David Stockman says get out of the casino before it’s too late
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David Stockman says get out of the casino before it’s too late
http://www.zerohedge.com/news/2017-04-2 ... ing-bubble
David Stockman On The Anything President And The Everything Bubble
Apr 20, 2017 4:25 PM
Authored by David Stockman via The Daily Reckoning,
The lemmings are running hard towards the cliffs today. Despite a renewed burst of bombs and drones careening into the already rubble-strewn wastelands of Afghanistan, Yemen, Syria and Iraq.
Or the outbreak of cold war style nuclear brinksmanship on the Korean peninsula — what one commentator properly called a Cuban missile crisis in slow motion.
Likewise, forget that the vacationing Congress is set to return on April 25 to an endless sequence of shoutdowns, showdowns and shutdowns on continuing resolutions and debt ceiling increases.
That is, it will be struggling to keep the fiscal lights on in the Imperial City, not enacting the Donald’s DBA (dead before arrival) fantasy about making the American economy great again.
Indeed, while the Donald has been out huffing and puffing in his new role as global Spanker-in-Chief, the domestic front has turned from bad to worse. His economic policy machinery has now been seized entirely by the Vampire Squid’s latest chieftains in the White House — Gary Cohn, Steve Mnuchin and Jared Kushner.
I am quite confident that none of these three has ever voted Republican in their life or have even the foggiest idea of how to craft a fiscal plan and tax program that could coalesce the warring GOP factions from the hardline Freedom Caucus to the moderate Tuesday Group.
And if the Goldman trio should even attempt to go the old Boehner-Obama “bipartisan” route, as Wall Street devoutly wishes, Speaker Ryan will come to understand what it means to be drawn-and-quartered.
As I stated earlier, it should be crystal clear by now that there will be no great Trump Stimulus. And what lies ahead is an unprecedented outbreak of dysfunction, paralysis and unmitigated mayhem in the Imperial City.
Moreover, the fact that the Donald is now flipping, flopping, pivoting and whirling on issues in an almost random manner is surely compounding the dysfunction.
While the clucking commentariat at CNN may find the Donald’s betrayal of core campaign positions and constituencies to be evidence of a “refreshing” flexibility — or even as “presidential” — it is actually just the opposite.
It’s proof that the Donald didn’t mean a thing he said during the campaign.
And that for GOP politicians on Capitol Hill, lining-up behind a whirling dervish of impetuous unpredictability is fast becoming a career hazard with vanishing appeal.
After all, the Donald has now flip-flopped not on campaign brochure footnotes, but on five core issues:
China’s blatant currency manipulation over two decades, the Fed’s egregious bubble finance that left Flyover American behind, the Export-Import bank’s crony capitalist subsidies to Boeing and GE, NATO’s obsolescence and intervention on both sides of the Syrian civil war were all front and center to the Donald’s appeal.
Yet the fact that he jettisoned his clear positions on these issues in less than a week’s time indicates that he is truly flying by the seat of his ample britches, and that his attention span does indeed compress into 140 characters or less.
Yet, as the bell rings this afternoon, the S&P 500 index was still up an unjustified 13% since November 8. So I will say it again with renewed emphasis: This century’s third great bubble’s days are numbered and in just a few digits.
The remaining bullishness and buy-the-dips robo-trading that temporarily sustained the dotcom bubble through March 2000 and the housing bubble through September 2008 will soon give way.
That’s especially true because the Fed is out of dry powder, and is raising interest rates and preparing to shrink its massive balance sheet in order to prepare for the next recession.
Given that the global economy languishes under $225 trillion of debt and massive excess capacity, the stock market is surely in the midst of the “Everything Bubble.”
As I stated above, the median stock is now trading at the highest multiple of earnings in history — including 2000 and 1929.
To top it all off, the state of American retail is indeed perilous.
With the recent chapter 11 filing by Payless shoes, it now appears that upwards of 3,500 stores will close in early 2017 alone.
Even the Bureau of Labor Statistics’ fudge factory seems to be getting the word about the scorched earth condition of the malls.
During the last two months, it has reported a 60,000 decline in the seasonally maladjusted job count; and a 758,000 drop in the actual count since the December holiday peak. By the way, that compares to only a 644,000 drop over December-March during the prior year.
Retailers stores closing 2017 The fact is, other than easy credit-fueled auto sales, which are now also rolling over, and purchases through Amazon’s cut rate e-Commerce juggernaut, the American consumer has been quasi-comatose for nearly three years now.
Reported sales at general merchandise stores in February were no higher than they were 30 months ago in August 2014 — and I do mean “nominal” sales. Since the Consumer Price Index (CPI) is up 2.8% during the last year alone, inflation adjusted sales are actually already well into recession territory.
More importantly, the plunge in department store sales — which comprise the anchor and driver of 70% of mall traffic — have not abated in the slightest. As of the most recent reading, the monthly sales rate was down 30% from the pre-crisis peak.
Again, that’s in nominal dollars. In real terms, department store sales have fall by upwards of 50% since the early years of this century.
Moreover, debt-encumbered American consumers are dropping, not shopping, because this entire so-called recovery has been wasted. That is, consumers can’t spend energetically because there has been no significant deleveraging since the 2008 crisis.
Despite all the Fed’s madcap money-printing, they are impaled on Peak Debt.
In a word, the retail mall sector is facing insuperable headwinds and the worst of both worlds. That is, flagging demand and immense over-capacity.
It now appears, in fact, that nearly 150 million of retail square footage could close during 2017 — an all-time record.
Does the foregoing paint a picture of economic health? Hardly. Quite the contrary, in fact.
So contrary to what the Wall Street stimulus junkies would have you think, the U.S. and global economies are hardly “accelerating.”
Of course, they have been preaching the same gospel since 2013. But this time, reality will come breaking in and finally shatter the delusion.
The U.S. economy is sliding toward recession. And with the Imperial City impossibly gridlocked, the chances that the “stimulus” baton will be handed off to some ballyhooed Trump Reflation are lower than those of the proverbial snowball in the hot place.
Which leads me to my sincerest piece of advice: get out of the casino before it’s too late.
David Stockman On The Anything President And The Everything Bubble
Apr 20, 2017 4:25 PM
Authored by David Stockman via The Daily Reckoning,
The lemmings are running hard towards the cliffs today. Despite a renewed burst of bombs and drones careening into the already rubble-strewn wastelands of Afghanistan, Yemen, Syria and Iraq.
Or the outbreak of cold war style nuclear brinksmanship on the Korean peninsula — what one commentator properly called a Cuban missile crisis in slow motion.
Likewise, forget that the vacationing Congress is set to return on April 25 to an endless sequence of shoutdowns, showdowns and shutdowns on continuing resolutions and debt ceiling increases.
That is, it will be struggling to keep the fiscal lights on in the Imperial City, not enacting the Donald’s DBA (dead before arrival) fantasy about making the American economy great again.
Indeed, while the Donald has been out huffing and puffing in his new role as global Spanker-in-Chief, the domestic front has turned from bad to worse. His economic policy machinery has now been seized entirely by the Vampire Squid’s latest chieftains in the White House — Gary Cohn, Steve Mnuchin and Jared Kushner.
I am quite confident that none of these three has ever voted Republican in their life or have even the foggiest idea of how to craft a fiscal plan and tax program that could coalesce the warring GOP factions from the hardline Freedom Caucus to the moderate Tuesday Group.
And if the Goldman trio should even attempt to go the old Boehner-Obama “bipartisan” route, as Wall Street devoutly wishes, Speaker Ryan will come to understand what it means to be drawn-and-quartered.
As I stated earlier, it should be crystal clear by now that there will be no great Trump Stimulus. And what lies ahead is an unprecedented outbreak of dysfunction, paralysis and unmitigated mayhem in the Imperial City.
Moreover, the fact that the Donald is now flipping, flopping, pivoting and whirling on issues in an almost random manner is surely compounding the dysfunction.
While the clucking commentariat at CNN may find the Donald’s betrayal of core campaign positions and constituencies to be evidence of a “refreshing” flexibility — or even as “presidential” — it is actually just the opposite.
It’s proof that the Donald didn’t mean a thing he said during the campaign.
And that for GOP politicians on Capitol Hill, lining-up behind a whirling dervish of impetuous unpredictability is fast becoming a career hazard with vanishing appeal.
After all, the Donald has now flip-flopped not on campaign brochure footnotes, but on five core issues:
China’s blatant currency manipulation over two decades, the Fed’s egregious bubble finance that left Flyover American behind, the Export-Import bank’s crony capitalist subsidies to Boeing and GE, NATO’s obsolescence and intervention on both sides of the Syrian civil war were all front and center to the Donald’s appeal.
Yet the fact that he jettisoned his clear positions on these issues in less than a week’s time indicates that he is truly flying by the seat of his ample britches, and that his attention span does indeed compress into 140 characters or less.
Yet, as the bell rings this afternoon, the S&P 500 index was still up an unjustified 13% since November 8. So I will say it again with renewed emphasis: This century’s third great bubble’s days are numbered and in just a few digits.
The remaining bullishness and buy-the-dips robo-trading that temporarily sustained the dotcom bubble through March 2000 and the housing bubble through September 2008 will soon give way.
That’s especially true because the Fed is out of dry powder, and is raising interest rates and preparing to shrink its massive balance sheet in order to prepare for the next recession.
Given that the global economy languishes under $225 trillion of debt and massive excess capacity, the stock market is surely in the midst of the “Everything Bubble.”
As I stated above, the median stock is now trading at the highest multiple of earnings in history — including 2000 and 1929.
To top it all off, the state of American retail is indeed perilous.
With the recent chapter 11 filing by Payless shoes, it now appears that upwards of 3,500 stores will close in early 2017 alone.
Even the Bureau of Labor Statistics’ fudge factory seems to be getting the word about the scorched earth condition of the malls.
During the last two months, it has reported a 60,000 decline in the seasonally maladjusted job count; and a 758,000 drop in the actual count since the December holiday peak. By the way, that compares to only a 644,000 drop over December-March during the prior year.
Retailers stores closing 2017 The fact is, other than easy credit-fueled auto sales, which are now also rolling over, and purchases through Amazon’s cut rate e-Commerce juggernaut, the American consumer has been quasi-comatose for nearly three years now.
Reported sales at general merchandise stores in February were no higher than they were 30 months ago in August 2014 — and I do mean “nominal” sales. Since the Consumer Price Index (CPI) is up 2.8% during the last year alone, inflation adjusted sales are actually already well into recession territory.
More importantly, the plunge in department store sales — which comprise the anchor and driver of 70% of mall traffic — have not abated in the slightest. As of the most recent reading, the monthly sales rate was down 30% from the pre-crisis peak.
Again, that’s in nominal dollars. In real terms, department store sales have fall by upwards of 50% since the early years of this century.
Moreover, debt-encumbered American consumers are dropping, not shopping, because this entire so-called recovery has been wasted. That is, consumers can’t spend energetically because there has been no significant deleveraging since the 2008 crisis.
Despite all the Fed’s madcap money-printing, they are impaled on Peak Debt.
In a word, the retail mall sector is facing insuperable headwinds and the worst of both worlds. That is, flagging demand and immense over-capacity.
It now appears, in fact, that nearly 150 million of retail square footage could close during 2017 — an all-time record.
Does the foregoing paint a picture of economic health? Hardly. Quite the contrary, in fact.
So contrary to what the Wall Street stimulus junkies would have you think, the U.S. and global economies are hardly “accelerating.”
Of course, they have been preaching the same gospel since 2013. But this time, reality will come breaking in and finally shatter the delusion.
The U.S. economy is sliding toward recession. And with the Imperial City impossibly gridlocked, the chances that the “stimulus” baton will be handed off to some ballyhooed Trump Reflation are lower than those of the proverbial snowball in the hot place.
Which leads me to my sincerest piece of advice: get out of the casino before it’s too late.
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Re: David Stockman says get out of the casino before it’s too late
What is one thing the Spirit has been telling you to do that you are still procrastinating? Do that one thing and then ask yourself the preceding question again. Rinse and repeat.
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Re: David Stockman says get out of the casino before it’s too late
Many thing pointing to a financial collapse in 2017 and very many well known economist predicting it as well.. All eyes on the French election on Sunday..
Billionaire investor Paul Tudor Jones has a message for Janet Yellen and investors: Be very afraid.
http://www.zerohedge.com/news/2017-04-2 ... -terrified
Guggenheim Partner’s Scott Minerd said he expected a "significant correction" this summer or early fall, citing as potential triggers President Donald Trump’s struggle to enact policies, including a tax overhaul, as well as geopolitical risks.
Philip Yang, a macro manager who has run Willowbridge Associates since 1988, sees a stock plunge of between 20 and 40 percent, according to people familiar with his thinking, citing events like a severe slowdown in China or a greater-than-expected rise in inflation that could lead to bigger rate hikes.
Seth Klarman, who runs the $30 billion Baupost Group, told investors in a letter last week that corporate insiders have been heavy sellers of their company shares. To him, that’s “a sign that those who know their companies the best believe valuations have become full or excessive."
Larry Fink, whose BlackRock Inc. oversees $5.4 trillion mostly betting on rising markets, acknowledged this week that stocks could fall between 5 and 10 percent if corporate earnings disappoint.
Another multi-billion-dollar hedge fund manager, who asked not to be named, said that rising interest rates in the U.S. mean fewer companies will be able to borrow money to pay dividends and buy back shares. About 30 percent of the jump in the S&P 500 between the third quarter of 2009 and the end of last year was fueled by buybacks, according to data compiled by Bloomberg. The manager says he has been shorting the market, expecting as much as a 10 percent correction in U.S. equities this year.
Even billionaire Leon Cooperman -- long a stock bull -- wrote to investors in his Omega Advisors that he thinks U.S. shares might stand still until August or September, in part because of flagging confidence in the so-called Trump reflation trade.
Billionaire investor Paul Tudor Jones has a message for Janet Yellen and investors: Be very afraid.
http://www.zerohedge.com/news/2017-04-2 ... -terrified
Guggenheim Partner’s Scott Minerd said he expected a "significant correction" this summer or early fall, citing as potential triggers President Donald Trump’s struggle to enact policies, including a tax overhaul, as well as geopolitical risks.
Philip Yang, a macro manager who has run Willowbridge Associates since 1988, sees a stock plunge of between 20 and 40 percent, according to people familiar with his thinking, citing events like a severe slowdown in China or a greater-than-expected rise in inflation that could lead to bigger rate hikes.
Seth Klarman, who runs the $30 billion Baupost Group, told investors in a letter last week that corporate insiders have been heavy sellers of their company shares. To him, that’s “a sign that those who know their companies the best believe valuations have become full or excessive."
Larry Fink, whose BlackRock Inc. oversees $5.4 trillion mostly betting on rising markets, acknowledged this week that stocks could fall between 5 and 10 percent if corporate earnings disappoint.
Another multi-billion-dollar hedge fund manager, who asked not to be named, said that rising interest rates in the U.S. mean fewer companies will be able to borrow money to pay dividends and buy back shares. About 30 percent of the jump in the S&P 500 between the third quarter of 2009 and the end of last year was fueled by buybacks, according to data compiled by Bloomberg. The manager says he has been shorting the market, expecting as much as a 10 percent correction in U.S. equities this year.
Even billionaire Leon Cooperman -- long a stock bull -- wrote to investors in his Omega Advisors that he thinks U.S. shares might stand still until August or September, in part because of flagging confidence in the so-called Trump reflation trade.
- ajax
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Re: David Stockman says get out of the casino before it’s too late
This is a head-scratcher for me. If thousands (tens of thousands?) of retail employees are fired due to store closings, not all of them will be able to go to work for Amazon. With a shrinking labor participation rate, who is going to buy anything, whether online or otherwise?ajax wrote: ↑April 21st, 2017, 7:51 am The retail bugaboo is no big deal:
Creative destruction: Thousands of traditional retailers close as consumers switch to online retailers like Amazon
- ajax
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Re: David Stockman says get out of the casino before it’s too late
Sorry, your question is too esoteric for me.
- ajax
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Re: David Stockman says get out of the casino before it’s too late
It's meant to be chewed on. It's what differentiates the good economist from the bad. (See Bastiat and Hazlitt for the foundation)
Not saying Stockman is a bad economist, but I think he protest-eth too much regarding the demise of brick and mortar retail outlets.
Not saying Stockman is a bad economist, but I think he protest-eth too much regarding the demise of brick and mortar retail outlets.
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Re: David Stockman says get out of the casino before it’s too late
OK. For clarity, I would never suggest that we implement a government bailout to save the retail industry. Nature must take its course and things only get worse when .gov delays the inevitable. The market should right-size itself.ajax wrote: ↑April 21st, 2017, 9:48 am It's meant to be chewed on. It's what differentiates the good economist from the bad. (See Bastiat and Hazlitt for the foundation)
Not saying Stockman is a bad economist, but I think he protest-eth too much regarding the demise of brick and mortar retail outlets.
- shadow
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Re: David Stockman says get out of the casino before it’s too late
Same thing was said 5 years ago- 4years ago- 3 years ago - 2 years ago and last year. "well known economists", as it turns out, don't know.Spaced_Out wrote: ↑April 21st, 2017, 12:25 am Many things pointing to a financial collapse in 2017 and very many well known economist predicting it as well.. All eyes on the French election on Sunday..
- Col. Flagg
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Re: David Stockman says get out of the casino before it’s too late
:ymapplause:shadow wrote: ↑April 21st, 2017, 12:58 pmSame thing was said 5 years ago- 4years ago- 3 years ago - 2 years ago and last year. "well known economists", as it turns out, don't know.Spaced_Out wrote: ↑April 21st, 2017, 12:25 am Many things pointing to a financial collapse in 2017 and very many well known economist predicting it as well.. All eyes on the French election on Sunday..
The 'Fed' and U.S. Mafia seem to be able to control things financially without worry about any unforeseen consequences - never seen anything like it - shenanigans, corruption, manipulation, trillion dollar bail-outs, fraud, deception, rigging, etc., etc., etc, and it's as if they can keep it going perpetually to serve their own interests. @-)
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Re: David Stockman says get out of the casino before it’s too late
There is an end game and it is coming sooner than later. One can only pile on so much debt before the ponzi debt scheme crashes. Everything from housing, Obamacare, auto loans, student loans, corporate defaults and bankruptcies, war and civil disobedience has started to break out in a major way in 2017. Ignore the signs of the fig tree budding at your own peril.
Why "Nothing Matters": Central Banks Have Bought A Record $1 Trillion In Assets In 2017
http://www.zerohedge.com/news/2017-04-2 ... ssets-2017
Trump Administration Begins Quiet Preparations For Government Shutdown
"Total Chaos" - Cyber Attack Feared As Multiple Cities Hit With Simultaneous Power Grid Failures
Why "Nothing Matters": Central Banks Have Bought A Record $1 Trillion In Assets In 2017
http://www.zerohedge.com/news/2017-04-2 ... ssets-2017
Trump Administration Begins Quiet Preparations For Government Shutdown
"Total Chaos" - Cyber Attack Feared As Multiple Cities Hit With Simultaneous Power Grid Failures
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- captain of 1,000
- Posts: 1795
Re: David Stockman says get out of the casino before it’s too late
The US consumer and middle class are tapped out so there is no more consumer, just easy debt holding it together. The western world has turned to credit cards for relief, credit card debt is surging so the endgame has begun.Silver wrote: ↑April 21st, 2017, 8:59 amThis is a head-scratcher for me. If thousands (tens of thousands?) of retail employees are fired due to store closings, not all of them will be able to go to work for Amazon. With a shrinking labor participation rate, who is going to buy anything, whether online or otherwise?ajax wrote: ↑April 21st, 2017, 7:51 am The retail bugaboo is no big deal:
Creative destruction: Thousands of traditional retailers close as consumers switch to online retailers like Amazon
Amazon uses robots. That is a second issue that 60% of jobs would be taken over by robots in the next 5 years, I don't think the system last that long.
- shadow
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Re: David Stockman says get out of the casino before it’s too late
The middle class have been tapped out and using debt for decades.
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Re: David Stockman says get out of the casino before it’s too late
The economic doom and gloom has been predicted for years. I do think we're headed for disaster, but I will roll my eyes when everyone claims THEY predicted it.
- mike_rumble
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Re: David Stockman says get out of the casino before it’s too late
I suppose if you predict an economic collapse long enough, you might eventually get it right.
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Re: David Stockman says get out of the casino before it’s too late
Just stay away from all gambling, only fools gamble.
contius wrote: ↑July 2nd, 2019, 2:20 am I just coming into the world of slot machines, but I know the rule - to stop on time. I read that professionals believe that you can`t risk everything you have. You should know when to stop. For example, the best way is to set deposit limits. It is impossible to go beyond them. I just don`t get it, and where in the australian online gambling slots, you can make limitation by deposits? Or do you just need to make limitations in your mind?