...don’t think badly of yourself if you find it harder and harder. The insanity is reaching levels unexpected.
Just a few short weeks ago, it was Thanksgiving, my favorite Holiday. We take a day to enjoy our friends and family, and say our prayers of thanks for all the good things we have. It was peaceful and for a day, no markets to fret over, no lunatic politicians to lie to us. Just a wonderful nice day.
But that certainly didn’t mean that all the ills of this world had mystically gone away, no on the contrary. They’ve gotten progressively worse.
I’m not going to dissect the IG report, other than to say that Horowitz was an Obama appointee, that just so happened to be the same guy who exonerated Hillary Clinton. After she smashed her cell phones, and after she deleted 33,000 emails, and after she cleared her hard drive with BleachBit. Of course his report says there was no bias. ( Eyeroll)
The response has been exactly what I’d expect. The left thinks everyone is exonerated, and no one did anything wrong. The right is blowing flares out of their noses, saying “Are you kidding me?!?!?!?” But while Horowitz is a Hillary shill, and a never Trumper, the fact is that the report still made the FBI out to look as criminal as we expected. 17 instances of “errors” made by the FBI and all 17 went against trump? No evidence of Bias, when the texts between the two love birds were the single most biased writings ever? Please.
HOROWITZ - "We found no intentional wrongdoing."
BARR - "The malfeasance and misfeasance detailed in the Inspector General’s report reflects a clear abuse of the FISA process."
Um, these are COMPLETELY contradictory statements.
But of course this isn’t over, and not by a long shot. Barr and Durham have been doing their own investigations, as has Trumps lawyer buddy Rudy. They completely disagree with Horowitz. So, as you could have predicted the lefties are screaming that Horowitz was ethical and nonpartisan, while Barr is in Trumps pocket, to cover for Trumps illegal activity. The civil war continues.
This won’t stop folks. 2020 has the ability to be the most vicious political infighting we’ve ever seen. So, we’ve got all that to look forward to, and it’s going to be ugly. Very ugly.
But it’s not just the political “in your face” mess that’s going to keep us on our heels this coming year. Unless you’ve been asleep all year, we are in terribly uncharted water when it comes to the economy, and what’s going on in our banking system.
The market is literally just a spit from all-time highs, and yet the internals, the fundamentals, are creaking and groaning as if we were in a heavy recession. Heavy truck sales are way down, in fact one of the largest trucking concerns in the nation went belly up Tuesday. US production fell the most since 2015. Diesel demand is very low, signaling the manufacturing pull back is still intact.
U.S. manufacturers expect to reduce capital spending in 2020, which would be the first annual decline in 11 years. The average amount financed for new auto loans has hit a new record with $31,500 per loan. 4 central banks with $19.6 trillion in balance sheets and rising. Shall I go on? Well, maybe.
According to Professor Jay Ritter at the University of Florida, 81% of U.S. companies to list in 2018 did so with negative 12-month trailing earnings on the day they went public, the highest such figure since the “irrational exuberance” of the tech bubble.
Yes we have “trade” optimism. We even have some hope for the USMCA to finally move forward, after incoherent Pelosi finally figured out that Americans would like them to work on some policy, mixed into their total obsession with removing Trump.
But, what’s really quite frightening is what’s happening in the world of Repo land and liquidity. It just might be me looking for the sky that’s falling, but I truly think we’re literally one Repo screw up from a cascading bond and then market crash.
The Fed’s have been doing umpteen billions in overnight and short term Repurchase agreements with several major banks. We’re talking HUGE money, and by the way, this isn’t hype, every time they inject that huge liquidity to the banks, “X” amount of it ends up in the market. The correlation is 100%.
Anyway, unless the Feds thread a very fine needle in here, there’s a good chance that in a few weeks time, we could be looking at a squeeze where they can’t just do their ‘not QE” program, and have to launch a full frontal assault of true QE. Why? There’s NO MONEY. It sounds odd to say it, but it’s the truth. The banks don’t have the cash to make reserve margins. They have to borrow it.
The bottom line is, that the system is busted. I’m talking 2008/09 busted. They’ve duct taped it, and twisted it, and pushed their buttons and pulled their levers, and here we are 11 years later and the whole thing’s a rotting pile of dung. The Russians and Chinese want out of the entire SWIFT system, our banks can’t meet regulations, Our political system is on the verge of melting down, and we’re heading into 2020 with more debt and derivatives than any time in human history. Combined.
There’s NO shortage of high power fund managers that believe sometime in 2020 we’re going to be in a recession. Well that’s baloney because we’re in one NOW. What they’re suggesting, isn’t that we’ll be in recession, they’re suggesting we’re going to have a bear market that aligns with the recession. Right now they’ve avoided any big market collapses with all the Fed money. But make no mistake, without those central banks going all in, we could dump for 40%.
In fact, I blew it this year on my prediction. I truly didn’t think the Feds could keep this market up all year. After last Decembers 20% “mini crash” and then rebound into January/ February, I thought it was just that, a bounce back from a quick dump and we’d be stair stepping lower in a controlled market melt down.
NOPE, didn’t happen. They cut rates, they printed trillions, they got the Swiss to buy more billions worth of US stocks, and our companies to buy back more of their own stock. How sure was I that at some point in 2019 we’d roll over? I bought puts against the DOW ( DIA). Now, heading into year end, they’re worthless. The Fed’s made it happen.
The question is…can they continue to keep this up? They pulled it off for this year, can they do it in the face of next year? The election jitters, the debt, the liquidity problems, the impeachment mess, the Barr investigations, the civil unrest, the Chinese trade, the noise out of North Korea, etc? I don’t know folks. They sure used some voodoo to get past this year, yet I truly wonder when they run out of rabbits in that hat.
In the here and now, there was a news headline that suggested that the tariffs would NOT be hiked on December 15th as was the original plan. If that turns out to be true, I have to think it gives the market the ammo for the year end run to glory. But, if they did go ahead with them, I feel we’d take a gut punch. My bet is that they kick the can down the road and don’t do anything with the tariffs.
Oh I so wish it was Thanksgiving again. No news programs, just good folks over to eat well, and share some joy. But alas, we got our one “national” day of saying thanks, and now it’s back to doing so on a personal level daily. Yet don’t think badly of yourself if you find it harder and harder. The insanity is reaching levels unexpected!