Donald Trump’s Big Fat Ugly Bubble Is Ready to Pop

By David Stockman

This post Donald Trump’s Big Fat Ugly Bubble Is Ready to Pop appeared first on Daily Reckoning.

[Urgent Note: The nation’s future hangs in the balance as Trump approaches his first 100 days. That’s why I’m on a mission to send my new book TRUMPED! A Nation on the Brink of Ruin… and How to Bring It Back to every American who responds, absolutely free. Click here for more details.]

There have been numerous eruptions of irrational exuberance since Alan Greenspan launched the modern era of monetary central planning in response to the 25% crash of the stock market in October 1987.

But for my money, the Trump-O-Mania since the wee hours of election night is the greatest folly of all.

That’s because Donald Trump is destined to be history’s Great Disruptor — not the 11th hour savior of the mutant financial system and giant bubbles that have been generated by our Wall Street/Washington rulers over the past three decades.

The latter is a product of massive financial asset inflation fueled by the Fed’s cheap debt, falsified financial prices and the tidal wave of Wall Street speculation they have induced.

But the Fed (and its convoy of central bank imitators around the world) is finally out of dry powder. If it resumes quantitative easing (QE) preemptively to thwart the now incipient recession, it will generate a panicked sell-off — stoking fears in the casino that it “knows” something the gamblers don’t.

Likewise, if it even hints at reversing course toward sub-zero interest rates, it will bring the aroused populations of Flyover America, which elected Donald Trump, descending upon the Imperial City with torches and pitchforks.

The savers and retirees of America have already been so severely savaged by 96 months of zero interest rates (ZIRP) that they are not about to take it any more or have their savings flat-out confiscated by the elitist fools who inhabit Eccles Building.

In short, after having impaled itself on the zero bound and hideously bloating its balance sheet — from $900 billion to $4.4 trillion since the Lehman event in September 2008 — the Fed has no capacity whatsoever to forestall the oncoming recession or reflate the economy and financial markets once it begins.

The market should currently be in panicked retreat because it is inconceivable that the Donald will appoint to the Fed even more aggressive money-pumpers than the paralyzed posse currently in command, led by clueless Janet Yellen.

But in one of the most ludicrous stick saves ever confected in the bowels of Wall Street, the day traders and robo-machines have been induced to slam the “buy” button on a theory so preposterous that even CNBC’s chief circus barker, Jim Cramer, could not have invented it.

That is, the notion that Donald Trump is the second coming of Ronald Reagan and that a huge deficit-fueled “stimulus” is just around the corner is just plain nuts.

There will be no such thing.

Trump-O-Mania is the greatest eruption of irrational exuberance yet because it occurred in the …read more

Source:: Daily Reckoning feed

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Coking coal price correction turns into crash

By analyst

Coking coal price correction turns into crash

By Frik Els

The price of coking coal plunged again on Friday with the industry benchmark price tracked by the Steel Index dropping 9% or $26.10 to $263.40 a tonne as supply disruption following tropical storms in Australia begin to ease.

Last week the price of Australia free-on-board premium hard coking coal jumped to highest since the second quarter of 2011. That price spike was also the result of flooding in Queensland that saw quarterly contract prices negotiated at an all time high of $330.

While coking coal is returning to more expected levels, iron ore’s unnerving decline appears to have been arrested

Cyclone Debbie caused serious damage to key rail lines serving mines in the state of Queensland and while three lines have now reopened according to operator Aurizon, but large sections of the Goonyella railroad in the centre of the network is only be expected to be up and running in a week’s time.

Earlier expectations were that roughly 12–13 million tonnes of Australian met coal cargoes destined for China, India and Japan could be delayed, but Aurizon said this week up to 21 million tonnes have been affected.

A total of 221 million tonnes of coal was exported last year from Queensland, according to the Queensland Resources Council quoted by Reuters and of that at least 75% be steelmaking coal. The global met coal market is around 300 million tonnes per year with premium hard coking coal or PHCC constituting more than a third of the total market. More than half of PHCC seaborne coal come from Australian producers according to TSI data.

A survey of economist and investment bank analysts by FocusEconomics show prices are expected to decline substantially later this year. The median forecast is for met coal to average $146 per tonne in Q4 2017 and $130 during the final quarter next year. Coking coal averaged $121 a tonne in 2016.

While coking coal is returning to more expected levels, iron ore’s unnerving decline – a third over just the last month – has now turned around.

The Northern China import price of 62% Fe content ore advanced for a third day on Friday trading at $67.40 a tonne, up 4.2% on the day and just into positive territory for the week. The steelmaking raw material after dipped to a six-month low of $61.50 per dry metric tonne on Tuesday according to data supplied by The Steel Index.

The post Coking coal price correction turns into crash appeared first on

…read more

Source:: Infomine

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Wall Street, Retail Sales and Consumer Surveys

Wall Street Journal

By Lee Adler

This post Wall Street, Retail Sales and Consumer Surveys appeared first on Daily Reckoning.

[This post is from Lee Adler. To find out more about his work – visit Wall Street Examiner by clicking HERE.]

The Wall Street Journal took note of the decline in retail sales reported by the US Census Bureau last week, headlining:

The Journal blamed drops in spending at gas stations and auto dealerships.

Their lead paragraph was emblematic of the stupidity and misleading nature of Wall Street and economic conventional wisdom.

“U.S. retail sales fell for the second straight month in March, ​a sign economic growth eased to start the year despite strong consumer optimism and steady hiring.”

Exactly how did the Journal know that consumer “optimism” was strong?

Answer: Surveys… particularly the University of Michigan Consumer Sentiment Index, and the Conference Board’s Consumer Confidence Index, also known as the Con Con Con Index. The real function of these surveys is to measure how well they have learned the lessons Wall Street has taught survey respondents. Consumers report not whether they have the wherewithal to spend or not. Instead, they report what they think they should say, based on the stock market.

Wall Street, the mainstream financial media, and the high priests of Economism have told consumers for years that the stock market is a reflection of the economy and forecaster of the economy’s future. When the bell rings as the stock market makes new highs, consumers salivate and regurgitate to survey takers what they have been taught. The stock market is going up, so the economy must be doing great.

This is where the dog chases its tail. The dog is the Wall Street media. The tail is the consumers who wittingly or unwittingly tell the Con Con Con survey takers little white lies about they think of present economic conditions, and what their expectations are for the future.

Wait a minute. The economists at the Con Board and University of Michigan can’t forecast the future. Even the Fed Almighty can’t accurately forecast the future. And the stock market appears to constantly overstate how good things are, and how good they’re going to be. Yet these economic sages think that asking consumers what their expectations are about the economy in the future serves some useful purpose, like predicting whether consumers will spend or not.

Then the dog, the Wall Street media, gets into the act of chasing its “tale.” It reports with great consternation that retail sales were down DESPITE consumer optimism. I can just see the financial journo crowd scratching its collective heads over that one, as they groom each other and pick the nits out of each other’s fur in their echo chambers.

The media and the economism high priests all assume that retail sales should reflect the stories that consumers tell survey takers. But all those consumers are actually doing are giving the pollsters a stock market report. “Oh the stock market made new highs. The stock market discounts the future [not really] therefore I …read more

Source:: Daily Reckoning feed

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Are You a Member of “The Invisible Rich”?

By Alexander Green What do most rich people look like?

You might be surprised. During my 16 years in the money management business, I dealt with a lot of highly affluent individuals.

And if you imagine that most of them drive Bentleys, wear Armani suits and sport diamond-encrusted Rolexes, you’re wrong. Dead wrong.

Most of these folks act, dress and talk the same way you do. (Or maybe a little worse, since they generally don’t have to impress anyone.) Picture someone browsing around a Tractor Supply store, and you’ll have just the right image.

I call them “The Invisible Rich.” And they’re all around you.

According to Barron’s, last year, the number of U.S. households with $1 million or more in investable assets totaled nearly 6.8 million. That’s 5.5% of U.S. households. Include home equity, and that number grows substantially.

So it’s reasonable to assume that better than one in 20 people you bump into each day have a net worth at the seven-figure mark… or higher.

How did all these Americans attain their financial freedom? Fortunately, we don’t have to wonder, thanks to the work of Dr. Thomas Stanley.

Stanley conducted decades of research on the habits and characteristics of America’s wealthy and wrote several best-sellers, including The Millionaire Next Door and The Millionaire Mind.

Stanley points out that the vast majority of millionaires do not have exceptional skills. They do not have hit records. They do not play in the NBA. They did not found a software company in their garage.

They are ordinary people who worked and saved and invested their money sensibly. In The Millionaire Next Door, Stanley detailed seven common denominators among those who build wealth successfully:

They live well below their means.
They allocate their time, energy and money efficiently, in ways conducive to building wealth.
They believe that financial independence is more important than displaying high social status.
Their parents did not provide economic outpatient care.
Their adult children are economically self-sufficient.
They are proficient in targeting market opportunities.
They chose the right occupation.

In short, your net worth is essentially a result of the choices you make.

To generate significant savings to invest, you need to make good career decisions, the right lifestyle decisions and smart spending decisions. It takes forethought. It takes discipline. And it often means making hard choices.

According to Stanley, the most productive accumulators of wealth live well below their means and religiously save and invest the difference.

Millionaires spend far less than they can afford on homes, cars, clothing, taxes, vacations, food and entertainment.

The wannabes, on the other hand (people with higher-than-average incomes but not much net worth), are merely “aspirational.” They buy expensive clothes, top-shelf wines and liquors, luxury cars, power boats, all kinds of bling and more houses than they can comfortably afford.


Their problem, in essence, is that they’re trying to look rich. This prevents them from ever becoming rich. (The Texas term is “all hat, no cattle.”)

Sure, the “glittering rich” – households with a net worth of $10 million or more – are often conspicuous consumers. That’s because they can comfortably …read more

Source:: Investment You

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Big News for Biotech Investors


By Mallorie Beckner

It’s easy to get caught up in the hype surrounding medical breakthroughs.

And investors aren’t immune.

So far this year, biotech companies have outperformed the broader market.

And we believe even bigger returns can be found in biotech this year…

The end of January is typically strong because, as Chief Income Strategist Marc Lichtenfeld explains, “Biotech stocks usually take a breather, sometimes for the rest of the year until they start moving in anticipation of the J.P. Morgan Healthcare Conference – the first big one of the year – in early January.”

This is where many investors first learn about new biotech companies. And they end up putting money in the most promising ones – spiking the sector.

This spike in biotech at the end of January, especially this year, also comes from the promise of personalized gene therapies.

Whereas current therapies for chronic diseases may need lifelong treatment, gene therapies could cure them in a single sitting.

Just imagine being able to edit a disease out of your DNA…

It’s revolutionary.

And this technology is not only good for the longevity of your life…

It’s also good for your portfolio.

I’ll reveal the big players in the field. But first, let’s talk about this gene-editing tool.

CRISPR stands for “clustered regularly interspaced short palindromic repeats.” In short, it’s the technology that allows researchers to remove, add or alter sections of DNA.

It was discovered in 2013 and has been disrupting the biotech sector ever since.


The name CRISPR may sound familiar because it was recently involved in a high-profile patent case…

There’s a dispute over who has the rights to the technology.

Needless to say, the patent is valuable.

It was developed in bacteria by the Doudna lab at University of California at Berkeley. It was later developed for use in animals by the Zhang lab at the Broad Institute.

The patent for use in humans will likely go to the Zhang lab group.

So the companies founded from the Broad Institute will have strong patent claims and licensing power for the technology.

Editas Medicine Inc. (Nasdaq: EDIT) was founded out of the Broad Institute and has access to many of its patents.

This case, and its recent partnership with Allergan, is positioning Editas for success.

But as is common for the biotech sector, its news has also affected the two other companies researching with CRISPR: Intellia Therapeutics Inc. (Nasdaq: NTLA) and CRISPR Therapeutics Ltd. (Nasdaq: CRSP). While neither are affiliated with the Broad Institute, they are two of the other leading genome-editing companies.

The patent news surrounding CRISPR technology in early February caused the stocks of the three companies to move.

Editas jumped first because of the patent and partnership news. Intellia and CRISPR Therapeutics followed.

This trend, as Marc explains, occurs because “more than any other sector, biotech trades based on future potential.

“Remember, many of these companies are not profitable and don’t even have a product to sell. So investors buy and sell the stock based purely on how much potential revenue and profit a company will generate many years in the future.

“Those forecasts change dramatically with each new …read more

Source:: Investment You

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Why Select Comfort Stock is Rated a ‘Strong Buy’ Today

By Rob Otman

Select Comfort (Nasdaq: SCSS) is a $2 billion company today. Investors that bought shares one year ago are sitting on a 63.78% total return. That’s above the S&P 500’s return of 13.69%.

Select Comfort stock is beating the market, but does that make it a good buy today? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…


Earnings-per-Share (EPS) Growth: Select Comfort reported a recent EPS growth rate of 111.11%. That’s above the specialty retail industry average of 14.28%. That’s a great sign. Select Comfort’s earnings growth is outpacing competitors.

Price-to-Earnings (P/E): The average price-to-earnings ratio of the specialty retail industry is 24.11. And Select Comfort’s ratio comes in at 23.69. It’s trading at a better value than many of its competitors.

Debt-to-Equity: The debt-to-equity ratio for Select Comfort Stock is 0. That’s below the specialty retail industry average of 58.28. The company is less leveraged.

Free Cash Flow per Share Growth: Select Comfort’s FCF has been higher than its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.

Profit Margins: The profit margin of Select Comfort comes in at 6.21% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Select Comfort’s profit margin is above the specialty retail average of 5.34%. So that’s a positive indicator for investors.

Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Select Comfort is 39.15%, and that’s above its industry average ROE of 16.25%.

Select Comfort Stock passes six of our six key metrics today. That’s why our Investment U Stock Grader rates it as a strong buy.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here.
Thoughts on this article? Leave a comment below. …read more

Source:: Investment You

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Central Banks Have a $13 Trillion Problem

By Bill Bonner

Paycheck to Paycheck

GUALFIN, ARGENTINA – The Dow was down 118 points on Wednesday. It should have been down a lot more. Of course, markets know more than we do. And maybe this market knows something that makes sense of these high prices. What we see are reasons to sell, not reasons to buy.

DJIA daily (incl. Thursday)… it was just taking a rest – click to enlarge.

Nearly half of all American families live “paycheck to paycheck,” say researchers. Without borrowing, 46% couldn’t raise $400 to cover an emergency. This is at least part of the reason why retail sales dropped for the second month in a row in March. Despite seven years of economic “recovery,” millions of Americans don’t have much money.

According to Census Bureau figures, 110 million Americans receive benefits from means-tested federal programs – food stamps, disability, and the like. And according to the Bureau of Labor Statistics, about 125 million Americans have full-time work (with another roughly 112 million without jobs).

That means there are only 125 million people in full-time jobs supporting the whole kit and caboodle of the U.S. economy, with a total population of 323 million. At that rate, each full-time worker supports about 2.6 people… including almost one person receiving money from the feds.

They are also supporting a government debt of $20 trillion and private debt of another $40 trillion or so. That puts the debt-to-full-time-worker ratio at $480,000. The average salary for a full-time worker is just $48,000. At a modest 5% interest, his share of the debt cost would set him back $24,000 each year.

He’d have only the remaining $24,000 to support (1) his own family… and (2) all the malingerers, cronies, and zombies who are drawing government benefits. Obviously, those numbers don’t work. But they explain much of the weakness in the U.S. economy.

The feds’ cheap credit keeps moving money (mostly in the form of asset price increases) to the wealthiest ZIP codes… while the average person’s budget gets tighter and tighter.

It’s not just better to be rich, it’s double-plus-better! – click to enlarge.

Crisis Level

Foot traffic in chain restaurants is dropping, too. It’s down 3.4% from last month year over year. And all across the country, retail stores are closing their doors and shuttering their windows as though a hurricane were coming. And maybe it is…

Household debt is once again at more than $14 trillion – the level that set off the crisis of 2008–’09. At that level, consumers have a hard time spending. Despite these warnings, the Fed is still patting itself on the back. Bloomberg:

The economy continued to grow across the U.S. at a modest-to-moderate pace in recent weeks as a tight labor market helped broaden wage gains, though consumer spending was mixed, a Federal Reserve survey showed Wednesday.

Not only that, it is still talking about undoing the damage it has done over the past eight years, hoping to get down from its debt-mountain perch without breaking …read more

Source:: Acting Man

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India – Is Kashmir Gone?

By Jayant Bhandari

Everything Gets Worse (Part XII) – Pakistan vs. India

After 70 years of so-called independence, one has to be a professional victim not to look within oneself for the reasons for starvation, unnatural deaths, utter backwardness, drudgery, disease, and misery in India.

Intellectual capital accumulated in the West over the last 2,500 years — available for free in real-time via the internet — can be downloaded by a passionate learner. In the age of modern technology, another mostly free gift from the West which has significantly leveled the playing field, societies that wanted economic convergence with the West, such as Japan, Korea, Singapore, HK, China, etc., have either achieved it rapidly, or have strongly trended toward it.

More than 28,000 children less than six years of age have died in just one province, Madhya Pradesh, over the past year. Because these deaths were due to diseases resulting from malnourishment, the government attributed every single death to disease rather than malnourishment.

Photo credit: Hemender Sharma, India Today

Given that Indian prime minister Narendra Modi has been at the helm for only three years, it is hard to blame him in general for any of the above mentioned monstrosities marring daily life in India. The best the head of the executive of an extremely diverse and complicated country can achieve is to nudge the Titanic in the right direction.

The problem is that Modi has actively sped the Titanic toward collision with an iceberg, from which he himself will not emerge unharmed. He must be blamed for his naiveté, his upside-down understanding of economics and a complete lack of awareness of the realities of life, his narcissism and obsession of making a hero out of himself, and an utter lack of self-respect that drives him to seek solace in Hindu fanaticism. He and his party have been a catalyst fanning the flames of nationalism and fanaticism among Indians.

Farmers demonstrating in Delhi to point out their plight. More than 12,600 farmers and agricultural laborers committed suicide in 2015 in what is one of the world’s poorest countries. On average, life is worse for Indians than it is for Africans.

Photo credit: Reuters

However, sociopaths exist in every society. If you get rid of one, another one enters the scene. In the end, it is Indians who deserve to be blamed for elevating Modi and his BJP to their positions. In the end, it is Indians who deserve to be blamed for hollowing out and destroying institutions the British left behind over the past 70 years.

In the irrational and tribal society of India, Modi perfectly symbolizes and unconsciously exploits the thinking process of the common man, who tends to deal with problems by doing even more of what created the problems in the first place.

A rational person (particularly one whose perception is otherwise skewed by political correctness) faces a huge uphill task and high levels of frustration, when trying to comprehend the actions of irrational people and societies. He won’t be able to understand …read more

Source:: Acting Man

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5 reasons I Favor Junior Exploration Companies

5 Reasons I Favor Junior Explorers_OPT2

By Jordan Roy-Byrne CMT, MFTA

I started following Gold and precious metals in 2002 and first invested in small cap and junior resource companies in 2005. Until recently I always focused on junior producers rather than junior explorers. Production stories were easier for me to understand. Towards the end of the 2008-2011 bull cycle I began covering more exploration companies and by late 2016 my focus had almost shifted entirely to exploration companies. In this piece I discuss the reasons why I currently favor junior exploration companies.

Exploration Companies From This Point Offer Greater Upside Potential

From the very bottom or from around the start of bull markets producers are the best buy for two reasons. First, producers make huge moves off the bottom. In studying bull and bear markets in gold stocks I’ve noticed that producers not only make huge moves off the bottom but a good deal of their upside during a bull market is captured during that initial move.

From late 2000 through 2003 the HUI gained 640% but from the 2005 low to the 2008 peak it only gained 213%.

I looked at eight producers in the GDXJ (with a median market capitalization of roughly $1 Billion) and measured their performance from their 2015-2016 low to 2016 peak. The average gain was 314%. For this group to rise another 314% we would probably need to see Gold retest its all time high. That would require much more time than the roughly nine months to one year required for the initial rebound.

Secondly, exploration companies as a group tend to lag the sector until a turn has been confirmed. Individual explorers can certainly make huge percentage moves off the bottom but as a group more value is found in explorers after the initial surge.

Exploration Companies Can Be Less Dependent On Rising Metals Prices

Once metals prices have bottomed and the cycle has turned, exploration companies don’t necessarily require rising metals prices to be successful. If a junior explorer has made a discovery that could be economic at $1100-$1150 Gold, then it doesn’t require Gold to consistently rise in order to create value. That junior can add value by growing its discovery through more drilling or it can add value by de-risking the project and moving it closer to production. If metals prices are not rising then a producer needs to grow its production or grow its resources and reserves to add more value. It’s very difficult for a producer to do that considering most of its capital would go into the mine.

We should note a new bull cycle is important for exploration companies. During a bear market, only the absolute highest margin deposits are sought after. Exploration is cut back and capital for the junior sector is scarce. Junior explorers are extremely reliant on a bull cycle. They need it to be in place but from there don’t necessarily need metals prices to shoot to the moon.

The Big Money is Made in Exploration

A big investor in the junior sector …read more

Source:: The Daily Gold

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