Is The Global Economy About To Roll Over?

Recent pullbacks in stocks, and, more importantly, their inability to recover, is a sure sign that trouble lies directly ahead for the global elite chieftains of central banks which have dominated economics since the Great Financial Crisis of 2008.

The central banks are not the only culprits when it comes to how poorly economies of countries are engaged, elected and unelected officials in government need at least a share of the blame. Both parties promote endless debt in a finite world, a construct which cannot endue without obvious pitfalls and the troublesome realities of mathematics.

Central banks issue currency as debt. Politicians tax and spend money they don't have. Between the two, the only profiteers are those large enough to engage and/or endanger the system, i.e., very, very rich people and large banking interests, otherwise known as commercial banks, investment banks, insurance companies and ultra-large, multi-national, monopolistic corporations like McDonald's, Wal-Mart, Google, Facebook, the six big oil companies.

Nothing against big companies and very, very rich people, except that they've benefitted from a very, very unlevel playing field of economics which takes - by way of interest, taxes, and various fees - from the common and remits to the oligarchical controllers of said economies.

This world is ending because of inertia and entropy. Individuals and small business cannot keep up with rising taxes, inflating prices the result of increasing interest rates. Credit has skyrocketed near all-time highs in America, and the wallets of those individuals tasked with repayment are thin - as thin as they've been since 1999, the last time incomes kept pace with inflation or the meanderings and maneuverings of the central banks and governments.

The stock market is not a cause of wealth or decline. It is a symptom, and it is breaking down.

It's only a matter of time before the symptom of excessive valuation falls prey to the reality of diminishing returns.

Dow Jones Industrial Average March Scorecard:

Date	Close	Gain/Loss	Cum. G/L
3/1/18	24,608.98	-420.22	-420.22
3/2/18	24,538.06	-70.92	-491.14
3/5/18	24,874.76	+336.70	-154.44
3/6/18	24,884.12	+9.36	-145.08
3/7/18	24,801.36	-82.76	-227.84

At The Close, Wednesday, March 7, 2018:
Dow Jones Industrial Average: 24,801.36, -82.76 (-0.33%)
NASDAQ: 7,396.65, +24.64 (+0.33%)
S&P 500: 2,726.80, -1.32 (-0.05%)
NYSE Composite: 12,707.01, -13.76 (-0.11%)

Cohn's Departure Shakes Wall Street; What is WABOL?

Stocks spent the better part of the session pondering the unchanged line, bouncing from gains to losses back to gains by the end of the day, but those gains were marginal, as the bigger news broke after the close.

Supposedly in response to President Trump's proposed tariffs on imported steel and aluminum, Chief Economic Advisor to the president, Gary Cohn, resigned his position just before the nightly news broadcast at 6:00 pm ET.

Cohn, former president and COO at investment bank, Goldman Sachs, is highly regarded on Wall Street, thus, his departure from the administration puts the nation's major corporations (and especially those in the financial services sector) at odds with the president. Add to that defections from his own party in the form of comments from House Speaker Paul Ryan and the dutious declarations of defiance from Democrats in House and Senate, and the president is again on his own, skating on some very thin ice.

With stocks reacting in varied fashion - the Nikkei and Hang Seng were both down overnight, while European exchanges were mixed at midday - Trump's foray into the international trade arena has sparked no small degree of interest and disparagement.

While Trump has only announced his intention to impose steel and aluminum tariffs of 25% and 10%, the reactions have been vociferous and without restraint. It remains to be seen whether the president actually goes ahead with his plan (he likely will) and how actual trade will be affected, with reciprocal tariffs and retaliatory measures sure to come from trading partners around the world.

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What is WABOL?

Fearless Rick, publisher and chief writer for the Money Daily blog and parent Downtown Magazine has coined a new internet acronym, referenced as WABOL, for "What A Bunch Of Losers."

As such, the acronym WABOL can be employed in any situation involving two or more people that may be the subject of negative commentary, for example:

The New England Patriots
Any gathering of politicians
Public employees

You get the idea. Fearless Rick coined the term. Yes, he did, and this is proof.

WABOL

Dow Jones Industrial Average March Scorecard:

Date	Close	Gain/Loss	Cum. G/L
3/1/18	24,608.98	-420.22	-420.22
3/2/18	24,538.06	-70.92	-491.14
3/5/18	24,874.76	+336.70	-154.44
3/6/18	24,884.12	+9.36	-145.08

At the Close, Tuesday, March 6, 2018:
Dow Jones Industrial Average: 24,884.12, +9.36 (+0.04%)
NASDAQ: 7,372.01, +41.30 (+0.56%)
S&P 500: 2,728.12, +7.18 (+0.26%)
NYSE Composite: 12,720.77, +40.04 (+0.32%)

Stocks Bounce Back, Set To Continue Gains

After posting losses the first two trading days of March, stocks opened the new week with fresh gains, nearly erasing the red ink for the month. The Dow is still down more than 150 points for the month and much more than that from all-time highs (January 26 is looking smaller and smaller in the rear-view mirror), but stocks are poised to push higher on Tuesday on good news from the Korean Peninsula.

Talks between the North and South are apparently proceeding well, with the North - according to published reports - willing to denuclearize if the US and its allies can ensure its safety. The thought of nuking North Korea, being more of a paranoid construct in the mind of leader, Kim Jong-un, than any substantive reality, should not be a major obstacle should talks continue apace.

If the North and South states do eventually settle their differences, it would amount to nothing less than a complete coup for President Trump and his negotiating team, which has talked alternatively tough and sensible to the North Koreans. Resolution of the 65-year-old standoff would seem to be positive for all parties, depending on the terms of any definitive pact.

A re-emergence of North Korea into the union of so-called civilized nations might also pave the way for other countries, such as Ukraine and Iran, to proceed with normalization of policies, taking a step back from the brink of war or annihilation, nuclear or otherwise.

Dow Jones Industrial Average March Scorecard:

Date	Close	Gain/Loss	Cum. G/L
3/1/18	24,608.98	-420.22	-420.22
3/2/18	24,538.06	-70.92	-491.14
3/5/18	24,874.76	+336.70	-154.44

At the Close, Monday, March 5, 2018:
Dow Jones Industrial Average: 24,874.76, +336.70 (+1.37%)
NASDAQ: 7,330.70, +72.84 (+1.00%)
S&P 500: 2,720.94, +29.69 (+1.10%)
NYSE Composite: 12,680.73, +122.74 (+0.98%)

The Week That Wasn't: February Flop Folds Into March Madness

This was a generally unsightly week for stocks. All of the major indices suffered losses, despite a late-Friday rally that boosted three of the four to positive, the notable exception, the stoic Dow Jones Industrial Average.

Taking a three percent hit for the week, the Dow suffered its third weekly setback in the last five, the most recent being the second-largest of the year, following the debacle from the first week in February. The other averages were down smaller percentages, the least of which was the NASDAQ, with just over one percent to the downside, staggered by the S&P (-2.04%) and the NYSE Composite (-2.53%).

Bonds were less volatile for the week as a whole, as the 10-year-note stabilized around 2.85%, finishing officially at 2.86%. Crude oil weakened, though not much, and gas prices eased a little as refiners switch over from winter to summer blends. With the US Dollar Index firming up early in the week, precious metals took it on the chin, but both gold and silver rebounded on Thursday and Friday as the short-lived dollar rally faded.

Most of the ballyhoo was over President Trump's announcement of tariffs on steel and aluminum imports, with a 25% fee on the former and a 10% duty on the latter. Critics mouthed off about rising prices on everything from automobiles to beer, though the effects are likely to be negligible. A 12-pack of beer is expected to cost about two cents more if duty-added aluminum is used, while a car contains roughly a ton of steel, which at $750 a ton, will amount to an additional $250 in the price of the already-bloated cost of a new vehicle.

Some countries are already crying foul, the loudest being Canada, from which the US imports the most steel, but many products from Canada, including lumber, are already highly regulated on the producer end, so even despite the NAFTA agreements, the US's neighbor to the North likely has little upon which to argue unfairness.

On the main, it was a poor week for stock holders, with mounting declines heading back toward the lows reached in the early days of February. The only index that can claim victory for the first two months of the year is the NASDAQ, holding tenuously onto a roughly three percent gain, with the S&P flat for the year, the Composite and Dow down the most, but none more than 2% for the annum.

Looking ahead, the FOMC is set to meet on March 16, with expectations of another 25 basis point hike to the federal funds rate. That is still disquieting to equity longs, and feeding into the ongoing rout in stocks. The week ahead will be indicative of the market's ability to digest another rate hike. So far, it's done well enough, but there is a point at which nearly risk-free yields will attract more money. Buoying up the stock market are massive buybacks, however, courtesy of the recent tax bill passed late last year. While companies that have been handing out bonuses have received most of the headlines, little to no reporting has been done on the same companies buying back even more of their own stock in an effort to assuage shareholders and keep their stock prices afloat at high tide.

How much money will be pumped back into stocks by the very owners and executives of said stocks is unknown, but eventually the tap will run dry and then interest rates will look more and more attractive. Without the buybacks of recent years, stocks would be more fairly valued, rather than being excessively overpriced as they have been for some time.

Sideways could be the most-favored direction for the next few weeks and months, with many experts calling for the eventual market blowout decline sometime in the third quarter (July-September), which would fit with the anti-Trump narrative leading into November's midterm elections.

Now the markets have not only become algo-driven and reactionary, but they are soon-to-be politically-charged as well.

Dow Jones Industrial Average March Scorecard:

Date	Close	Gain/Loss	Cum. G/L
3/1/18	24,608.98	-420.22	-420.22
3/2/18	24,538.06	-70.92	-491.14

At the Close, Friday, March 2, 2018:
Dow Jones Industrial Average: 24,538.06, -70.92 (-0.29%)
NASDAQ: 7,257.87, +77.31 (+1.08%)
S&P 500: 2,691.25, +13.58 (+0.51%)
NYSE Composite: 12,557.99, +39.26 (+0.31%)

For the Week:
Dow: -771.93 (-3.05%)
NASDAQ: -79.52 (-1.08%)
S&P 500: -56.05 (-2.04%)
NYSE Composite: -326.12 (-2.53%)

Stocks Continue Falling As March Commences With 420-Point Drop

After a brutal February, which took the Dow down by more than 1100 points, the first day of March suggested that more capital carnage may still be yet to come.

After a shaky positive start to the session, stocks quickly reversed course at midday after remarks by NY Fed head, William Dudley, and Fed Chair Jerome Powell signaled that the Fed would be pursuing three, and possibly, four, rate hikes in 2018. Accelerating the decline was the announcement by President Trump that he planned to impose 25% tariffs on imported steel and a 10% tag on imported aluminum.

Added to the losses of the last two sessions of February, Thursday's 420-point decline has ripped 1100 points off the Dow and futures are pointing to a lower open on Wall Street after stocks in Asia (NIKKEI, -542.83; Hang Seng, -460.80) were hit hard and European bourses have opened hard to the downside with Germany's DAX the biggest loser, down more than two percent at midday.

The Dow continues to cruise closer to correction territory, though it is still another 1000 points away, at 23,594, but, as seen in previous sessions, that amount of loss can occur in one or two sessions with relatively little resistance.

Current conditions suggest that economies globally are contracting, after a binge of easy credit field by central bank intervention and wanton money-printing for the past nine years. If the Fed and other central banks are convinced those policies must come to an end, an all-encompassing crash in the not-so-distant future is not out of the question.

Dow Jones Industrial Average March Scorecard:

Date	Close	Gain/Loss	Cum. G/L
3/1/18	24,608.98	-420.22	-420.22

At the Close, Thursday, March 1, 2018:
Dow Jones Industrial Average: 24,608.98, -420.22 (-1.68%)
NASDAQ: 7,180.56, -92.45 (-1.27%)
S&P 500: 2,677.67: -36.16 (-1.33%)
NYSE Composite: 12,518.73, -133.82 (-1.06%)