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January 2017

Donald Trump Are We In A Bubble? (Video)

January 31, 2017 by EconMatters   Comments (0)

By EconMatters


In this video we discuss Donald Trump`s interesting take on Financial Markets, pre-election results, and now that he is President. Everyone knows we are in a Stock Market Bubble!

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Republicans Will Get Slaughtered in 2018 Midterm Elections

January 30, 2017 by EconMatters   Comments (0)

By EconMatters


If Elections were held tomorrow, The Democrats would win the Presidential election and the Senate for sure, and maybe even the House of Representatives; it is going to be brutal for Republicans come Midterm Elections. Donald Trump is even hurting the business community with his policy initiatives.

Donald Trump will be slowly isolated in Washington and be a lame duck President in two years, most of the stuff Donald Trump blusters about will never see the light of day. The Global Economy will be in recession, and although he will not have caused it directly, he sure will not have helped the situation with his extreme policy approach, and ultimately he will serve as the easy scapegoat for laying the blame.

At this rate, even the business community will be tired of his dictatorial act, and multiple groups will band together and take him down. He will probably be the most impotent President serving out the last couple years of his term, that`s if he isn`t outright impeached before then. Things are going to get rather ugly given his incompetent cabinet makeup these four years; things are not shaping up good for financial markets and the Global Economy under Donald Trump. Financial Market Participants could not have gotten this more wrong after the election.

They are so completely off sides and unprepared for what is to follow over the next four years. I cannot think of a worse Price and Time Relationship to be this Long as a Market Participant. Given valuations what they are, Central Banks at the end of the Road, and a Global Trade War, with Geopolitical Event Risks off the Charts. And I didn`t even get to the unsustainable debt burdens of governments around the world, the end of the stock buybacks and dividends era, and baby boomers about to take out retirement funds from financial markets to live on for the next decade.

I would have thought that the 2008 Financial Crisis cleaned out a lot of the dead wood, i.e., incompetent money managers from the system in a purge effect, but it appears as if the dead wood was replaced with even stupider investors and more incompetent Dead Wood. The Decision Making, Critical Thinking Skills necessary for making intelligent investment decisions is sure a rare commodity these days in Financial Markets.

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Happy Chinese New Year of the Rooster

January 30, 2017 by EconMatters   Comments (0)

By EconMatters

Happy Chinese New Year of the Rooster to our readers.  Thanks for all your support of our work.....

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Grains, Meats, Softs Analysis (Video)

January 29, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss the entire complex from wheat, corn and soybeans to meats, lean hogs and milk, to orange juice, sugar, coffee and lumber in this market analysis video. Lumber and Cotton Markets stood out the most for me in this comprehensive analysis.

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Trading and Markets Video - What Has Worked So Far This Year (Video)

January 28, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss what has and hasn`t worked so far this year from a trading and investing standpoint in Financial Markets, in short how to be like water, and what was the best way to have adapted to this current low volatility, high liquidity market environment. The shit will hit the fan sometime this year, with Donald Trump as President it is a given!

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The US Cannot Afford To Build and Maintain TrumpWall (Video)

January 27, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss the Politics & Economics of the Trump Wall in this video. If we build the Mexico Wall, is Canada going to reimburse us for the Canadian Border Wall as well?

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It`s The Fed`s Responsibility To Pop Asset Bubbles

January 27, 2017 by EconMatters   Comments (0)

By EconMatters


It is pretty obvious the stock market is not, and has not been trading on actual earnings for a long time, but at these valuations it is starting to get downright scary how far these assets are going to fall in the inevitable market crash when every excessive risk taker runs for the exits at the same time.

Nouriel Roubini wrote a paper before the 2008 financial crash outlining the fact that market participants basically will not and cannot help themselves in taking outsized risky bets in assets when given the chance. That it is the Fed`s job to be the responsible actor in the room and Pop these Bubbles before they get so big that they risk the stability of the entire financial system due to the fact that they become so large and out of proportion to the historical norms or the underlying fundamentals.

This is what we currently have in stocks, an outsized asset bubble by any historical financial metric we want to analyze. The Federal Reserve was supposed to raise rates 3 times last year, instead they waited until the end of the year to do one, further exacerbating the stock market bubble. They are supposed to do 3 more rate hikes this year, but by my calculation that means they need to do at least 5 rate hikes to make up for the 2 rate hikes they missed last year, and fell well behind their own rate hiking normalization schedule.

They keep making excuses for not doing their job as the market regulator, and the only market regulator in the room. Did they not learn anything from the 2008 financial crisis, that financial asset bubbles are bad for both the economy and the stability of the entire financial system. Were bank bailouts and TARP fun for you Janet Yellen? It is about time regulators do their job, or start going to jail instead of taking lucrative consulting opportunities once they leave office like Ben Bernanke. The conflicts of interest in the economics` profession have been a problem for decades.

The economics` profession needs to start being held accountable for doing damage to the economy and financial markets through promoting artificial bubbles that they know end poorly every time in a similar fashion to Jeffrey Skilling and off balance sheet financing activities at Enron.

The Central Bank Strategy seems to be to just dance until the music stops, and Come What May when the shit hits the fan. Well in my book, that isn`t going to cut it after the financial crisis of 2008, because it costs taxpayers and ordinary citizens and the overall economy a whole lot more to wait and address the problem after the fact, than to just do your job and raise interest rates and pop the asset bubble ahead of time.

This is pretty easy for any economist to understand, shoot the average high school student gets this economic calculation. The incompetence or outright corruption, or just not doing your intended job function has got to stop at the Federal Reserve, or these people need to start serving time in prison like common criminals who destabilize societal cohesion. Central Bankers should Pop known asset bubbles before they get to the Crash Stage Scenario. In short, stop dancing while the music is still playing.



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A Strong Dollar Isn`t Always Bad For Commodities (Video)

January 26, 2017 by EconMatters   Comments (0)

By EconMatters


We discuss the day`s trading action in how the oil market is being carry traded up by some entity today, and illustrate the negative effects for gold, copper and the bond markets. Per the Investopedia source, here is the concept of Positive Carry explained for everyone:

What is a 'Positive Carry'

A positive carry is a strategy of holding two offsetting positions, one of which creates an incoming cashflow that is greater than the obligations of the other.

BREAKING DOWN 'Positive Carry'

Similar to arbitrage, positive carries generally occur in the currency market where interest paid to investors in one currency is more than they have to pay to borrow in another currency.

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20 Trillion in Government Debt Means No Lifeline for Caterpillar`s Declining Revenues

January 26, 2017 by EconMatters   Comments (0)

By EconMatters


The real problem for Caterpillar is that China is no longer going to build a new city every month, the commodity super cycles are over for a long time given the global debt overhang, and don`t expect Trump Infrastructure Projects to save the day for CAT, as the United States has its own debt problems to worry about which is unsustainable even at these levels.

We basically have gone from 8 Trillion to 20 Trillion in Government Debt since 2008, and it is the rate of change of this debt spending that is the real elephant in the room, and we are just coming up on the entitlement`s impact curve on our government debt obligations.

I feel for Trump because he has inherited a boxed in economic situation here, he actually wants to stimulate the economy through growth projects; but the previous wars, financial crisis, bailouts, and unwise and inefficient spending programs have made borrowing anymore money at these levels impossible, and Congress knows this fact!

They may try to go down this borrow and spending road but it will backfire bigtime on the Republicans. By my calculation the Democrats are going to benefit immensely from the fact that the shit is going to hit the fan during the Trump presidency and Republican controlled Congress from past bad governmental practices of what I call "Can-Kicking" and "Short Termism."

Trump has no hope of avoiding a recession, and things are going to get quite nasty with an exploding Debt problem, a Central Bank out of Bullets, a Crashing Financial Market, and the end of the current business cycle. We borrowed a lot from the future with short term solutions to problems we faced, and now it is time to pay the Debt Piper!

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Oil and Petroleum Product Inventories Worse Than Last Year (Video)

January 25, 2017 by EconMatters   Comments (0)

By EconMatters


We examine the EIA Data this past week, and it is interesting what a difference a year makes psychologically speaking as we have more inventories in storage across the board yet we are almost double the oil price versus this time last year in $53 a barrel versus $26 a barrel. There is a lot of Fantasy Land Thinking Going On in Financial Markets Right Now!

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