Jeffrey Gundlach said yet again that the U.S. economy is gorging on debt.

Echoing many of the themes from his annual "Just Markets" webcast on Tuesday, Gundlach took part in a round-table of 10 of Wall Street’s smartest investors for Barron’s. He highlighted the dangers especially posed by the U.S. corporate bond market.

Prolific sales of junk bonds and significant growth in investment grade corporate debt, coupled with the Federal Reserve weaning the market off quantitative easing, have resulted in what the DoubleLine Capital LP boss called “an ocean of debt.”

The investment manager countered President Donald Trump’s claim that he’s presiding over the strongest economy ever. The growth is debt-based, he said.

Gundlach’s forecast for real GDP expansion this year is just 0.5 percent. Citing numbers spinning out of the USDebtClock.org website, he pointed out that the U.S.’s unfunded liabilities are $122 trillion -- or six times GDP.

“I’m not looking for a terrible economy, but an artificially strong one, due to stimulus spending,” Gundlach told the panel. “We have floated incremental debt when we should be doing the opposite if the economy is so strong.”

Stock Bear
Gundlach is coming off another year in which his Total Return Bond Fund outperformed its fixed-income peers. It returned 1.8 percent in 2018, the best performance among the 10 largest actively managed U.S. bond funds, according to data compiled by Bloomberg.

Gundlach expects further declines in the U.S. stock market, which recently have steadied after reeling for most of December since the Great Depression. Equities will be weak early in the year and strengthen later in 2019, effectively a reversal of what happened last year, he said.

“So now we are in a bear market, which isn’t defined by me as stocks being down 20 percent. A bear market is determined by the way stocks are acting,” he said.

Read: Gundlach Likens Buy-the-Dip Mentality to Crisis: Brian Chappatta

Rupal Bhansali, chief investment officer of International & Global Equities at Ariel Investments, picked up on Gundlach’s debt theme in the Barron’s cover story. Citing General Electric’s woes, she urged investors to focus more on balance-sheet risk rather than whether a company could beat or miss earnings. Companies with net cash are worth looking at, she said.

https://www.bloomberg.com/news/artic...t?srnd=premium
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Old 01-14-19, 11:49 AM
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U.S. banks have less than $7 in equity for each $100 in assets.

The 2008 financial crisis showed what happens when the banking system lacks an adequate foundation of loss-absorbing equity capital. Unable to raise what they needed from wary investors, banks were forced to slash lending at precisely the worst time for the economy. Ultimately, only the full faith and credit of the U.S. government — and a direct infusion of more than 200 billion taxpayer dollars — could prop them up.

The lesson seems clear enough: Banks should raise capital while they can, and before they have to. The Federal Reserve apparently hasn’t learned it.

The 2010 Dodd-Frank Act gave the Fed this very responsibility: tell banks to build a buffer of extra capital in good times, when the economy is growing and funds are relatively easy to raise. This idea of so-called countercyclical capital has worked well in other countries, most notably Spain.

The question is when to add to the buffer. In the U.S., now seems right. The economy has been expanding for nearly 10 years, inflation is close to the Fed’s target, and forecasters expect annual growth to peak this year at about 2.9 percent. Business lending standards are deteriorating even as corporate debt levels hover near record highs. Across the Atlantic, the U.K., France and eight other European countries have already raised their buffers.

The Fed hasn’t. This is partly because of how officials have chosen to interpret Dodd-Frank. The central bank has adopted a rule that says systemic vulnerabilities should be “meaningfully above normal” before extra capital is required — a threshold that some, including Chairman Jerome Powell, say hasn’t been met. Opponents of requiring more capital also argue that U.S. banks don’t need it, because they’re already better capitalized than their European counterparts.

That’s true — but better capitalized doesn’t mean adequately capitalized. On average, the six largest U.S. banks have less than $7 in equity for each $100 in assets. That’s more than they had before the 2008 crisis, but probably not enough to avoid distress in a similar situation. Economists at the Minneapolis Fed, for example, have estimated that banks need more than twice as much equity to make the probability of government bailouts as low as it should be. Even if fully deployed, the Fed’s countercyclical buffer would get them only a small part of the way there.

Fed officials ought to ask: If not now, when? If the central bank’s rules prevent them from acting, they should change them. By the time investors are sure the system has a problem, it will be too late.

https://www.bloomberg.com/opinion/ar...n-bank-capital
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