[KR1485] Keiser Report: Stock Markets Party Like It’s 1999

Continuing with their look back on 2019 and their look forward to 2020, Max and Stacy look at the year end charts from 2019 as the NASDAQ (up nearly 40%) parties like it’s 1999 when the index closed up 85%. Could 2020 achieve even higher returns? The massive end of year rally in the stock markets matched the Fed’s v-shaped recovery in its balance sheet which ballooned by over a hundred billion per month in the last four months of the year. Should anyone fight the Fed? Or ride their free money helicopter to ever higher highs? In the second half, Max talks to Mitch Feierstein of PlanetPonzi.com about the euphoria in the markets. How long it might last, how big the Fed’s balance sheet might grow. Mitch admits that he had called 2019 wrongly because he looked at fundamentals rather than at the willingness of the Fed to print money with such enthusiasm. How long it may continue is anyone’s guess, but the higher the bubble goes, the bigger will be the eventual fall.


[KR1484] Keiser Report: Hard Money, Passive Indexation

Continuing with their look back on 2019 and their look forward to 2020, Max and Stacy look at the admissions of failure from the mainstream media at looking at stories and opinions from outside the metropolitan elite. They also look at passive indexation and how the Boomers are winning (again) at the expense of the younger generations and at what is next for Boeing as their 737MAX disaster continues.

In the second half, Max is joined by bitcoin core developer and author, Jimmy Song, to discuss the year ahead for bitcoin. They also talk about money and monetary policy and how that influences his understanding of hard money like bitcoin.


Front Running – China Policy

Watch the latest episode of Front Running here.

Front Running looks at the ‘Sputnik moment’ for the US as China overtakes it in high-tech achievements. Donald Trump won 2016 on the promise to ‘Make America Great Again’, but has imposing new trade conditions on China worked? Are any candidates proposing an industrial policy that can trump Trump’s policy? How was it that China was able to overtake America in the first place?

Max and Stacy are joined by guests Dan Collins, a businessman who lived and worked in China for 20 years, and Marshall Auerback, a market analyst and a researcher at the Levy Institute. They trace the history of the policy first set in motion by the Clinton administration in 2000 when Congress was urged to accept China into the WTO. Trump’s current trade representative, Robert Lighthizer, was almost the lone voice at the time arguing that allowing China into the WTO would destroy US manufacturing. He was right, everyone else was wrong. How can the US be extracted from its own disastrous mistakes? Is it possible to catch up to China’s high-tech advantage? Dan Collins notes that there has been a manufacturing boom over the past two decades, only it’s been happening in China, not America. Marshall Auerback believes it is possible to remedy that. Tune in to learn how.

If you can’t see it above, then watch here.

Transcript is below the fold — > Read more ›


The Two Charts You Need to Ignore or Rationalize Away in 2020 (Unless You’re a Bear)

We’re awash in financial charts, but only a few crystallize an entire year. Here are the two charts that sum up everything you need to know about the stock market in 2020.

Put another way–these are the two charts you need to ignore or rationalize away–unless you’re a Bear, of course, in which case you’ll want to tape a printed copy next to your wall of curled Post-It notes for future reference.

These charts show that all the potential gains from a thee-year advance (2019-2021) in P-E multiples and stock valuations have already been front-run in a mere three months. This is a key dynamic in the diminishing returns on Federal Reserve stimulus. This is an important point that few seem to observe.

Read more ›

Tagged with: , ,

The Fed’s “Not-QE” and the $33 Trillion Stock Market in Three Charts

The past decade has shown that when the Federal Reserve creates trillions of dollars out of thin air (QE), U.S. stocks rise accordingly. The correlation is very nearly perfect.

This has given rise to the belief that buyers of stocks will always be rewarded because “the Fed has our backs.” The evidence for this belief is the near-perfect correlation of Fed money-printing and stocks soaring.

This near-universal belief in the omnipotent Fed raises an interesting question: how much actual control does the Fed have on the U.S. stock market? One way to approach this question is to plot the size (to scale) of the Fed’s current money-printing campaign of $60 billion per month, “Not-QE,” to the market cap (total value) of U.S. stocks, using the Wilshire 5000 as the measuring stick and the St. Louis Federal Reserve database (FRED) as the data source.

This first chart shows the Fed’s $60 billion per month “Not-QE” in relation the $33 trillion market value of U.S. stocks.

The nearly invisible thin red line is $60 billion in relation to $33 trillion. So exactly how does this signal-noise sum translate into “the Fed has our backs”?

Read more ›

Tagged with: ,

[KR1482] Keiser Report: 2020 Predictions!!!

Hey all, thanks for visiting the site and being so awesome. Here is our New Year’s Eve special which aired yesterday and featuring Gerald Celente in the second half. Of course, we have loads of predictions. Let me know what you think of those ideas we have . . . and give us your own in the comments below. Hope you had a nice, sober New Years and are ready for a roaring 20s!


The Hour Is Getting Late

So here we are in Year 11 of the longest economic expansion/ stock market bubble in recent history, and by any measure, the hour is getting late, to quote Mr. Dylan:

So let us not talk falsely now
the hour is getting late
Bob Dylan, “All Along the Watchtower”

The question is: what would happen if we stop talking falsely? What would happen if we started talking about end-of-cycle rumblings, extreme disconnects between stocks and the real economy, the fact that “the Fed is the market” for 11 years running, that diminishing returns are setting in, as the Fed had to panic-print $400 billion in a few weeks to keep this sucker from going down, and that trees don’t grow to the troposphere, no matter how much the Fed fertilizes them?

When do we stop talking falsely about expansions that never end, and stock melt-ups that never end? Just as there is a beginning, there is always an ending, and yet here we are in Year Eleven, talking as if the expansion and the stock market bubble can keep going another eleven years because “the Fed has our backs.”

Take a quick glance at the chart below of the Fed balance sheet and tell me this is just the usual plain-vanilla, ho-hum, nothing out of the ordinary Year 11 of a “recovery” that will run to 15 years and then 20 years and then 50 years–as long as the Fed panic-prints, there’s no end in sight.

So after 9 years of “recovery,” the Fed finally starts reducing its balance sheet, peeling off about $700 billion over the course of 18 months.

Nice–only $3 trillion more to dump to return to the pre-crisis asset levels of less than $800 billion. In other words, the Fed’s “normalization” was a travesty of a mockery of a sham, a pathetically modest reduction that barely made a dent in its bloated balance sheet.

Knock a couple trillion off and we’ll be impressed with your “normalization.”

Read more ›

Tagged with: , , , ,

[KR1481] Keiser Report: Printing money, chopping down trees

In this episode of the Keiser Report from Rio de Janeiro, Max and Stacy note the acceleration of the rainforest being chopped down into the last months of the year. At the same time, out of control money printing from the Fed is sending stock markets to all time new highs. In the second half, Max continues his interview with private equity investor and former banker, Robert Wilson, who has lived in Brazil for over twenty years. They discuss the more sound economic arguments for maintaining the Amazon than chopping it down for timber. The nature of the rainforest makes it for more rational to keep it for the long term intellectual property prospects to be found in the unique flora and fauna of the region. They also discuss China’s important trade relationship with Brazil and about the need for greater immigration into the country.


Front Running 2020: The Billionaire Tax

The first of our 12 part series looking at the economic policies being presented by the many Democratic candidates and the party’s rising stars, like AOC, as they seek to challenge Trump in 2020.

In this episode, Front Running looks at the ‘billionaire tax’ proposed by the likes of Bernie Sanders and Elizabeth Warren. What is driving the demand for this tax? Why are billionaires suddenly so hated? Where do billionaires even come from? Is there such a thing as ‘odious wealth?’Front Running and guests, Dr Michael Hudson and Professor Steve Keen, look at the massive rise in wealth inequality and the central bank money printing that has contributed to it. They trace the rise of finance capitalism at the expense of the industrial capitalism which made America great for decades after WWII. Can taxes ever make America great again? Or is something more profound required to restore the wealth creation machine that powered the largest middle class in history?

If you can’t view it above, watch it here.

Transcript is below: Read more ›


Is Social Media the New Tobacco?

Social problems arise when initially harmless addictions explode in popularity, and economic problems arise when the long-term costs of the addictions start adding up. Political problems arise when the addictions are so immensely profitable that the companies skimming the profits can buy political influence to protect their toxic products from scrutiny and regulation.

That describes both the tobacco industry before its political protection was stripped away and social media today, as the social media giants hasten to buy political influence to protect their immensely profitable monopolies from scrutiny and regulation.

It’s difficult to measure the full costs of addictions because our system focuses on price discovery at the point of purchase, meaning that absent any regulatory measuring of long-term consequences, the cost of a pack of cigarettes is based not on the long-term costs but solely on the cost of producing and packaging the tobacco into cigarettes, and the enterprise side: marketing, overhead and profit.

(I address the consequences of what we don’t measure in my latest book, Will You Be Richer or Poorer?)

To take tobacco as an example, the full costs of smoking two packs of cigarettes a day for 20 years is not limited to the cost of the cigarettes: 365 days/year X 20 years X 2 packs (14,600) X cost per pack ($5 each) $73,000.

The full costs might total over $1 million in treatments for lung cancer and heart disease, and the reduction in life span and productivity of the smoker. (The emotional losses of those who lose a loved one to a painful early death is difficult to assign an economic value but it is very real.)

If the full costs of the nicotine addiction were included at the point of purchase, each pack of cigarettes would cost about $70 ($1,000,000 / 14,600). Very few people could afford a habit that costs $140 per day ($51,000 per year).

What are the full costs of the current addiction to social media? These costs are even more difficult to measure than the consequences of widespread addiction to nicotine, but they exist regardless of our unwillingness or inability to measure the costs.

Read more ›

Tagged with: , ,

A “Market” Crash Is Baked In–Here’s Why

The last thing punters and pundits expect is a stock “market” crash, yet a “market” crash is already baked in and here’s why: real markets have internal resilience (they’re anti-fragile, to use Nassim Taleb’s phrase), and central-planning manipulated “markets” don’t.

Few look at markets as obeying systems-level dynamics that have little to do with “news” or conventional metrics. The media makes money by reporting every tiny change in mood, metrics, rumors, etc., as if these drive markets. But we all know that the reality is much simpler: The Federal Reserve is the “market.”

In other words, the “market” is no longer a functioning (real) market; it is a central-planning signaling utility of the Fed and other central banks. This hollowing-out of the real market in favor of a central-planning, top-down controlled “market” destroys the system-level functions of markets.

If you want a refresher on the legitimate functions of a market, please read The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good, which explains why all the hundreds of billions of dollars of top-down, central-planning “aid” to impoverished nations has failed, enriching kleptocrats and autocratic regimes while assuaging the guilt of the poverty-pimps in the IMF, UN, and all the philanthro-capitalist foundations.

The only programs that actually improve the lives of the impoverished are those that enable small-scale markets in which participants make their own decisions rather than suffer the consequences of decisions made by central-planners who not only know nothing of local conditions, they’re uninterested in local conditions because we know best.

This is the core of central-planning: a handful of those with power make decisions that cripple markets’ ability to respond to reality by allocating goods, services, capital and credit as participants see fit.

Read more ›

Tagged with:

Our Fragmentation Accelerates

That our society and economy are fragmenting is self-evident. This fragmentation is accelerating rapidly, as middle ground vanishes and competing camps harden their positions to solidify the loyalty of the “tribe.” All or nothing, either-or binaries are the order of the day: you’re either 100% with us or 100% against us, you’re either part of the solution or part of the problem.

As fragmentation accelerates, “tribes” splinter into warring groups who compete for members of once-broad-based movements. Moderation is no longer tolerated as it smacks of mixed loyalties or (most dangerous) independent analysis and action.

What’s striking is the complete absence of economic class loyalty or identity: Few if any feel any shared identity with other workers, or feel any loyalty to a class that shares economic interests. Identities and loyalties are to ethnicity, gender, faith, political ideology or sports teams; shared economic interests simply don’t register in the U.S.

Read more ›

Tagged with: , ,