PRE MARKET

We might as well wait until every morning before posting here as so many things change overnight.

Hong Kong airport closed down. This affected our open. Why? Beats the heck out of us.

Markets here are simple…becoming messy. Fewer and fewer names working. More and more names rolling over. Foreign markets remain much weaker. Small and mid caps continue to lag the large caps badly. Transports still not happening. Many areas like oils, retail remain bearish.

Major indices have taken on water recently. Just a good time to take a step back. There are still a decent amount of leaders just less so.

Yields continue to come down, notwithstanding bounces. We continue to ask what is wrong when $13 trillion of debt is negative, many economies starting to contract even with those negative rates…so we pay attention.

Bigger indices will open below their 50 day average today. That must change before anyone can get excited.

GOLD/GOLD STOCKS/SILVER/SILVER STOCKS remain strongest but only on pullbacks or settling down.

ROLLER COASTER

They say here in Orlando that we have some of the greatest roller coasters in the world as Orlando does have quite the few amusement parks. But they have nothing on this market, nothing on a tweeting president, nothing on a central bank as they continue to move markets on a dime. Markets used to have a decent ebb and flow. Not any more. Washington DC has assured that. This morning, it is the Huawei thing. Up next?????????????????????

Two more thoughts…UBER…that was some crappy numbers and one thing not highlighted…continued deceleration of sales.

THE METS…3 above .500 and 1 behind wild card.

PRE MARKET…THE SCRIPT CONTINUES

The script continues. Every time markets get in trouble, the fed starts the easy money rhetoric. If it doesn’t work a first time, try a second time. Two days ago, it was Bullard. Yesterday, it was Evans. None of this is by accident.

Here is  how we believe this plays out:

If markets ignore the 2nd attempt by the fed to stanch the bleeding, we suspect there will be a louder attempt at rhetoric, maybe something to the effect of using the word “imminent!” If that doesn’t work, expect them to take action before the next meeting. After all, it should be evident now it is all abpout the markets for these people. After all, the meeting is Sept-25-26…a long way away. They will not wait that long if markets do not cooperate.

If markets do cooperate with the fed rhetoric, they will be able to wait but it is a mortal lock of  rate cuts at the September meeting. Just keep in mind, if rates stay where they are in the market, a rate cut is meaningless as the market is way head of the fed…or putting it better, the fed is way behind the market.

As far as yesterday, just an very very very oversold market rally. We were oversold but foreign markets a lot worse. Emerging market stocks have been bludgeoned. They have to bounce somewhere. At this juncture, we will know more on how this bounce plays out. If it fails quickly, not good.

As far as rates, the bond bubble may be in the climactic stage. This occurs when maniacal investors buy longer term bonds yielding negative…only to make money on capital gains…AFTER a gigantic bond market run. We also have to mention Austria was able to float a 100 year bond…at 1.2%. Repeat…100 years at 1.2%. But don’t worry, Powell tells us there are no bubbles.

THE FED WILL LOWER RATES IMMINENTLY IF THIS CONTINUES

If markets continue to plunge and more importantly, if yields continue to plunge, expect the fed to act imminently. There is no way they will wait 6 weeks (the next fed meeting Sept 25-26) to lower rates if this continues.

As of this writing, our 10 year yield is now down to 1.64%. Fed funds are 2-2.25%. The fed could cut 1/2 point easily and that is to just play catch up.

The most asked question is how can people continue to buy bonds around the globe that are yielding negative. IT IS SIMPLE. Greed! Forget the yields for a second. BOND PRICES have been skyrocketing. Why do you think people have bought a fake meat company with $200 million of sales with nothing but losses with a $14 billion market cap? Greed. It was moving higher. The hope was just sell to someone else. Screw valuations. That is what you are seeing in worldwide bonds.

We have news for you. There will eventually be gigantic, gargantuan, out of this world losses in world bond markets when this greatest of central bank-induced bubbles ends. We just do not know when it ends but we must tell you it feels like the climactic stage is at hand.

Markets are simple here. We have now entered a bearish phase of unknown price and time. All major indices are trading below the 50 day average. We are now headed towards the longer-term 200 day average. Most leadership has quickly broken support. The big worry remains all the leverage built up in the system enabled by maniacal central banks not to mention the $250 trillion of debt around the globe. Just don’t worry because sycophantic economists and corrupt politicians say it is all manageable. The president made a serious mistake with these latest proposed tariffs. We suspect there was no chance he would follow through with them but China’s reaction may have boxed him in. As always, the fed will again try to defend the markets. Every time in the past, the fed intervention has stanched the bleeding and turned markets back up. Next time?

But the Mets are now 2 games above .500 and very close to the wild card.

ON CUE, HERE COMES MORE EASIER MONEY

—–And again and again and again and again.—–
—–We have told you on several thousand occasions that the fed targets the market. They no longer target the economy. On June 3, at the last low of a measly 7-10% correction, Powell sent out his easy money puppet…ooops, we mean another easy money fedhead by the name of Bullard to leak the news that the fed will move from “being patient” to “lowering of rates!”—–
—–We told you in past days that at any moment, the same would happen. Little did we know it would happen today and little did we know they would send out the same easy money puppet…ooops, we mean easy money fedhead Bullard who just came out and stated:—–
—–“FURTHER RATE ACTION DESIRABLE.”—–
—–This by no accident yapping has nothing to do with the economy. It has everything to do with markets. They are scared crap-less that if they lose markets, look out. After all, they cannot be that dumb to not know what 10 years of ridiculous easy money has done for asset prices…or maybe…—–
—–We suspect very very very oversold markets will not dislike this planted yapping. Whether or not it sticks is another story. As we stated last night, we will know a lot more by how the market bounces.—–
——And yes…we do think it a good chance the easy money dolts out of the Eccles building would cut rates before the next meeting.—–
—–We know. We are not very nice and are quite sarcastic with our words. We are just frustrated that a few ex-tenured professors around the globe can just press a button and create unimaginable amounts of conjured up money to keep asset prices up and to screw savers. How did we ever get to the point where the most powerful people in the world are the ones heading central banks?.Free markets are dead!—–
—–But the good news, the Mets are 1 game above .500 and are nearing wild card.  Serenity now!—–

PRE MARKET

To be brief, last night, futures were down 500…now up 100…yummy.

We will know a lot more as to how this bounces. The big 4 large cap indices broke below the 50 day…bringing a lot with them.

Pay no attention to those who just say buy buy buy.

Pay no attention to those who say crash crash crash.

Pay attention to what is holding up best but beware, if this worsens, they usually get them all.

Expect a lot of tweets from the big guy and a lot of rumblings from the Eccles building housing the maniacs at the fed.