Riding the Type 3 Mega Market Melt Up Train

Posted on November 8, 2019 by MN Gordon

The decade long bull market run, aside from making everyone ridiculously rich, has opened up a new array of competencies.  The proliferation of ETFs, for instance, has precipitated a heyday for the ETF Analyst.  So, too, blind faith in data has prompted the rise of Psychic Quants…who see the future by modeling the past.

For the big financial outfits, optimizing systematic – preprogrammed – delta hedges is an essential aptitude of the 21st century.  Our guess is that many of today’s high flyers will crash and burn during the next bear market.  But what do we know?

As far as we can tell, the stock market, circa November 2019, is an absolute fantasy.  The Dow Jones Industrial Average (DJIA), S&P 500, and Nasdaq have little connection to the underlying economy.  Rain or shine, they go up.

Market watchers, eager to explain the fantasy, employ creative nomenclature as they attempt to classify the state of the stock market with discerning acumen.  Is it a bubble?  Is it a melt up?  If it’s a melt up, what type and gradation is it? Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , | 2 Comments

The Federal Reserve is a Barbarous Relic

Posted on November 1, 2019 by MN Gordon

“We believe monetary policy is in a good place.” – Federal Reserve Chairman Jerome Powell, October 30, 2019.

The Sky is Falling

Ptolemy I Soter, in his history of the wars of Alexander the Great, related an episode from Alexander’s 334 BC compact with the Celts ‘who dwelt by the Ionian Gulf.’  According to Ptolemy’s account, which survives via quote by Arrian of Nicomedia some 450 years later, when Alexander asked the Celtic envoys what they feared most, they answered:

“We fear no man: there is but one thing that we fear, namely, that the sky should fall on us.”

Today, at the risk of being called Chicken Little, we tug on a thread that weaves back to the ancient Celts.  Our message is grave: The sky is falling.  Though the implications are still unclear.

The sky, for our purposes, is the debt based dollar reserve standard that’s been in place for the past 48 years.  If you recall, on August 15, 1971, President Nixon “temporarily” suspended convertibility of the dollar into gold.  The dollar  became wholly the fiat money of the Treasury. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , | 4 Comments

How to Prepare as the Fed Scorches the Earth

Posted on October 25, 2019 by MN Gordon

The hillsides are always brown in the land of fruits and nuts come autumn.  After baking away all summer long in the hot sun, the dense sage and chaparral covering the coastal hillsides and canyons are dry and toasty.  Though, before conditions get better, they must first get worse.

High pressure systems form over the high-elevation deserts of the Great Basin, between the Sierra Nevada Mountains and the Rocky Mountains, each fall like clockwork.  The pressure builds and forces the air to the south and west.  The warm, dry winds of Santa Ana then race towards Southern California where they scorch the earth.

The winds howl from the east, across the inland deserts, where they funnel through the mountain passes and then blast across the LA Basin and out to the Pacific Ocean.  As the winds conduit from high to low elevation they compress and rise in temperature at a rate of almost 30 degrees per mile of descent.  What’s more, as the air’s temperature spikes upward, its relative humidity plunges downward below 10 percent. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , | 1 Comment

America’s Road Map to $40 Trillion National Debt by 2028

Posted on October 18, 2019 by MN Gordon

Watch out!  At this very moment, professional economists of all stripes are making plans on your behalf.  They’re dreaming and scheming new and innovative ways to spend your money long before you’ve earned it.

While you’re busy at the gristmill, grinding away for clients and customers, claims are being laid upon your life.  Your future earnings are being directed to boondoggles galore.  Yet these claims are in addition to everything Washington’s already signed you up for.

At last count of the U.S. National Debt, every American citizen’s on the hook for nearly $70,000.  Add U.S. Unfunded Liabilities – which includes Social Security, Medicare Parts A, B, and D, federal debt held by the public, plus federal employee and veteran benefits – and each citizen owes almost $383,000.  And this sum’s going to double in the years ahead faster than you can say lickety-split.

These professional economists, enamored by the genius of their graphs, see tomorrow’s recessions and know just how to prevent them.  Their master plan for reversing a recession before it strikes amounts to pre-emptive stimulus. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , | 9 Comments