Weekend Wrap: Trade, Recession, Currency Fears Stoke Week-Ending Sell-Off

These days, it doesn't take much to spook markets.

That stands to reason, with all of the US major indices near all-time highs conjoined with a divisive political environment, global trade tensions, and a corrupted financial system run by central bankers bent on the globalization of currencies and nations.

Thus, on Friday, after Fed Chairman, Jay Powell, spoke to the assembled cognoscenti at Jackson Hole, Wyoming, and President Trump doubled down on his tariff mandate towards China, the runners, scalpers, and money-changers on Wall Street were so spooked that one might have assumed they'd seen the ghost of legendary China short-seller, Jim Chanos, stalking the trading floor, even though - as far as is known - Mr. Chanos is still alive and kicking the shorts out of the Chinese market.

Stocks had opened only marginally in the red on Friday and were improving into the eleven o'clock hour before suddenly reversing course, heading into the abyss, the Dow shedding more than 400 points in a matter of minutes.

With Wall Street struggling to regain some semblance of balance and propriety, stocks drifted lower, cratering in the final hour with the Dow Industrials down nearly 750 points before gaining back another hundred into the closing bell.

It was ugly. It was impressive. At the end of the day, it seemed completely appropriate.

The fuel for growth was fading fast and has been since well before Friday's melt-down. All of the fancy tricks the Fed and their central banking buddies had employed to goose equities skyward over the past decade were being exposed as fraudulent, artificial, unnecessary, and eventually harmful to the operation of what previously had been free markets.

Wall Street has lost confidence in the Fed's forward guidance, which, according to Mr. Powell, is decidedly negative. The Trump tariffs are a sideshow to the already-failing economies of the developed nations, slowing precipitously and taking down the emerging giants of China and India with them.

Over the weekend, while the leaders of the G7 powerhouse nations debate and will likely confirm that globalization is a crumbling edifice of one-percenter greed and that the world needs to be adjusted toward something that serves people other than just the mega-corporate interests and the skimming habits of the ultra-wealthy.

As has been of considerable mention here the past few days, negative interest-bearing sovereign debt instruments - those wildly popular $19 trillion worth of bonds - are ringing the death-knell of fiat currencies and central bank interference with the normal operation of capitalist design.

For now, the shock waves of fading confidence in the global Ponzi and counterfeit schemes of stock buybacks, quantitative easing, and negative interest rates is contained largely to the Wall Street crowd, but, it is spreading and the uproar will increase as stocks fall, ordinary people worry about their jobs and their futures, and the central bankers moan and cajole and mumble and stumble and fall.

Remnants of the global economic structure previously known as Bretton Woods are being shredded on a daily basis. A new world order is on the way, but any transition - like the one which dashed national currencies into one euro a few decades past - is going to be painful and consequential.

Sadly, when all the smoke is blown away and the dust settled, the planet will still largely be governed by the same morons and their predecessors who brought all of this upon us and their economic agents of destruction. The new currency regiment will be talked about as more fair, more balanced, more equitable, but those in the know will have already understood that it will be more of the same, damaging to the middle classes while barely scraping off a scintilla of the assets held by the rich and powerful.

Americans, Europeans, Japanese and all citizens are being shafted, and it's going to hurt.

The long-delayed reckoning from the global crisis of 2008 is about to be unleashed. Unless one holds hard assets such as precious metals, real estate, and/or income-producing assets like a productive business or needed service, one is likely to feel more pain than would otherwise be prescribed by the lords of finance.

At the Close, Friday, August 23, 2019:
Dow Jones Industrial Average: 25,628.90, -623.34 (-2.37%)
NASDAQ: 7,751.77, -239.62 (-3.00%)
S&P 500: 2,847.11, -75.84 (-2.59%)
NYSE Composite: 12,416.45, -272.01 (-2.14%)

For the Week:
Dow: -257.11 (-0.99%)
NASDAQ: -144.23 (-1.83%)
S&P 500: -41.57 (-1.44%)
NYSE Composite: -163.96 (-1.30%)
Dow Transports: -227.58 (-2.28%)

Four Straight: All Major US Indices Close At Record Highs

Shades of the Weimar Republic, as all financial assets are becoming ridiculously overpriced.

As was the case in the Weimar, this may not end well. Inflation statistics from this morning's CPI reading showed January up 0.6% and the core CPI higher by some 0.3%. Meanwhile, capacity utilization fell 0.3 from December, to 75.3%.

Retail sales figures were also positive, showing a gain of 0.4%, after December's numbers were magically improved, revised from 0.6% to 1.0%. This as holiday sales gains from major retailers were modest or unreported, and large chains such as Sears and Macy's announced mass store closings coming throughout the year.

Global stock indices have also been ramping higher of late, an indication that the inflation, so often promised by endless rounds of quantitative easing (money printing) and an extended period (8 to 15 years) of low interest rates (some below zero) is finally occurring. What the globalists have been touting and predicting to happen can only lead to one logical conclusion: higher prices for consumers, a condition that will prove to impoverish the average citizenry of nearly every country in the world.

All of this may have something to do with the globalists running scared that their era of "free trade" and fiat money is about to meet its logical conclusion.

But it's all good for Wall Street, and that's what counts, to Wall Street.

At the Close, 2/15/17:
Dow: 20,618.98, +114.57 (0.56%)
NASDAQ: 5,821.62, +39.05 (0.68%)
S&P 500: 2,351.15, +13.57 (0.58%)
NYSE Composite: 11,510.34, +41.47 (0.36%)

Globalism Is Dead And Dying At Davos

As the world prepares for a new American era to begin with the inauguration of Donald J. Trump as the 45th president of the United States, the global elites are gathered at Davos to interpret the condition of the world economy.

Ian Goldin, a professor of globalization and development at Oxford University spoke briefly at the World Economic Forum in Davos, Switzerland, saying,

“You can’t stop managing an entangled environment by disconnecting. This is the fundamental mistake of Brexit, of Trump, and of so many others. We are not simply connected. We are entangled. Our lives, our destinies are intertwined. What happens in China, what happens in Indonesia, what happens in India, what happens across Europe, and what happens in North America, across Africa and Latin America will affect all of us in dramatic new ways. The idea that somehow we can forge our future in an insular way, even for the biggest countries like the U.S., is a fantasy.”

Obviously, Mr. Goldin has been smoking too much of what he's been growing over the past couple of decades. To put it into a more precise perspective, Mr. Goldin kneels at the altar of globalization, thus, he's unprepared to express or even admit that there's any other opinion or world view than the one he personally promotes.

If one were living in a rural area in America, or India, or the Congo, even, the effects of global initiatives like those espoused and implemented by the people at Davos would be minimal, at best. One would still water plants, feed livestock, wash eggs, and perform all the other chores of a minimal farming/subsistence lifestyle. Mr. Goldin, being of the elitist character, has virtually no concept of digging holes for posts, erecting fences, germinating seed, slaughtering hogs, gathering chicken eggs daily, and so on. He's about as disconnected from the reality of everyday life as one could possibly be, viewing the world from his ivory tower at Oxford as he glances up briefly from his reading of some other obviously clueless professor emeritus or other "authority" whose mantra to which he subscribes.

Therefore, as we've seen in the Brexit movement and the election of Donald Trump as the next president of the United States of America, the globalist agenda is dead in the water, disconnected and disintegrating. The annual fete at Davos - through the media filter, at least - gives everyone an opportunity to see firsthand just how audaciously and vigorously the gathered elitists continue to promote their agendas. Liberalism, diversity, and globalism are all joined together into a kind of religion of the rich and powerful, but, the masses need not adhere to what is looking increasingly like failed policy.

If globalism has taken thirty or forty years to expand itself into monstrosities such as the European Union, the Arab Spring, and unadulterated acceptance of gay marriage, it's likely going to take an equal amount of time to dismantle its various parts and replace them with more stable value systems. As the globalists retreat from their worn-out traditions and values, popular uprisings will accelerate the decline. It starts, as do all major moral or political or economic upheavals, on the fringes of society, in the hinterlands, so to speak, before spreading to all ranges of the spectrum, from old to young, from the countryside to the cityscape.

We are at the beginning of a new age, one which promises the demise of authority at all levels from local to supranational and more freedom for the working classes and ordinary citizens.

On cue, one day before the actual inauguration of the man all the "experts" said had no chance of winning, Donald Trump, world markets continued a dizzy dance of denial and suspense, especially the Dow Jones Industrial Average, which spasmodically descended today to a point below where it began the year, closing at its lowest level since Decemeber 30 of last year (19,732.40, -72.32 (-0.37%)).

Though the drop in percentage terms was hardly sensational, the level is of more immediate concern. Since December 12, the intraday level never fell below 19,718, the mark made on the final day of trading for 2016, December 30.

While broader indices, the S&P 500 and the NASDAQ, retained a positive tilt for 2017, it has been the Dow that garnered the most attention of late, especially over its historic (failed) attempt to crack the 20,000 level.

With Trump taking the oath of office at noon tomorrow, the question on every trader's mind is how the markets will respond. With a whimper or a yawn, or might the Dow set aim again for an historic close?

At The Close 1.19.16:
Dow 19,732.40, -72.32 (-0.37%)
NASDAQ: 5,540.08, -15.57 (-0.28%)
S&P 500: 2,263.69, -8.20 (-0.36%)
NYSE Composite: 11,151.69, -44.41 (-0.40%)