The yield curve has been trending upward.
Long term interest rates are climbing a lot faster than the short term interest rates. This will make it more profitable for banks to lend money. Money supply growth has been downward slopping since the summer.
If these conditions continue, the money supply growth will begin to tick up again. This will further support stock prices. Investors should slowly accumulate stocks in the performance tab.
Author: s4k
The Russians are Coming
Since the FBI dropped the ball on investigating a psycho who killed 17 people, one would think they would have delayed the release of the Russian collusion indictment. How much time and resources were wasted on this Russian case that could have been spent trying to prevent the high school shooting tragedy?
After reading the indictment I came to the following conclusion:
The crack pot team at the FBI spent over 5 million dollars investigating paid trolls.
From the indictment we read the following:
“…on or about May 29, 2016, Defendants and their co-conspirators, through an organization-controlled social media account, arranged for a real US. person to stand in front of the White House in the District of Columbia under false pretenses to hold a sign that read “Happy 55th Birthday Dear Boss.”
This is what the FBI gives you for a multi million dollar investigation.
Far more disturbing, is the idea that it is illegal to be a paid troll or a foreigner that organizes political movements. Where does this end? Should we arrest the dreamers? How many newspapers are owned by foreigners? What about foreigners who own stock in media outlets? Couldn’t these people be said to affecting elections by using information warfare?
You would be hard pressed to find a country existing now that wasn’t influenced by US government meddling.
Conclusion
The left thinks this proves they were correct all along. The right thinks this proves Trump is innocent. I think this proves we should abolish the FBI.
Multi Headed Bottom
Gold looks like it wants to make a multi headed bottom. I wont go long until I see a clear break above 1380.
This will be the fifth time in the past 4 years gold has attempted to break this resistance. Looking at the chart we see the series of higher highs leading to 1380 since the beginning of 2016. I think this time it will break through. However, we will wait for confirmation.
JPY Breaks out
The Japanese Yen broke out. Put stop at 0.92
Looks like it is targeting 1.0000.
The reason I like this trade is the third try it broke out. In my experience, these chart formations tend to move right to there target.
Closed out VWO
Closed out VWO
Stopped Out
Bitcoin Short got closed out.
Is the Great Bond Bull Dead?
Lots of chatter that the bond bull market that started in the early 80’s might be over. Here is a long term perspective.
The 10 year is closing in on 3%. It has been a few years since it has seen this level. Will Trumps massive deficits and the Feds QT kill it? Fundamentally, there has been no reason to go long this market for the past 10 years. However, it is the best of the worst at the moment considering other countries in the western world are closing in on zero. I don’t believe this bull is dead. Before it is over the USA might see negative rates. The perception of the market participants has not changed. The first sign of trouble, investors jump right back in. One day, some one will make a fortune shorting this market. I don’t believe the time has come yet.
CPI Jumps
The fed is way behind the curve. They are going to let the economy run on the hot side.
Zimbabwe II
Watching South Africa turn into Zimbabwe is sad. However, it is self inflected by the South African people. Zuma seems to be on his way out.
Their central bank and government officials seem hell bent on destroying the currency and economy. In this respect, they are no different than all the other countries. The ANC seems smart enough not to nationalize the mining industry. This is a good thing.
The EFF is a small political movement in favor of nationalizing mining. In times of crisis, political movements can become majorities very quickly. South Africa becomes more political unstable each day. Buying platinum is like buying a put option that never expires on the stupidity of SA’s government.
Fiscal Insanity
The Office of Management and Budget just released the fiscal year 2019 budget details. Here is my summary (some dollar amounts are excluding mandatory spending).
| Department | Request | Increase/Decrease from the 2017 Enacted Level |
| Department of Agriculture | $19 Billion | -16% |
| Department of Commerce | $9.8 billion | +6% |
| Department of Defense | $686 billion | +13% |
| Department of Education | $59.9 billion | -10.5% |
| Department of Energy | $29 billion | -3% |
| Department of HHS | $68.4 billion | -21% |
| Department of Homeland Security | $46 billion | +8% |
| Department of HUD | $39.2 billion | -18.3% |
| Department of Interior | $11.3 billion | -16% |
| Department of Justice | $28 billion | -1.2% |
| Department of Labor | $9.4 billion | -21% |
| Department of State | $25.8 billion | -26% |
| Department of Transportation | $15.6 billion | -19% |
| Department of the Treasury | $12.3 billion | -3% |
| Department of Veterans Affairs | $83.1 billion | +11.7% |
| Corps of Engineers | $4.8 billion | -20% |
| EPA | $5.4 billion | -34% |
| National Aeronautics and Space Administration | $19.6 billion | +2.6% |
| Small business Administration | $834 million | -5.9% |
All of these departments represent a minor cost to the US government, besides the DOD. The elephant in the room is the sacred cows of entitlements. No one talks about those.
The left is going to go into overdrive about this. Expect it to be the media talking point for the next few days:
“Critical investments include $1.6 billion for construction of the border wall and $782 million to hire and support 2,750 additional law enforcement officers and agents at U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE). The Budget also requests $2.5 billion for detaining up to 47,000 illegal aliens on a daily basis.”
Now on to the projected deficits.
Back to trillion dollar deficits, which have not been seen since the 2008 recession. Notice the deficits start to decrease 4 years out. How convenient.
Now for the projection of total US debt, which is based on a lot of optimistic assumptions. Low interest rates, no recession, etc.
Browsing the internet we find that conservative web sites are silent on this issue. The left, rightly, is pounding on the hypocrisy of this silence.
Note to Trumpbots: Nothing has changed.