Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Stock Market

China Stock Market Tumbles Into Bear Market

This article appeared online at TheNewAmerican.com on Friday, July 3, 2015:  

Since June 12 the Shanghai Index of Chinese stocks has lost 30 percent, thanks to losses on Friday of nearly six percent, and 12 percent for the week. That index, reflective of the Chinese stock market in general, exploded between November and June thanks to some 90 million newly minted Chinese investors entering the market for the first time, many of them with borrowed money, hoping to cash in on the rise.

Brokerage houses were only too glad to oblige, with many of them allowing new investors to borrow up to six times their initial equity position. As the market went almost vertical, commentators have been calling it a bubble, with prognosticators predicting its end sometime before 2016.

That may have been too hopeful:

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“The most Bullish thing the Stock Market can do is go up.”

This article was published by The McAlvany Intelligence Advisor on Wednesday, June 10, 2015: 

Charles Dow -an American journalist who co-fou...

Charles Dow -an American journalist who co-founded Dow Jones & Company with Edward Jones and Charles Bergstresser.

 

Right up until early April, that is. The Value Line Geometric Index, the unweighted index of approximately 1,700 stocks that fund manager Dana Lyons likes to watch, topped out at 522 and has declined by almost 10 percent since then.

By Monday, June 8 the Dow’s decline had wiped out all of its gains and is now flat for the year. The Dow Transportation Index fell 2 percent that day, its worst day since January 6, wiping out its 11 percent year-to-date gain. The Dow Utilities Index has suffered an even greater decline, erasing all of its 16 percent gain.

The Dow is one of the primary leading indicators used by financial advisors like Bruce Bittles, the chief investment strategist at RW Baird. Bittles manages $100 billion of other peoples’ money, and he’d better be right. Now, he’s getting nervous:

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Stock Market Wipes Out All Gains for the Year

This article first appeared online at TheNewAmerican.com on Tuesday, June 9, 2015:

On Monday, June 8, the Dow Jones Industrial Average (DJIA) declined by enough to wipe out all gains investors thought they had made in stocks since January 1. It was confirmed by action in the Dow Jones Transportation Index (DJTA), which is even older than the Dow and reflects the price performance of the stocks of 20 transportation companies such as Avis, Delta Airlines, and FedEx. On Monday that index fell by two percent, its worst day since January 6, bringing that index to a loss of nearly 11 percent from its high earlier in the year.

The decline in the Dow was further confirmed by

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More Keynesian Insanity: Negative Interest Rates

This article first appeared at The McAlvany Intelligence Advisor on Monday, May 4, 2015:

There’s a corollary to the insanity rule. It’s called the Keynesian Corollary: When something doesn’t work, do more of it. When history is written about the coming Second Great Recession, historians will likely note July 2012 as the turning point. That was when Mario Draghi, head of the European Central Bank (ECB) said during a panel discussion that the ECB “is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”

Other historians might list that as one of the top ten “famous last words” ever issued by a human being. Since that moment bond yields across the world have dropped, and dropped, and dropped. On Thursday Jeremy Warner, the London Daily Telegraph’s assistant editor, announced that

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China Stock Market Off Sharply After Regulatory Crackdown

This article first appeared online at TheNewAmerican.com on Monday, January 19, 2015:

Chateau Lafite Rothschild Label for the 1999 v...

Chateau Lafite Rothschild Label for the 1999 vintage

During Monday’s session, stocks traded on the Shanghai stock market fell to their lowest level since June 2008, losing nearly eight percent.

Hardest hit were three brokerages that have been heavily involved in allowing Chinese small investors to open margin accounts, through which investors are able to borrow a portion of the money needed to buy securities, using the securities as collateral. When many of them were unable to settle their accounts, rather than forcing margin calls (a demand by a broker that an investor deposit further cash or securities to cover possible losses), the brokerage houses simply allowed them to

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OPEC’s Hegemony is over

This article was first published at The McAlvany Intelligence Advisor on Monday, October 27, 2014:

English: Saudi Arabia

Saudi Arabia

Tim Treadgold, a Forbes contributor who watches the world’s energy markets, decided to break the journalist’s unspoken rule: never forecast the demise of an individual (or an institution) until he is holding the coroner’s report (or bankruptcy judgment) in his hand:

At grave risk of committing [that] cardinal sin … this time it might be different because OPEC is steadily losing control of the oil market….

The irony, he said, was staggering:

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Stock Market Gains Failing to Bail Out Pension Plans

This article first appeared at The McAlvany Intelligence Advisor on Friday, September 26, 2014: 

Pension managers’ hopes that investment returns – i.e., pixie dust – would bail them out from their bad assumptions, and keep their plans solvent and fully funded so that they would be able to keep every promise made, have finally crashed on the rocks of reality. Just three months ago, the Center for Retirement Research at Boston College released a study showing that the shortfall between promises and assets to pay them for 25 of the largest public defined-benefit pension plans in the country amounted to more than

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Scary Default Scenarios Based on Faulty Treasury Department Release

Within hours of the “brinkmanship” press release by the U.S. Department of the Treasury, major media began to repeat the highly dubious risks outlined by the department without reading carefully exactly what it contained. The headline and opening paragraph were all that the echo chambers needed:

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The President’s Approval Ratings Continue to Drop

On Wednesday, August 7th, Fox News reported that President Obama’s approval rating was “in a summer swoon,” with just 42 percent of Americans approving of his performance. This was down 4 percentage points from July and 7 points from his 2013 high. In addition more than half of those polled

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Central Banks’ bubble is bursting, sending markets down worldwide

When the Japanese stock market lost more than 6 percent of its value on Wednesday in a massive selloff, pundits jumped on the move to try to explain what happened, and what it all means. Evan Lucas, a market strategist at IG Markets, wrote:

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Obamanomics is to Blame for Worst Recession since the Great Depression

When libertarian scholar Peter Ferrara asked rhetorically in Sunday’s issue of Forbes, “Economically, Could Obama be America’s Worst President?” he relied heavily on statistics provided by the chief enabler of the Great Recession,

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Is Obama’s Support Finally Fading?

This article was originally published at the McAlvany Intelligence Advisor on May 22nd, 2013:

 

Last week’s poll by the Washington Post and ABC News showing the president’s rating remaining constant despite increasing public unhappiness with White House cover-ups over Benghazi and the IRS targeting scandals noted that his rating was tenuous at best:

The president’s approval rating, at 51 percent positive and 44 percent negative, has remained steady in the face of fresh disclosures about the IRS, the Benghazi attack and the Justice Department’s secret collection of telephone records of Associated Press journalists as part of a leak investigation…

But the stability of those ratings comes with an obvious caveat. Information continues to emerge

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A very smart guy reviews Stockman’s massive new book

Whenever someone as smart as David Stockman (President Reagan’s Director of the Office of Management and Budget) writes a 768-page book (The Great Deformation), it makes me nervous, for two reasons: I don’t have the time to read 768 pages, but if I don’t I might miss something important. So I was gratified that

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The coming Tobin Tax and Wall Street

I have watched in utter amazement as the stock market continues inexorably to climb to new highs nearly on a daily basis. I have wondered aloud and in writing how such an upward march could be justified. I have looked in vain. There is nothing going on in the economy that, in my opinion, justifies this. Smarter people than I have failed to find justification for it either. The markets don’t care, it seems. They just continue to move higher.

But perhaps Wall Street is watching something that is about to happen in Europe

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The gap between Wall Street and Main Street widens

On Thursday, the last trading day of the first quarter of 2013, the Standard and Poor’s index of 500 stocks – the S&P 500 – closed  at 1569, four points above where it traded in October, 2007, just before it plummeted to 676 in March, 2009. With that news the sigh of relief on Wall Street was nearly audible. CNNMoney gushed:

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Is the stock market real? Not according to consumers.

With the stock market steadily marching higher and setting new all-time highs (on a nominal, not inflation-adjusted basis), does this reflect what’s really going on in the economy? Not according to 5,000 households who

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The numbers behind the Dow are simply awful

Just as the Dow and the S&P 500 are reaching new highs, many are suggesting further gains are possible. That’s why this summary of how things look when compared to October, 2007, the day the Dow hit its previous all-time high, is more than a little unnerving.

  • Regular Gas Price: Then $2.75; Now $3.73
  • GDP Growth: Then +2.5%; Now +1.6%
  • Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
  • Americans On Food Stamps: Then 26.9 million; Now 47.69 million
  • Size of Fed’s Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
  • US Debt as a Percentage of GDP: Then 38%; Now 74.2%
  • US Deficit : Then $97 billion; Now $975.6 billion
  • Total US Debt Outstanding: Then $9 trillion; Now $16.4 trillion
  • Labor Force Participation Rate: Then 65.8%; Now 63.6%
  • Consumer Confidence: Then 99.5; Now 69.6
  • S&P Rating of the US: Then AAA; Now AA+
  • Gold: Then $748; Now $1583

Years ago when I was on a speaking tour for the American Opinion Speakers Bureau, I showed a cartoon of a man climbing a ladder. On his back were the words “stock market.” The first panel showed him climbing. The second showed him climbing higher. The third panel showed him reaching the top of the ladder. The fourth panel showed him continuing to climb, without the ladder. It always brought a laugh. Everyone understood that the market had become totally detached from reality. So it appears to be today.

Here’s where the Dow has to be in inflation-adjusted terms in order really to break a new high. Using an inflation calculator (which assumes that the CPI is a fair measure of price inflation – a dubious assumption), in order for the Dow Jones Industrial Average to equal its high of 14,164 touched in October, 2007, it would have to be at 15,630. At the moment, following the bad news out of Cyprus, the Dow is at 14,473. It would have to gain 1,157 points, or another 8 percent, just to get back to where it was, in real terms, in October, 2007, five and a half years ago.

The stock market might just continue moving higher, just like the man in the cartoon. But at some point reality is bound to kick in.

Another 1987 black Monday coming?

Mark Hulbert has expressed serious doubt about the stock market’s ability to continue it climb upward.  As the Dow touches the magic 14,000 mark, it hesitates, pulls back slightly, and then tests that ceiling, only to repeat the process. Much is being made in the news that this is a “new high” in the Dow and things can only go higher:

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The Gloomy Report from the CBO is Too Optimistic

On its face the latest report from the Congressional Budget Office is gloomy enough, but careful sifting through it reveals

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Where Are the Spending Cuts?

Cutting your Spending

Cutting your Spending (Photo credit: Tax Credits)

The fiscal cliff “deal” about to be signed into law by President Obama is all about tax increases. This is what The One has wanted since he got into office. He wanted to overload the system so much that taxpayers would be forced to pay more. It’s more of the “leveling” required to push the US down relative to other deadbeat nations who also can’t pay their bills. The easier to be “absorbed” into the new world order run by non-elected elites. But I digress…

According to the Congressional Budget Office (CBO), the “deal” consists of $15 billion in spending cuts (over the next ten years, mind you) compared to $620 billion in new taxes – a ratio of 41:1. What a deal!

“We’ll address spending cuts later” is now the cry from sycophants like Grover Norquist. “We got a deal we can live with,” they say. “Now let’s get down to business.”

Sorry. Business is already done. That window of opportunity to hold the government accountable is closed. Obama got what he wanted. Boehner caved in. End of discussion.

I’m biased (!). But I think the fiscal cliff turned out to be a speed bump on the road to more

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.