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The Economy and The Markets (where are we, where are we heading, and what does it mean for the QC...)

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Obama + Trump= Debt 

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On 11/19/2019 at 8:27 AM, JHart said:

Well that's absolutely not true. The Obama administration reduced deficit spending while during one of the worst recessions faced in the US and Trump has ballooned deceit spending during  the longest stretch of growth in history. 

 

See charts. Again I am politically agnostic, but BOTH had explosive debt. This isn’t a knock on Obama (or Trump), just numbers. For that matter all administrations for the last several decades are ALL guilty.

Here is a very quick read on Deficits and ranking the Administrations that added to them. Spoiler alert: the last few Administrations are at the top of this list. The thing to note is it is Politically NEUTRAL, which is the ONLY way to gauge these types of matters. 

https://www.thebalance.com/deficit-by-president-what-budget-deficits-hide-3306151

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11 hours ago, A2. said:

See charts. Again I am politically agnostic, but BOTH had explosive debt. This isn’t a knock on Obama (or Trump), just numbers. For that matter all administrations for the last several decades are ALL guilty.

Here is a very quick read on Deficits and ranking the Administrations that added to them. Spoiler alert: the last few Administrations are at the top of this list. The thing to note is it is Politically NEUTRAL, which is the ONLY way to gauge these types of matters. 

https://www.thebalance.com/deficit-by-president-what-budget-deficits-hide-3306151

Bill Clinton ran a budget surplus during his administration. Your link mentions that in the supporting data below the chart, yet still shows him as the 4th largest deceit administration so not sure how reliable their data is. Looking at total debt added is disingenuous because you really should be looking at change in budget deceit spending. The Obama administration inherited a budget with $1.4T deceit due to tax cuts and reduced deceit spending even with the added bailouts and healthcare implementation that were required at the time, but yes drastically added to the total national debt. I'm with you on politically agnostic, I'm a firm believer that our first past the pole political system and 2 party system is the worst thing wrong with this country; but if you honestly look apolitically at our countries debt, it really is a one-sided conversation

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12 minutes ago, JHart said:

Bill Clinton ran a budget surplus during his administration. Your link mentions that in the supporting data below the chart, yet still shows him as the 4th largest deceit administration so not sure how reliable their data is. Looking at total debt added is disingenuous because you really should be looking at change in budget deceit spending. The Obama administration inherited a budget with $1.4T deceit due to tax cuts and reduced deceit spending even with the added bailouts and healthcare implementation that were required at the time, but yes drastically added to the total national debt. I'm with you on politically agnostic, I'm a firm believer that our first past the pole political system and 2 party system is the worst thing wrong with this country; but if you honestly look apolitically at our countries debt, it really is a one-sided conversation

Image result for federal debt by administration

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Just so we aren’t being antagonistic towards one another based on some perceived political ideology, the main point I’m attempting to make is that the country is in deep doo-doo. Regardless of how we got here, or by whom, deficits and debt matter and at some point the system takes on more than it can pay back. At some mathematical point in the near future the tax receipts merely service the interest on the debt we have, and at the next level, even that is too much, as the debt metastasizes (grows beyond maintaining) and the country succumbs to it and folds through default. This creates a wave of catastrophic consequences, the likes of which we can’t begin to appreciate in its totality. 

The biggest way we see countries in the past try to extend their lifespan is via one thing: WAR

War is, and has always been, about one thing: 

 Money 

A2

 

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It's almost as if.... hold on, bear with me... the institutions steering the economy through economic policy are detached from the presidency while providing an easy target for people to get upset about. It's Bush! Obama! Reagan! Trump!

What about the Federal Reserve, the IMF, and all the other groups that shape and form economic policy that continues on no matter who the president is? 

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2 hours ago, Matthew.Brendan said:

It's almost as if.... hold on, bear with me... the institutions steering the economy through economic policy are detached from the presidency while providing an easy target for people to get upset about. It's Bush! Obama! Reagan! Trump!

What about the Federal Reserve, the IMF, and all the other groups that shape and form economic policy that continues on no matter who the president is? 

Trump is announcing a stimulus package today, that's why DOW and the S&P are positive.  

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316E3026-FD19-4F19-8285-E1DAABDA262B.jpeg

 

My larger point was that you may notice Debt heading in only one direction over the last 40 years, regardless of president/party. That's the Fed and their policy making. Now why would they put the country on this track? What did we get in exchange for this? Endless war making, more and more and more tax cuts for those who need it least, while basic infrastructure crumbles. Let's examine the state of education and healthcare, here in the richest nation in the world. Amazing really, isn't it?

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2 hours ago, Matthew.Brendan said:

My larger point was that you may notice Debt heading in only one direction over the last 40 years, regardless of president/party. That's the Fed and their policy making. Now why would they put the country on this track? What did we get in exchange for this? Endless war making, more and more and more tax cuts for those who need it least, while basic infrastructure crumbles. Let's examine the state of education and healthcare, here in the richest nation in the world. Amazing really, isn't it?

That's why the gold standard should have never ended, but here we are now.  For private loans, mortgage lenders are not giving high risk loans anymore in contrast to the subprime catastrophe.  delinquencies are declining for mortgages.  

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14 minutes ago, urbanlover568 said:

That's why the gold standard should have never ended, but here we are now.  For private loans, mortgage lenders are not giving high risk loans anymore in contrast to the subprime catastrophe.  delinquencies are declining for mortgages.  

However, credit card debt is at an all time high. Over a trillion.

Why the gold standard?  Russia would then control our money since they have so much stockpiled. Or did.  (Russia is just an example)

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7 minutes ago, Windsurfer said:

However, credit card debt is at an all time high. Over a trillion.

Why the gold standard?  Russia would then control our money since they have so much stockpiled. Or did.  (Russia is just an example)

Quote

Because the global gold supply grows only slowly, being on the gold standard would theoretically hold government overspending and inflation in check. ... The country effectively abandoned the gold standard in 1933, and completely severed the link between the dollar and gold in 1971.

https://www.mentalfloss.com/article/12715/why-did-us-abandon-gold-standard

 

 

Now we are hyping up credit card debt lol 

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Edited by urbanlover568

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Sorry I haven’t posted in a while guys. I pray you’ve all been well. Due to the last few weeks I have been incredibly busy with work and due to my profession being tied directly to markets, it’s been a little chaotic (I suppose that’s putting it mildly, lol)

That said, I wanted to just post a really quick note to you all.  Please consider de-risking your own portfolios into this recent strength. Without going into specific recommendations, the bottom line is this will be probably one of the last bumps back before the carnage resumes. Bear markets have rip your face off rallies like today’s, but those aren’t markers of a bottom. Quite contrary, it’s simply short covering. 
 

I am not here to pound my chest and say “I told you so”, because no one wins in what’s coming. However, this market is just getting ready for a second wave down, and I just care enough to let my UP peeps know that all isn’t well. The economy and the markets will continue in fits and starts, but ultimately the weeks and months ahead will be some of the toughest we will ever witness in our lives. Please keep things simple, don’t complicate it, and know that I am all of your fans!

Ps—-while I know many will assume Coronavirus is the cause, it was simply the match to light the dynamite that just needed the spark. That said, it’s still prudent and wise to keep your hygiene in check, and your common sense in gear. Don’t hype it, but also don’t ignore it either.

Godspeed to all!

A2

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On 10/2/2019 at 10:47 AM, A2. said:

Ok I will kick things off. The S&P better hold 2830.

if it breaks on significant volume, it’s game over. I personally believe it might bounce around that level, but then after the bounce fall through it. If it breaks and proceeds south, Katie bar the door!

2830 IS THE LINE IN THE SAND! 

If that does break, there is one lesser level of support around 2520. But I believe if 2830 breaks then it will be a bloodbath. 

A2

^^^as for a road map. The above numbers I posted months back are still accurate. Just something to keep in mind.
 

For what it’s worth, for any wanting to know, I moved out of ALL equities in mid-December (and by everything, I mean I took 100% out of equities, while holding onto some Government Bonds). My friends in my industry laughed, but hey they laughed at Noah when he was building the Arc. Just remember, in the end, there wasn’t anyone laughing  when it started to rain. There is no pride in my statement, just true concern. I don’t win being right on this call. 

While I didn’t “top tick” the exit of the market exactly, that was ok by me. But then again being a little off on the timing isn’t the worse thing in the world, especially when we’re dealing with what I knew was coming. Stay safe out there and as always keep us posted on the going on’s in the QC! Always enjoy the UP posts! It’s nice to take my mind to another place when it’s a little gloomy otherwise.
 

goodnight for now.

A2

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@A2., where do you think the Dow Jones bottoms out?  I'm calling 18,000, but I will admit that I pulled that number out of my ass.

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12 hours ago, cltheel.sdl said:

@A2., where do you think the Dow Jones bottoms out?  I'm calling 18,000, but I will admit that I pulled that number out of my ass.

Take the 1 off.

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15 minutes ago, A2. said:

Take the 1 off.

Really?  You think it will be that bad?  Even in 08 the Dow lost about 45% of its value.  Dropping to 8,000 would be over a 70% drop!  Seems pretty insane.

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@A2. , seems like the depression you're forecasting is due to something way deeper than Coronavirus.  For us simpletons out there, what's the short version of why you're predicting such a drastic fall-off?

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3 hours ago, cltheel.sdl said:

@A2. , seems like the depression you're forecasting is due to something way deeper than Coronavirus.  For us simpletons out there, what's the short version of why you're predicting such a drastic fall-off?

Debt. The CV is just the “boogeyman“ they are blaming it on. We have had countless pandemics in just the last 10 years, but never have any of them garnered more hype than CV. This is a perfect scapegoat to take your eye off what the REAL Cause is. 

And when I say debt, I don’t mean just household credit cards, student loans, etc (and those are large). But I mean debt created through TRILLIONS in unabated money printing by the Fed.  It  has fueled the largest bubble in the history of mankind. Without getting too technical, their are over 1 quadrillion in derivatives in the markets today. Those are bets placed by large banks and institutions, they are finally breaking and their isn’t enough money they can print to stop the defaults from cascading through the markets. The sad part is that most all of this was not our fault. It was the fault of central banks the world over. Most all the wealth you see is an illusion. Your home, your 401k, etc., . They are all illusions of wealth.  The printing of money has debased our currency to the point of being worthless IOU’s. Then there are also other issues at play, but the bottom line is that we printed our way out of every crisis. And at some point the markets finally face reality that the funny money is just that, funny money. (The real funny thing is that the FED is at it again at printing like mad, but the markets aren’t responding)

 
 We are now in a deflationary debt collapse. This market will have fits and starts going up at points, but the bottom line is that it will find it’s fair value when this is all done. And suffice it to say, it’s a LOT LOWER than where we are at now. 

 For now, I see the bigger problems not in the stock markets, but rather the bond markets. Then after that, the currency market. Many the world over, HATE the fact that the $USD is the world reserve currency. That is the one real reason we’ve been able to get away with the printing presses running at full throttle for decades. The roosters are now coming home to roost. So be very vigilant in looking at the dollar. Initially it will spike as ALL debts are settled in $USD’s. And today it’s sell anything that’s not nailed down to settle margin debts.  And don’t forget, that the $USD is the petrodollar as well (that will soon end). And oil falling through the floor is telling you a lot on that front. Once we lose our reserve status, it’s game over. And it will happen. It’s just a matter of time. 
I am going to say something that I don’t like saying, but this time around we are entering a depression, not a recession. This will be a long road back to normalcy. Will we be back, you betcha. But for now, just know, the times, they are a changin’.

A2

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Sometimes a picture is worth a thousand words:

This chart of the NYSE has to scare anyone who can see we have almost wiped out four years of gains in less than two weeks. Will we bounce, most likely. Will the bounce fail, yes.

presented with no further comment.

 

9FFD33ED-18A3-4227-A668-A9A93CC386E8.jpeg

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