Gary on stuff!

By Gary Kaltbaum- June 22,2016
A few thoughts one having nothing to do with the other:
We think the dreaded Brexit is not the big deal pundits are making it out to be. A) We think odds favor the vote will go against leaving. Human psychology does not like change. But to our bleary eyes, even if the vote is a “yes” to leave, what changes? Are people not going to wake up and go to work? Is the world really going to end? After all, the U.K. is quite the self-sustaining place with their own currency. Of course, this is just guessing but how many times have we heard the call for “end of the world”-type scenarios and then…crickets!
Leave no doubt, this proposed Tesla for Solarcity incestuous buyout is an owner saving a company from extinction. Nothing more!
Oooops…Janet is all of a sudden again worried about the global economy. Nope…she is worried about global markets but firstly, she is worried about the upcoming election. As we have stated, there will be no rate hikes the rest of this year and if things turn down meaningfully, you did notice she said it was completely legal for the Fed to go to negative rates?
Two weeks ago on the weekend Fox News show, “Cavuto On Business”, we simply stated that things are going to be different for Donald Trump moving forward. During the primary, he was up against Republicans…thus the media played nice-nice. We went on to state that now that he was up against Hillary, that same “nice-nice” media would go after him with sharp teeth and a fervor we had not seen in ages.

At that time, the big news was that there was a criminal investigation into Clinton’s emails…crickets. What did the media report? The only headline we saw was about Donald Trump supposedly not paying bills decades before. Well, we woke up this morning to a CBS Trump interview. Amazingly, a CBS head honcho told Trump that some economists believed his economic policies would create trillions of dollars of debt. Really! They are actually asking that question of a candidate that has never run the show but they do not ask that same question of those who created the last $20 trillion of ACTUAL debt. NOW they care about debt?

We do not remember one question being asked by the mainstream media to Barack Obama about his $8-9 trillion of new debt that he created during his administration. We do not remember asking him about the bold -faced lie that he lowered the deficit in half when the fact is President Obama first more than doubled the deficit before it came down. We do not see them asking him about the fact that future debt and deficits are set to skyrocket directly because of his policies. We do not remember one question about what those deficits and debt do to the future of the economy but all of a sudden, it matters.
Ladies and gentlemen, this is just the start. There will be no more Hillary scandals to report.  There will be no more Hillary troubles to talk about. We are already hearing about a network blackout of an ex-secret service’s opinion of her. Do you think there would be a blackout if those opinions were for someone in the other party? For the next few months, Donald Trump caused the Chicago fire, the San Francisco earthquake, the Zika virus and the downfall of civilization. And for the record, we did not vote for Mr. Trump.

“HEY SAVERS…GO SCREW YOURSELF!”

By Gary Kaltbaum- June 21,2016

We have been talking and writing about the sickening Fed policy that for years, has completely ripped off savers, completely destroyed the riskless income investment, completely forcing these saved dollars into risky income investments and for that matter, into the markets.

This morning, Mrs. Bubble was asked by Rep Jeb Hensarling about the Fed’s legal authority to go to negative rates.

” WE DO HAVE A LEGAL BASIS TO PURSUE NEGATIVE RATES!”

Granted, Mrs. Bubble then went on to say that it was not in their plans but then again, several weeks ago, she just about assured the world that a rate hike was coming in June.

That answer is Mrs. Bubble again trying to goose markets with even more easier money. As we have stated forever, their only goal is to keep markets up because if markets crater, the curtains come down on their enabling of massive debts and deficits around the globe which will continue to block the potential for any economy to get going and reach its full potential.

So to the saver…Mrs. Bubble is again telling you to go screw yourself! Just because they have taken any riskless income investment away from you and gave your money away to the good folks at the banks and lenders…don’t worry because as the main culprit, Mr Bubble Bernanke said…any income not made by savers will be made up by a better economy. Yes…this maniac did say that.

We expect that eventually, this maniacal Fed will enter the negative rate zone even though negative rates around the globe have done nothing to help the cause. These maniacs are addicted. There is no number too high to print and no number to low to go on rates. (We actually believed they could not go below 0%) We had better never, ever, ever get to the point where their easy, easier and easiest money talk does not move markets up and instead sends them down. It will be at this time where as Mr Buffett said, “It’s only when the tide goes out that you learn who has been swimming naked!”

Depending on what abacus you are using, there has been $15-20 trillion of printed money, $10 trillion of negative rates, 0% rates for almost 8 years, the outright buying up of markets and who knows what else…all the while telling us they are in control and everything will be fine. But all this has only enabled the highest leverage and debt in history, government (taxpayer) deficits that will never be paid back and the continued centralized power in just a few hands with no accountability. And the Knicks still suck!

The Closing Look

Stocks opened higher on Monday after the latest Brexit poll came out over the weekend and hinted they will stay. But sellers showed up by the close and stocks ended well off their highs. The British Pound (FXB) gapped up on the news. JD.Com ($JD) rallied after Wal-Mart ($WMT) said it would sell its online business to the Chinese e-commerce company. Elsewhere, Boeing ($BA) opened higher after news broke that Iran had reached a deal to buy 100 planes. On Tuesday and Wednesday, Fed Chair Janet Yellen is going to testify in front of Congress and the actual Brexit vote is on Thursday.

Gary’s Thoughts: Huge gap…sold into…which means gap to upside again tomorrow. No…really! The game is on.

A Big Bowl of Slop!

We had a report all ready for you on what we call the “big bowl of slop” market as we have seen a decent amount of deterioration recently. But after getting past being held hostage by Mrs Bubble, next up was the Brexit. Markets have teased the upside and downside depending on which way the polls go.
As we write this coming back from the mountains of Colorado, Dow futures are up almost 200 getting back some of the recent downdraft…all  because a new poll that came out says maybe not so fast…that the UK will vote no. It is amazing to us this is what the markets have to deal with. So, we will take a step back and see what tomorrow brings as a gap to the upside negates some of the ugly. Yippee! Keep in mind, the vote comes next. Keep in mind the Russell and NYSE sit where they were in late 2013. The Dow and S&P late 2014. The same for the Nasdaq which has been weak as of recent. This defines the slop. Foreign markets remain much weaker than ours. From highs, Japan is down almost 25%, the German Dax about 23% and the Shanghai down a whopping 45%!

The Closing Look

On Thursday, stocks opened lower but closed near their highs after several major global central banks concluded their latest meetings. The Bank of Japan (BOJ), Bank of England (BOE) and The Swiss National Bank (SNB) did not announce any changes to monetary policy and that spooked investors and sparked a rally into so-called “safe-heaven” asset classes. Japan’s Nikkei plunged 485 points and the Yen soared after the BOJ ended its meeting. Initially, gold soared before reversing by the end of the day after becoming very extended. The USD was higher but gave back the gains in the afternoon.

Gary’s Thoughts: Good reversal on market…bad reversal on gold. Tomorrow another day. Markets remain in a nauseating box.

The Morning Look

Market Update:

Futures are lower ahead of Thursday’s open as markets digest the Fed meeting and another round of Central Bank meetings.

Gary’s Thoughts: On or about 5/18, many fedheads were out just about guaranteeing a fed rate hike in June. That caused the dollar to spike higher and gold to break below support. In a nanosecond, all have changed their mind, sending gold to new highs. We continue to have to deal with the nonsense from the few, the few that oversaw the problems, the few that created the problems and now, we are to believe that those same few will fix the problems. We urge you to listen to our radio show from yesterday…which pretty much outlines the genesis of THIS central bank as well as central banks around the globe. We continue to believe that ultimate outcomes of easy money are never good.  We’ll keep fingers crossed. here is the link without commercials: https://ia801506.us.archive.org/3/items/160615.output/160615.output.mp3

Economic Data:

  • Consumer Price Index 8:30 AM ET
  • Jobless Claims 8:30 AM ET
  • Philadelphia Fed Business Outlook Survey 8:30 AM ET
  • Current Account 8:30 AM ET
  • Bloomberg Consumer Comfort Index 9:45 AM ET
  • Housing Market Index 10:00 AM ET
  • EIA Natural Gas Report 10:30 AM ET
  • Fed Balance Sheet 4:30 PM ET
  • Money Supply 4:30 PM ET

Highlights:

  • Fed Remains Dovish And Markets fall
    Gary’s Thoughts: Duh!
  • Japan’s Nikkei falls sharply (almost 500 points)after The Bank Of Japan holds rates steady…
    Gary’s Thoughts: Their market can be described as the land of the setting sun.

The Closing Look

Stocks opened higher on Wednesday but turned lower after the Fed meeting and press conference. The Fed held rates steady and turned more “dovish” as they reduced the likelihood of more rate hikes in the future. Economic data was mixed. The producer price index (PPI) rose by 0.4% in May, beating estimates for 0.3%. Industrial production fell to -0.4%, missing estimates for -0.1%. The June Empire State Manufacturing Survey rose to 6.0, beating estimates for -3.5%.

Gary’s Thoughts: Yellen the bubble robot explains how economy was fine and we are near full employment but lo and behold, blah blah blah and we cannot even raise rates 1/4 point. We could have a lot more to say but will hold our tongue. Makret did not thrill by the close. Steep sell-off in last half hour.

 

The Morning Look

Market Update:

Futures are higher ahead of Wednesday’s open as markets wait for the Fed this afternoon. On Tuesday, we saw the yield on the German 10-year bund drop into negative territory for the first time in history! That can’t be healthy in the long-run.

Gary’s Thoughts: Today we get Mrs Bubble telling us blah blah blah…is, was , maybe blah blah blah. Amazing markets held hostage on the decision of a whopping 1/4 point or not. That’s what you get when you have central banks running the world with a good $15-20 trillion of printed money, 0% rates forever and now, go look at the matrix we put up at garyk.com on government rates. No bubble? Our arse no bubble!

Economic Data:

  • MBA Mortgage Applications 7:00 AM ET
  • PPI-FD 8:30 AM ET
  • Empire State Mfg Survey 8:30 AM ET
  • Industrial Production 9:15 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • FOMC Meeting Announcement 2:00 PM ET
  •  FOMC Forecasts 2:00 PM ET
  • Fed Chair Press Conference 2:30 PM ET
  • Treasury International Capital 4:00 PM ET

Highlights:

  • Russian Hackers Stole Information From the DNC
    Gary’s Thoughts: Russia now knows the Socialist party will try and riase tax rates to 90%!
  • The market remains in pullback mode as the world waits for the Fed meeting and press conference later today…
    Gary’s Thoughts: Let’s hope it is just a pullback.

The Closing Look

Stocks fell on Tuesday as the Fed began their two-day meeting and government bond yields continued to fall across the globe. Before Tuesday’s open, the German 10-year bund yield slid into negative territory for the first time in history. Would you lend money to Germany for 10 years and pay them? The world of negative interest rates is worrisome and the outcome can not be healthy. The US dollar rallied after retail sales rose a more-than-expected +0.5% in May, beating estimates for 0.3%. Elsewhere, import and export prices rose +1.4%, beating estimates for 0.8% which signals inflation may be rising.

Gary’s Thoughts: Of main interest to us is the horrid action in financials. That needs to change. Not sure markets can hold up if this ugly continues. Credit card companies whacked as SYF announced consumers taking their time paying things back…uh oh! Rest of market is  blech!

The Closing Look

Stocks fell on Monday, adding to Friday’s losses as the market continues pulling back after encountering (and failing) near stubborn resistance last week. The S&P 500 continues pulling back into its 50 day moving average. In tech news, Microsoft (MSFT) fell over 2% after the tech-giant said it would buy online networking giant LinkedIn (LNKD) for $26.2 billion in its biggest-ever deal. LinkedIn shares surged +46.6%. In other news, shares of Apple Inc. (AAPL) fell after the company held its latest developers conference and failed to impress.

Gary’s Thoughts: We said Friday’s action may have meant something of import and Monday adding to those thoughts. Go slow.