From the Trenches World Report
Enforce our Bill of Rights
Pretty good if you ask me. Most economic indicators this year have moved relentlessly in the direction of recession, and now the Cass Freight Index is saying a US recession may start in the 3rd quarter, fitting up nicely to my prediction that we would be entering recession this summer. Continue reading “How’s That Recession Coming, Dave?”
Let me help remove the rose-colored glasses for anyone who still thinks GDP this year is good.
First, GDP growth in the first quarter was not “great” as I’ve heard some claiming. It was, by US historical standards, mediocre. Second, the biggest tax cuts in history only got us down to 2.9% GDP growth for 2018. GDP had been pegged originally around 3.1%, but that was revised down, as is usually the case. Every administration tends to estimate GDP on the rosy side because bad news is swallowed easier the further back in time it lies. So, estimate high and revise lower seems to be the government’s perennial approach. Continue reading “GDP Ain’t What it Used to Be!”
Let’s take a look at how the average consumer is doing. I’ll call this typical consumer “Bubba” because I just read an article that claimed “Bubba’s doing better today than at any time since before the Korean War.” It disgusted me because I found it to be such a disingenuous set of lies wrapped in half-truths, all contrived to pacify the trickle-down peasants as that philosophy continues to short-change the middle class with its fake promise. Continue reading “Bubble Bubba Isn’t Doing Fine Anymore”
The following is my recent argument with yet one more market analyst who can’t see straight, even when his article overall was admitting it was time to bail out of stocks. Correcting the market mantras that dominate the bullheaded is partly why I am here.
I’m not going to call this one out of the herd by name because sometimes his writing is sensible. It is the group-think herd mentality of the bulls, which he expresses, that I am challenging. His writing is in quotes and my responses to his way of thinking follow each quote. Continue reading “When will we win? Chinese trade victory is a mirage”
On June 12, I wrote,
The market is moving into waiting mode as the Fed’s next FOMC meeting where they have the opportunity to live up to the rate-cutting hopes they’ve raised come next week. As it does, it is forming that topping pattern that keeps repeating at this level. Continue reading “And That’s How it All Came Down”
Here is a journey in photos and facts to compare the present Great Recession with the past Great Depression to gain perspective on where we might be headed.
Just as we had two great world wars, we might have two great depressions, the last of which we started out calling “The Great Recession” because, at the time, we didn’t know where it would end up or how long it would continue. Remember that World War I did not start off being called WWI. It was originally called “The Great War.” Continue reading “Reading the Next Recession: Will the Great Recession 2.0 become The Great Depression II?”
News of significant recessionary drops in the US became as relentless this past week as the ping, ping, pang of drips from a leaking ceiling hitting pans in the New York Stock Exchange. I’ve been saying you would hear the sounds of recession everywhere as soon as the second-quarter earnings reporting season began this summer. Here we are, and here’s a list of the week’s downbeat economic news that quickly terminated the S&P 500’s rally … right where I said it would end … slightly above its previous summit. Continue reading “The Drip, Drip, Drip of Recession”
Fed missteps and flip-flops this week tripped up multiple markets. After accidentally announcing their ammo is down to one last bullet against recession, can they be trusted to handle powerful weapons?
Given how the market is now trading on nothing but the Fed, it’s no surprise that it leaped up instantly in the middle of weak when the European Central Bank announced it may be raising its long-time inflation target from “just below 2%” up to 3% just as New York Fed President John Williams (a voting FOMC member) said the Fed should respond quickly to recessionary troubles with its own rate cuts. Continue reading “The Fed’s Final Bullet”
It’s time to turn around and see the darkness that the Fed sees looming over you. Earnings season is already extending signs of recession with the first corporate reports coming in far darker than expectations that were already twilight dim in FactSet’s estimations, which pegged earnings as likely to show a 2% contraction. Continue reading “A Long Shadow Creeps over the Economy This Summer”
The bears that are gathering will soon enough be picking flesh off the sun-bleached bones of this market. Even the Fed Chair, who usually does all he can can to avoid dismal pictures and to sound optimistic, is finally talking downcast about the US economy. Continue reading “Chairman Powell Moves toward my Recession Prediction and Helps Trump Trade War”
Stock market investors, hungry for more pork, are demanding Fed Chair, Jerome Powell, land on their table on a silver platter with an apple in his mouth at this week’s congressional hearings. Will he deliver? Powell has a thin red line to talk, or this overFed market, which he and is cronies have nurtured, dies this week from its own morbid obesity. On the other hand, if he does what they want, it’s a major blow for Fed independence. Powell proves he is the market’s slave, and he bows to President Trump. Continue reading “Stock Market Pigs Hold Powell Hostage to Deliver the Bacon”
First, a decline in manufacturing, and then a slump in service industries, now a broad-spectrum inversion of the yield curve hitting its most critical metric this week, unemployment finally starting to rise again, a one-year relentless housing decline across most of the nation and the world, carmageddon pressing car dealers to offer big incentives once again just to hold sales flat, shipping everywhere sinking rapidly, broadly deteriorating general business conditions, plus tariff troubles for the US throughout the world — all of these economic stresses have gotten remarkably worst in just the past month. Continue reading “Ten Big Steps down the Road to Recession”
If you’re a Trump supporter, you’re going to hate this article andlove it; likewise, if you are a Trump hater. I am going to lay out evidence that Trump is either the biggest moron of a president the US has ever had but also my own 4-D chess explanation that would make him cunning if true. Which is true, I have no idea; but I will lay out equally strong arguments for either view, and you can decide for yourself. Continue reading “Iranium ConFUSION Part 2: What we Know, What we Know we Don’t Know, and What we Wish we Knew”
That didn’t take long. On Saturday, well before the US stock market opened post-China-trade-talks, I wrote:
The next step for the market would likely be that the remaining stock indices that have not pushed past their own previous peaks would now punch through. By that … I meant those indices like the Dow that were very close to breaking past their old heights
Continue reading “Cleaning up after the China Trade Summit Looks Exactly Like I Said it Would”
President Trump stated on Wednesday that a war with Iran will be fast and easy. Let’s hope that means faster and easier than the trade war with China has turned out to be, now a year long and getting worse.
We’re in a very strong position if something should happen. I’m not talking boots on the ground. I’m just saying if something would happen, it wouldn’t last very long.
Continue reading “Iranium ConFUSION Part 1: The costs of war and the likelihood of quick victory”
The S&P 500 is up 18% and powering toward its biggest first half since 1997. For bulls, things are great. Will they get any better? To a handful of cross-asset strategists who turned skeptical on stocks before this week’s manic sessions, that’s becoming the most pressing question. Increasingly, their answer is: not likely.However spectacular the real-time reaction … gestures like Federal Reserve Chairman Jerome Powell’s dovish pivot don’t engender confidence for the long term, says Sophie Huynh, a cross-asset strategist at Societe Generale in London. They ring more as a warning, she says, perhaps marking the beginning of the end to economic and market cycles that have lasted a decade.
Continue reading “Market Mania Bets the Cash Registers Go Xi Ching!”
The US deficit this year is already over three-quarters of a trillion dollars, putting the first eight months of the fiscal year almost equal with the entire past fiscal year. It is also $200 billion above the previous record for this portion of the year, and this May’s deficit alone was 40% higher than last May’s.
The previous deficit record was set in the middle of the last recession, which means the government is already spending more than it did to try to pull us out of the last financial crisis. In spite of all of this fiscal stimulus, the economy appears to be receding on many fronts. Continue reading “Is the Fed Dead?”
“The perfect storm” has become a cliché, but the current setup for a 2019 recession just became so text-book perfect in alignment of the three most critical recessionary forces that I have to use it.
Let me start by noting that a stock market that rallies because the news is bad — as happened a little over a week ago when we got a terrible new jobs number (only 75,000, less than half of the weak number economists expected and lower than what it takes just to keep up with population growth) — is a market that is locked in dependence on recovery-mode life support where everyone is happy just because the ambulance will soon be on its way … again. Continue reading “Market Mayhem is Due to Truly Perfect Storm for 2019 Recession”
These are not the tiny champagne bubbles Don Ho used to sing about, but those greenish-gray floats of foam that pile up against harbor docks where the churn of the waves meets the oil spittle of boat motors. They are the economic froth that has piled up around us and is now beginning to fizzle. Continue reading “Frothy Bubbles Make Me Whine”