RANDOM THOUGHTS AND WORRIES

As we rapidly approach the end of 2018, it is time to let you know what we are seeing as well as thinking on any number of subjects. As you know, we really do believe price talks, markets talk and we must listen. This report will cover some facts and some worries. We will have a market report later tonight. Think ugly but think Fed trying to continue to save the day.

We received this and verified. Below all time highs in cryptoland:

BITCONNECT 100%

QTUM 99%

ICON 99%

BITCOIN GOLD 98%

BICOIN CASH 98%

NEO 97%

IOTA 96%

LITECOIN 93%

ETHEREUM 93%

BITCOIN 83%

We only listed 10 names but the morons/crooks/charlatans brought out about 2,500 names including the POTCOIN from Dennis Rodman and a coin from Venezuela. Most are down in the 90s with many already turned to dust. This is one of our proudest calls as we yelled and screamed back when these coins were having their final ridiculous run that they will all “turn to dust” and dust they are going. We believe the only reason BITCOIN is not down further is because it is now held in a few big hands. If they sell, they kill each other. Thus you are seeing what we call the slow death. Remember this for the future as easy money creates manias and bubbles. There will be more and unfortunately, these bubbles are touted by a bunch of hypsters who are talking their book and ultimately their mistake. We are still amazed how many still are touting this crap…and how a certain media outlet that touted this crap at the highs, still brings them on.

Last week, APPLE (AAPL) posted a banner on top of its website advertising the new IPHONE XR for just $449 if you trade in an IPHONE 7 PLUS. The XR usually sells for $779. They also started offering a promotion boosting the trade-in value of other older IPHONES. Maybe price does matter as suppliers continue to cut their numbers and APPLE’s stock continues to swoon.

A recent survey found 44% of Facebook users between 18-29 say they’ve deleted the app from their phone in the last year. Sales and earnings have had a serious deceleration in recent quarters. Facebook and Apple HAD been big leaders in the market.

Corporate debt, enabled by the dolts at the fed is up approximately 86% since 07. About 25% of junk rated issuers are now rated at B-MINUS or lower, up from 17% four years ago and the highest level since 09. Remember what we have been saying for years. Easy money creates dislocations in price and yield…and almost always ends badly when things normalize.

For those continuing to say fundamentals are fine, Germany and Japan just announced contractions even though both are still printing money and have negative rates. There is no ammo left. On top of that, estimates for US GDP just dropped from 3% to 2.4% in just the past few weeks.  We recently told you the norm going forward will be lowered expectations. Markets seem to know this.

The main cause of the recent protests in France is not only about a scheduled 25 cents/gallon increase in gas taxes but also the elimination of a wealth tax put upon the country by the last socialist who ran the show by the name of Hollande. Of course, Macron already has backtracked on the tax with our expectation that the wealth tax will come back. Not sure this will appease as Macron is polling just below root canal. But the real story is a $49/gallon tax. What? You haven’t heard of this. From Forbes: “If Paris streets burned over a proposed 25 cents/gallon climate change tax, imagine the global conflagration over a $49/gallon tax. That’s what a UN special climate report calls for in 12 years, with a carbon tax of $5,500 per tone- equal to $49/gallon of gasoline or diesel. Follow the money!

We believe we have heard several different stories coming out of the administration on the arrest of the CFO from Huawei. We repeat. Nothing happens by accident and to believe nobody knew about this in the administration? We continue to believe tariffs suck and this whole trade thing has been mishandled. It seems we are hearing different stories from different people. Yes…we know China is a bad player but what happened to the greatest negotiator of all time and the “Art of the Deal?” Companies cannot plan when they do not know costs/expenses or what they can charge. Trust is usually part of negotiations and not sure there is any from each side.

Let us repeat. Ben (Jay Powell) Bernanke said this in 2012. “Investors really do understand now that we will be there to prevent serious losses!” You are now seeing what he meant over the past two weeks. If they actually raise rates one more time next week, we expect more language to come out trying to do one thing…defend the markets. So far, markets have stuck a certain finger back at him and his now-dovish yapping, a complete 180 from just a few weeks ago. It is also no accident that a couple of other fedheads came out in the past couple of days, one saying we should be getting close to the end and the other amazingly saying the fed shouldn’t even raise rates next week..

The taxpayer’s interest tab in 2018…a measly $523 billion. That’s $523 billion not going towards roads, bridges, highways, the poor, the elderly, the indigent, children. Yet, there is still talk about the need for infrastructure money and money for a wall when all these people created all this. And don’t get us started on Obama’s $800 billion stimulus for “shovel-ready jobs. We know the only thing that got shoveled. But don’t worry. Many of the same people who brought us to $22 trillion of debt are still in power. They promise to fix the problems of this country.