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David M Glassman, President

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Email: Stockmarketdoc@comcast.net

February 20, 2019

0This ‘prophet of doom’ predicts stock market will plunge more than 50%


Published: July 30, 2018 5:37 p.m. ET









































    AAA

Schiff: "The Next Crisis Is Not Going To Look At All Like 2008"

by Tyler Durden

Sun, 08/05/2018 - 14:05

154

SHARES

Peter Schiff is an economist who served as an advisor to Ron Paul in 2008 and even made a run for Senate on his own at one point. He’s well-known in the "Austrian" as well as the libertarian economic community, but is perhaps best known for his belief that our next coming crisis is going to be "an order of magnitude larger than the crisis in 2008", only this one, the Federal Reserve is not going to be able to print their way out of, Schiff predicts in his most recent interview.

"What the Fed is worried about is a repeat of the 2008 financial crisis. What they don't realize is the next crisis is not going to look like the 2008 crisis," Schiff said.

He makes the why the dollar going up in 2008 helped the Fed bail everyone out, and why it's going to be impossible for the Fed to do the same thing when the dollar collapses during the next recession. Schiff also explains that a loss of confidence in the dollar as the world's reserve currency could see interest rates move much higher, resulting in the U.S. defaulting on its debt.


Despite getting the 2008 housing crisis right, Schiff's appearances in the mainstream financial media have declined precipitously due to his bearish outlook. As an alternative, he has created a substantial voice for himself on his YouTube channel, which boasts hundreds of thousands of subscribers.

On Saturday, August 4, Peter Schiff appeared on the Quoth the Raven podcast to talk about a multitude of topics, including:

  1. Why the mainstream media doesn’t have him on anymore, despite predicting the 2008 financial crisis production dead-on

  2. Why the government should have let more banks fail in 2008

  3. Why he believes that a socialist will be elected in 2020 and why a libertarian may actually have a chance in 2024

  4. Why he believes the price of gold will be appreciating drastically in the years to come

  5. Why people are going to want to own commodities and emerging markets and get out of dollar denominated assets in the United States

  6. Why the Fed "stress tests" are rigged

  7. Why macroeconomic data shouldn't be relied upon

  8. How inflation will hit when newly printed money finally exits the capital markets

On the podcast, Schiff also notes how wrong the media and economists were in 2008, an accusation he himself has been the target of in recent years:

"It's a total double standard because it shows you their way of thinking. If you look at all of these experts that were completely wrong now that we're 10 years from the financial crisis...by 2007, the bubble had burst...even after it was so completely obvious. I was predicting it. They didn't figure it out until everything imploded..."

"I was going on television in mid 2008 saying 'we're in recession' and they were saying 'you're crazy, there's no recession in sight...'"

You can listen to the full podcast here:



<div class="player-unavailable"><h1 class="message">An error occurred.</h1><div class="submessage"><a href="http://www.youtube.com/watch?v=axyylJoZiBU" target="_blank">Try watching this video on www.youtube.com</a>, or enable JavaScript if it is disabled in your browser.</div></div>


In the podcast, Schiff also talks how Keynesian and Austrian economic theory differ, how inflation has an effect on the middle class, the politics of Trump's economic policy, and the recent volatility in tech stocks and tons more.

Peter's YouTube channel can be found here, meanwhile for those looking for some of the best alternative podcasts around, check out QTR's work at the following link.Schiff: "The Next Crisis Is Not Going To Look At All Like 2008"


by Tyler Durden

Sun, 08/05/2018 - 14:05

154

SHARES

Peter Schiff is an economist who served as an advisor to Ron Paul in 2008 and even made a run for Senate on his own at one point. He’s well-known in the "Austrian" as well as the libertarian economic community, but is perhaps best known for his belief that our next coming crisis is going to be "an order of magnitude larger than the crisis in 2008", only this one, the Federal Reserve is not going to be able to print their way out of, Schiff predicts in his most recent interview.

"What the Fed is worried about is a repeat of the 2008 financial crisis. What they don't realize is the next crisis is not going to look like the 2008 crisis," Schiff said.

He makes the why the dollar going up in 2008 helped the Fed bail everyone out, and why it's going to be impossible for the Fed to do the same thing when the dollar collapses during the next recession. Schiff also explains that a loss of confidence in the dollar as the world's reserve currency could see interest rates move much higher, resulting in the U.S. defaulting on its debt.


Despite getting the 2008 housing crisis right, Schiff's appearances in the mainstream financial media have declined precipitously due to his bearish outlook. As an alternative, he has created a substantial voice for himself on his YouTube channel, which boasts hundreds of thousands of subscribers.

On Saturday, August 4, Peter Schiff appeared on the Quoth the Raven podcast to talk about a multitude of topics, including:

  1. Why the mainstream media doesn’t have him on anymore, despite predicting the 2008 financial crisis production dead-on

  2. Why the government should have let more banks fail in 2008

  3. Why he believes that a socialist will be elected in 2020 and why a libertarian may actually have a chance in 2024

  4. Why he believes the price of gold will be appreciating drastically in the years to come

  5. Why people are going to want to own commodities and emerging markets and get out of dollar denominated assets in the United States

  6. Why the Fed "stress tests" are rigged

  7. Why macroeconomic data shouldn't be relied upon

  8. How inflation will hit when newly printed money finally exits the capital markets

On the podcast, Schiff also notes how wrong the media and economists were in 2008, an accusation he himself has been the target of in recent years:

"It's a total double standard because it shows you their way of thinking. If you look at all of these experts that were completely wrong now that we're 10 years from the financial crisis...by 2007, the bubble had burst...even after it was so completely obvious. I was predicting it. They didn't figure it out until everything imploded..."

"I was going on television in mid 2008 saying 'we're in recession' and they were saying 'you're crazy, there's no recession in sight...'"

You can listen to the full podcast here:



<div class="player-unavailable"><h1 class="message">An error occurred.</h1><div class="submessage"><a href="http://www.youtube.com/watch?v=axyylJoZiBU" target="_blank">Try watching this video on www.youtube.com</a>, or enable JavaScript if it is disabled in your browser.</div></div>


In the podcast, Schiff also talks how Keynesian and Austrian economic theory differ, how inflation has an effect on the middle class, the politics of Trump's economic policy, and the recent volatility in tech stocks and tons more.

Peter's YouTube channel can be found here, meanwhile for those looking for some of the best alternative podcasts around, check out QTR's work at the following link.Schiff: "The Next Crisis Is Not Going To Look At All Like 2008"


by Tyler Durden

Sun, 08/05/2018 - 14:05

154

SHARES

Peter Schiff is an economist who served as an advisor to Ron Paul in 2008 and even made a run for Senate on his own at one point. He’s well-known in the "Austrian" as well as the libertarian economic community, but is perhaps best known for his belief that our next coming crisis is going to be "an order of magnitude larger than the crisis in 2008", only this one, the Federal Reserve is not going to be able to print their way out of, Schiff predicts in his most recent interview.

"What the Fed is worried about is a repeat of the 2008 financial crisis. What they don't realize is the next crisis is not going to look like the 2008 crisis," Schiff said.

He makes the why the dollar going up in 2008 helped the Fed bail everyone out, and why it's going to be impossible for the Fed to do the same thing when the dollar collapses during the next recession. Schiff also explains that a loss of confidence in the dollar as the world's reserve currency could see interest rates move much higher, resulting in the U.S. defaulting on its debt.


Despite getting the 2008 housing crisis right, Schiff's appearances in the mainstream financial media have declined precipitously due to his bearish outlook. As an alternative, he has created a substantial voice for himself on his YouTube channel, which boasts hundreds of thousands of subscribers.

On Saturday, August 4, Peter Schiff appeared on the Quoth the Raven podcast to talk about a multitude of topics, including:

  1. Why the mainstream media doesn’t have him on anymore, despite predicting the 2008 financial crisis production dead-on

  2. Why the government should have let more banks fail in 2008

  3. Why he believes that a socialist will be elected in 2020 and why a libertarian may actually have a chance in 2024

  4. Why he believes the price of gold will be appreciating drastically in the years to come

  5. Why people are going to want to own commodities and emerging markets and get out of dollar denominated assets in the United States

  6. Why the Fed "stress tests" are rigged

  7. Why macroeconomic data shouldn't be relied upon

  8. How inflation will hit when newly printed money finally exits the capital markets

On the podcast, Schiff also notes how wrong the media and economists were in 2008, an accusation he himself has been the target of in recent years:

"It's a total double standard because it shows you their way of thinking. If you look at all of these experts that were completely wrong now that we're 10 years from the financial crisis...by 2007, the bubble had burst...even after it was so completely obvious. I was predicting it. They didn't figure it out until everything imploded..."

"I was going on television in mid 2008 saying 'we're in recession' and they were saying 'you're crazy, there's no recession in sight...'"

You can listen to the full podcast here:



<div class="player-unavailable"><h1 class="message">An error occurred.</h1><div class="submessage"><a href="http://www.youtube.com/watch?v=axyylJoZiBU" target="_blank">Try watching this video on www.youtube.com</a>, or enable JavaScript if it is disabled in your browser.</div></div>


In the podcast, Schiff also talks how Keynesian and Austrian economic theory differ, how inflation has an effect on the middle class, the politics of Trump's economic policy, and the recent volatility in tech stocks and tons more.

Peter's YouTube channel can be found here, meanwhile for those looking for some of the best alternative podcasts around, check out QTR's work at the following link.Schiff: "The Next Crisis Is Not Going To Look At All Like 2008"


by Tyler Durden

Sun, 08/05/2018 - 14:05

154

SHARES

Peter Schiff is an economist who served as an advisor to Ron Paul in 2008 and even made a run for Senate on his own at one point. He’s well-known in the "Austrian" as well as the libertarian economic community, but is perhaps best known for his belief that our next coming crisis is going to be "an order of magnitude larger than the crisis in 2008", only this one, the Federal Reserve is not going to be able to print their way out of, Schiff predicts in his most recent interview.

"What the Fed is worried about is a repeat of the 2008 financial crisis. What they don't realize is the next crisis is not going to look like the 2008 crisis," Schiff said.

He makes the why the dollar going up in 2008 helped the Fed bail everyone out, and why it's going to be impossible for the Fed to do the same thing when the dollar collapses during the next recession. Schiff also explains that a loss of confidence in the dollar as the world's reserve currency could see interest rates move much higher, resulting in the U.S. defaulting on its debt.


Despite getting the 2008 housing crisis right, Schiff's appearances in the mainstream financial media have declined precipitously due to his bearish outlook. As an alternative, he has created a substantial voice for himself on his YouTube channel, which boasts hundreds of thousands of subscribers.

On Saturday, August 4, Peter Schiff appeared on the Quoth the Raven podcast to talk about a multitude of topics, including:

  1. Why the mainstream media doesn’t have him on anymore, despite predicting the 2008 financial crisis production dead-on

  2. Why the government should have let more banks fail in 2008

  3. Why he believes that a socialist will be elected in 2020 and why a libertarian may actually have a chance in 2024

  4. Why he believes the price of gold will be appreciating drastically in the years to come

  5. Why people are going to want to own commodities and emerging markets and get out of dollar denominated assets in the United States

  6. Why the Fed "stress tests" are rigged

  7. Why macroeconomic data shouldn't be relied upon

  8. How inflation will hit when newly printed money finally exits the capital markets

On the podcast, Schiff also notes how wrong the media and economists were in 2008, an accusation he himself has been the target of in recent years:

"It's a total double standard because it shows you their way of thinking. If you look at all of these experts that were completely wrong now that we're 10 years from the financial crisis...by 2007, the bubble had burst...even after it was so completely obvious. I was predicting it. They didn't figure it out until everything imploded..."

"I was going on television in mid 2008 saying 'we're in recession' and they were saying 'you're crazy, there's no recession in sight...'"

You can listen to the full podcast here:



<div class="player-unavailable"><h1 class="message">An error occurred.</h1><div class="submessage"><a href="http://www.youtube.com/watch?v=axyylJoZiBU" target="_blank">Try watching this video on www.youtube.com</a>, or enable JavaScript if it is disabled in your browser.</div></div>


In the podcast, Schiff also talks how Keynesian and Austrian economic theory differ, how inflation has an effect on the middle class, the politics of Trump's economic policy, and the recent volatility in tech stocks and tons more.

Peter's YouTube channel can be found here, meanwhile for those looking for some of the best alternative podcasts around, check out QTR's work at the following link.Schiff: "The Next Crisis Is Not Going To Look At All Like 2008"


by Tyler Durden

Sun, 08/05/2018 - 14:05

154

SHARES

Peter Schiff is an economist who served as an advisor to Ron Paul in 2008 and even made a run for Senate on his own at one point. He’s well-known in the "Austrian" as well as the libertarian economic community, but is perhaps best known for his belief that our next coming crisis is going to be "an order of magnitude larger than the crisis in 2008", only this one, the Federal Reserve is not going to be able to print their way out of, Schiff predicts in his most recent interview.

"What the Fed is worried about is a repeat of the 2008 financial crisis. What they don't realize is the next crisis is not going to look like the 2008 crisis," Schiff said.

He makes the why the dollar going up in 2008 helped the Fed bail everyone out, and why it's going to be impossible for the Fed to do the same thing when the dollar collapses during the next recession. Schiff also explains that a loss of confidence in the dollar as the world's reserve currency could see interest rates move much higher, resulting in the U.S. defaulting on its debt.


Despite getting the 2008 housing crisis right, Schiff's appearances in the mainstream financial media have declined precipitously due to his bearish outlook. As an alternative, he has created a substantial voice for himself on his YouTube channel, which boasts hundreds of thousands of subscribers.

On Saturday, August 4, Peter Schiff appeared on the Quoth the Raven podcast to talk about a multitude of topics, including:

  1. Why the mainstream media doesn’t have him on anymore, despite predicting the 2008 financial crisis production dead-on

  2. Why the government should have let more banks fail in 2008

  3. Why he believes that a socialist will be elected in 2020 and why a libertarian may actually have a chance in 2024

  4. Why he believes the price of gold will be appreciating drastically in the years to come

  5. Why people are going to want to own commodities and emerging markets and get out of dollar denominated assets in the United States

  6. Why the Fed "stress tests" are rigged

  7. Why macroeconomic data shouldn't be relied upon

  8. How inflation will hit when newly printed money finally exits the capital markets

On the podcast, Schiff also notes how wrong the media and economists were in 2008, an accusation he himself has been the target of in recent years:

"It's a total double standard because it shows you their way of thinking. If you look at all of these experts that were completely wrong now that we're 10 years from the financial crisis...by 2007, the bubble had burst...even after it was so completely obvious. I was predicting it. They didn't figure it out until everything imploded..."

"I was going on television in mid 2008 saying 'we're in recession' and they were saying 'you're crazy, there's no recession in sight...'"

You can listen to the full podcast here:



<div class="player-unavailable"><h1 class="message">An error occurred.</h1><div class="submessage"><a href="http://www.youtube.com/watch?v=axyylJoZiBU" target="_blank">Try watching this video on www.youtube.com</a>, or enable JavaScript if it is disabled in your browser.</div></div>


In the podcast, Schiff also talks how Keynesian and Austrian economic theory differ, how inflation has an effect on the middle class, the politics of Trump's economic policy, and the recent volatility in tech stocks and tons more.

Peter's YouTube channel can be found here, meanwhile for those looking for some of the best alternative podcasts around, check out QTR's work at the following link.

 


Charlie Munger Warns Of "Extreme" Monetary Policy, "Dangerous" Money Printing And "Ignorant" Liberals

https://www.zerohedge.com/news/2019-02-15/charlie-munger-warns-extreme-monetary-policy-dangerous-money-printing-and-ignorant


Why the stock market might soon careen down a dangerous ‘slope of hope’

Published: Feb 15, 2019 2:36 p.m. ET

The prevailing mood has shifted from extreme pessimism to extreme optimism





By

MARK

HULBERT

COLUMNIST

 

CHAPEL HILL, N.C. (MarketWatch) — Sentiment conditions on Wall Street are flashing short-term danger signs.

That’s because the mood has shifted from the extreme pessimism that prevailed in late December to nearly as extreme optimism today. Some call current conditions a “slope of hope.”

Consider the average recommended equity exposure among the Nasdaq-oriented market timers I monitor (as measured by the Hulbert Nasdaq Newsletter Sentiment Index, or HNNSI). In late December, this average was lower — at minus 72.2% — than at almost any other time since I began collecting data in 2000.

That’s why contrarians, in late December, were forecasting a powerful rally.

Read: Should stock-market investors freak out over an ‘earnings recession’? These charts say no

Today, in contrast, in the wake of a 17%-plus gain in the S&P 500 SPX, +1.09% and a 20%-plus rally in the Nasdaq COMP, +0.61% the HNNSI has risen to plus 73%. That’s higher than 90% of all comparable readings since 2000.


In other words, as you can see from the accompanying chart, in six weeks’ time this group of short-term stock-market timers has increased their average equity exposure by more than 140 percentage points: Away from being aggressively bearish (recommending that clients allocate three-fourths of their trading portfolios to short-selling) to being almost as aggressively bullish (now recommending that three-fourths of clients’ portfolios be long).

To be sure, this does not mean that a decline back to the December lows is imminent. Nevertheless, contrarian analysts are convinced that the sentiment winds are no longer blowing in the direction of higher prices.

The usual qualifications apply, of course. Contrarian analysis doesn’t always work. And, even when it does, the market doesn’t always immediately respond to the contrarian signals. This past summer, for example, as you can see from the chart, the HNNSI hit its high about six weeks prior to the market’s. That’s a longer lead time than usual, but not unprecedented. But when the market finally did succumb to the extreme optimism, the Nasdaq fell by more than 20%.

Another qualification about the HNNSI as a contrarian indicator: It works only as a very short-term timing indicator, providing insight about the market’s trend over perhaps the next few months at most. So it’s not inconsistent with the contrarian analysis of current market sentiment that the stock market could be headed to major new all-time market highs later this year.

What contrarians are saying, however, is that even if the market does hit new highs later this year, there may be lower prices first.

Cryptos Are Surging: Bitcoin, Ethereum Hit One-Month Highs As Institutions Dip Toes


Cryptocurrencies are surging while the US equity markets take the day off. Ethereum is up over 18% from Friday's 'close' and the rest of the crypto space is a sea of green. While no immediate catalyst (headline or technical level) is clear, increasing chatter over institutional investors dipping their toes in the space have prompted an extension of the positive trend.

A sea of green...


Source: Coin360

Ethereum is leading the charge followed by Litecoin and Bitcoin Cash...


 

Bitcoin has broken back to one-month highs...


 

And Ethereum is really accelerating...


As CoinTelegraph notes, the total market capitalization of all cryptocurrencies is around $128 billion as of press time, up a strong 3.7 percent on the week.


In an interview with Cointelegraph this week, prominent CNBC commentator Brian Kelly argued that Bitcoin is currently around 50 percent undervalued, and that the asset is likely near a bottom. While holding back on optimism in regard to the approval of a Bitcoin exchange-traded fund, Kelly predicted that 2019 would be better for the crypto markets overall, conceding however that 2018 had set “a pretty low bar.”

In adoption news, it appears that the forthcoming update of the Rakuten Pay mobile app from major Japanese e-commerce firm Rakuten will support cryptocurrency payments in addition to fiat.

While no immediate catalyst jumps to mind for today's surge, Bloomberg notes that institutional investors should consider dipping their toes into cryptocurrencies, according to Cambridge Associates, a consultant for pensions and endowments.

“Despite the challenges, we believe that it is worthwhile for investors to begin exploring this area today with an eye toward the long term,’’ said analysts at Boston-based Cambridge in a research note published Monday.

“Though these investments entail a high degree of risk, some may very well upend the digital world.’’

Most large institutions have steered clear of the 10-year-old, $120 billion industry because it’s largely unregulated and cryptocurrencies have been used to finance illicit trade. The collapse in crypto prices hasn’t helped either: Bitcoin, the largest digital currency, lost about 75 percent of its value in 2018.

For those prepared to take the plunge, Cambridge recommends “a considerable amount of time learning about the space,” including surveying the different ways of investing, from illiquid venture capital funds to buying tokens on an exchange. The firm advises institutions that manage more than $300 billion.

Institutional investments, though rare, bring cheer to crypto enthusiasts who say a wave of institutional investment could bring greater credibility to the market.

"The Trap Has Been Set"

The failing engines of global growth

The global slowdown has been much discussed lately. A slowdown in Europe and China was considered to be the main reason for the December stock market rout combined with the balance sheet normalization (QT) program of the Federal Reserve. What is behind the slowdown?

No satisfactory answer has emerged, though China’s efforts to curb excessive lending are a natural candidate, in addition to the fact that central banks have been removing stimulus. The answer, however, goes deeper into the structure of modern economies.

We will show in the March issue of our Q-review that the world economy never actually recovered from the financial crisis, and explain the reasons why. The failure of the economic drivers of global growth, China, the Eurozone and the US, is at the heart of the non-recovery. We will delve into that here.

Killing the spirit

In June 2017, we noticed that something strange was going on in the global economy. The growth of total factor productivity (TFP) had stagnated starting in 2011. This is something that should not happen in a growing economy.

TFP is the measure of that part of GDP growth that changes in the quality and quantity of investments and work force cannot explain. It’s generally thought to be the measure of technological change driving economic growth. If it stagnates, it means that production is not becoming more efficient. That is, the achieved production is just the sum of capital and labor. Stagnation thus implies that our ability to create productive innovations has halted. A serious omen, and yet this is exactly what has happened since 2011. Why?


Figure 1. Regional and global growth rates of total factor productivity (TFP) in percentage points. Source: GnS Economics, Conference Board

The Three Kings on a journey down

When the global economy falters, you turn to its leaders to look for blame. At the end of 2017, China, the euro area and the United States accounted for some 51 percent of the global GDP. They were the undisputed engines of global growth.

After the GFC, leaders of Europe, China and the United States enacted exceptional measures to “save” the global economy. These kept many insolvent banks and companies operating thus intensifying the zombification of the global economy. However, the GFC also led to a fall in the investment rate in the euro area and in the US (see Figure 2). Their gross formation of physical capital fell by several percentage points and it has never recovered.


Figure 2. Formation of gross physical capital in China, euro area, and in the United States in constant (base year: 2010) US dollars. Source: GnS Economics, World Bank

The capital formation in China has kept its (very high) rate. There, however, the problem is that investments have grown increasingly unproductive. Figure 3 shows the TFP growth of China, the euro area and the US. It shows that since 2011, the productivity of China has actually fallen despite heavy investment levels. This has led to an even more intractable problem, over-indebtedness, because the revenue from the investments has not been sufficient to service the debt.


Figure 3. Growth rates of total factor productivity (TFP) in China, euro area and the United States points. Source: GnS Economics, Conference Board

Figure 4 shows the combined private and government debt and the real GDP of China since 1995.[1] From 1995 till 2007, the overall debt in China grew only fractionally faster than GDP, as it should. However, between 2008 and 2017, the real GDP of China grew by around 7.6 trillion US dollars, but private and government debt grew by an astonishing 25 trillion US dollars. That is, during those nine years, the debt in China grew faster than GDP by a factor higher than three! There are no parallels in modern history, and it prompts an uncomfortable conclusion.


Figure 4. Nominal gross domestic product and the total private sector and government debt in China. Source: GnS Economics, Mbaye, Moreno-Badina and Chae (2018), World Bank

The Chinese economy has become a Ponzi.  It cannot sustain itself without a continued harrowing rise in debt. Halt the growth in debt and the real economy will tumble, and that’s what we have seen recently.

If it’s broken, you might want to fix it

The fact is that something has gone seriously wrong in the model of global economic governance that has been in place since the Second World War. It may have never worked the way the macroeconomists envisaged it to work, but clearly it is not working anymore.

In the March issue, we will explain in detail, based on data and academic research, why the model of global governance has failed. It should be heeded closely, as the fragility of the global economy creates the possibility of a global crash, as we have warned since March 2017. Most likely, it’s too late to avert the global crash, but one can always prepare. We will return to that in more detail in June.

Based on what has happened in the global economy, one should be extra careful when calling for more stimulus. It will most likely not benefit the real economy, but it is likely to propel over-valued asset markets even higher. The unfortunate fact is that when asset markets go, the fragile global economy will go with them. The trap has been set.


$166 Billion In Student Debt Is Now Officially Delinquent


According to the Federal Reserve Bank of New York's latest quarterly household debt report, student loan delinquencies surged last year, up to $166.4 billion in the fourth quarter. The report includes the total owed and the percentage of delinquent accounts past 90 days or in default. 



The percentage of delinquent accounts figure has stood at 11% since about mid-2012, but the total amount of debt outstanding has increased to a stunning $1.46 trillion at the end of December 2018 - and unpaid student debt rose to its highest levels ever. 

Delinquencies rose even as unemployment fell below 4%, telegraphing that the U.S. job market simply hasn't generated the level of wage growth necessary to deal with the country's growing debt load. 

Bloomberg Intelligence interest-rate strategist Ira Jersey said: "Income levels for graduates are not necessarily high enough for debt payments overall. If you have a choice to pay your student loan or for food or housing, which do you choose?”



According to Jersey, the loans "probably won't hurt the economy" because they are government-sponsored. Which is another way of saying taxpayers will once again come to the "rescue."

"But incrementally, it does mean higher federal deficits if the loans are not repaid,” he conceded. 

Echoing what we first said back in 2012, Bloomberg notes  that the total amount in arrears is twice the amount the U.S. Treasury paid to bail out the auto industry during the last recession.

Meanwhile, with the cost of higher education doubling over the last 20 years, even the St. Louis Fed was unsure as to whether or not "college was still worth it", according to a blog posted on their website. 


Another stunning observation: the age group that is transitioning to delinquency the fastest is not workers fresh out of college, but the 40 to 49 year old cohort, partly as a result of parents shouldering the load and borrowing to pay for their children's expenses. 


This has forced some schools to provide more support for those attending. For instance, Cornell increased tuition for 2019-2020 by "the lowest it has been in decades" and the school is "budgeting for a significant increase in financial aid". Purdue University will also not boost room and board rates for 2019-2020, the seventh year in a row it has avoided hiking these prices.

On average, however, in-state tuition and fees for a public four year institution has risen by 3.1% beyond inflation over the last decade.





Gartman: "The Time For Buying Stocks Is Past"


Two months ago, in the depth of the December market doldrums, one person said that it was time to go long stocks ahead of the Fed's dovish reversal, Mnuchin's call to the plunge protection team and Trump's appeal to Americans to buy stocks on Dec 25 2018: that man was "world-renowned commodity guru" Dennis Gartman, and for the subsequent 8 weeks, Gartman has been stadfast, and correct, in his contrarian at the time reversal which promptly became a consensus call after stocks rebounded in their best January since 1987, a rally which has since continued into February and the S&P is fast approaching its Sept 20 all time high after 8 consecutive weeks of gains.

Which then begs the question: has Gartman's reputation of being the world's most contrarian indicator finally come to a close? That remains to be seen, however, it is worth noting that after being relentlessly bullish for the duration of the S&P's 400 point increase, this morning Gartman has another contrarian call: "we say here this morning that the time for buying stocks and or for adding to long positions is past. The time for being less involved… less long… less enthusiastic in the short term is now upon us."

Of course, having learned from prior mistakes and staying from absolute trade recommendations, Gartman is quick to note that the rally may indeed continue, to wit:

We remain positive of equities in the long term … not, however, in the short term and we’ve more on this below… for the same reason that we’ve been bullish thus far for most of this year: that we are certain that the Fed has adopted a changed and more expansionary monetary policy, made quite clear by the Fed’s Chairman, Mr. Powell, over a month ago when he spoke on his own regarding this fact and made even clearer following the FOMC meeting when he noted in his post-meeting press conference that the Fed’s balance sheet will continue to be run-off through the process of its debt securities being allowed to mature, but in a far  more “patient” manner than had been its course of action previously. This, we suspect, shall be made clearer still this afternoon when the minutes of the last FOMC meeting are made public at 2:00 p.m..

Further…and this we do in fact believe has been materially overlooked by so many others in the capital markets on a daily basis and it is all the more important given the focus upon the Chinese Renminbi’s valuation being focused upon far more certainly as explained above in our comments on the forex market… we continue to view the Chinese government’s cut in bank reserve requirements and the tax cuts announced nearly five weeks ago are materially long term supportive of shares in China and eventually to the markets abroad. As we have said previously several times, reserve requirement changes are the monetary authorities’ equivalents of a handy piece of lumber applied to the head of a reluctant mule: It does indeed get the mule’s attention and sometimes the mule even likes it!

That's the good news. Now the not so good:

Note that the CNN Fear and Greed Index made its way to 70 as of the close on Friday but closed 2 “points” lower yesterday at 68. The CNN Index has in the past proved its merit time and again and we’ve maintained that until it has risen above 70… and preferably to 75… and then has turned down, we’ve no choice but to remain bullish. It’s 68 presently and it has turned lower, but only very marginally so.


Thus we say here this morning that the time for buying stocks and or for adding to long positions is past. The time for being less involved… less long… less enthusiastic in the short term is now upon us.

And then this:

Given our comment above that the CNN Fear & Greed Index has made it to 70 and has turned lower and given that the short interest on both the NYSE and the NASDAQ have fallen, and given simply that the markets have run a very, very long way since late December we will absolutely not be adding to long positions at this point and will likely be taking defensive actions to protect our profits. Buying puts; selling futures; buying “short side” derivatives and selling calls against long positions to reduce our exposure a bit. This seems both rational and reasonable.

If this "new and improved" Gartman is no longer the contrarian indicator of years past, algos - and bulls - better take note: if he is right, and many other strategists are confident we will top out just around the "quad top" around 2,800, this may be as good as it gets.

This stock-market gauge just hit an all-time high — and that’s bad news for bears

Published: Feb 20, 2019 3:51 p.m. ET


Bear markets ‘never ever’ begin when A/D line is hitting all-time highs: analyst


Getty Images/iStockphoto

A/D line is a bad signal for the bears


By

MARK

DECAMBRE


One widely used signal of the health of the stock market has hit an all-time high, potentially setting the stage for a further rally by U.S. equity benchmarks, say technical analysts.

The New York Stock Exchange’s advance/decline line touched an all-time high on Wednesday, as seen in the chart below from StockCharts:




Paul Schatz, the president of Heritage Capital, told MarketWatch in a phone interview that “bear markets never, ever, ever begin when the A/D line is making an all-time high.”

The Woodbridge, Connecticut-based investment manage also said the A/D line “is historically 90% accurate in predicting large-scale bear markets.”

Among technical analysts, the A/D line is the most widely used indicator measuring market breadth and represents a cumulative total of the number of stocks advancing versus the number of stocks declining. When the A/D line rises, it means that more stocks are rising than declining, and vice versa.

Check out: MarketWatch’s snapshot of the market


The number of stock gaining ground is outnumbering decliners 1,673 to 1,079 on the NYSE and 1,492 to 1,168 on the Nasdaq, while volume in advancing stocks represents 64.8% of total volume on the Big Board and 64.5% of the Nasdaq’s total volume.

The bullish A/D reading comes after stocks extended a rebound that has taken the major equity benchmarks to their highest levels of 2019, after suffering the worst declines on record for trading session immediately before Christmas.

The Dow Jones Industrial Average DJIA, +0.24% is up 18.8% from its Dec. 24 low, the S&P 500 SPX, +0.18%  also has gained by about 18%, the Nasdaq Composite Index COMP, +0.03% has advanced 21% from that nadir.

Declines had been attributed to the a combination of mounting fears of economic disaster emanating from China’s trade spat with the U.S., and worries that the Federal Reserve was moving too aggressively in normalizing monetary policy and creating ripples in financial markets.

Now, those issues have abated with Wall Street investors expecting that Beijing and Washington will soon strike a tariff pact, even if an imperfect one, and the Fed has declared a wait-and-see approach to raising borrowing costs for investors.

“Week by week, the bearish case is crumbling; everything that the bears were hanging their hopes on is falling apart,” said Schatz. “It doesn’t guarantee that stocks continue to rip higher, but it insulates the stock market against a large-scale decline,” he said.

J.C. Parets of the All Star Charts blog also is sanguine about the record A/D reading. “This expansion of upside breadth continues to point towards higher stock prices from any sort of intermediate-term perspective,” he wrote on Wednesday.

To be sure, worries about the durability of the current rally persists, particularly given the apparent speed at which stocks snapped back from ugly lows.

Skepticism about the current rebound is partly rooted in the belief that stock gains have renewed worries about stock valuations as earnings aren’t expected to shine the coming periods. The S&P 500’s price-to-earnings ratio, a popular measure of stock values, over the next 12 months is at its highest since October, at 16.27, after touching a low of 13.59, according to FactSet data (see chart below):


Source: FactSet


Moreover, there is also concern that the more the markets improve on the back of a U.S.-China trade agreement, the more likely the Fed may be to resume its apparent pause in interest-rate hikes, which could potentially fuel a fresh rout.

“Bulls hope a surprisingly strong U.S.-China trade breakthrough keeps consensus earnings estimates from drifting down as 2019 progresses just like the tax cuts kept profit forecasts buoyant in 2018. The problem is that, even if that happens, at 16.5x 2019 CY earnings, large-cap stocks appear fairly valued given only 4.2% consensus 2019 EPS growth forecasts,” wrote Alec Young, managing director of global markets research at FTSE Russell, referring to the late-2017 tax cuts signed into law that offered a fillip to corporations.





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